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EXHIBIT 99.1
PHILADELPHIA SUBURBAN CORPORATION
COMMON STOCK
Underwriting Agreement
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September 11, 2000
A.G. Edwards & Sons, Inc.
PaineWebber Incorporated
Janney Montgomery Scott LLC
c/o A.G. Edwards & Sons, Inc.
One North Jefferson Avenue
St. Louis, Missouri 63103
Ladies and Gentlemen:
PHILADELPHIA SUBURBAN CORPORATION, a Pennsylvania corporation (the
Company), hereby confirms its agreement with you, as the several Underwriters
(the Underwriters), as follows:
1. Purchase and Sale.
(a) Firm Shares. Upon the basis of the representations and
warranties herein contained, and subject to the terms and conditions herein set
forth, the Company agrees to sell to each of the Underwriters and any firm or
corporation substituted as provided in Section 3(e) hereof as if such firm or
corporation had originally been a party to this Agreement and such Underwriter
agrees, at the time and place herein specified, severally and not jointly, to
purchase from the Company, the respective number of shares of Common Stock, par
value $.50 per share, of the Company (the Common Stock) set forth opposite such
Underwriter's name on Schedule I hereto (the Firm Shares) at a purchase price of
$22.57 per share (the Purchase Price).
(b) Option Shares. Upon the basis of the representations and
warranties herein contained, and subject to the terms and conditions herein set
forth, the Company agrees to sell to the respective Underwriters named in
Schedule I hereto and the Underwriters have an option to purchase, severally and
not jointly, from the Company (the Option) not more than an additional 172,500
shares of Common Stock (the Option Shares) at the Purchase Price minus, if an
Option Closing Date (as defined in Section 3(c) hereof) with respect to the
delivery and payment of any Option Shares occurs after the date fixed for the
determination of stockholders entitled to receive the next dividend payable on
shares of Common Stock, an amount equal to such dividend per share of such
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Option Shares, provided such Option Closing Date is after the Firm Closing Date
(as defined in Section 3(b) hereof). Option Shares may be purchased as provided
herein solely for the purpose of covering over-allotments made in connection
with the public offering of the Firm Shares. If any Option Shares are to be
purchased, each of the Underwriters agrees, severally and not jointly, to
purchase the number of Option Shares that bears the same proportion to the total
number of Option Shares to be purchased as the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I hereto bears to the total
number of Firm Shares. The Option may be exercised, in whole or in part from
time to time, within the period of 30 days from the date hereof, by written
notice from the Underwriters to the Company (the Option Notice). The Option
Notice shall set forth the aggregate number of Option Shares as to which the
Option is being exercised and the date of delivery of, and payment for, such
Option Shares pursuant to Section 3(c) hereof. As used herein, the term
Securities shall mean, collectively, the Firm Shares and the Option Shares.
2. Representations and Warranties of Company. The Company represents
and warrants to, and covenants and agrees with, the several Underwriters that:
(a) Filing of Registration Statement and any Preliminary Prospectus
with Commission. The Company meets the requirements for use of Form S-3 under
the Securities Act of 1933, as amended (the 1933 Act), and has transmitted for
filing to the Securities and Exchange Commission (the SEC) the Registration
Statement (as defined below), any Rule 462(b) Registration Statement (as defined
below) and each Preliminary Prospectus (as defined below) relating to the
Securities, if any, required to be filed pursuant to Rule 424(a) or (b) under
the 1933 Act; each of the Registration Statement and any Rule 462(b)
Registration Statement has been declared effective by the SEC under the 1933 Act
and complies in all material respects with Rule 430A under the 1933 Act; and no
stop order suspending the effectiveness of the Registration Statement, any Rule
462(b) Registration Statement or any part thereof has been issued under the 1933
Act and no proceeding for that purpose have been instituted or threatened by the
SEC, and any request on the part of the SEC for additional information has been
complied with. For purposes of this Agreement, the following terms used herein
shall have the following meanings: (i) Registration Statement shall mean the
registration statement on Form S-3 (No. 333-42982) filed by the Company with the
SEC for the registration under the 1933 Act of the Securities, as amended and
supplemented to the date of this Agreement and including the exhibits thereto,
and shall be deemed to include the Incorporated Documents (as defined below) and
the information deemed to be included therein pursuant to Rule 430A under the
1933 Act; (ii) Incorporated Documents shall mean the documents filed by the
Company with the SEC under the Securities Exchange Act of 1934, as amended (the
1934 Act), that are, or are deemed to be, incorporated by reference in the
Prospectus (as defined herein) pursuant to Item 12 of Form S-3 under the 1933
Act; (iii) Preliminary Prospectus shall mean (A) any prospectus included in the
Registration Statement prior to the initial Effective Date (as defined below)
used in connection with the offering and sale of the Securities (other than
making confirmations of sales of the Securities), as such prospectus may at any
time be amended or modified (whether or not transmitted for filing pursuant to
Rule 424(a) or (b) under the 1933 Act), or (B) any amendment or supplement to
such prospectus used in connection with the offering and sale of the Securities
(other than making confirmations of sales of the Securities) transmitted for
filing to the SEC pursuant to Rule 424(a) or (b) under the 1933 Act, and shall
in each case be deemed to include the Incorporated Documents; (iv) Rule 462(b)
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Registration Statement shall mean any registration statement filed pursuant to
Rule 462(b) under the 1933 Act and, after such filing, the term Registration
Statement as used herein shall include the Rule 462(b) Registration Statement;
and (v) Effective Date shall mean the date or time that the Registration
Statement, any Rule 462(b) Registration Statement or any post-effective
amendment thereto was declared effective by the SEC under the 1933 Act. For
purposes of this Agreement, the words "amend," "amendment," "amended,"
"supplement" or "supplemented" with respect to the Registration Statement or the
Prospectus shall mean (i) amendments or supplements to the Registration
Statement or the Prospectus, and (ii) Incorporated Documents, in each case filed
with the SEC or sent to prospective purchasers of the Securities after the date
of this Agreement and prior to the completion of the distribution of the
Securities.
(b) Registration Statement; Prospectus; Incorporated Documents. (i)
The Registration Statement and any Rule 462(b) Registration Statement, at their
respective Effective Dates, any Preliminary Prospectus, when delivered to the
Underwriters for their use in marketing the Securities (whether or not
transmitted for filing to the SEC pursuant to Rule 424(a) or (b) under the 1933
Act), and the Prospectus, at the time it is transmitted for filing to the SEC
pursuant to Rule 424(b) under the 1933 Act and when delivered to the
Underwriters for their use in making confirmations of sales of the Securities,
complied and will comply, as the case may be, in all material respects with the
applicable requirements of the 1933 Act and the rules and regulations of the SEC
thereunder; (ii) the Registration Statement and any Rule 462(b) Registration
Statement, at their respective Effective Dates, did not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading; (iii)
the Prospectus, at the time it is transmitted for filing to the SEC pursuant to
Rule 424(b) under the 1933 Act and when delivered to the Underwriters for their
use in making confirmations of sales of the Securities, will not and any
Preliminary Prospectus, when delivered to the Underwriters for their use in
marketing the Securities (whether or not transmitted for filing to the SEC
pursuant to Rule 424(a) or (b) under the 1933 Act), did not include any untrue
statement of a material fact or omit 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; and (iv) each Incorporated Document, at the time
it is transmitted for filing to the SEC pursuant to the 1934 Act, complied and
will comply, as the case may be, in all material respects with the applicable
requirements of the 1934 Act and the rules and regulations of the SEC
thereunder; provided, however, that, in the case of clauses (i), (ii) and (iii)
above, the Company makes no representation or warranty as to information
furnished in writing to the Company by any Underwriter expressly for use in the
Prospectus, which for purposes of this Agreement shall be deemed to consist
solely of (x) the last sentence of the penultimate paragraph on the cover page
of the Prospectus, and (y) the statements in the eighth, ninth, tenth, eleventh
and twelfth paragraphs under the caption "Underwriting" in the Prospectus
(collectively, the Underwriter Information). For purposes of this Agreement,
Prospectus shall mean the prospectus included in the Registration Statement at
the initial Effective Date, as such prospectus may at any time be amended or
supplemented by the addition of (i) the information omitted in reliance on Rule
430A under the 1933 Act and contained in the prospectus as first transmitted for
filing to the SEC pursuant to Rule 424(b) under the 1933 Act, and (ii) except
for purposes of subsection (f) of Section 5, any Incorporated Documents filed
with the SEC after the Effective Date.
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(c) Securities. The Securities have been duly and validly
authorized, and when issued and delivered against payment therefor as provided
herein, will be validly issued and fully paid and non-assessable and entitled to
the rights set forth in the Company's Amended and Restated Articles of
Incorporation, as it may be amended (the Charter); other than as set forth in
the Prospectus, there are no preemptive rights or other rights to subscribe for
or to purchase, or any restriction upon the voting or transfer of, any shares of
Common Stock pursuant to the Charter or the Company's Bylaws, as it may be
amended (the Organizational Documents) of the Company, or pursuant to any other
agreement or instrument to which the Company is a party or by which it is bound
or to which any of the property of the Company is subject; and the Common Stock,
including the Securities and the Company's Shareholders Rights Plan, each
conforms in all material respects to the description thereof contained in the
Prospectus.
(d) Agreement. This Agreement has been duly authorized, executed
and delivered by the Company and is a valid and legally binding agreement of the
Company enforceable against the Company in accordance with its terms, except as
may be limited by (i) bankruptcy, insolvency, fraudulent conveyance,
reorganization and other similar laws relating to or affecting creditors' rights
generally, (ii) general equitable principles (whether considered in a proceeding
in equity or at law) and (iii) requirements of reasonableness, good faith and
fair dealing (such exceptions, collectively, the Exceptions).
(e) Due Incorporation and Qualification. The Company has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the Commonwealth of Pennsylvania, with power and authority (corporate
and other) to own its properties and conduct its business as described in the
Prospectus and to execute and deliver, and perform its obligations under, this
Agreement; each subsidiary of the Company listed on Schedule II hereto
(collectively, the Subsidiaries) has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the jurisdiction of
its incorporation with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus; the Company
and the Subsidiaries are each duly qualified as a foreign corporation to
transact business and each is in good standing in each jurisdiction in which it
owns or leases substantial properties or in which the conduct of its business
requires such qualification, except where the failure to so qualify would not
have a material adverse effect on the financial condition of the Company and the
Subsidiaries taken as a whole and would not subject the Company or the
Subsidiaries to any material liability or disability; and the Company does not
have any "significant subsidiaries" (within the meaning of Rule 1-02(w) of
Regulation S-X) except to the extent a Subsidiary is such a significant
subsidiary.
(f) Material Changes or Transactions. Neither the Company nor any
of the Subsidiaries has sustained since December 31, 1999 any loss or
interference with its business from fire, explosion, flood or other calamity, or
from any labor dispute or court or governmental action, order or decree that
would have a material adverse effect on the financial condition of the Company
and the Subsidiaries taken as a whole, otherwise than as set forth in the
Prospectus; and, since the respective dates as of which information is given in
the Prospectus, there has not been any change in the capital stock (other than
pursuant to the Company's registration statement on Form S-4 (File No.
333-93243) or the Company's 1994 Equity Compensation Plan, its 1994 Employee
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Stock Purchase Plan, its Shareholder Rights Plan and its Dividend Reinvestment
and Direct Stock Purchase Plan, as such plans are in effect as of the date
hereof) or material increase in short-term debt or long-term debt of the Company
and the Subsidiaries taken as a whole or any material adverse change, or any
development known to the Company which could reasonably be expected to involve a
prospective material adverse change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of operations of
the Company and the Subsidiaries taken as a whole, otherwise than as set forth
in the Prospectus.
(g) No Conflicts; No Consents Required. The offering and sale of
the Securities and the compliance by the Company with all of the provisions of
this Agreement, and the consummation by the Company of the transactions herein
contemplated, will not conflict with or result in a breach or violation of any
of the material terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other material agreement
or instrument to which the Company or the Subsidiaries is a party or by which
the Company or the Subsidiaries is bound or to which any of the property or
assets of the Company or the Subsidiaries is subject, nor will such action
result in any violation of the provisions of the Organizational Documents or any
statute, rule, regulation or other law applicable to the Company or the
Subsidiaries, or any order or judgment of any court or governmental agency or
body having jurisdiction over the Company or the Subsidiaries or any of their
respective properties; and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental agency
or body is required for the issue and sale of the Securities or the consummation
by the Company of the transactions contemplated by this Agreement, except such
as have been, or will be prior to the Firm Closing Date, obtained under the 1933
Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or blue sky laws in
connection with the purchase and distribution of the Securities by the
Underwriters.
(h) Capital Stock. The Company has an authorized capitalization as
set forth in the Prospectus and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued and are fully paid and
non-assessable; and all of the issued shares of capital stock of the
Subsidiaries have been duly and validly authorized and issued, are fully paid
and non-assessable and, except as otherwise set forth in the Prospectus, are
beneficially owned directly or indirectly by the Company, free and clear of all
liens, encumbrances, equities or claims.
(i) No Defaults. The Company is not in violation of the
Organizational Documents and neither the Company nor the Subsidiaries is in
default in the performance or observance of any obligation, agreement, covenant
or condition contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which either of them is a
party or by which either of them is bound or to which any of the property or
assets of either of them is subject that would have a material adverse effect on
the financial condition of the Company and the Subsidiaries taken as a whole.
Neither the Company nor the Subsidiaries has incurred any liability or
obligation, direct or contingent, or entered into any transaction, not in the
ordinary course of business, that is material to the Company and the
Subsidiaries taken as a whole.
(j) Litigation. There are no legal or governmental proceedings
pending to which the Company or the Subsidiaries is a party or of which any
property of the Company or the Subsidiaries is the subject that are required to
be disclosed in the Registration Statement that are not so disclosed as
required; and, to the Company's knowledge, no such proceedings are threatened or
contemplated.
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(k) 1940 Act. The Company is not and, after giving effect to the
offering and sale of the Securities, will not be an "investment company" or an
entity "controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended (the 1940 Act).
(l) Independent Public Accountants. KPMG LLP (the Accountants), who
have audited certain financial statements of the Company, are independent public
accountants as required by the 1933 Act and the rules and regulations of the SEC
thereunder.
(m) No Right to Require Registration. No holder of any security of
the Company has any right to require registration of shares of Common Stock or
any other security of the Company because of the filing of the Registration
Statement or consummation of the transactions contemplated by this Agreement.
3. Offering; Delivery of Securities; Defaulting Underwriters.
(a) Offering. The Company is advised by the Underwriters that they
propose to make a public offering of their respective portions of the Securities
as soon after the effectiveness of this Agreement as in their judgment is
advisable. The Company is further advised by the Underwriters that the
Securities will be offered to the public at the initial public offering price
specified in the Prospectus.
(b) Delivery of Firm Shares. Delivery of the Firm Shares, against
payment of the Purchase Price in immediately available funds by wire transfer,
shall be made prior to 1:00 p.m. New York City time on September 15, 2000 to the
Underwriters or at such other time and date as may be agreed upon by the Company
and the Underwriters. Delivery of the documents required by Section 5 hereof
shall be made at such time and date at the offices of Winthrop, Stimson, Putnam
& Roberts, One Battery Park Plaza, New York, NY 10004, or at such other location
as may be agreed upon in writing by the Company and the Underwriters. For
purposes of this Agreement, Firm Closing Date shall mean the hour and date of
such delivery and payment.
(c) Delivery of Option Shares. If any Option Shares are to be
purchased, delivery of such Option Shares, against payment of the Purchase Price
in immediately available funds by wire transfer, shall be made prior to 1:00
p.m. New York City time on the date (which may be the same as the Firm Closing
Date but shall in no event be earlier than the Firm Closing Date nor later than
three business days after the giving of the Option Notice) specified in the
Option Notice, to the Underwriters or at such other time and date as may be
agreed upon in writing by the Company and the Underwriters. Delivery of the
documents required by Section 5 hereof shall be made at such time and date at
the offices of Winthrop, Stimson, Putnam & Roberts, One Battery Park Plaza, New
York, NY 10004, or at such other location as may be agreed upon by the Company
and the Underwriters. For purposes of this Agreement, Option Closing Date shall
mean the hour and date of such delivery and payment.
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(d) Certificates for Securities. The certificates for the Firm
Shares and any Option Shares shall be delivered to the Underwriters in such
denominations and registered in such names as the Underwriters may reasonably
request in writing not later than 10:00 a.m. New York City time on the business
day prior to the Firm Closing Date and any Option Closing Date, respectively, or
to the extent not so requested, registered in the names of the respective
Underwriters in such authorized denominations as the Company shall determine.
For the purpose of expediting the checking of the certificates for the Firm
Shares and such Option Shares by the Underwriters, the Company agrees to make
such certificates available to the Underwriters for such purpose at the offices
of The Depository Trust Company, New York, NY, or at such other location in New
York, NY, as may be agreed upon between the Company and the Underwriters, not
later than 2:00 p.m. New York City time on the business day preceding the Firm
Closing Date and such Option Closing Date, respectively.
(e) Defaulting Underwriters. If any Underwriter shall default at
the Firm Closing Date or any Option Closing Date in its obligation to purchase
the Securities that it has agreed to purchase under this Agreement, the
non-defaulting Underwriters may in their discretion arrange for themselves or
another firm or corporation or firms or corporations to purchase such Securities
on the terms contained herein. If, within thirty-six hours after such default by
any Underwriter, the non-defaulting Underwriters do not arrange for the purchase
of such Securities, then the Company shall be entitled to a further period of
thirty-six hours within which to procure another firm or corporation or firms or
corporations which are members in good standing of the National Association of
Securities Dealers, Inc. and reasonably satisfactory to the non-defaulting
Underwriters to purchase such Securities on such terms. In the event that,
within the respective prescribed period, the non-defaulting Underwriters shall
notify the Company that they have so arranged for the purchase of such
Securities, or the Company notifies the non-defaulting Underwriters that it has
so arranged for the purchase of such Securities, the non-defaulting Underwriters
or the Company shall have the right to postpone the Firm Closing Date or any
Option Closing Date for such Securities, as the case may be, for a period of not
more than seven days in order to effect whatever changes may thereby be made
necessary in the Registration Statement or the Prospectus, or in any other
documents or arrangements, and the Company agrees to file promptly any
amendments to the Registration Statement or the Prospectus that in the opinion
of the non-defaulting Underwriters may thereby be made necessary. If, after
giving effect to any arrangements for the purchase of the Securities of a
defaulting Underwriter or Underwriters by the non-defaulting Underwriters and
the Company, the number of such Securities that remains unpurchased does not
exceed one-tenth of the total number of Securities, then the Company shall have
the right to require each non-defaulting Underwriter to purchase the number of
Securities that such Underwriter agreed to purchase under this Agreement and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the number of Securities that such Underwriter agreed to
purchase under this Agreement) of the Securities of such defaulting Underwriter
or Underwriters for which such arrangements have not been made; but nothing
herein shall relieve a defaulting Underwriter from liability for its default.
If, after giving effect to any arrangements for the purchase of the Securities
of a defaulting Underwriter or Underwriters by the non-defaulting Underwriters
and the Company, the number of Securities that remains unpurchased exceeds
one-tenth of the total number of Securities, or if the Company shall not
exercise the right to require non-defaulting Underwriters to purchase the
Securities of a defaulting Underwriter or Underwriters, then this Agreement or,
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with respect to any Option Closing Date that occurs after the Firm Closing Date,
the obligation of the Underwriters to purchase, and of the Company to sell, the
Option Shares to be purchased and sold on such Option Closing Date, shall
thereupon terminate, without liability on the part of any non-defaulting
Underwriter or the Company, except for the expenses to be borne by the Company
and the Underwriters as provided in Section 4(k) hereof and the indemnity and
contribution agreements in Section 6 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
4. Covenants of Company. The Company covenants and agrees with the
several Underwriters that:
(a) Filing of Prospectus. If required by the 1933 Act or the rules
and regulations promulgated thereunder, the Company will promptly transmit
copies of the Prospectus, and any amendments thereto, to the SEC for filing
pursuant to Rule 424(b) under the 1933 Act.
(b) Copies of Registration Statement and Prospectus; No Stop
Orders. The Company will deliver to each of the Underwriters, and to Winthrop,
Stimson, Putnam & Roberts (Underwriters' Counsel), (i) one copy of the
Registration Statement certified by an officer of the Company to be in the form
originally filed, including copies of exhibits thereto (other than any exhibits
incorporated by reference therein), (ii) copies (so certified) of any amendments
to the Registration Statement, including copies of exhibits thereto (other than
any exhibits incorporated by reference therein), (iii) copies of the
Incorporated Documents (other than exhibits thereto), and (iv) a signed copy of
each consent and certificate included or incorporated by reference in, or filed
as an exhibit to, the Registration Statement as so amended; the Company will
deliver to the Underwriters as soon as practicable after the date of this
Agreement as many copies of the Prospectus as the Underwriters may reasonably
request for the purposes contemplated by the 1933 Act and the blue sky laws of
any jurisdiction in which the Securities are offered; the Company will promptly
advise the Underwriters of the issuance of any stop order under the 1933 Act
with respect to the Registration Statement (as amended) or the institution of
any proceedings therefor, or the suspension of the qualification of the
Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose, of which the Company shall have received notice or
otherwise have knowledge prior to the completion of the distribution of the
Securities; and the Company will use its best efforts to prevent the issuance of
any such stop order and, if issued, to secure the prompt removal thereof.
(c) Filing of Amendments. During the period when a prospectus
relating to any of the Securities is required to be delivered under the 1933 Act
by any Underwriter or dealer, the Company will not file any amendment to the
Registration Statement, the Prospectus or any Incorporated Document to which the
Underwriters or Underwriters' Counsel shall reasonably object on legal grounds
in writing.
(d) Compliance with 1933 Act. During the period when a prospectus
relating to any of the Securities is required to be delivered under the 1933 Act
by any Underwriter or dealer, the Company will comply, at its own expense, with
all requirements imposed by the 1933 Act, as now and hereafter amended, and by
the rules and regulations of the SEC thereunder, as from time to time in force,
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so far as necessary to permit the continuance of sales of or dealing in the
Securities during such period in accordance with the provisions hereof and as
contemplated by the Prospectus.
(e) Notification of SEC Requests; Notification of Change in
Condition. The Company will advise the Underwriters promptly and, if requested
by the Underwriters, will confirm such advice in writing: (i) of any request by
the SEC for amendment of the Registration Statement, any Preliminary Prospectus
or the Prospectus or for additional information; and (ii) until the earlier of
(y) notification from the Underwriters that the distribution of the Securities
has been completed and (z) 60 days following the date hereof, of any change in
the Company's condition (financial or other), business, prospects, properties,
net worth or results of operations, or of the happening of any event, which
makes any statement of a material fact made in the Registration Statement or the
Prospectus (as then amended) untrue or which requires the making of any
additions to or changes in the Registration Statement or the Prospectus (as then
amended) in order to state a material fact required by the 1933 Act or the
regulations thereunder to be stated therein or necessary in order to make the
statements therein not misleading, or of the necessity to amend the Prospectus
(as then amended) to comply with the 1933 Act or any other law.
(f) Certain Events and Amendments. If, during the period when a
prospectus relating to any of the Securities is required to be delivered under
the 1933 Act by any Underwriter or dealer, (i) any event relating to or
affecting the Company or of which the Company shall be advised in writing by the
Underwriters shall occur as a result of which, in the opinion of the Company or
the Underwriters, the Prospectus as then amended would include any untrue
statement of a material fact or omit 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 or (ii) it shall be necessary to amend the
Registration Statement or the Prospectus to comply with the 1933 Act, the 1934
Act or the rules and regulations of the SEC thereunder, the Company will
forthwith at its expense prepare and furnish to the Underwriters a reasonable
number of copies of such amendment that will correct such statement or omission
or effect such compliance.
(g) Blue Sky Qualifications. During the period when a prospectus
relating to any of the Securities is required to be delivered under the 1933 Act
by any Underwriter or dealer, the Company will furnish such proper information
as may be lawfully required and otherwise cooperate in qualifying the Securities
for offer and sale under the securities or Blue Sky laws of such jurisdictions
as the Underwriters may reasonably designate and will file and make in each year
such statements or reports as are or may be reasonably required by the laws of
such jurisdictions; provided, however, that the Company shall not be required to
qualify as a foreign corporation and shall not be required to qualify as a
dealer in securities or to file a general consent to service of process under
the laws of any jurisdiction.
(h) Earning Statement. In accordance with Rule 158 under the 1933
Act, the Company will make generally available to its security holders and to
holders of the Securities, as soon as practicable, an earning statement (which
need not be audited) in reasonable detail covering the 12 months beginning not
later than the first day of the month next succeeding the month in which
occurred the effective date (within the meaning of Rule 158 under the 1933 Act)
of the Registration Statement.
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(i) Exchange Act Documents; Ratings Notification. During the period
when a prospectus relating to any of the Securities is required to be delivered
under the 1933 Act by any Underwriter or dealer, the Company will file promptly
all documents required to be filed with the SEC pursuant to Section 13(a),
13(c), 14 or 15(d) of the 1934 Act; and the Company will promptly notify the
Underwriters of any written notice given to the Company by any "nationally
recognized statistical rating organization" within the meaning of Rule 436(g)(2)
under the 1933 Act (a Rating Agency) of any intended decrease in any rating of
any securities of the Company or of any intended change in any such rating that
does not indicate the direction of the possible change of any such rating, in
each case by any such Rating Agency.
(j) No Issuance Period. During a period of ninety (90) days from
the date of the Prospectus, the Company will not, without the prior written
consent of A.G. Edwards & Sons, Inc., (i) directly or indirectly, offer, pledge,
sell, offer to sell, solicit an offer to buy, contract to sell, grant any option
to purchase or otherwise transfer or dispose of any shares of Common Stock, or
any securities convertible into or exercisable or exchangeable for Common Stock
or file any registration statement under the 1933 Act with respect to any of the
foregoing or (ii) enter into any swap or any other agreement or any transaction
that transfers, in whole or in part, directly or indirectly, the economic
consequence of ownership of the Common Stock, whether any such swap or
transaction described in clause (i) or (ii) above is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to (A) the Securities to be sold hereunder, (B) any
shares of Common Stock issued pursuant to the Company's 1994 Equity Compensation
Plan, its 1994 Employee Stock Purchase Plan, its Shareholder Rights Plan and its
Dividend Reinvestment and Direct Stock Purchase Plan, as such plans are in
effect on the date hereof, and (C) up to 600,000 shares of Common Stock that may
be issued as consideration for acquisitions of businesses or assets pursuant to
the Company's registration statement on Form S-4 (File No. 333-93243).
(k) Payment of Expenses. Whether or not any sale of the Securities
is consummated, the Company will pay or cause to be paid the following: (i) the
fees, disbursements and expenses of Morgan, Lewis & Bockius LLP (Company
Counsel) and the Accountants in connection with the registration of the
Securities under the 1933 Act and all other expenses in connection with the
preparation, printing and filing of the Registration Statement, any Preliminary
Prospectus and the Prospectus and amendments thereto and the mailing and
delivering of copies thereof to the Underwriters and dealers; (ii) the cost of
printing or producing any agreement among the Underwriters, this Agreement, any
blue sky memorandum, closing documents (including any compilations thereof) and
other documents in connection with the offering, purchase, sale and delivery of
the Securities; (iii) all expenses in connection with the qualification of the
Securities for offering and sale under state securities laws as provided in
Section 4(g) hereof, including the reasonable fees and disbursements of
Underwriters' Counsel in connection with such qualification and in connection
with any such blue sky memorandum; (iv) any filing fees incident to, and the
fees and disbursements of Underwriters' Counsel in connection with, any required
review by the National Association of Securities Dealers, Inc. of the terms of
the sale of the Securities; (v) the cost of preparing the Securities; (vi) the
fees and expenses in connection with the listing of the Securities on the New
York Stock Exchange and the Philadelphia Stock Exchange; and (vii) all other
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costs and expenses incident to the performance of the Company's obligations
hereunder that are not otherwise specifically provided for in this Section 4(k);
provided, however, that if this Agreement shall be terminated pursuant to
Section 3(e) hereof and could not have been terminated pursuant to Section 5
hereof, the Company shall then not be under any liability to any Underwriter
with respect to the Securities except as provided in this Section 4(k) and
Section 6 hereof; but, if for any other reason the Securities are not delivered
by or on behalf of the Company as provided herein, the Company will reimburse
the Underwriters for all out-of-pocket expenses approved in writing by the
Underwriters, including fees and disbursements of Underwriters' Counsel,
reasonably incurred by the Underwriters in making preparations for the purchase,
sale and delivery of the Securities, but the Company shall then be under no
further liability to any Underwriter with respect to the Securities except as
provided in this Section 4(k) and Section 6 hereof. It is understood that,
except as provided in this Section 4(k) and Section 6 hereof, the Underwriters
will pay all of their own costs and expenses, including the fees of
Underwriters' Counsel and any advertising expenses in connection with any offers
of the Securities they may make.
(l) Listing of Securities. The Company will use its best efforts to
cause the Securities to be duly authorized for listing on the New York Stock
Exchange and the Philadelphia Stock Exchange, subject to notice of issuance.
(m) Provision of Information. During the period of two years from
the date hereof, the Company will furnish to the Underwriters (i) as soon as
available, a copy of each report of the Company mailed to stockholders or filed
with the SEC, and (ii) from time to time such other information concerning the
Company as the Underwriters may reasonably request.
(n) Application of Proceeds. The Company will apply the net
proceeds from the sale of the Securities substantially in accordance with the
description set forth in the Prospectus.
(o) Abstention from Price-affecting Transactions. Except as stated
in this Agreement and in the Preliminary Prospectus and Prospectus, the Company
has not effected, nor will it effect, directly or indirectly, any transaction in
the Common Stock designed to or that might reasonably be expected to cause or
result in stabilization or manipulation of the price of the Common Stock to
facilitate the sale or resale of the Securities.
5. Conditions to Underwriters' Obligations. The obligations of the
several Underwriters under this Agreement shall be subject, in the discretion of
the Underwriters, to the condition that all representations and warranties of
the Company contained in this Agreement are, at and as of the Firm Closing Date
and, if any Option Shares are to be purchased, at and as of any Option Closing
Date, true and correct (i) in the case of representations and warranties that
are qualified as to materiality, in all respects, and (ii) as to all other
representations and warranties, in all material respects, to the condition that
the Company shall have performed all of its obligations hereunder in all
material respects on or prior to the Firm Closing Date or such Option Closing
Date, as the case may be, and to the following additional conditions:
(a) Filing of Prospectus with SEC; No Stop Order. If, at the time
this Agreement is executed and delivered, it is necessary for a post-effective
amendment to the Registration Statement to be declared effective before the
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offering of the Securities may commence, such post-effective amendment shall
have become effective not later than 5:30 p.m. New York City time on the date
hereof, or at such later date and time as shall be consented to in writing by
the Underwriters; if, at the time this Agreement is executed and delivered, it
is necessary for a Rule 462(b) Registration Statement to be filed and declared
effective prior to the time sales of the Securities are made or confirmations
are sent or given, such Rule 462(b) Registration Statement shall have become
effective not later than 10:00 p.m. New York City time on the date hereof; the
Prospectus, and any amendments thereto, shall have been transmitted for filing
to the SEC within the time period prescribed for such filing by Rule 424(b)
under the 1933 Act and in accordance with Section 4(a) hereof; no stop order
suspending the effectiveness of the Registration Statement or any part thereof
shall have been issued under the 1933 Act and no proceeding for that purpose
shall have been initiated or threatened by the SEC; and all requests for
additional information on the part of the SEC shall have been complied with to
the reasonable satisfaction of the Underwriters.
(b) Opinion of Underwriters' Counsel. At the Firm Closing Date and
such Option Closing Date, Underwriters' Counsel shall have furnished to the
Underwriters an opinion, dated the Firm Closing Date and such Option Closing
Date, respectively, with respect to the Securities, the Prospectus and the
Registration Statement and such other related matters as the Underwriters may
reasonably request, and Underwriters' Counsel shall have received such papers
and information as it may reasonably request to enable it to pass upon such
matters.
(c) Opinion of Company Counsel. The Underwriters shall have
received on the Firm Closing Date and such Option Closing Date, an opinion of
Company Counsel, dated the Firm Closing Date and such Option Closing Date,
respectively, in form and substance (including as to qualifications and
assumptions) satisfactory to the Underwriters, which opinion shall state that it
is being rendered at the request of the Company and shall be to the effect that:
(i) The Company is a corporation duly incorporated and validly
existing in good standing under the laws of the Commonwealth of
Pennsylvania with full corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus, and is duly registered and qualified to conduct its business
and is in good standing in the Commonwealth of Pennsylvania (which is
the only jurisdiction in which such registration or qualification is
required);
(ii) Philadelphia Suburban Water Company (PSWC) is a corporation
duly incorporated and validly existing in good standing under the laws
of the Commonwealth of Pennsylvania, with full corporate power and
authority to own, lease, and operate its properties and to conduct its
business as described in the Prospectus; and all the outstanding shares
of capital stock of PSWC have been duly authorized and validly issued,
are fully paid and non-assessable, and are beneficially owned by the
Company free and clear of any perfected security interest, or, to the
knowledge of such counsel, any Adverse Claim (as defined in Title 13 of
the Pennsylvania Uniform Consolidated Statutes Annotated (the PA UCC));
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(iii) Consumers Water Company (CWC) is a corporation duly
incorporated and validly existing in good standing under the laws of the
Commonwealth of Pennsylvania with full corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus; and all the outstanding shares of capital
stock of CWC have been duly authorized and validly issued, are fully
paid and non-assessable, and are beneficially owned by the Company free
and clear of any perfected security interest, or to the knowledge of
such counsel, any Adverse Claim (as defined in Title 13 of the PA UCC);
(iv) Each of Consumers Pennsylvania Water Company-Shenango Valley
Division, Consumers Pennsylvania Water Company-Roaring Creek Division
and Consumers Pennsylvania Water Company-Susquehanna Division is a
corporation validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania;
(v) Each of Consumers Ohio Water Company, Consumers Illinois Water
Company, Consumers New Jersey Water Company, and Consumers Maine Water
Company is a corporation validly existing and in good standing under the
laws of the jurisdiction of its incorporation;
(vi) The capital stock and the Shareholders Rights Plan of the
Company each conforms in all material respects as to legal matters to
the description thereof contained in the Prospectus under the caption
"Description of Capital Stock";
(vii) All the shares of capital stock of the Company outstanding
prior to the issuance of the Securities have been duly authorized and
validly issued, and are fully paid and non-assessable;
(viii) The Securities have been duly authorized and, when issued
and delivered to the Underwriters against payment therefor in accordance
with the terms hereof, will be validly issued, fully paid and
non-assessable and free of any preemptive, or to the knowledge of such
counsel, similar rights that entitle or will entitle any person to
acquire any Securities upon the issuance thereof by the Company;
(ix) The form of certificates for the Securities conforms to the
requirements of the Pennsylvania Business Corporation Law of 1988, as
amended;
(x) The Registration Statement and all post-effective amendments,
if any, have become effective under the 1933 Act and, to the knowledge
of such counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose are pending before or contemplated by the SEC; and the required
filing of the Prospectus pursuant to Rule 424(b) under the 1933 Act has
been made in accordance with such Rule 424(b);
(xi) The Company has the requisite corporate power and authority to
enter into this Agreement and to issue, sell and deliver the Securities
to the Underwriters as provided herein, and this Agreement has been duly
authorized, executed and delivered by the Company and is a valid, legal
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and binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as enforcement of rights to indemnity
and contribution hereunder may be limited by Federal or state securities
laws or principles of public policy and subject to the qualification
that the enforceability of the Company's obligations hereunder may be
limited by bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium, and other laws relating to or affecting
creditors' rights generally, and by general equitable principles;
(xii) Neither the offer, sale or delivery of the Securities, the
execution, delivery or performance of this Agreement, compliance by the
Company with the provisions hereof nor consummation by the Company of
the transactions contemplated hereby conflicts or will conflict with or
constitutes or will constitute a breach of, or a default under, the
Organizational Documents or any agreement, indenture, lease or other
instrument known to such counsel to which the Company or the
Subsidiaries is a party or by which any of them or any of their
respective properties is bound nor will any such action result in any
violation of any existing law, regulation, ruling (assuming compliance
with all applicable state securities and blue sky laws), judgment,
injunction, order or decree known to such counsel applicable to the
Company, the Subsidiaries or any of their respective properties;
(xiii) No consent, approval, authorization or other order of, or
registration or filing with, any court, regulatory body, administrative
agency or other governmental body, agency, or official is required on
the part of the Company (except as have been obtained under the 1933 Act
or such as may be required under state securities or blue sky laws
governing the purchase and distribution of the Securities) for the valid
issuance and sale of the Securities to the Underwriters as contemplated
by this Agreement;
(xiv) The Registration Statement, at the Effective Date, and the
Prospectus, when filed pursuant to Rule 424(b) under the 1933 Act
(except for the financial statements and the notes thereto and the
schedules and other financial and statistical data included therein, as
to which such counsel need not express any opinion), complied as to form
in all material respects with the applicable requirements of the 1933
Act and the rules and regulations of the SEC thereunder; and each of the
Incorporated Documents (except for the financial statements and the
notes thereto and the schedules and other financial and statistical data
included therein, as to which counsel need not express any opinion) when
it was filed with the SEC pursuant to the 1934 Act complied as to form
in all material respects with the requirements of the 1934 Act and the
rules and regulations of the SEC thereunder;
(xv) To the knowledge of such counsel, (A) other than as described
or contemplated in the Prospectus, there are no legal or governmental
proceedings pending or threatened against the Company or the
Subsidiaries, or to which the Company or the Subsidiaries, or any of
their property, is subject, which are required to be described in the
Registration Statement or the Prospectus and (B) there are no
agreements, contracts, indentures, leases or other instruments, that are
required to be described in the Registration Statement or the Prospectus
or to be filed as an exhibit to the Registration Statement or any
Incorporated Document that are not described or filed as required, as
the case may be;
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(xvi) The statements in the Registration Statement and the
Prospectus, insofar as they are descriptions of contracts, agreements or
other legal documents, or refer to statements of law or legal
conclusions, are accurate and present fairly in all material respects
the information required to be shown; and
(xvii) Although counsel has not undertaken, except as otherwise
indicated in their opinion, to determine independently, and does not
assume any responsibility for, the accuracy or completeness of the
statements in the Registration Statement, such counsel has participated
in the preparation of the Registration Statement and the Prospectus,
including review and discussion of the contents thereof (including
review and discussion of the contents of the Incorporated Documents),
and nothing has come to the attention of such counsel that has caused
them to believe that the Registration Statement, at the Effective Date,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus, as of the date
it was filed pursuant to Rule 424(b) and as of the Firm Closing Date or
such Option Closing Date, as the case may be, contained or 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 such counsel need 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
Registration Statement or the Prospectus or any Incorporated Document).
(d) Opinion of General Counsel. The Underwriters shall have
received on the Firm Closing Date and such Option Closing Date, an opinion of
Roy H. Stahl, Esq., Executive Vice President - General Counsel for the Company
(General Counsel), dated the Firm Closing Date and such Option Closing Date,
respectively, and addressed to the Underwriters which opinion shall state that
it is being rendered at the request of the Company which shall be to the effect
set forth in clause (xvii) of Section 5(c) hereof and which shall be to the
further effect that:
(i) Except as otherwise set forth in the Prospectus, the Company
and the Subsidiaries each have full corporate power and authority, and
all necessary governmental authorizations, approvals, orders, licenses,
certificates, franchises and permits of and from all governmental
regulatory officials and bodies (except where the failure so to have any
such authorizations, approvals, orders, licenses, certificates,
franchises or permits, individually or in the aggregate, would not have
a material adverse effect on the business, properties, operations or
financial condition of the Company and the Subsidiaries taken as a
whole), to own their respective properties and to conduct their
respective businesses as now being conducted;
(ii) Each Subsidiary is a corporation duly incorporated and validly
existing in good standing under the laws of the jurisdiction of its
incorporation; and all of the outstanding shares of capital stock of the
Subsidiaries have been duly authorized and validly issued, are fully
paid and non-assessable and, except as otherwise set forth in the
Prospectus, the Company owns of record, directly or indirectly, all such
shares of capital stock free and clear of any Adverse Claim (as defined
in Title 13 of the PA UCC);
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(iii) Other than as described or contemplated in the Prospectus (or
any supplement thereto), there are no legal or governmental proceedings
pending or, to such counsel's knowledge, threatened against the Company
or the Subsidiaries, or to which the Company or the Subsidiaries, or any
of their property, is subject, which are required to be described in the
Registration Statement or Prospectus (or any amendment or supplement
thereto);
(iv) To such counsel's knowledge, there are no agreements,
contracts, indentures, leases or other instruments, that are required to
be described in the Registration Statement or the Prospectus (or any
amendment or supplement thereto) or to be filed as an exhibit to the
Registration Statement or any Incorporated Document that are not
described or filed as required, as the case may be;
(v) To the knowledge of such counsel, neither the Company nor the
Subsidiaries is in violation of any law or regulation known to such
counsel to be generally applicable to the businesses of such companies
or of any decree of any court or governmental agency or body having
jurisdiction over the Company or the Subsidiaries, except where such
violations, considering all such cases in the aggregate, do not involve
a material risk to the business, properties, financial position or
results of operations of the Company and the Subsidiaries taken as a
whole;
(vi) Except as described in the Prospectus, there are no
outstanding options, warrants or other rights calling for the issuance
by the Company of, and such counsel does not know of any commitment,
plan or arrangement to issue, any shares of capital stock of the Company
or any security convertible into or exchangeable or exercisable for
capital stock of the Company; and
(vii) To the knowledge of such counsel, except as described in the
Prospectus, there is no holder of any security of the Company or any
other person who has the right, contractual or otherwise, to cause the
Company to sell or otherwise issue to them, or to permit them to
underwrite the sale of, the Securities or the right to have any Common
Stock or other securities of the Company included in the Registration
Statement or the right, as a result of the filing of the Registration
Statement, to require registration under the 1933 Act of any shares of
Common Stock or other securities of the Company.
(e) Letter of Accountants. On the date of this Agreement at a time
prior to the execution of this Agreement and at the Firm Closing Date and such
Option Closing Date, the Accountants shall have furnished to the Underwriters
letters, dated the date of this Agreement and the Firm Closing Date and such
Option Closing Date, respectively, in form and substance satisfactory to the
Underwriters, confirming that they are independent accountants within the
meaning of the 1933 Act and the rules and regulations of the SEC thereunder with
respect to the Company and the Subsidiaries and stating in effect that:
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(i) in the opinion of the Accountants, the consolidated financial
statements and schedules included or incorporated by reference in the
Prospectus and audited by them comply as to form in all material
respects with the applicable accounting requirements of the 1933 Act and
the 1934 Act and the rules and regulations of the SEC thereunder;
(ii) on the basis of a reading of the unaudited consolidated
financial statements, if any, included or incorporated by reference in
the Prospectus and the latest available interim unaudited consolidated
financial statements of the Company, the performance of the procedures
specified by the American Institute of Certified Public Accountants for
a review of any such financial statements as described in Statement on
Auditing Standards No. 71, inquiries of officials of the Company
responsible for financial and accounting matters and a reading of the
minutes of meetings of the stockholders and the Board of Directors of
the Company and the Audit, Executive Compensation and Nominating
Committees thereof through a specified date not more than five days
prior to the date of the applicable letter, nothing came to the
attention of the Accountants that caused them to believe that: (A) any
material modification should be made to the unaudited consolidated
financial statements, if any, included or incorporated by reference in
the Prospectus for them to be in conformity with generally accepted
accounting principles or any such financial statements do not comply as
to form in all material respects with the applicable accounting
requirements of the 1933 Act or the 1934 Act and the rules and
regulations of the SEC thereunder; (B) for the period ended as of the
date of the most recent available financial statements of the Company,
there were any decreases in revenues, earnings on common stock or
earnings per common share as compared with the comparable period of the
preceding year; or (C) at the date of the most recent available
financial statements of the Company and at a subsequent date not more
than five days prior to the date of such letter, there was any change in
the capital stock (except for sales under the Company's 1994 Equity
Compensation Plan, its 1994 Employee Stock Purchase Plan, its
Shareholder Rights Plan, and its Dividend Reinvestment and Direct Stock
Purchase Plan) or long-term debt of the Company or any decrease in its
net assets as compared with the amounts shown in the most recent
consolidated balance sheet included or incorporated by reference in the
Prospectus, except in all instances for changes or decreases that the
Prospectus discloses have occurred or may occur, or for changes or
decreases that are described in such letter that are reasonably
satisfactory to the Underwriters; and
(iii) if unaudited pro forma financial statements are included or
incorporated by reference in the Prospectus, on the basis of a reading
of such financial statements, carrying out certain specified procedures,
inquiries of certain officials of the Company and the company or
business acquired or to be acquired who have responsibility for
financial and accounting matters and proving the arithmetic accuracy of
the application of the adjustments to the historical amounts in such
financial statements, nothing came to the attention of the Accountants
that caused them to believe that such financial statements do not comply
in form in all material respects with the applicable accounting
requirements of Rule 11-02 of Regulation S-X or that such pro forma
adjustments have not been properly applied to such historical amounts in
the compilation of such financial statements.
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Such letter shall also cover such other matters as the Underwriters
shall reasonably request, including but not limited to the "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" contained in the financial statements included or
incorporated by reference in the Prospectus and any other information of
an accounting, financial or statistical nature included therein.
(f) No Material Changes. Since the respective dates as of which
information is given in the Prospectus there shall not have been any
change in the capital stock (other than pursuant to the Company's
registration statement on Form S-4 (File No. 333-93243) or the Company's
1994 Equity Compensation Plan, its 1994 Employee Stock Purchase Plan,
its Shareholder Rights Plan and its Dividend Reinvestment and Direct
Stock Purchase Plan, as such plans are in effect as of the date hereof)
or material increase in short-term debt or long-term debt of the Company
and the Subsidiaries taken as a whole or any change, or any development
involving a prospective change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of
operations of the Company and the Subsidiaries, otherwise than as set
forth in the Prospectus, the effect of which is in the judgment of the
Underwriters so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Securities on the terms and in the manner contemplated in the
Prospectus.
(g) Non-occurrence of Certain Events. On or after the date of this
Agreement there shall not have occurred any of the following: (i) a
suspension or material limitation in trading in securities generally on
the New York Stock Exchange or on the Philadelphia Stock Exchange; (ii)
a suspension or material limitation in trading in the Company's
securities on the New York Stock Exchange or on the Philadelphia Stock
Exchange; (iii) a general moratorium on commercial banking activities
declared by Federal or New York State or Pennsylvania State authorities;
or (iv) any material adverse change in the financial markets in the
United States, any outbreak of hostilities or escalation thereof or
other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or
economic conditions, if the effect of any such event specified in this
clause (iv) in the judgment of the Underwriters makes it impracticable
or inadvisable to proceed with the public offering or the delivery of
the Securities on the terms and in the manner contemplated in the
Prospectus.
(h) Listing of Securities. The Securities shall have been listed
(subject to official notice of issuance) on the New York Stock Exchange
or on the Philadelphia Stock Exchange.
(i) Officers' Certificate. At the Firm Closing Date and such Option
Closing Date, the Company shall have furnished or caused to be furnished
to the Underwriters a certificate of the President or a Vice President
of the Company and of the chief financial or chief accounting officer of
the Company as to the accuracy of the representations and warranties of
the Company herein on and as of the Firm Closing Date and on and as of
such Option Closing Date, as to the performance by the Company of all of
its obligations hereunder to be performed on or prior to the Firm
Closing Date and such Option Closing Date, as to the matters set forth
in Sections 5(a) and 5(f) hereof and as to such other matters as the
Underwriters may reasonably request.
(j) Lock-up Agreement. As of the date of this Agreement, the
Company has furnished to the Underwriters an agreement, in substantially
the form agreed to by the Underwriters, signed by Vivendi Water S.A.
with respect to the shares of Common Stock beneficially owned by it.
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In case any of the conditions specified above in this Section 5
shall not have been fulfilled, this Agreement or, in the case of any
condition to the purchase of Option Shares, on any Option Closing Date
which is after the Firm Closing Date, the obligations of the several
Underwriters to purchase the relevant Option Shares, may be terminated
by the Underwriters upon mailing or delivering written notice thereof to
the Company at any time prior to the Firm Closing Date or any Option
Closing Date, as the case may be. Any such termination shall be without
liability of either party to the other party except as otherwise
provided in Section 4(k) hereof and except for any liability under
Section 6 hereof.
6. Indemnification and Contribution
(a) Indemnification by Company. The Company will indemnify and
hold harmless each Underwriter for and against any losses, damages or
liabilities, joint or several, to which such Underwriter may become
subject, under the 1933 Act or otherwise, insofar as such losses,
damages or liabilities (or actions or claims in respect thereof) arise
out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in any Preliminary Prospectus, the
Registration Statement, the Prospectus, or any amendment thereto, 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 will reimburse each
Underwriter for any legal or other expenses incurred by such Underwriter
in connection with investigating or defending any such action or claim
as such expenses are incurred (including such losses, damages,
liabilities or expenses to the extent of the aggregate amount paid in
settlement of any such action or claim provided that (subject to Section
6(c) hereof) any such settlement is effected with the written consent of
the Company); provided, however, that the Company shall not be liable in
any such case to the extent that any such loss, damage or liability
arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary
Prospectus, the Registration Statement, the Prospectus, or any such
amendment, in reliance upon and in conformity with the Underwriter
Information; and provided, further, that the Company shall not be liable
in any such case under the indemnity agreement in this Section 6(a) with
respect to any Preliminary Prospectus or the Prospectus, to the extent
that any such losses, damages or liabilities result from the fact that
the Underwriter sold Securities to a person to whom there was not sent
or given, at or prior to the written confirmation of such sale, a copy
of the Prospectus or of the Prospectus as then amended or supplemented
(excluding any Incorporated Documents) in any case where such delivery
is required by the 1933 Act if the Company has previously furnished
copies thereof to the Underwriter and the loss, claim, liability,
expense or damage of the Underwriter results from an untrue statement,
alleged untrue statement, omission or alleged omission of a material
fact contained (y) in a Preliminary Prospectus which was corrected in
the Prospectus, or (z) in the Prospectus which was corrected in an
amendment or supplement thereto. The foregoing indemnity agreement shall
be in addition to any liability which the Company may otherwise have.
(b) Indemnification by Underwriters. Each Underwriter will
indemnify and hold harmless the Company for and against any losses,
damages or liabilities to which the Company may become subject, under
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the 1933 Act or otherwise, insofar as such losses, damages or
liabilities (or actions or claims in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment thereto, or arise out of
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, in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any such amendment, in
reliance upon and in conformity with the Underwriter Information in
respect of such Underwriter, and will reimburse the Company for any
legal or other expenses reasonably incurred by the Company in connection
with investigating or defending any such action or claim as such
expenses are incurred (including such losses, damages, liabilities or
expenses to the extent of the aggregate amount paid in settlement of any
such action or claim provided that (subject to Section 6(c) hereof) any
such settlement is effected with the written consent of the
Underwriters). The foregoing indemnity agreement shall be in addition to
any liability which the Underwriters may otherwise have.
(c) General. Promptly after receipt by an indemnified party under
Section 6(a) or 6(b) hereof of notice of the commencement of any action,
such indemnified party shall, if a claim in respect thereof is to be
made against the indemnifying party under Section 6(a) or 6(b) hereof,
notify such indemnifying party in writing of the commencement thereof,
but the failure so to notify such indemnifying party shall not relieve
such indemnifying party from any liability except to the extent that it
has been prejudiced in any material respect by such failure or from any
liability that it may have to any such indemnified party otherwise than
under Section 6(a) or 6(b) hereof. In case any such action shall be
brought against any such indemnified party and it shall notify such
indemnifying party of the commencement thereof, such indemnifying party
shall be entitled to participate therein and, to the extent that it
shall wish, jointly with any other indemnifying party under Section 6(a)
or 6(b) hereof similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except
with the consent of such indemnified party, be counsel to such
indemnifying party), and, after notice from such indemnifying party to
such indemnified party of its election so to assume the defense thereof,
such indemnifying party shall not be liable to such indemnified party
under Section 6(a) or 6(b) hereof for any legal expenses of other
counsel or any other expenses, in each case subsequently incurred by
such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. If at any time such indemnified
party shall have requested such indemnifying party under Section 6(a) or
6(b) hereof to reimburse such indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 6(a) or 6(b) hereof
effected without its written consent if (i) such settlement is entered
into more than 45 days after receipt by such indemnifying party of such
request for reimbursement, (ii) such indemnifying party shall have
received notice of the terms of such settlement at least 30 days prior
to such settlement being entered into and (iii) such indemnifying party
shall not have reimbursed such indemnified party in accordance with such
request for reimbursement prior to the date of such settlement. No such
indemnifying party shall, without the written consent of such
indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened
action or claim in respect of which indemnification or contribution may
be sought hereunder (whether or not such indemnified party is an actual
or potential party to such action or claim) unless such settlement,
24
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compromise or judgment (A) includes an unconditional release of such
indemnified party from all liability arising out of such action or claim
and (B) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified
party. In no event shall such indemnifying parties be liable for the
fees and expenses of more than one counsel, including any local counsel,
for all such indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances.
(d) Contribution. If the indemnification provided for in this
Section 6 is unavailable to or insufficient to indemnify or hold
harmless an indemnified party under Section 6(a) or 6(b) hereof in
respect of any losses, damages or liabilities (or actions or claims in
respect thereof) referred to therein, then each indemnifying party under
Section 6(a) or 6(b) hereof shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, damages or
liabilities (or actions or claims in respect thereof) in such proportion
as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other hand from the
offering of the Securities. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if
such indemnified party failed to give the notice required under Section
6(c) hereof, and such indemnifying party was prejudiced in a material
respect by such failure, then each such indemnifying party shall
contribute to such amount paid or payable by such indemnified party in
such proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of the Company on the one hand and
the Underwriters on the other hand in connection with the statements or
omissions that resulted in such losses, damages or liabilities (or
actions or claims in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company
on the one hand and such Underwriters on the other hand shall be deemed
to be in the same proportion as the total net proceeds from such
offering (before deducting expenses) received by the Company bear to the
total underwriting discounts and commissions received by the
Underwriters. The relative fault of the Company on the one hand and the
Underwriters on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material
fact relates to information supplied by the Company or the Underwriters
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 6(d) were determined
by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation that does
not take account of the equitable considerations referred to above in
this Section 6(d). The amount paid or payable by such an indemnified
party as a result of the losses, damages or liabilities (or actions or
claims in respect thereof) referred to above in this Section 6(d) shall
be deemed to include any legal or other expenses incurred by such
indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 6(d), no
Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Securities underwritten by
it and distributed to the public were offered to the public exceeds the
amount of any damages that such Underwriter has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 1933 Act) shall be entitled
to contribution from any person who was not guilty of such fraudulent
misrepresentation. The obligations of the Underwriters in this Section
6(d) to contribute are several in proportion to their respective
underwriting obligations with respect to the Securities and not joint.
25
<PAGE>
(e) Scope of Obligations. The obligations of the Company under this
Section 6 shall be in addition to any liability that the Company may
otherwise have and shall extend, upon the same terms and conditions, to
each officer, director, employee, agent or other representative and to
each person, if any, who controls any Underwriter within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act; and the
obligations of the Underwriters under this Section 6 shall be in
addition to any liability that the respective Underwriters may otherwise
have and shall extend, upon the same terms and conditions, to each
officer and director of the Company who signed the Registration
Statement and to each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act.
7. Representations, Warranties and Agreements to Survive Delivery. The
respective indemnities, agreements, representations, warranties and other
statements of the Company and the several Underwriters, as set forth in this
Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter, any officer, director, employee, agent or other
representative of the Underwriters or any controlling person of any Underwriter,
or the Company, any officer or director of the Company who signed the
Registration Statement or any controlling person of the Company, and shall
survive delivery of and payment for the Securities. The obligations of the
Company contained in Section 4(k) (to the extent provided for therein) and
Section 6 hereof shall survive termination of this Agreement.
8. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by
any standard form of telecommunication. Notices to the Underwriters shall be
directed to A.G. Edwards & Sons, Inc. at the address set forth on the first page
of this Agreement, Attention: Howard R. Posner; notice to the Company shall be
directed to Philadelphia Suburban Corporation, 762 W. Lancaster Avenue, Bryn
Mawr, PA 19010-3489, Attention: Executive Vice President - General Counsel.
9. Miscellaneous. The rights and duties of the parties to this
Agreement shall, pursuant to New York General Obligations Law Section 5-1401, be
governed by the law of the State of New York. This Agreement shall be binding
upon, and inure solely to the benefit of, the Underwriters and the Company,
except to the extent provided in Section 6(e) hereof, and their respective
heirs, executors, administrators, successors and assigns, and no other person
shall acquire or have any right under or by virtue of this Agreement. No
purchaser of any of the Securities from any Underwriter shall be deemed a
successor or assign by reason merely of such purchase. This Agreement may be
executed by any one or more of the parties hereto and thereto in any number of
counterparts, each of which shall be deemed to be an original, but all such
respective counterparts shall together constitute one and the same instrument.
The word "or" shall not be exclusive, and all references in this Agreement to
the words "herein," "hereof," "hereunder" and other words of similar import
refer to this Agreement as a whole and not to any particular Section or
subdivision hereof, and the captions to such Sections and subdivisions are for
convenience only and shall not affect the construction hereof.
26
<PAGE>
If the foregoing is in accordance with your understanding, please sign
and return to the Company the enclosed duplicate hereof, whereupon this
Agreement will become a binding agreement between the Company and the several
Underwriters in accordance with its terms.
Very truly yours,
PHILADELPHIA SUBURBAN CORPORATION
By: /s/ Nicholas DeBenedictis
----------------------------------
Name: Nicholas DeBenedictis
Title: Chairman
Accepted as of the date hereof:
A.G. EDWARDS & SONS, INC.
PAINEWEBBER INCORPORATED
JANNEY MONTGOMERY SCOTT LLC
By: A.G. Edwards & Sons, Inc.
By: /s/ Howard R. Posner
----------------------------
Name: Howard R. Posner
Title: Senior Vice President
27
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SCHEDULE I
----------
Underwriter Firm Shares
----------- -----------
A.G. Edwards & Sons, Inc......................................... 431,250
PaineWebber Incorporated......................................... 431,250
Janney Montgomery Scott LLC...................................... 287,500
---------
Total........................................... 1,150,000
=========
28
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SCHEDULE II
-----------
Philadelphia Suburban Water Company
Consumers Water Company
Consumers Ohio Water Company
Consumers Illinois Water Company
Consumers New Jersey Water Company
Consumers Maine Water Company
Consumers Pennsylvania Water Company--Shenango Valley Division
Consumers Pennsylvania Water Company--Roaring Creek Division
Consumers Pennsylvania Water Company--Susquehanna Division
29
