Exhibit No. 10.42
BOND PURCHASE AGREEMENT
$25,000,000
BUCKS COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY
Water Facilities Revenue Bonds
(Pennsylvania Suburban Water Company Project) Series of 2002
Bond Purchase Agreement dated May 21, 2002, among the BUCKS COUNTY
INDUSTRIAL DEVELOPMENT AUTHORITY (the "Authority"), PENNSYLVANIA SUBURBAN WATER
COMPANY, a Pennsylvania corporation (the "Company"), and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
LLC, a Delaware limited liability company as representative on behalf of the
underwriters (the "Underwriter").
1. Background.
(a) The Authority proposes to enter into a Construction and
Financing Agreement (the "Financing Agreement") dated as of June 1, 2002 with
the Company, under which the Authority will agree to loan to the Company funds
(1) to finance a portion of the costs of the acquisition, construction,
installation and equipping of the Facilities (as defined below), and (2) to pay
a portion of the costs of issuance of the Bonds (the "Project"). The Facilities
being financed using proceeds of the Bonds (the "Facilities") are located at
various sites throughout the Company's existing water supply and distribution
system and are described in the Financing Agreement. To finance the loan under
the Financing Agreement, the Authority proposes to issue and sell $25,000,000
aggregate principal amount of the bonds identified above (the "Bonds") to the
Underwriter, who will in turn reoffer the Bonds for sale to the public;
(b) The Bonds will be issued pursuant to the Pennsylvania
Economic Development Financing Law, Act of August 23, 1967, P.L. 251, as amended
and supplemented (the "Act"), a resolution adopted by the Authority on May 2,
2002 (the "Authority Resolution") and under a Trust Indenture dated as of June
1, 2002 (the "Trust Indenture"), between the Authority and Wachovia Bank,
National Association, as trustee (the "Trustee"). The Bonds will have such terms
as are set forth in Schedule I attached hereto. The Bonds will be payable out of
payments by the Company under the Financing Agreement, including payments under
its First Mortgage Bond, to be issued in the principal amount of $25,000,000
(the "First Mortgage Bond") concurrently with the Bonds pursuant to the
Company's Indenture of Mortgage (the "Indenture of Mortgage") dated as of
January 1, 1941, from the Company to ▇▇ ▇▇▇▇▇▇ Trust Company, National
Association, as trustee (successor to The Pennsylvania Company for Insurance on
Lives and Granting Annuities, The Pennsylvania Company for Banking and Trusts,
The First Pennsylvania Banking and Trust Company, First Pennsylvania Bank, N.A.,
CoreStates Bank, N.A. and Mellon Bank, N.A.) (the "Mortgage Trustee"), as
presently amended and supplemented and as to be further supplemented by a
Thirty-Sixth Supplemental Indenture of Mortgage dated as of June 1, 2002 (the
"Thirty-Sixth Supplemental Mortgage," which together with the Indenture of
Mortgage, as amended and supplemented, is referred to hereinafter as the
"Mortgage"). The First Mortgage Bond will be issued in the same principal amount
and will mature on the same date and bear interest at the same rate as the
Bonds. All of the Authority's rights under the Financing Agreement to receive
and enforce repayment of its loan to the Company and to enforce payment of the
Bonds, including all of the Authority's rights to the First Mortgage Bond,
except for the Authority's rights to certain fees and reimbursements for
expenses, indemnification and notice thereunder and rights relating to
amendments of and
notices under the Financing Agreement, will be assigned to the Trustee as
security for the Bonds pursuant to the Trust Indenture;
(c) The Project is intended to construct facilities for the
furnishing of water for purposes of Section 142(a)(4) of the Internal Revenue
Code of 1986, as amended (the "Code"), so that the interest on the Bonds will
not be includable in gross income for federal income tax purposes under the Code
and the Underwriter may offer the Bonds for sale without registration under the
Securities Act of 1933, as amended (the "1933 Act") or qualification of the
Trust Indenture under the Trust Indenture Act of 1939, as amended (the "1939
Act"); and
(d) A Preliminary Official Statement dated May 10, 2002,
including the Appendices thereto and all documents incorporated therein by
reference (the "Preliminary Official Statement"), has been supplied to the
parties hereto, and a final Official Statement to be dated as of the date
hereof, including the Appendices thereto and all documents incorporated therein
by reference, prepared for use in such offerings will be supplied to the parties
hereto as soon as it is available, subject to Section 10 hereof (such final
Official Statement, as it may be amended or supplemented with the consent of the
Authority, the Underwriter and the Company, is hereinafter referred to as the
"Official Statement").
2. Purchase, Sale and Closing. On the terms and conditions herein
set forth, the Underwriter will buy from the Authority, and the Authority will
sell to the Underwriter, all (but not less than all) of the Bonds at a purchase
price equal to $24,750,000 consisting of the aggregate principal amount of the
Bonds ($25,000,000), less an underwriters' discount of $250,000, plus accrued
interest. Payment shall be made in immediately available funds to the Trustee
for the account of the Authority. Closing (the "Closing") will be at the offices
of Eckert, Seamans, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLC, bond counsel, at 10:00 a.m., Eastern
Daylight Time, on June 5, 2002 or at such other date, time or place or in such
other manner as may be agreed on by the parties hereto. The Bonds will be
delivered as fully registered Bonds with one Bond for each maturity, each in the
aggregate principal amount of Bonds for each such maturity as requested in the
name of Cede & Co., as nominee for The Depository Trust Company ("DTC"), with
CUSIP numbers printed thereon, and shall conform in all respects to DTC's
Book-Entry-Only System. Delivery of the Bonds will be made at the office of DTC
in New York, New York, unless DTC's "FAST" program is employed, in which case
the delivery of the Bonds will be made at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, LLC, bond counsel (or such other location as is acceptable to the
Underwriter). If the Underwriter so requests, the Bonds shall be made available
to the Underwriter (prior to their delivery to DTC) in Philadelphia,
Pennsylvania at least three full business day before the Closing for purposes of
inspection.
The Underwriter agrees to make a bona fide public offering of the Bonds
at the initial offering prices or yields set forth in the Official Statement;
provided, however, that the Underwriter reserves the right (and the Authority
and the Company hereby expressly acknowledge such right): (i) to make
concessions to dealers; (ii) to effect transactions that stabilize or maintain
the market price of the Bonds above that which might otherwise prevail in the
open market and to discontinue at any time such stabilizing transactions; and
(iii) to change such initial offering prices, all as the Underwriter shall deem
necessary in connection with the marketing of the Bonds.
3. Authority's Representations and Warranties. The Authority
makes the following representations and warranties, all of which shall survive
Closing; that:
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(a) The Authority is a body politic and corporate, duly
created and existing under the Constitution and laws of the Commonwealth of
Pennsylvania (the "Commonwealth"), and has, and at the date of Closing will
have, full legal right, power and authority to: (i) enter into this Bond
Purchase Agreement; (ii) execute and deliver the Bonds, the Trust Indenture, the
Financing Agreement, this Bond Purchase Agreement and the Authority's tax
certificate and the other various documents and certificates executed by the
Authority in connection therewith (collectively, the "Authority Financing
Documents"); (iii) issue, sell and deliver the Bonds to the Underwriter as
provided herein; and (iv) carry out and consummate the transactions contemplated
by the Authority Financing Documents and the Official Statement to be carried
out and/or consummated by it;
(b) The sections entitled "INTRODUCTORY STATEMENT," "ABSENCE
OF MATERIAL LITIGATION" (insofar as each such section relates to the Authority)
and "THE AUTHORITY" contained in the Preliminary Official Statement as of its
date did not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements contained therein, in the light of the circumstances under which
they were made, not misleading;
(c) The sections entitled "THE AUTHORITY" and "ABSENCE OF
MATERIAL LITIGATION" (insofar as it relates to the Authority) contained in the
Official Statement as of its date does not or will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements contained therein,
in the light of the circumstances under which they were made, not misleading;
(d) The Authority has complied, and will at the Closing be in
compliance, in all material respects with the provisions of the Act;
(e) To the extent required by law, the Authority has duly
authorized and approved the Preliminary Official Statement and the Official
Statement; and has duly authorized and approved the execution and delivery of,
and the performance by the Authority of the obligations on its part contained
in, the Authority Financing Documents;
(f) To the best of the knowledge of the officer of the
Authority executing this Bond Purchase Agreement, the Authority is not in
material breach of or in default under any applicable law or administrative
regulation of the Commonwealth or the United States; and the execution and
delivery of the Authority Financing Documents, and compliance with the
provisions of each thereof, do not and will not conflict with or constitute a
breach of or default under any existing law, administrative regulation,
judgment, decree, loan agreement, note, resolution, agreement or other
instrument to which the Authority is a party or is otherwise subject;
(g) Except as previously disclosed to the Company and the
Underwriter, the Authority is not now in default, and has not at any time been
in default, as to principal or interest on any obligation issued or guarantee by
the Authority;
(h) All approvals, consents and orders of any governmental
authority, board, agency or commission having jurisdiction which would
constitute a condition precedent to the
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Authority's legal ability to issue the Bonds or to the Authority's performance
of its obligations hereunder and under the Authority Financing Documents have
been obtained or will be obtained prior to the Closing;
(i) The Bonds, when issued, authenticated and delivered in
accordance with the Trust Indenture and sold to the Underwriter as provided
herein, will be validly issued and will be valid and binding limited obligations
of the Authority enforceable against the Authority in accordance with their
terms (except as an enforcement of remedies may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws or legal or equitable
principles affecting the enforcement of creditors' rights ("Creditors' Rights
Limitations"));
(j) The terms and provisions of the Authority Financing
Documents when executed and delivered by the respective parties thereto will
constitute the valid, legal and binding obligations of the Authority enforceable
against the Authority in accordance with their respective terms (except as
enforcement of remedies may be limited by Creditors' Rights Limitations);
(k) There is no action, suit, proceeding, inquiry or
investigation, at law or in equity, before or by any court, or public board or
body, pending or, to the knowledge of the Authority after due inquiry,
threatened against the Authority, affecting the existence of the Authority or
the titles of its officers to their respective offices or seeking to prohibit,
restrain or enjoin the sale, issuance or delivery of the Bonds or of the
revenues or assets of the Authority pledged or to be pledged to pay the
principal of and interest on the Bonds, or the pledge thereof, or in any way
contesting or affecting the validity or enforceability of the Authority
Financing Documents or contesting in any way the completeness or accuracy of the
Preliminary Official Statement or the Official Statement, or contesting the
power or authority of the Authority with respect to the issuance of the Bonds or
the execution, delivery or performance of any of the Authority Financing
Documents, or wherein an unfavorable decision, ruling or finding would affect in
any way the validity or enforceability of any of the Authority Financing
Documents;
(l) The net proceeds received from the Bonds and applied in
accordance with the Trust Indenture and Financing Agreement shall be used in
accordance with the Act as described in the Official Statement;
(m) The Authority has not been notified of any listing or
proposed listing by the Internal Revenue Service to the effect that the
Authority is a bond issuer whose arbitrage certifications may not be relied
upon; and
(n) Any certificate signed by any of the authorized officers
of the Authority and delivered to the Underwriter shall be deemed a
representation and warranty by the Authority to the Underwriter as to the
statements made therein.
4. Company's Representations and Warranties. The Company makes
the following representations and warranties, all of which will survive the
Closing:
(a) The Company has not sustained since December 31, 2001 any
material loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree; and since the respective dates
as of which information is given in the Official Statement, there
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have not been any material changes in the outstanding capital stock or the
long-term debt of the Company or any material adverse change, or a development
involving a prospective material adverse change, in or affecting the general
affairs, management, financial position, stockholders' equity or results of
operations of the Company, otherwise than as set forth or contemplated in the
Official Statement;
(b) The Company was organized, is in good standing and
subsists as a corporation under the laws of the Commonwealth, with power
(corporate and other) to own its properties and conduct its business as
described in the Official Statement;
(c) The First Mortgage Bond has been duly authorized; and,
when issued and delivered as contemplated by this Bond Purchase Agreement, will
have been duly executed, authenticated, issued and delivered and will constitute
a valid and legally binding obligation of the Company entitled to the benefits
provided by the Mortgage;
(d) The Original Indenture has been duly authorized, executed
and delivered by the Company and the Mortgage Trustee, and the Thirty-Sixth
Supplemental Mortgage has been duly authorized. When the Thirty-Sixth
Supplemental Mortgage, in substantially the form approved by the Company, has
been executed and delivered by the Company and the Mortgage Trustee and recorded
as required by law, the Mortgage (i) will constitute a valid and legally binding
instrument enforceable in accordance with its terms except as enforceability may
be limited by Creditors' Rights Limitations; and (ii) will constitute a direct,
valid and enforceable first mortgage lien (except as enforceability of such lien
may be limited by Creditors' Rights Limitations) upon all of the properties and
assets of the Company (not heretofore released as provided for in the Mortgage)
specifically or generally described or referred to in the Mortgage as being
subject to the lien thereof, excepting permitted liens under the Mortgage and
excepting property and assets that the Mortgage expressly excludes from the lien
thereof, and will create a similar lien upon all properties and assets acquired
by the Company after the execution and delivery of the Thirty-Sixth Supplemental
Mortgage and required to be subjected to the lien of the Mortgage pursuant
thereto when so acquired, except for permitted liens under the Mortgage; the
Original Indenture has been, and the Thirty-Sixth Supplemental Mortgage will be,
duly filed, recorded or registered in each place in the Commonwealth in which
such filing, recording or registration was or is required to protect and
preserve the lien of the Mortgage; and all necessary approvals of regulatory
authorities, commissions and other governmental bodies having jurisdiction over
the Company required to subject the mortgaged properties and assets or trust
estate (as defined in the Mortgage) to the lien of the Mortgage have been duly
obtained;
(e) In each of the following cases with such exceptions as are
not material and do not interfere with the conduct of the business of the
Company, the Company has good and marketable title to all of its real property
currently held in fee simple; good and marketable title to all of its other
interests in real property (other than certain rights of way, easements,
occupancy rights, riparian and flowage rights, licenses, leaseholds, and real
property interests of a similar nature); and good and marketable title to all
personal property owned by it; in each case free and clear of all liens,
encumbrances and defects except such as may be described in the Official
Statement, the lien of the Mortgage, permitted liens under the Mortgage or such
as do not materially affect the value of such property and do not interfere with
the use made and proposed to be made of such property by the Company; and any
real property and buildings held under lease by the Company are held by it under
valid, subsisting and enforceable leases with
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such exceptions as are not material and do not interfere with the use made and
proposed to be made of such property and buildings by the Company;
(f) In each of the following cases except for such exceptions
which are not material and do not interfere with the conduct of the business of
the Company, the Company has all licenses, franchises, permits, authorizations,
rights, approvals, consents and orders of all governmental authorities or
agencies necessary for the ownership or lease of the properties owned or leased
by it and for the operation of the business carried on by it as described in the
Official Statement, and all water rights, riparian rights, easements, rights of
way and other similar interests and rights described or referred to in the
Mortgage necessary for the operation of the business carried on by it as
described in the Official Statement; except as otherwise set forth in the
Official Statement, all such licenses, franchises, permits, orders,
authorizations, rights, approvals and consents are in full force and effect and
contain no unduly burdensome provisions; except as otherwise set forth in the
Official Statement, there are no legal or governmental proceedings pending or,
to its knowledge after due inquiry, threatened that would result in a material
modification, suspension or revocation thereof; and the Company has the legal
power to exercise the rights of eminent domain for the purposes of conducting
its water utility operations;
(g) The issue and delivery of the First Mortgage Bond and the
compliance by the Company with all of the applicable provisions of the First
Mortgage Bond and the Mortgage and the execution, delivery and performance by
the Company of the Thirty-Sixth Supplemental Mortgage, the Financing Agreement,
this Bond Purchase Agreement and the Continuing Disclosure Agreement
(hereinafter defined) will not conflict with or result in a breach of any of the
terms or provisions of, or constitute a default under, or result in the creation
or imposition of any lien, charge or encumbrance (other than the lien of the
Mortgage) upon any of the property or assets of the Company pursuant to the
terms of any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company is a party or by which the Company
is bound or to which any of the property or assets of the Company are subject,
nor will such action result in a violation of the provisions of the Articles of
Incorporation, as amended, or the Bylaws of the Company or any statute or any
order, rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its property; and no consent, approval,
authorization, order, registration or qualification of or with any court or any
such regulatory authority or other governmental body (other than those already
obtained) is required for the issue and delivery of the First Mortgage Bond; the
execution, delivery and performance by the Company of this Bond Purchase
Agreement, the Financing Agreement, the Thirty-Sixth Supplemental Mortgage, the
First Mortgage Bond and the Continuing Disclosure Agreement, or the consummation
by the Company of the other transactions contemplated by this Bond Purchase
Agreement or the Mortgage;
(h) The Pennsylvania Public Utility Commission by order has
duly authorized the issuance and delivery of the First Mortgage Bond on terms
not inconsistent with this Bond Purchase Agreement;
(i) The Company is not a holding company, a registered holding
company or an affiliate of a registered holding company within the meaning of
the Public Utility Holding Company Act of 1935, as amended;
(j) There are no legal or governmental proceedings pending to
which the Company is a party or to which any property of the Company is subject,
other than as set forth in
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the Official Statement and other than litigation incident to the kind of
business conducted by the Company, wherein an unfavorable ruling, decision or
finding is likely that would have a material adverse effect on the financial
position, stockholders' equity or results of operations of the Company; and, to
the best of the Company's knowledge after due, no such proceedings are
threatened by governmental authorities or threatened by others;
(k) (i) The Project consists of either land or property of a
character subject to the allowance for depreciation for federal income tax
purposes and will be used to furnish water that is or will be made available to
members of the general public (including electric utility, industrial,
agricultural, or commercial users); (ii) the rates for the furnishing or sale of
the water have been established or approved by a State or political subdivision
thereof, by an agency or instrumentality of the United States, or by a public
service or public utility commission or other similar body of any State or
political subdivision thereof; and (iii) all other information supplied by the
Company to the Underwriter with respect to the exclusion from gross income
pursuant to Section 103 of the Code of the interest on the Bonds is correct and
complete;
(l) The Company has not, within the immediately preceding ten
(10) years, defaulted in the payment of principal or interest on any of its
bonds, notes or other securities, or any legally authorized obligation issued by
it; and
(m) The information with respect to the Company and the
Project contained in the Preliminary Official Statement and the Official
Statement (including appendices A and B thereto) do not contain an untrue
statement of a material fact or omit to state a material fact necessary to make
such information and descriptions, in the light of the circumstances under which
they were made, not misleading.
5. Authority's Covenants. The Authority will:
(a) furnish such information, execute such instruments and
take such other action in cooperation with the Underwriter as the Underwriter
may reasonably request to qualify the Bonds for offer and sale under the Blue
Sky or other securities laws and regulations of such states and other
jurisdictions in the United States of America as the Underwriter may designate
and will assist, if necessary therefor, in the continuance of such
qualifications in effect so long as required for distribution of the Bonds;
provided, however, that the Authority shall in no event be required to file a
general consent to suit or service of process or to qualify as a foreign
corporation or as a dealer in securities in any such state or other
jurisdiction;
(b) not, on its part, amend or supplement the Official
Statement without prior notice to and the consent of the Underwriter and the
Company and will advise the Underwriter and the Company promptly of the
institution of any proceedings by any governmental agency or otherwise affecting
the use of the Official Statement in connection with the offer and sale of the
Bonds; and
(c) refrain from knowingly taking any action (and permitting
any action with regard to which the Authority may exercise control) which would
result in the loss of the exclusion from gross income for federal income tax
purposes of interest on the Bonds referred to under the caption "TAX MATTERS" in
the Official Statement.
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6. Company's Covenants. The Company agrees that it will:
(a) refrain from knowingly taking any actions (and from
permitting any action with regard to which the Company may exercise control)
that would result in the loss of the exclusion from gross income for federal tax
purposes of interest on the Bonds referred to under the caption "TAX MATTERS" in
the Official Statement;
(b) indemnify and hold harmless the Authority, its members,
directors, officers, agents, attorneys, and employees and the Underwriter, its
officers, directors, officials, agents, attorneys, employees, and each person,
if any, who controls the Underwriter within the meaning of Section 15 of the
1933 Act or Section 20 of the Securities Exchange Act of 1934, as amended (the
"1934 Act"), from and against all losses, claims, damages, liabilities and
expenses, joint or several, to which the Authority and the Underwriter, or
either of them, or any of their respective members, directors, officers, agents,
attorneys, and employees and each person, if any, who controls the Underwriter
within the meaning of the 1933 Act or 1934 Act as aforedescribed may become
subject, under federal laws or regulations, or otherwise, insofar as such
losses, claims, damages, liabilities and expenses (or actions in respect
thereof) arise out of or are based upon: (i) a breach of the Company's
representations included in this Agreement; (ii) any untrue statement or alleged
untrue statement of any material fact pertaining to the Project, the Company,
the First Mortgage Bond or any document delivered by the Company in connection
with the issuance of the Bonds set forth in the Official Statement, the
Preliminary Official Statement or any amendment to either, or (iii) the willful
or negligent omission of (or the alleged omission to state) a material fact in
the Official Statement or in the Preliminary Official Statement, or in any
amendment or supplement to either, as such fact is required to be stated therein
or necessary to make the statements therein which pertain to the Company, the
Project, the Bonds or any document delivered by the Company in connection with
the issuance of the First Mortgage Bond not misleading in the light of the
circumstances under which they were made, or (iv) arising by virtue of the
failure to register the Bonds under the 1933 Act or the failure to qualify the
Indenture under the 1939 Act;
(c) undertake, pursuant to the Continuing Disclosure Agreement
dated June 1, 2002 to be entered into between the Company and the Trustee (the
"Continuing Disclosure Agreement"), to provide annual reports and notices of
certain material events in accordance with Rule 15c2-12 under the 1934 Act, as
amended ("Rule 15c2-12"). A description of this undertaking and the Continuing
Disclosure Agreement is set forth in the Preliminary Official Statement and will
also be set forth in the Official Statement;
(d) not amend or supplement the Official Statement without
prior notice to, and the consent of, the Underwriter, and will advise the
Underwriter and the Authority promptly of the institution of any proceedings by
any governmental agency or otherwise affecting the use of the Official Statement
in connection with the offer and the sale of the Bonds; and
(e) Concurrently with the Authority's and the Company's
acceptance hereof, and as a condition to the obligation of the Underwriter
hereunder, (a) the Company will deliver or cause to be delivered to the
Underwriter a letter or letters from PricewaterhouseCoopers, LLP, dated a date
not more than seven days prior to the date of this Bond Purchase Contract,
containing the results of the performance of certain agreed upon procedures and
consenting to the use of the Company's audited financial statements prepared by
PricewaterhouseCoopers, LLP, in the Preliminary Official Statement and the
Official Statement.
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7. Underwriter's Covenant. By acceptance hereof the Underwriter agrees
to indemnify and hold harmless the Authority, its members, directors, officers,
agents, attorneys, and employees and the Company, its officers, directors,
agents, attorneys, and employees and each person if any, who controls the
Company within the meaning of Section 15 of the 1933 Act against all or several
claims, losses, damages, liabilities and expenses asserted against them, or any
of them, at law or in equity, in connection with (i) the offering and sale of
the Bonds on the grounds that the information under the caption "UNDERWRITING"
in the Preliminary Statement or the Official Statement (or any supplement or
amendment to said information) contains an untrue or allegedly untrue statement
of a material fact or omits or allegedly omits to state any material fact
necessary to make the statements therein not misleading in the light of the
circumstances under which they were made (it being understood that the
Underwriters furnished only the information under such "UNDERWRITING" heading),
or (ii) failure on the part of the Underwriter to deliver an Official Statement
to any purchaser; and will reimburse any legal or other expenses reasonably
incurred by a party, person or entity indemnifiable under this Section 7 in
connection with investigating or defending any such loss, claim, damage,
liability or action. This indemnity agreement will be in addition to any
liability which the Underwriter may otherwise have. The Underwriter shall not be
liable for any settlement of any such action effected without its consent.
8. Notice of Indemnification; Settlement. Promptly after a party,
person or entity indemnifiable under Section 6 or 7 of this Bond Purchase
Agreement (an "Indemnitee") receives notice of the commencement of any action
against such Indemnitee in respect of which indemnity is to be sought by the
Indemnitee against the Company or the Underwriter, as the case may be (the
"Indemnifying Party"), the Indemnitee will notify the Indemnifying Party in
writing of such action and the Indemnifying Party may assume the defense
thereof, including the employment of counsel and the payment of all expenses;
but the omission so to notify the Indemnifying Party will not relieve the
Indemnifying Party from any liability which it may have to the Indemnitee
otherwise than hereunder. The Indemnifying Party shall not be liable for any
settlement of any such action effected without its consent, but if settled with
the consent of the Indemnifying Party or if there is a final judgment for the
plaintiff in any such action, the Indemnifying Party will indemnify and hold
harmless the Indemnitee from and against any loss or liability by reason of such
settlement or judgment. The indemnity agreements contained in this Bond Purchase
Agreement shall include reimbursement for expenses reasonably incurred by an
Indemnitee in investigating the claim and in defending it if the Indemnifying
Party declines to assume the defense and shall survive delivery of the Bonds.
9. Equitable Contribution. If the indemnification provided for in
Section 6(b) of this Bond Purchase Agreement is unavailable to the Underwriter
(or any controlling person thereof) in respect of any losses, claims, damages or
liabilities referred to therein, then the Company shall, in lieu of indemnifying
the Underwriter, contribute to the amount paid or payable by the Underwriter as
a result of such losses, claims, damages or liabilities in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Underwriter, respectively, from the offering of the Bonds. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law, then the Company shall contribute to such amount paid or payable
by the Underwriter in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company and the
Underwriter, respectively, in connection with the statements or omission which
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable
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considerations. The relative benefit received by the Company or the Underwriter
shall be deemed to be in the same proportion as the total proceeds from the
offering (before deducting issuance costs and expenses other than underwriting
fees and commissions) received by the Company, on the one hand, bear to the
total underwriting fees and commissions received by the Underwriter, on the
other hand. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact related to information
supplied by the Company or the Underwriter and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriter agree that it would not
be just and equitable if contribution pursuant to this Section 9 were determined
by pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to above in this Section 9. The
amount paid or payable by the Underwriter as a result of the losses, claims,
damages or liabilities referred to above in this Section 9 shall be deemed to
include any reasonable legal or other expenses reasonably incurred by the
Underwriter in connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this Section 9, the Underwriter shall
not be required to contribute any amount in excess of the amount by which the
total price at which the Bonds underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which the
Underwriter has otherwise been required to pay by reason of such untrue or
allegedly untrue statement or omission or alleged omission.
10. Official Statement; Public Offering.
(a) In order to enable the Underwriter to comply with Rule
15c2-12: (i) the Company has prepared (or caused to be prepared) the Preliminary
Official Statement, which the Company and the Authority (but, in the case of the
Authority, only with respect to the information therein under the headings "THE
AUTHORITY" and, insofar as they relate to the Authority, "INTRODUCTORY
STATEMENT" and "ABSENCE OF MATERIAL LITIGATION") deem final and complete as of
its date; (ii) the Company shall provide to the Underwriter sufficient copies of
the Official Statement in sufficient time to accompany any confirmation that
requires payment from any customer and in any event within seven business days
after the date of this Bond Purchase Agreement; and (iii) if any event of which
the Company has or gains knowledge would render the Official Statement
misleading in any material respect in the period from the date of its delivery
to the Underwriter by the Company (as that phrase is defined in Rule 15c2-12)
then the Company shall promptly give the Underwriter notice thereof. The
Authority and the Company hereby authorize the use of the Preliminary Official
Statement and the Official Statement by the Underwriter in connection with the
offering of the Bonds.
(b) After the Closing, and until the Underwriter has informed
the Authority and the Company that the Underwriter has sold all the Bonds, the
Authority and the Company will not adopt or distribute any amendment of or
supplement to the Official Statement, except with the prior written consent of
the Underwriter; and if any event relating to or affecting the Authority, the
Company or the Bonds shall occur, the result of which shall make it necessary,
in the opinion of the Underwriter, to amend or supplement the Official Statement
in order to make it not misleading in the light of the circumstances existing at
that time, the Company shall forthwith prepare, and the Company and the
Authority shall approve for distribution, a reasonable number of copies of an
amendment of or supplement to the Official Statement, in form and substance
reasonably satisfactory to the Underwriter, so that the Official Statement
10
then will not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances existing at that time, not misleading. The Authority shall
cooperate with the Company in the issuance and distribution of any such
amendment or supplement.
(c) At or before Closing, the Underwriter shall promptly
provide a Nationally Recognized Municipal Securities Information Repository
("NRMSIR") and the Municipal Securities Rulemaking Board ("MSRB") with a copy of
the Official Statement for filing in accordance with Rule 15c2-12 and will
inform the Authority and the Company in writing as to (i) the date and place of
such filing and (ii) the date of the end of the underwriting period.
11. Conditions of Underwriter's and Authority's Obligations. The
Underwriter's obligations to purchase and pay for the Bonds and the Authority's
obligation to issue and deliver the Bonds are subject to fulfillment of the
following conditions at or before Closing:
(a) The representations of the Authority and the Company
herein shall be true in all material respects on and as of the date of the
Closing and shall be confirmed by appropriate certificates at Closing;
(b) Neither the Authority nor the Company shall be in default
in the performance of any of their respective covenants herein;
(c) The Underwriter shall have received:
(i) Opinions of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLC,
Bond Counsel, dated the date of Closing, substantially in the forms
attached as Appendix D to the Preliminary Official Statement and
Exhibit A hereto, addressed to (or with reliance letters delivered in
respect of) the Authority and the Underwriter;
(ii) An opinion of ▇▇▇▇▇▇, ▇▇▇▇▇▇ & Mandio, counsel
for the Authority, dated the date of Closing, with respect to the
matters set forth in Exhibit B hereto, addressed to the Underwriter and
in form and substance reasonably satisfactory to the Underwriter and
Bond Counsel;
(iii) Opinions of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ LLP, counsel to the
Company, and the Company's general counsel, dated the date of Closing,
with respect to the matters set forth in Exhibit C hereto, addressed to
the Underwriter, the Authority and Bond Counsel, in form and substance
reasonably satisfactory to the Underwriter and to Bond Counsel;
(iv) An opinion of ▇▇▇▇ ▇▇▇▇▇ LLP, counsel for the
Underwriter, in form and substance reasonably satisfactory to the
Underwriter;
(v) An opinion of legal counsel to the Financial
Guaranty Insurance Company (the "Bond Insurer") in form and substance
satisfactory to the Underwriter, relating to the enforceability of a
municipal bond insurance policy from the Bond Insurer (the "Insurance
Policy") and the information concerning the Bond Insurer in the
Official Statement;
11
(vi) A certificate dated the date of Closing executed
by an authorized officer of the Authority to the effect that:
(A) the representations and warranties of
the Authority contained herein, to the best of the knowledge
of such officer, are true and correct in all material respects
as of the date of Closing; and
(B) to the best of the knowledge of such
officer, the Authority has complied in all material respects
with all agreements executed by the Authority in connection
with issuance of the Bonds and satisfied in all material
respects the Authority's covenants contained in Section 5
herein and all of the conditions on its part to be performed
or satisfied at or prior to the Closing;
(vii) A certificate dated the date of Closing
executed by the chief financial officer of the Company to the effect
that:
(A) the representations and warranties of
the Company in this Bond Purchase Agreement are true and
correct in all material respects as of the date of Closing;
(B) the Preliminary Official Statement and
the Official Statement, as of their respective dates, insofar
as they relate to the Company, do not contain any untrue
statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the
statements therein, under the circumstances in which they were
made, not misleading in any respect; and
(C) no event affecting the Company has
occurred since the date of the Bond Purchase Agreement which
is required to be disclosed in the Official Statement in order
to make the statements and information therein not misleading
in any material respect;
(viii) Two executed copies of the Trust Indenture,
the Financing Agreement, the Bond Purchase Agreement, the Thirty-Sixth
Supplemental Mortgage and the Continuing Disclosure Agreement;
(ix) Two copies of the Articles of Incorporation and
Bylaws of the Company, as amended to the date of Closing, and of the
resolutions of the Board of Directors of the Company authorizing and
approving the execution and delivery of this Bond Purchase Agreement,
the Financing Agreement, the First Mortgage Bond, the Thirty-Sixth
Supplemental Mortgage, the Continuing Disclosure Agreement and the
incurrence of indebtedness with respect thereto and all transactions
described in the Official Statement and contemplated by this Bond
Purchase Agreement, all certified by its Secretary or Assistant
Secretary;
(x) Two copies of the Authority Resolution, a copy of
the Articles of Incorporation of the Authority certified by the
Secretary of the Commonwealth, a copy of the Bylaws of the Authority
certified by its Secretary, and a subsistence certificate from
12
the Secretary of the Commonwealth, dated as of a date within ten (10)
days prior to the Closing Date;
(xi) Letters from PricewaterhouseCoopers, LLP,
consenting to the use of the financial statements prepared by such firm
and all references to such firm contained in the Preliminary Official
Statement and the Official Statement;
(xii) Evidence of the issuance of the Insurance
Policy by the Bond Insurer, which policy shall unconditionally and
irrevocably guarantee the payment when due of the principal of and
interest on the Bonds;
(xiii) Evidence satisfactory to the Underwriter that
a rating of "AAA" assigned by Standard & Poor's with respect to the
Bonds based upon the Insurance Policy and that an underlying rating of
"AA-" for the Company are in full force and effect as of the date of
Closing;
(xiv) Evidence satisfactory to Bond Counsel and the
Underwriter of the receipt by the Authority of a Preliminary Allocation
relating to the Bonds from the Pennsylvania Department of Community and
Economic Development and of the registration of a Securities
Certificate relating to the First Mortgage Bond and the Bonds with the
Pennsylvania Public Utility Commission;
(xv) a subsistence certificate with respect to the
Company from the Secretary of the Commonwealth, dated as of a date
within ten (10) days prior to the Closing Date; and
(xvi) Such additional documentation as the
Underwriter or its counsel or Bond Counsel may reasonably request to
evidence compliance with applicable law and the validity of the Bonds,
the Financing Agreement, the Trust Indenture, this Bond Purchase
Agreement, the Mortgage, the First Mortgage Bond and the Continuing
Disclosure Agreement, and to evidence that the interest on the Bonds is
not includable in gross income under the Code and the status of the
offering under the 1933 Act and the 1939 Act.
(d) At Closing there shall not have been any material adverse
change in the financial condition of the Company or any adverse development
concerning the business or assets of the Company which would result in a
material adverse change in the prospective financial condition or results of
operations of the Company from that described in the Official Statement which,
in the judgment of the Underwriter, makes it inadvisable to proceed with the
sale of the Bonds; and the Underwriter shall have received certificates of the
Company certifying that no such material adverse change has occurred or, if such
a change has occurred, full information with respect thereto; and
(e) The Underwriter shall deliver at Closing a certificate in
form acceptable to Bond Counsel to the effect that the Underwriter has sold to
the public (excluding bond houses and brokers) a substantial amount of the Bonds
at (at least 10% of each maturity) initial offering prices no higher than, or
yields no lower than, those shown on the cover page of the Official Statement
and that such certificate may be relied upon for purposes of determining
compliance with Section 148 of the Code.
13
12. Events Permitting the Underwriter to Terminate. The
Underwriter may terminate its obligation to purchase the Bonds at any time
before Closing if any of the following occurs:
(a) A legislative, executive or regulatory action or proposed
action, or a court decision, which, in the reasonable judgment of the
Underwriter, casts sufficient doubt on the legality of, or the exclusion from
gross income for federal income tax purposes of interest on, obligations such as
the Bonds so as to materially impair the marketability or materially lower the
market price of the Bonds; or
(b) Any action by the Securities and Exchange Commission or a
court which would require registration of the Bonds or the First Mortgage Bond
under the 1933 Act or qualification of the Indenture under the 1939 Act; or
(c) Any general suspension of trading in securities on the New
York Stock Exchange or the establishment, by the New York Stock Exchange, by the
Securities and Exchange Commission, by any federal or state agency, or by the
decision of any court, of any limitation on prices for such trading, or any
outbreak of hostilities or other national or international calamity or crisis,
or any material escalation in any such hostilities, calamity or crisis, the
effect of which on the financial markets of the United States of America shall
be such as to materially impair the marketability or materially lower the market
price of the Bonds; or
(d) Any event or condition occurring or arising after the date
hereof which, in the reasonable judgment of the Underwriter, renders untrue or
incorrect, in any material respect as of the time to which the same purports to
relate, the information contained in the Official Statement, or which requires
that information not reflected in the Official Statement or Appendices thereto
should be reflected therein in order to make the statements and information
contained therein not misleading in any material respect as of such time;
provided that the Authority, the Company and the Underwriter will use their best
efforts to amend or supplement the Official Statement to reflect, to the
reasonable satisfaction of the Underwriter, such changes in or additions to the
information contained in the Official Statement; or
(e) Pending or threatened litigation affecting or arising out
of the ownership of the Project or any other facilities of the Company or the
issuance of the Bonds which in the reasonable judgment of the Underwriter would
materially impair the marketability or materially lower the market price of the
Bonds; or
(f) quantities of the Official Statement are not delivered to
the Underwriter in a timely manner as required by Section 10 hereof.
If the Underwriter terminates its obligation to purchase the Bonds
because any of the conditions specified in Section 11 hereof or this Section 12
shall not have been fulfilled at or before the Closing, such termination shall
not result in any liability on the part of the Authority, the Underwriter, or,
except for the payment of such costs of issuance described in Section 13 hereof
which are due and payable, the Company.
13. Expenses. All expenses and costs of the authorization,
issuance, sale and delivery of the Bonds including, without limitation, the
preparation of and furnishing to the Underwriter
14
of the Preliminary Official Statement and the Official Statement, the
preparation and execution of the Bonds, the Financing Agreement, the Trust
Indenture, the First Mortgage Bond, the Thirty-Sixth Supplemental Mortgage and
this Bond Purchase Agreement, the Insurance Policy premium, rating agency fees,
the issuance and closing fees of the Authority, the fees and disbursements of
counsel to the Authority, the fees and disbursements of Bond Counsel, the fees
and disbursements of counsel to the Underwriter and the expenses incurred in
connection with qualifying the Bonds for sale under the securities laws of
various jurisdictions and preparing Blue Sky and legal investment memoranda,
shall be paid by the Company. The Authority shall bear no out-of-pocket expense
in connection with the transactions contemplated by this Bond Purchase
Agreement. The Underwriter will pay all other expenses of the Underwriter in
connection with the public offering of the Bonds.
14. Execution in Counterparts. This Bond Purchase Agreement
may be executed in any number of counterparts, all of which taken together shall
constitute one and the same instrument, and any of the parties hereto may
execute this Bond Purchase Agreement by signing any such counterpart.
15. Notices and Other Actions. All notices, requests, demands
and formal actions hereunder will be in writing mailed, faxed (with confirmation
of receipt) or delivered by nationally recognized, next-day delivery service to:
The Underwriter:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ LLC
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇.
First Vice President
Fax #: (▇▇▇) ▇▇▇-▇▇▇▇
The Company:
Philadelphia Suburban Company
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇, Esq.,
Vice President, Treasurer & Rate Counsel
Fax #: (▇▇▇) ▇▇▇-▇▇▇▇
The Authority:
Bucks County Industrial Development Authority
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Executive Director
15
Fax #: (▇▇▇) ▇▇▇-▇▇▇▇
16. Governing Law. This Bond Purchase Agreement shall be
governed by and construed in accordance with the laws of the Commonwealth of
Pennsylvania, excluding those relating to choice of laws or conflict of laws,
and may not be assigned by the Authority, the Company or the Underwriter.
17. Successors. This Bond Purchase Agreement will inure to the
benefit of and be binding upon the parties and their respective successors and,
as to Sections 6, 7 and 8 hereof, the Indemnitees, and will not confer any
rights upon any other person. The term "successor" shall not include any holder
of any Bonds merely by virtue of such holding.
18. Limitations on Liability. No personal recourse shall be
had for any claim based on this Bond Purchase Agreement or the Bonds against any
board member, officer, agent, employee, or attorney past, present or future, of
the Authority or any successor body as such, either directly or through the
Authority or any successor body, under any constitutional provision, statute, or
rule of law or by enforcement of any assessment or penalty or otherwise.
Notwithstanding any provision or obligation to the contrary in this Bond
Purchase Agreement, the liability of the Authority for payments of any kind,
nature or description provided for herein or in any other document executed
pursuant hereto shall be limited to the revenues derived by the Authority from
the Financing Agreement and the First Mortgage Bond.
16
IN WITNESS WHEREOF, the Authority, the Company and the Underwriter have
caused their duly authorized representatives to execute and deliver this Bond
Purchase Agreement as of the date first written above.
BUCKS COUNTY INDUSTRIAL
DEVELOPMENT AUTHORITY
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------------
Chairman
PENNSYLVANIA SUBURBAN WATER
COMPANY
By: ▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------------------
Vice President, Treasurer & Rate Counsel
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ LLC
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇.
-----------------------------------------------
First Vice President
17
SCHEDULE I
Terms of Bonds
Principal Amount: $25,000,000
Dated Date: June 1, 2002
Maturity Date: September 1, 2032
Interest Payment Dates: March 1 and September 1, commencing September 1, 2002
Rate of Interest: 5.55%
Redemption provisions:
The Bonds are subject to redemption as follows:
Optional Redemption. The Bonds are subject to redemption prior to
maturity by the Authority, at the direction of the Company, on or after March 1,
2012, as a whole or in part at any time, at the redemption price of 100% of
principal amount redeemed, plus interest accrued to the date fixed for
redemption.
Extraordinary Optional Redemption. The Bonds are subject to redemption
by the Authority at the direction of the Company as a whole at any time prior to
maturity at a redemption price of 100% of the principal amount thereof plus
accrued interest to the redemption date upon the occurrence of the following
events:
(a) the Facilities are partially or totally damaged or
destroyed by fire or other casualty and (1) the Company fails to make
any determination within sixty (60) days after such damage or
destruction, as to the restoration of the Facilities; (2) the Company
determines within sixty (60) days after such damage or destruction that
satisfactory restoration of the Facilities may not be made; or (3)
after having made the determination to make such repair or restoration
as permitted by the Agreement, the Company fails to proceed promptly
with such restoration; or
(b) all or substantially all of the Facilities are taken or
condemned as a whole by a public body in the exercise of its power of
eminent domain, or any portion of the Facilities are so taken or
condemned and the Company determines that the remaining portion of the
Facilities is unsuitable for the Company's business; or
(c) if changes in the economic availability of raw materials,
operating supplies, labor or facilities necessary for the operation of
the Facilities or the water supply and distribution system of which
they are part as an efficient facility, or technological or other
changes shall have occurred which, in the Company's opinion, render the
Facilities or such system uneconomical for their intended purposes.
EXHIBIT A
June 5, ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, LLC First American Municipals, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Financial Guaranty Insurance Pennsylvania Suburban Water
Company Company
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: $25,000,000, Bucks County Industrial Development Authority, Water
Facilities Revenue Bonds, (Pennsylvania Suburban Water Company
Project), Series of 2002
------------------------------------------------------------------
Ladies and Gentlemen:
We have acted as Bond Counsel in connection with the issuance by the
Bucks County Industrial Development Authority (the "Authority") of $25,000,000,
aggregate principal amount of its Water Facilities Revenue Bonds (Pennsylvania
Suburban Water Company Project) Series of 2002 (the "Bonds) pursuant to the
provisions of a Trust Indenture dated as of June 1, 2002 (the "Indenture"),
between the Authority and Wachovia Bank, National Association, as Trustee.
This opinion is being rendered pursuant to the Bond Purchase Agreement,
dated May 21, 2002 relating to the Bonds (the "Bond Purchase Agreement"), and
supplements our opinion as Bond Counsel delivered concurrently herewith.
The terms used herein, which are defined in the Bond Purchase Agreement
and the Indenture, are used in this opinion with the same meaning as so defined.
Based on the foregoing, we are of the opinion that:
(a) the Bond Purchase Agreement has been duly authorized, executed
and delivered by the Authority;
(b) the execution and delivery of the Official Statement has been
duly authorized by the Authority;
(c) the offer and sale of the Bonds do not require registration of
the Bonds pursuant to the Securities Act of 1933, as amended, and the Indenture
is not required to be qualified pursuant to the Trust Indenture Act of 1939, as
amended; and
(d) the information and statements contained in the Official
Statement under the sections captioned "INTRODUCTORY STATEMENT - General",
"INTRODUCTORY STATEMENT - Description of the Bonds", "INTRODUCTORY STATEMENT -
Security for the Bonds", "THE
BONDS" (except for the subpart entitled "Book Entry-Only System" as to which no
opinion is expressed), "SECURITY FOR THE BONDS - Limited Obligations", "SECURITY
FOR THE BONDS - Assignment of Agreement and Pledge of Revenues", "SECURITY FOR
THE BONDS - The Agreement" and in Appendix C thereto (insofar as such
information and statements purport to summarize provisions of the Bonds, the
Indenture and the Financing Agreement) accurately summarize in all material
respects the provisions of the Bonds, the Indenture and the Financing Agreement
purported to be summarized therein, and statements set forth in the section
captioned "TAX MATTERS" accurately summarizes in all material respects the
matters purported to be summarized therein.
No opinion is expressed herein with respect to any statistical data,
technical and financial statements, operating statistics and other financial
data contained in said Official Statement.
We further advise you that you may rely on our approving opinion as
Bond Counsel dated the date hereof as if such opinion had been directed to you
in the first instance.
Very truly yours,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLC
EXHIBIT B
Points to be covered in Opinion of Counsel for the Authority
(Terms defined in Bond Purchase Agreement are used here with same meanings)
1. The Authority is a body corporate and politic constituting an
instrumentality of the Commonwealth and is duly created and existing pursuant to
the Act.
2. The Authority has by proper action duly authorized the
execution and issuance of the Bonds and the execution and delivery of the
Authority Financing Documents. The Bonds have been duly and validly issued by
the Authority and the Authority Financing Documents have each been duly and
validly executed and delivered by the Authority and the Bonds and each of such
documents are valid and binding agreements of the Authority, enforceable against
the Authority in accordance with their respective terms, except as enforcement
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
laws or legal or equitable principles affecting the enforcement of creditor's
rights.
3. To the knowledge of such counsel, the execution and the
issuance by the Authority of the Bonds, the execution and delivery by the
Authority of the Authority Financing Documents and performance by the Authority
of the Authority's obligations under the Bonds and the Authority's Financing
Documents, do not conflict with or constitute on a part of the Authority a
violation of, breach of or default under any existing constitutional provision
or statute of the Commonwealth, or, to our knowledge without having undertaken
any independent investigation, any indenture, mortgage, deed of trust,
resolution, note agreement or other agreement or instrument to which the
Authority is a party or by which the Authority is bound, or, to our knowledge,
any order, rule or regulation of any court, governmental agency or body of the
Commonwealth having jurisdiction over the Authority or any of its activities or
property.
4. To the knowledge of such counsel, there is no action, suit,
proceeding, inquiry or investigation, at law or in equity, before or by any
court, public board or body, pending or threatened against the Authority,
wherein an unfavorable decision, ruling or finding would materially and
adversely affect the transactions contemplated by the Bonds.
5. The Authority has approved the distribution of the Preliminary
Official Statement and the Official Statement by the Underwriter in connection
with the sale of the Bonds.
6. The information contained in the Preliminary Official
Statement and the Official Statement under the headings "INTRODUCTORY STATEMENT"
and "ABSENCE OF MATERIAL LITIGATION" (insofar as such information relates to the
Authority) and "THE AUTHORITY" has been reviewed by us and nothing has come to
our attention which would lead us to believe that such information contains any
untrue statement of a material fact or omits to state a material fact which is
required to be stated therein or which is necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading in any material respect.
EXHIBIT C
Points to be covered in Opinions of the Company's Legal and General Counsel
(Terms defined in Bond Purchase Agreement are used here with same meanings)
1. The Company was organized and subsists under the laws of the
Commonwealth, with power (corporate and other) to own its properties and conduct
its business as described in the Official Statement.
2. The Company has the corporate power and authority to enter
into and perform the Bond Purchase Agreement, the Financing Agreement, the First
Mortgage Bond, Thirty-Sixth Supplemental Mortgage, and the Continuing Disclosure
Agreement. The execution, delivery and performance by the Company of the
Financing Agreement, the Bond Purchase Agreement, the First Mortgage Bond,
Thirty-Sixth Supplemental Mortgage, and the Continuing Disclosure Agreement have
been duly authorized by all requisite corporate action.
3. The Bond Purchase Agreement has been duly executed and
delivered by the Company and constitutes a legal, valid and binding obligation
of the Company. The Financing Agreement and the Continuing Disclosure Agreement,
when executed and delivered by the Company, will constitute legal, valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as may be limited by bankruptcy, insolvency
or other similar laws affecting the enforcement of creditors' rights in general.
4. The execution and delivery of the Bond Purchase Agreement, the
Financing Agreement and the Continuing Disclosure Agreement and the performance
by the Company of its obligations thereunder will not violate, conflict with or
result in a breach of or constitute a default under the Articles of
Incorporation or Bylaws of the Company or any agreement, instrument, order,
writ, judgment or decree to which the Company is a party or to which it or any
of its property is subject.
5. The Company has obtained all approvals required in connection
with the execution and delivery of, and performance by the Company of its
obligations under, the Bond Purchase Agreement, the Financing Agreement, the
First Mortgage Bond, the Thirty-Sixth Supplemental Mortgage and the Continuing
Disclosure Agreement.
6. The First Mortgage Bond has been duly authorized, executed,
authenticated, issued and delivered and constitutes a valid and legally binding
obligation of the Company entitled to the benefits provided by the Mortgage.
7. The First Mortgage Bond is not subject to the registration
requirements of the 1933 Act.
8. The Original Indenture has been duly authorized, executed and
delivered by the Company and the Trustee and the Thirty-Sixth Supplemental
Mortgage has been duly authorized, executed and delivered by the Company and the
Trustee and recorded as required by law. The Mortgage (i) constitutes a valid
and legally binding instrument enforceable in accordance with its terms except
as enforceability may be limited by bankruptcy, insolvency, reorganization or
other laws relating to or affecting the enforcement of creditors' rights, and
(ii)
constitutes a direct, valid and enforceable mortgage lien (except as
enforceability of such lien may be limited by bankruptcy, insolvency,
reorganization or other laws affecting the enforcement of creditors' rights)
upon all of the properties and assets of the Company (not heretofore released as
provided for in the Mortgage) specifically or generally described or referred to
in the Mortgage as being subject to the lien thereof, except for permitted liens
under the Mortgage; the Original Indenture and the Thirty-Sixth Supplemental
Mortgage have been properly recorded in the Counties of Berks, Bradford, Bucks,
▇▇▇▇▇▇▇, Columbia, Delaware, ▇▇▇▇▇▇▇▇, Mercer, Montgomery, Northumberland, Pike,
Schuylkill and ▇▇▇▇▇ in the Commonwealth of Pennsylvania and such recordations
are the only recordations necessary in order to establish, preserve, protect and
perfect the lien of the Mortgage on all real estate and fixed property of the
Company (excluding easement and other similar rights) described in the Mortgage
as subject to the lien thereof.
9. In each of the following cases with such exceptions as are not
material and do not interfere with the conduct of the business of the Company,
the Company has good and marketable title to all of its real property currently
held in fee simple; good and marketable title to all of its other interests in
real property (other than to certain rights of way, easements, occupancy rights,
riparian and flowage rights, licenses, leaseholds, and real property interests
of a similar nature); and good and marketable title to all personal property
owned by it; in each case free and clear of all liens, encumbrances and defects
except such as maybe described in the Official Statement, the lien of the
Mortgage, permitted liens under the Mortgage or such as do not materially affect
the value of such property and do not interfere with the use made and proposed
to be made of such property by the Company; and any real property and buildings
held under lease by the Company are held by it under valid, subsisting and
enforceable leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and buildings by the
Company.
10. In each of the following cases with such exceptions as are not
material and do not interfere with the conduct of the business of the Company,
the Company has all licenses, franchises, permits, authorizations, rights,
approvals, consents and order of all governmental authorities or agencies
necessary for the ownership or lease of the properties owned or leased by it and
for the operation of the business carried on by it as described in the Official
Statement, and all water rights, riparian rights, easements, rights of way and
other similar interests and rights described or referred to in the Mortgage
necessary for the operation of the business carried on by it as described in the
Official Statement; except as otherwise set forth in the Official Statement, all
such licenses, franchises, permits, orders, authorizations, rights, approvals
and consents are in full force and effect and contain no unduly burdensome
provisions; to the best of such counsel's knowledge, except as otherwise set
forth in the Official Statement, there are no legal or governmental proceedings
pending or, to its knowledge, threatened that would result in a material
modification, suspension or revocation thereof; and the Company has the legal
power to exercise the rights of eminent domain for the purposes of conducting
its water utility operations.
11. The issue and delivery of the First Mortgage Bond and the
compliance by the Company with all of the applicable provisions of the First
Mortgage Bond and the Mortgage; the execution, delivery and performance by the
Company of the Thirty-Sixth Supplemental Mortgage, the Financing Agreement, this
Bond Purchase Agreement and the Continuing Disclosure Agreement will not
conflict with or result in a breach of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of any lien,
charge or encumbrance (other than the lien of the Mortgage) upon any of the
property or assets
of the Company pursuant to the terms of, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company is a party
or by which the Company is bound or to which any of the property or assets of
the Company is subject, nor will such action result in a violation of the
provisions of the Articles of Incorporation, as amended, or the Bylaws of he
Company or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of its
property; and no consent, approval, authorization, order, registration or
qualification of or with any court or any such regulatory authority or other
governmental body not already obtained is required for the issue and delivery of
the First Mortgage Bond; the execution, delivery and performance of this Bond
Purchase Agreement, the Financing Agreement, the Thirty-Sixth Supplemental
Mortgage, the First Mortgage Bond and the Continuing Disclosure Agreement; or
the consummation of the other transactions contemplated by this Bond Purchase
Financing Agreement or the Mortgage.
12. The Company is not a holding company, a registered holding
company or an affiliate of a registered holding company within the meaning of
the Public Utility Company Holding Act of 1935, as amended.
13. There are no legal or governmental proceedings pending to
which the Company is a party or of which any property of the Company is the
subject, other than as set forth in the Official Statement and other than
litigation incident to the kind of business conducted by the Company, wherein an
unfavorable ruling, decision or finding is likely that would have a material
adverse effect on the financial position, stockholders' equity or results of
operations of the Company.
14. The Mortgage and the First Mortgage Bond conform in all
material respects as to legal matters to the descriptions thereof in the
Official Statement.
15. We have not independently verified the accuracy, completeness
or fairness of the statements made or included in the Official Statement and
take no responsibility therefor, except to the extent referred to in paragraph
14 and this paragraph. In the course of the preparation by the Company of the
Official Statement, we participated in conferences with certain officers and
employees of the Company, examined the Official Statement and made certain
inquiries in connection with the preparation of the Official Statement. Subject
to the foregoing, we have no reason to believe that the Official Statement
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 or statistical data included or
incorporated by reference therein).