1
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 or 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 1995
Commission File Number 1-6659
PHILADELPHIA SUBURBAN CORPORATION
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Pennsylvania 23-1702594
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S.Employer
incorporation or organization) Identification No.)
762 Lancaster Avenue, Bryn Mawr, Pennsylvania 19010
- --------------------------------------------- ---------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (610)-527-8000
----------------
Indicate by check mark whether the registrant (1) filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
---- ----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of March 31, 1995.
11,760,729
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2
PHILADELPHIA SUBURBAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands of dollars)
March 31, December 31,
1995 1994
(Unaudited) (Audited)
--------- --------
Property, plant and equipment, at cost $466,568 $462,500
Less accumulated depreciation 78,969 76,791
-------- --------
Net property, plant and equipment 387,599 385,709
Current assets
Cash (58) (636)
Accounts receivable, net 16,916 19,303
Inventory, materials and supplies 1,815 1,696
Prepayments and other current assets 377 594
-------- --------
Total current assets 19,050 20,957
Regulatory assets 48,383 48,334
Deferred charges and other assets, net 3,250 3,183
-------- --------
$458,282 $458,183
======== ========
Common stockholders' equity $144,514 $143,795
Preferred stock of subsidiary with
mandatory redemption requirements 5,714 7,143
Long-term debt, excluding current portion 154,140 152,195
Commitments - -
Current liabilities
Current portion of preferred stock of
subsidiary with mandatory redemption
requirements 1,429 2,857
Current portion of long-term debt 887 887
Loans payable 5,645 4,050
Accounts payable 2,217 5,626
Accrued interest 3,801 3,346
Other accrued liabilities 12,114 9,912
Net reserves related to
discontinued operations 2,636 2,701
-------- --------
Total current liabilities 28,729 29,379
Deferred credits and other liabilities
Deferred income taxes and investment credits 68,306 67,721
Customers' advances for construction 23,629 24,713
Other non-current liabilities 10,946 11,028
-------- --------
Total deferred credits and other
liabilities 102,881 103,462
Contributions in aid of construction 22,304 22,209
-------- --------
$458,282 $458,183
======== ========
See notes to consolidated financial statements on page 4 of this report.
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PHILADELPHIA SUBURBAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(UNAUDITED)
Three Months Ended
March 31,
------------------
1995 1994
---- ----
Earned revenues $25,712 $24,849
Costs and expenses
Operating expenses 11,766 12,056
Depreciation 2,770 2,573
Amortization (17) (131)
Taxes other than income taxes 1,973 1,902
------- -------
16,492 16,400
------- -------
Operating income 9,220 8,449
Interest and debt expenses 3,396 3,165
Dividends on preferred stock 167 216
Allowance for funds used during
construction (40) (19)
------- -------
Income before income taxes 5,697 5,087
Provision for income taxes 2,382 2,138
------- -------
Net income $ 3,315 $ 2,949
======= =======
Net income per share $ .28 $ .26
======= =======
Average common and common equivalent
shares outstanding during the period 11,781 11,469
======= =======
See notes to consolidated financial statements on page 4 of this report.
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PHILADELPHIA SUBURBAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
(In thousands of dollars)
(UNAUDITED)
Three Months Ended
March 31,
------------------
1995 1994
---- ----
Cash flows from operating activities:
Net income $ 3,315 $ 2,949
Adjustments to reconcile net income to net
cash flows from operating activities:
Depreciation and amortization 2,753 2,442
Deferred taxes, net of taxes on
customers' advances 140 161
Net decrease (increase) in receivables,
inventory and prepayments 2,485 (481)
Net decrease in payables and
other accrued liabilities (1,161) (750)
Net increase in accrued interest 455 358
Other 368 (138)
------- -------
Net cash flows from operating activities 8,355 4,541
------- -------
Cash flows from investing activities:
Property, plant and equipment additions,
including allowance for funds used during
construction of $40 and $19 (4,612) (2,641)
Other (11) 28
------- -------
Net cash flows from investing activities (4,623) (2,613)
------- -------
Cash flows from financing activities:
Customers' advances and contributions in aid of
construction, net of income tax payments 409 295
Repayments of customers' advances (1,398) (1,455)
Net proceeds (repayments) of short-term debt 1,595 (819)
Proceeds of long-term debt 1,908 8,839
Repayments of long-term debt - (4,000)
Redemption of preferred stock of subsidiary (2,857) -
Proceeds from issuing common stock 692 654
Repurchase of common stock (5) (1,771)
Dividends paid (3,283) (3,078)
Other (150) (125)
------- -------
Net cash flows from financing activities (3,089) (1,460)
------- -------
Net cash flows from discontinued operations (65) (165)
------- -------
Net increase in cash 578 303
Cash deficit beginning of year (636) (868)
------- -------
Cash deficit at end of period $ (58) $ (565)
======= =======
See notes to consolidated financial statements on page 4 of this report.
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PHILADELPHIA SUBURBAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of dollars, except per share amounts)
Note 1 Basis of Presentation
The accompanying consolidated balance sheet of Philadelphia
Suburban Corporation at March 31, 1995, the consolidated statements
of income for the three months ended March 31, 1995 and 1994, and
the consolidated cash flow statements for the three months ended
March 31, 1995 and 1994 are unaudited, but reflect all adjustments,
consisting of only normal recurring accruals, which are, in the
opinion of management, necessary to present fairly the consolidated
financial position at March 31, 1995, the consolidated results of
operations, and the consolidated cash flow for the periods
presented. Because they cover interim periods, the statements and
related notes to the financial statements do not include all
disclosures and notes normally provided in annual financial
statements and therefore, should be read in conjunction with the
Annual Report on Form 10-K for the year ended December 31, 1994.
Note 2 Water Rates
Philadelphia Suburban Water Company (PSW) filed an application with
the Pennsylvania Public Utility Commission ("PUC") on April 28,
1995 requesting a $14,000 or 12.1% increase in annual revenues.
This application is currently pending before the PUC and a final
determination is anticipated by January 1996.
In addition to its base rates, PSW has utilized a surcharge or
credit on its bills to reflect certain changes in Pennsylvania
State taxes until such time as the tax changes are incorporated
into base rates. In July 1994, PSW was required to initiate a
revenue credit of .19% in order to provide its customers with the
savings associated with Pennsylvania tax rate decreases. Effective
April 10, 1995, PSW revised its credit to .4% to reflect the
savings associated with further decreases in the applicable taxes.
The change in 1995 is expected to result in an annual revenue
reduction of approximately $230.
Note 3 Long-Term Debt
In March 1995, PSW established a $100,000 medium-term note program
providing for the issuance of long-term debt with maturities ranging
from between one to thirty years at fixed rates of interest, as
determined at the time of issuance. The notes issued under this
program will be secured by the Twenty-ninth Supplement to the trust
indenture relating to PSW's First Mortgage Bonds. As of March 31,
1995, no debt has been issued through this program however, PSW
intends to borrow $15,000 through this program to partially fund the
acquisition of the water utility assets of Media Borough. The proceeds
from debt issuances under this program will be used for general
corporate purposes and to fund PSW's ongoing construction programs and
acquisitions.
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PHILADELPHIA SUBURBAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(In thousands of dollars, except per share amounts)
Note 4 Acquisitions
As discussed in the Company's Annual Report, PSW's proposal to
purchase the water utility assets of Media Borough ("Media") was
accepted in November 1994, and the necessary ordinance authorizing
the transaction has since been enacted. The transaction was
approved by the PUC in March 1995, and closing is expected to take
place by June 1995. The Media system, for which PSW will pay
approximately $24,500 in cash, covers a 23 square mile service area
contiguous to PSW's service territory. Annual revenues from this
system approximate $5,000.
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PHILADELPHIA SUBURBAN CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(In thousands of dollars, except per share amounts)
Philadelphia Suburban Corporation (the Company or PSC) is composed of
two businesses, a regulated water utility (Philadelphia Suburban Water
Company or PSW), and a non-regulated data processing service bureau (Utility
& Municipal Services, Inc. or UMS). The operations of UMS are not
significant to the financial results of the Company and, therefore, are not
discussed separately. Corporate expenses include administrative expenses of
a general nature.
Financial Condition
During the quarter, the Company made $4,612 of capital expenditures
related to routine capital improvements and replacements, redeemed $2,857 of
preferred stock, and repaid $1,398 of customer advances for construction.
During the first quarter of 1995, internally generated funds, available
working capital and funds available under the revolving credit agreement,
were sufficient to fund the cash requirements discussed above, and to pay
dividends.
At March 31, 1995, the Company and PSW had $6,375 and $730 available,
respectively under short-term lines of credit and PSW had $8,685 available
under its revolving credit agreement.
During the second quarter of 1995, PSW intends to issue approximately
$22,000 of First Mortgage Bonds through the Delaware County Industrial
Development Authority at an interest rate and maturity to be determined. The
net proceeds of this issue will be used to finance water system construction
projects and repay amounts outstanding under PSW's revolving credit
agreement.
Traditionally, PSW has financed its ongoing construction program and
other financial requirements separately from the Company. PSW's ability to
finance its future construction program and pay dividends to the Company
depends on its ability to attract the necessary external financing and to
maintain or increase internally generated funds. Rate increases and
regulatory support will be required to allow PSW to achieve an adequate level
of earnings necessary to attract capital, to maintain satisfactory debt
coverage ratios and to provide shareholders an adequate return on their
investment.
Management believes that with the improvement in the Company's and PSW's
capitalization ratios over the past three years, it will be able to obtain
the external financing that it may need. Further, management believes that
internally generated funds along with existing credit facilities and the
issuance of long-term debt are adequate to meet the Company's financing
requirements through the balance of the year and beyond.
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PHILADELPHIA SUBURBAN CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
(In thousands of dollars, except per share amounts)
Results of Operations
Analysis of First Quarter of 1995 Compared to First Quarter of 1994
Revenues for the quarter increased $863 or 3.5% primarily due to a 9.05%
rate increase granted PSW in June 1994, offset partially by a decrease in
customer consumption of water.
Operating expenses decreased by $290 or 2.4% primarily as a result of
the effects of the milder winter weather experienced in 1995 and the decrease
in customer consumption of water. The effects of the severe winter weather
in 1994 caused significant maintenance problems, including a high number of
water main breaks and required additional treatment costs as raw water
quality deteriorated during the first quarter of 1994. The reduction in
maintenance and production costs were partially offset by higher employee
benefit expenses and increased wages. The employee benefit expense increased
as a result of the recognition of $444 of additional costs for Postretirement
Benefits Other than Pensions computed under Statement of Financial Accounting
Standards No. 106 that were recognized in conjunction with the June 1994 rate
increase.
Depreciation increased by $197 or 7.7% reflecting the impact of utility
plant placed in service since the first quarter of 1994. Depreciation was
approximately 2.3% of average utility plant in service in both the first
quarter of 1995 and 1994.
Amortization was a credit of $17 compared to a credit of $131 in the
first quarter of 1994, a change of $114 or 87%. The change is due to $148 of
additional negative amortization associated with the December 1992
acquisitions of two water systems.
Taxes other than income taxes increased by $71 or 3.7% primarily due to
an increase in the base on which the Pennsylvania Capital Stock Tax is
calculated, and due to increased state regulatory taxes.
Interest expense increased by $231 or 7.3% reflecting higher interest
rates on borrowings under the Company's credit facilities and an increase in
the average debt outstanding.
Allowance for funds used during construction ("AFUDC") increased by $21
primarily due to a higher AFUDC rate. The AFUDC rate increased due to a
higher average cost of borrowing under its revolving credit facility in 1995
as compared to the first quarter of 1994.
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PHILADELPHIA SUBURBAN CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
(In thousands of dollars, except per share amounts)
The Company's effective income tax rate was 41.8% in 1995 and 42.0% in
1994. The decrease in the effective tax rate is primarily due to a 1%
reduction in the Pennsylvania Corporate Net Income tax rate, partially offset
by a change in the expenses that are not tax deductible.
Net income for the quarter increased by $366 or 12.4% primarily as a
result of increased revenues and lower operating expenses, partially offset
by increased interest expense and higher depreciation and amortization. On a
per share basis, earnings increased $.02 or 7.7% reflecting the improvement
in net income, offset by a 2.7% increase in the average number of shares
outstanding. The increased number of shares outstanding reflects additional
shares sold since the first quarter of 1994 through the Customer Stock
Purchase Plan and the Dividend Reinvestment and Optional Stock Purchase Plan.
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PHILADELPHIA SUBURBAN CORPORATION AND SUBSIDIARIES
Part II. Other Information
Item 1. Legal Proceedings
There are no pending legal proceedings to which the Registrant or
any of its subsidiaries is a party or to which any of their
properties is the subject that present a reasonable likelihood of a
material adverse impact on the Registrant. Reference is made to
Item 3 of the Company's Annual Report on Form 10-K for the year
ended December 31, 1994, which is included by a reference herein.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit No. Description
4.17 Twenty-ninth Supplemental
Indenture dated as of March 30, 1995
10.12 Placement Agency Agreement between
Philadelphia Suburban Water Company
and PaineWebber Incorporated dated
as of March 30, 1995
27 Financial Data Schedule
(b) Reports on Form 8-K
None
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be executed on its behalf by the
undersigned thereunto duly authorized.
May 10, 1995
PHILADELPHIA SUBURBAN CORPORATION
---------------------------------
Registrant
Nicholas DeBenedictis
---------------------------------
Nicholas DeBenedictis
Chairman and President
Michael P. Graham
--------------------------------
Michael P. Graham
Senior Vice President - Finance
and Treasurer
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EXHIBIT INDEX
Exhibit No. Description Page No.
- ----------- ----------- --------
4.17 Twenty-ninth Supplemental Indenture, dated
as of March 30, 1995 13
10.12 Placement Agency Agreement between
Philadelphia Suburban Water Company and
PaineWebber Incorporated, dated as of
March 30, 1995 46
27 Financial Data Schedule 110
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EXHIBIT 4.17
- -------------------------------------------------------------------------------
TWENTY-NINTH SUPPLEMENTAL
INDENTURE
DATED AS OF MARCH 1, 1995
TO
INDENTURE OF MORTGAGE
DATED AS OF JANUARY 1, 1941
----------------------------
PHILADELPHIA SUBURBAN WATER COMPANY
TO
CORESTATES BANK, N.A., as Trustee
----------------------------
$100,000,000 FIRST MORTGAGE BONDS,
MEDIUM TERM NOTE SERIES
- -------------------------------------------------------------------------------
14
TWENTY-NINTH SUPPLEMENTAL INDENTURE dated as of the first day of
March, 1995, by and between PHILADELPHIA SUBURBAN WATER COMPANY, a
corporation duly organized and existing under the laws of the Commonwealth of
Pennsylvania (the "Company"), party of the first part, and CORESTATES BANK,
N.A., a national banking association successor to The Pennsylvania Company
for Insurances on Lives and Granting Annuities, and as The Pennsylvania
Company for Banking and Trusts, and as The First Pennsylvania Banking and
Trust Company, and as First Pennsylvania Bank N.A. (the "Trustee"), party of
the second part.
WHEREAS, the Company heretofore duly executed and delivered to The
Pennsylvania Company for Insurances on Lives and Granting Annuities, as
Trustee, an Indenture of Mortgage dated as of January 1, 1941 (the "Original
Indenture"), which by reference is hereby made a part hereof, and in and by
the Original Indenture the Company conveyed and mortgaged to the Trustee
certain property therein described, to secure the payment of its bonds to be
generally known as its "First Mortgage Bonds" and to be issued under the
Original Indenture in one or more series as therein provided; and
WHEREAS, on March 29, 1947, concurrently with a merger of
Germantown Trust Company into The Pennsylvania Company for Insurances on
Lives and Granting Annuities, the name of the surviving corporation was
changed to The Pennsylvania Company for Banking and Trusts, on September 30,
1955, concurrently with a merger of The First National Bank of Philadelphia
into The Pennsylvania Company for Banking and Trusts, the name of the
surviving corporation was changed to The First Pennsylvania Banking and Trust
Company, and on June 3, 1974, by amendment to its Articles of Association,
The First Pennsylvania Banking and Trust Company was changed and converted
into a national bank and concurrently therewith changed its name to First
Pennsylvania Bank N.A., and on October 1, 1991, First Pennsylvania Bank N.A.
merged with and into The Philadelphia National Bank, which changed its name
to CoreStates Bank, N.A., such mergers and changes of name not involving any
change in the title, powers, rights or duties of the Trustee, as trustee
under the Original Indenture as supplemented at the respective dates thereof;
and
WHEREAS, the Company duly executed and delivered to the Trustee a
First Supplemental Indenture dated as of July 1, 1948, a Second Supplemental
Indenture dated as of July 1, 1952, a Third Supplemental Indenture dated as
of November 1, 1953, a Fourth Supplemental Indenture dated as of January 1,
1956, a Fifth Supplemental Indenture dated as of March 1, 1957, a Sixth
Supplemental Indenture dated as of May 1, 1958, a Seventh Supplemental
Indenture dated as of September 1, 1959, an Eighth Supplemental Indenture
dated as of May 1, 1961, a Ninth Supplemental Indenture dated as of April 1,
1962, a Tenth Supplemental Indenture dated as of March 1, 1964, an Eleventh
Supplemental Indenture dated as of November 1, 1966, a Twelfth Supplemental
Indenture dated as of January 1, 1968, a Thirteenth Supplemental Indenture
dated as of June 15, 1970, a Fourteenth Supplemental Indenture dated as of
November 1, 1970, a Fifteenth Supplemental Indenture dated as of December 1,
1972, a Sixteenth Supplemental Indenture dated as of May 15, 1975, a
Seventeenth Supplemental Indenture dated as of December 15, 1976, an
Eighteenth Supplemental Indenture dated as of May 1, 1977, a Nineteenth
Supplemental Indenture dated as of June 1, 1980, a Twentieth Supplemental
Indenture dated as of August 1, 1983, a Twenty-First Supplemental Indenture,
dated as of August 1, 1985, a Twenty-Second Supplemental Indenture, dated as
of April 1, 1986, a Twenty-Third Supplemental Indenture, dated as of April 1,
1987, a Twenty-Fourth Supplemental Indenture, dated as of June 1, 1988, a
15
Twenty-Fifth Supplemental Indenture, dated as of January 1, 1990, a Twenty-
Sixth Supplemental Indenture, dated as of November 1, 1991, a Twenty-Seventh
Supplemental Indenture, dated as of June 1, 1992 and a Twenty-Eighth
Supplemental Indenture, dated as of April 1, 1993, to subject certain
additional property to the lien of the Original Indenture and to provide for
the creation of additional series of bonds; and
WHEREAS, the Company has issued under the Original Indenture, as
supplemented at the respective dates of issue, thirty-four series of First
Mortgage Bonds designated, respectively, as set forth in the following table,
the Indenture creating each series and the principal amount of bonds thereof
issued being indicated opposite the designation of such series:
Designation Indenture Amount
- ----------- --------- ------
3 1/4% Series due 1971 Original $16,375,000
9 5/8% Series due 1975 Thirteenth Supplemental 10,000,000
9.15% Series due 1977 Fourteenth Supplemental 10,000,000
3% Series due 1978 First Supplemental 2,000,000
3 3/8% Series due 1982 Second Supplemental 4,000,000
3.90% Series due 1983 Third Supplemental 5,000,000
3 1/2% Series due 1986 Fourth Supplemental 6,000,000
4 1/2% Series due 1987 Fifth Supplemental 4,000,000
4 1/8% Series due 1988 Sixth Supplemental 4,000,000
5% Series due 1989 Seventh Supplemental 4,000,000
4 5/8% Series due 1991 Eighth Supplemental 3,000,000
4.70% Series due 1992 Ninth Supplemental 3,000,000
6 7/8% Series due 1993 Twelfth Supplemental 4,500,000
4.55% Series due 1994 Tenth Supplemental 4,000,000
10 1/8% Series due 1995 Sixteenth Supplemental 10,000,000
5 1/2% Series due 1996 Eleventh Supplemental 4,000,000
7 7/8% Series due 1997 Fifteenth Supplemental 5,000,000
8.44% Series due 1997 Twenty-Third Supplemental 12,000,000
9.20% Series due 2001 Seventeenth Supplemental 7,000,000
8.40% Series due 2002 Eighteenth Supplemental 10,000,000
5.95% Series due 2002 Twenty-Seventh Supplemental 4,000,000
12.45% Series due 2003 Twentieth Supplemental 10,000,000
13% Series due 2005 Twenty-First Supplemental 8,000,000
10.65% Series due 2006 Twenty-Second Supplemental 10,000,000
9.89% Series due 2008 Twenty-Fourth Supplemental 5,000,000
7.15% Series due 2008 Twenty-Eighth Supplemental 22,000,000
9.12% Series due 2010 Twenty-Fifth Supplemental 20,000,000
8 7/8% Series due 2010 Nineteenth Supplemental 8,000,000
6.50% Series due 2010 Twenty-Seventh Supplemental 3,200,000
9.17% Series due 2011 Twenty-Sixth Supplemental 5,000,000
9.93% Series due 2013 Twenty-Fourth Supplemental 5,000,000
9.97% Series due 2018 Twenty-Fourth Supplemental 5,000,000
9.17% Series due 2021 Twenty-Sixth Supplemental 8,000,000
9.29% Series due 2026 Twenty-Sixth Supplemental 12,000,000
and
WHEREAS, all of the bonds of each of said series are presently
outstanding other than the bonds listed on Schedule A attached hereto and
made a part hereof; and
WHEREAS, the Original Indenture and said Supplemental Indentures
were duly recorded in the Commonwealth of Pennsylvania on the dates and in
the office for the Recording of Deeds for the following counties in the
Mortgage Books and at the pages indicated in the following table:
[continued on next page]
16
COUNTY
Bucks Chester Delaware Montgomery
Date of
Indenture Recording Book Page Book Page Book Page Book Page
Original 2/20/41 496 1 H-13.Vol.307 20 1034 1 1625 1
First Supplemental 8/26/48 632 1 F-16.Vol.380 200 1668 169 2031 257
Second Supplemental 7/1/52 768 438 18.Vol.425 186 1962 376 2360 517
Third Supplemental 11/25/53 895 1 18.Vol.442 325 2052 1 2493 1
Fourth Supplemental 1/9/56 1089 155 Z-20.Vol.499 1 2199 1 2722 425
Fifth Supplemental 3/20/57 1181 316 B-22.Vol.536 601 2294 50 2850 335
Sixth Supplemental 5/9/58 1254 1 G-23 201 2380 039 2952 289
Seventh Supplemental 9/25/59 1332 509 B-25 109 2442 1 3090 249
Eighth Supplemental 5/9/61 - - Z-26 17 2526 312 - -
Eighth Supplemental 5/10/61 1409 225 - - - - 3249 289
Ninth Supplemental 4/10/62 1458 372 G-28 126 2581 463 3307 169
Tenth Supplemental 3/19/64 1568 1 M-30 967 2976 1043 3310 237
Eleventh Supplemental 11/4/66 1655 695 Q-32 6682 762 223 3549 129
Twelfth Supplemental 1/23/68 1691 531 N-33 219 2792 708 3542 315
Thirteenth Supplemental 7/2/70 1763 1167 D-35 80 2850 301 3687 23
Fourteenth Supplemental 11/5/70 1774 331 K-35 713 2858 3113 700 548
Fifteenth Supplemental 12/11/72 1869 196 O-37 998 2926 550 3786 96
Sixteenth Supplemental 5/28/75 1979 14 E-44 77 3005 511 4010 307
Seventeenth Suplemental 12/18/77 2072 683 L-51 1 3072 43 5002 436
Eighteenth Supplemental 4/29/77 2082 567 B-52 344 3078 728 5003 291
Nineteenth Supplemental 6/23/80 2303 714 J-62 92 3261 293 5030 502
Twentieth Supplemental 8/2/83 2487 370 D-72 1 96 810 5662 1045
Twenty-First Supplemental 8/27/85 2690 806 54 550 - - 5864 1347
Twenty-First Supplemental 8/28/85 - - - - 264 159 - -
Twenty-Second Supplemental 4/22/86 2774 160 263 275 326 592 5944 360
Twenty-Third Supplemental 4/1/87 2960 693 - - - - - -
Twenty-Third Supplemental 4/2/87 - - 680 337 447 1807 6115 602
Twenty-Fourth Supplemental 7/25/88 3199 1095 1224 389 0593 0585 6324 143
Twenty-Fifth Supplemental 1/12/90 0136 0250 1848 205 731 1571 6538 376
Twenty-Sixth Supplemental1 1/8/91 369 2190 2660 205 894 2241 6780 891
Twenty-Seventh Supplemental 6/29/92 0487 1829 3055 182 0969 2023 6918 302
Twenty-Eighth Supplemental 4/22/93 0652 1335 3542 1542 1081 0852 7112 0539
and
17
WHEREAS, the Company proposes to create under the Original
Indenture, as supplemented, one or more new series of bonds to be designated
"First Mortgage Bonds, Medium Term Note Series, Subseries __" (the "Bonds")
to be limited in aggregate principal amount to $100,000,000, to be issued
hereunder only as registered bonds without coupons, to be dated as provided
in the Original Indenture and this Twenty-Ninth Supplemental Indenture, to
bear interest at the rates and mature on the dates as determined hereunder by
the Company; and
WHEREAS, the Bonds may be issued in a single series or from time to
time in more than one series designated as a "subseries" and, if so issued in
more than one subseries, each subseries of the Bonds shall bear a separate
letter designation and the first such subseries of the Bonds shall be
designated "First Mortgage Bonds, Medium Term Note Series, Subseries A"; and
WHEREAS, the Company proposes to issue up to $100,000,000 principal
amount of the Bonds under the provisions of Article IV of the Original
Indenture, as supplemented by this Twenty-Ninth Supplemental Indenture, in
one or more transactions over a period of up to two years from March 17, 1995
through March 16, 1997 (the "Offering Period"), and, for each such
transaction, will comply with the provisions thereof as well as with other
provisions of the Original Indenture and indentures supplemental thereto in
connection with the issuance of additional bonds so that it will be entitled
to procure the authentication and delivery of the Bonds; and
WHEREAS, the lien of the Original Indenture as supplemented has
been perfected as a security interest under the Pennsylvania Uniform
Commercial Code by filing a financing statement in the office of the
Secretary of the Commonwealth; and
WHEREAS, Article XVIII of the Original Indenture provides that the
Company, when authorized by resolution of its Board of Directors, may with
the Trustee enter into an indenture supplemental to the Original Indenture,
which thereafter shall form a part of the Original Indenture, for the
purposes, inter alia, of subjecting to the lien of the Original Indenture
additional property, of defining the covenants and provisions applicable to
any bonds of any series other than the 3 1/4% Series due 1971, of adding to
the covenants and agreements of the Company contained in the Original
Indenture other covenants and agreements thereafter to be observed by the
Company, of surrendering any right or power in the Original Indenture
reserved to or conferred upon the Company, and of making such provisions in
regard to matters or questions arising under the Original Indenture as may be
necessary or desirable and not inconsistent therewith; and
WHEREAS, in addition to the property described in the Original
Indenture and the First, Second, Third, Fourth, Fifth, Sixth, Seventh,
Eighth, Ninth, Tenth, Eleventh, Twelfth, Thirteenth, Fourteenth, Fifteenth,
Sixteenth, Seventeenth, Eighteenth, Nineteenth, Twentieth, Twenty-First,
Twenty-Second, Twenty-Third, Twenty-Fourth, Twenty-Fifth, Twenty-Sixth,
Twenty-Seventh and Twenty-Eighth Supplemental Indentures, the Company has
acquired certain other property and desires to confirm the lien of the
Original Indenture thereon; and
WHEREAS, the Company, by proper corporate action, has duly
authorized the creation of said new series of Bonds (to be issued in
accordance with the terms and provisions of the Original Indenture and
indentures supplemental thereto, including this Twenty-Ninth Supplemental
Indenture, and to be secured by said Original Indenture and indentures
supplemental thereto, including this Twenty-Ninth Supplemental Indenture),
and has further duly authorized the execution, delivery and recording of this
Twenty-Ninth Supplemental Indenture setting forth the terms and provisions of
the Bonds insofar as said terms and provisions are not set forth in said
Original Indenture; and
18
WHEREAS, the Bonds and the Trustee's certificate upon said Bonds
are to be substantially in the forms following - the proper amount, names of
registered owners and numbers to be inserted therein, and such appropriate
insertions, omissions and changes to be made therein as may be required or
permitted by this Twenty-Ninth Supplemental Indenture to conform to any
pertinent law or usage:
[continued on next page]
19
THIS BOND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), AND SALES OR OTHER TRANSFERS HEREOF MAY BE MADE ONLY TO
QUALIFIED INSTITUTIONAL BUYERS AS DEFINED IN RULE 144A UNDER THE ACT
("QUALIFIED INSTITUTIONAL BUYERS"), APPROVED BY PAINEWEBBER INCORPORATED OR
ANOTHER DULY APPOINTED PLACEMENT AGENT (THE "PLACEMENT AGENTS") OR BY THE
COMPANY IN TRANSACTIONS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION UNDER
THE ACT.
BY ITS ACCEPTANCE OF THIS BOND, THE HOLDER REPRESENTS AND AGREES THAT IT IS A
QUALIFIED INSTITUTIONAL BUYER AND THAT THIS BOND IS BEING ACQUIRED FOR ITS
OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF OTHERS) OR AS A FIDUCIARY FOR OTHERS
FOR INVESTMENT AND NOT WITH A VIEW TO, OR FOR SALE IN CONNECTION WITH, THE
PUBLIC DISTRIBUTION HEREOF IN ANY TRANSACTION THAT WOULD BE IN VIOLATION OF
FEDERAL OR STATE SECURITIES LAWS, AND THAT ANY RESALE OR OTHER TRANSFER
HEREOF OR ANY INTEREST HEREIN PRIOR TO THE DATE THAT IS THREE YEARS AFTER THE
LATER OF (A) ITS DATE OF ISSUE OR (B) THE LAST DATE ON WHICH THE COMPANY OR
ANY OF ITS AFFILIATES WAS THE BENEFICIAL OWNER HEREOF WILL BE MADE ONLY (1)
TO A PLACEMENT AGENT OR THE COMPANY, (2) THROUGH ANY PLACEMENT AGENT OR BY
ANY PLACEMENT AGENT ACTING AS PRINCIPAL TO A QUALIFIED INSTITUTIONAL BUYER,
IN EACH CASE APPROVED BY SUCH PLACEMENT AGENT, (3) DIRECTLY TO A QUALIFIED
INSTITUTIONAL BUYER APPROVED BY THE COMPANY IN A TRANSACTION APPROVED BY THE
COMPANY, (4) THROUGH A DEALER OTHER THAN A PLACEMENT AGENT TO A QUALIFIED
INSTITUTIONAL BUYER, IN EACH CASE IN A TRANSACTION APPROVED BY THE COMPANY,
OR (5) DIRECTLY TO A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION THAT
MEETS THE REQUIREMENTS OF RULE 144A UNDER THE ACT, SUBJECT TO IN EACH CASE
THE DISPOSITION OF THE PURCHASER'S PROPERTY BEING AT ALL TIMES WITHIN ITS
CONTROL. IN THE CASE OF CERTIFICATED BONDS, ANY TRANSFER DESCRIBED IN CLAUSE
(3), (4) OR (5) ABOVE REQUIRES THE SUBMISSION TO THE TRUSTEE (AS DEFINED
HEREIN) OR DULY AUTHORIZED PAYING AGENT (AS DEFINED HEREIN) OF THE
CERTIFICATE OF TRANSFER ATTACHED HERETO DULY COMPLETED OR A DULY COMPLETED
TRANSFER INSTRUMENT SUBSTANTIALLY IN THE FORM OF THE CERTIFICATE OF TRANSFER.
THE COMPANY SHALL NOT RECOGNIZE ANY RESALE OR OTHER TRANSFER, OR ATTEMPTED
RESALE OR OTHER TRANSFER, OF THIS BOND NOT MADE IN COMPLIANCE WITH THE
FOREGOING PROVISIONS. THIS BOND AND RELATED DOCUMENTATION MAY BE AMENDED OR
SUPPLEMENTED FROM TIME TO TIME TO MODIFY THE RESTRICTIONS ON THE PROCEDURES
FOR RESALES AND OTHER TRANSFERS OF THIS BOND TO REFLECT ANY CHANGE IN
APPLICABLE LAW OR REGULATION (OR THE INTERPRETATION THEREOF) OR PROVIDE
ALTERNATIVE PROCEDURES IN COMPLIANCE WITH APPLICABLE LAW AND PRACTICES
RELATING TO THE RESALE OR OTHER TRANSFER OF RESTRICTED SECURITIES GENERALLY.
THE HOLDER OF THIS BOND SHALL BE DEEMED, BY THE ACCEPTANCE OF THIS BOND, TO
HAVE AGREED TO ANY SUCH AMENDMENT OR SUPPLEMENT.
[Bonds eligible for deposit at The Depository Trust company shall also bear
the following legend:]
THIS BOND IS A PERMANENT GLOBAL BOND. UNLESS THIS CERTIFICATE IS PRESENTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER
STREET, NEW YORK, NEW YORK) TO PHILADELPHIA SUBURBAN WATER COMPANY
("COMPANY") OR ITS AGENT FOR REGISTRATION OR TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH
OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
20
No. R- $
----------------------
PHILADELPHIA SUBURBAN WATER
COMPANY
(Incorporated under the Laws of the Commonwealth
of Pennsylvania)
First Mortgage Bond, Medium Term Note Series, Subseries __
PRINCIPAL AMOUNT ______________________________
ORIGINAL ISSUE DATE ___________________________
INTEREST RATE _________________________________
MATURITY DATE _________________________________
INITIAL REDEMPTION DATE _______________________
INITIAL REDEMPTION PERCENTAGE _________________
ANNUAL REDEMPTION REDUCTION PERCENTAGE ________
Philadelphia Suburban Water Company, a corporation organized and
existing under the laws of the Commonwealth of Pennsylvania (hereinafter
called the "Company", which term shall include any successor corporation as
defined in the Indenture hereinafter referred to), for value received, hereby
promises to pay to Cede & Co., as nominee for The Depository Trust Company
("DTC") or its registered assigns, on the Maturity Date referred to above,
the sum of and to pay interest
thereon at the Interest Rate per annum specified above, until the principal
hereof is paid or duly made available for payment, semiannually on May 15 and
November 15 (each an "Interest Payment Date") in each year commencing on the
first Interest Payment Date next succeeding the Original Issue Date specified
above (the "Original Issue Date"), unless the Original Issue Date occurs
between a Record Date, as defined below, and the next succeeding Interest
Payment Date, in which case commencing on the second Interest Payment Date
succeeding the Original Issue Date, to the registered holder of this bond of
the Medium Term Note Series on the Record Date with respect to such Interest
Payment Date, and on the maturity date specified on the face hereof (the
"Maturity Date") or any date fixed for redemption pursuant to the terms
hereof (the "Redemption Date"). Interest on this bond of the Medium Term
Note Series will accrue from the most recent Interest Payment Date to which
interest has been paid or duly provided for or, if no interest has been paid,
from the Original Issue Date specified above, until the principal hereof has
been paid or made duly available for payment. If the Maturity Date (or any
Redemption Date) or an Interest Payment Date falls on a day which is not a
Business Day, as defined below, principal (and premium, if any) or interest
payable with respect to such Maturity Date (or Redemption Date) or Interest
Payment Date will be paid on the next succeeding Business Day with the same
force and effect as if made on such Maturity Date (or Redemption Date) or
Interest Payment Date, as the case may be, and no interest shall accrue with
respect to such payment for the period from and after such Maturity Date (or
Redemption Date) or Interest Payment Date. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will,
subject to certain exceptions, be paid to the nominee of DTC, in whose name
this bond of the Medium Term Note Series is registered at the close of
business on the Record Date for such interest, which shall be the 1st day of
the calendar month in which such Interest Payment Date occurs; provided,
however, that interest payable on the Maturity Date (or any Redemption Date)
will be payable to the person to whom the principal hereof shall be payable.
As used herein, "Business Day" means any day other than a Saturday or Sunday,
on which the Trustee or banks in New York, New York are not required or
authorized by law to close.
21
The interest so payable will (except as otherwise provided in the
Twenty-Ninth Supplemental Indenture referred to herein) be calculated on the
basis of a 360-day year of twelve 30-day months.
This bond is one of a duly authorized issue of bonds of the Company
known as its First Mortgage Bonds, issued and to be issued without limitation
as to aggregate principal amount except as set forth in the Indenture
hereinafter mentioned in one or more series and equally secured (except
insofar as a sinking fund or other similar fund established in accordance
with the provisions of the Indenture may afford additional security for the
bonds of any specific series) by an Indenture of Mortgage (herein called the
"Indenture") dated as of January 1, 1941, executed by the Company to The
Pennsylvania Company for Insurances on Lives and Granting Annuities (now
CoreStates Bank, N.A.), as Trustee (hereinafter called the "Trustee"), to
which Indenture and all indentures supplemental thereto reference is hereby
made for a description of the property mortgaged and pledged, the nature and
extent of the security, the rights of the holders and registered owners of
the bonds and of the Trustee in respect of such security, and the terms and
conditions under which the bonds are and are to be secured and may be issued
under the Indenture; but neither the foregoing reference to the Indenture nor
any provision of this bond or of the Indenture or of any indenture
supplemental thereto shall affect or impair the obligation of the Company,
which is absolute and unconditional, to pay at the stated or accelerated
maturity herein and in the Indenture provided, the principal of, (premium if
any) and interest on this bond as herein provided. As provided in the
Indenture, the bonds may be issued in series for various principal amounts,
may bear different dates and mature at different times, may bear interest at
different rates and may otherwise vary as in the Indenture provided or
permitted. This bond is one of the bonds described in an indenture
supplemental to said Indenture known as the "Twenty-Ninth Supplemental
Indenture" dated as of March 1, 1995, and designated therein as "First
Mortgage Bonds, Medium Term Note Series, Subseries __" (the "bonds of the
Medium Term Note Series").
The bonds of the Medium Term Note Series will be issued in fully
registered form, without coupons. The bonds of the Medium Term Note Series
will be deposited with, or on behalf of DTC and registered in the name of a
nominee of DTC in the form of one or more global securities (the "Global
Bonds") or will remain in the custody of the Trustee pursuant to a Medium-
Term Note Certificate Agreement, dated November 28, 1990, as amended, between
DTC and the Trustee. DTC was created to hold securities of persons who have
accounts with DTC ("participants") and to facilitate the clearance and
settlement of securities transactions among its participants in such
securities through electronic book-entry changes in accounts of the
participants.
22
Upon the issuance of a Global Bond, DTC or its nominees will credit the
respective bonds of the Medium Term Note Series represented by such Global
Bond to accounts of participants. The accounts to be credited shall be
designated by the purchasers. Ownership of beneficial interests in such
Global Bonds will be limited to participants or persons that may hold
interests through participants. Ownership of beneficial interests by
participants in such Global Bonds will be shown on, and the transfer of those
ownership interests will be effected only through, records maintained by DTC
or its nominee for such Global Bonds. Ownership of beneficial interests in
such Global Bonds by persons that hold through participants will be shown on,
and the transfer of that ownership interest within such participant will be
effected only through, records maintained by such participant.
So long as DTC or its nominee is the registered owner of a Global Bond,
DTC or such nominee, as the case may be, will be considered the sole owner or
holder of those bonds of the Medium Term Note Series beneficially owned by
other persons for all purposes under the Indenture. Except as set forth
below, owners of beneficial interests in such Global Bonds will not be
entitled to have the bonds of the Medium Term Note Series registered in their
names, will not receive or be entitled to receive physical delivery of the
bonds of the Medium Term Note Series in definitive form and will not be
considered the owners or holders thereof under the Indenture.
Payment of principal of and any interest on the bonds of the Medium
Term Note Series registered in the name of or held by DTC or its nominee will
be made to DTC or its nominee, as the case may be, as the registered owner or
the holder of the Global Bond. Neither the Company, the Trustee nor any
Paying Agent for the bonds of the Medium Term Note Series will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in a Global Bond
or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests. Payment of principal or any interest on the
Certificated Bonds (as defined below), if any, will be made to the registered
owners thereof.
The Company expects that DTC, upon receipt of any payment of
principal or interest in respect of a permanent Global Bond, will credit
immediately participants' accounts with payments in amounts proportionate to
their respective beneficial interests in the principal amount of such Global
Bond as shown on the records of DTC. The Company also expects that payments
by participants to owners of beneficial interests in such Global Bond held
through such participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts
of customers in bearer form or registered in "street name", and will be the
responsibility of such participants.
A Global Bond may not be transferred except as a whole by DTC to a
nominee or a successor of DTC. If DTC is at any time unwilling or unable to
continue as depositary and a successor depositary is not appointed by the
Company within 90 days, the Company will issue bonds of the Medium Term Note
Series in definitive registered form (the "Certificated Bonds") in exchange
for the Global Bond or Bonds representing such bonds of the Medium Term Note
Series. In addition, the Company may at any time and in its sole discretion
determine not to have some of or all the bonds of the Medium Term Note Series
represented by one or more Global Bonds and, in such event, will issue bonds
of the Medium Term Note Series in definitive registered form in exchange for
all of the Global Bonds representing such bonds of the Medium Term Note
Series. In any such instance, an owner of a beneficial interest in a Global
Bond will be entitled to physical delivery of Certificated Bonds represented
by such Global Bond equal in amount to that represented by such beneficial
interest and to have such Certificated Bonds registered in its name.
23
Payments of principal, premium, if any, and interest shall be made
in such coin or currency of the United States as at the time of payment is
legal tender for the payment of public and private debts. Payments of
interest, other than interest payable at the Maturity Date, or any earlier
Redemption Date, will be paid in immediately available funds by wire transfer
to the account of Cede & Co., as nominee for DTC, or, in the case of
Certificated Bonds, by check mailed to the registered holder of such bond at
the address shown in the Register maintained by the Trustee, or at the option
of the registered holder, at such place in the United States of America as
the registered holder shall designate to the Trustee in writing.
Notwithstanding the foregoing, the registered holder of $10,000,000 or more
of Certificated Bonds with the same Interest Payment Date shall be entitled
to receive payment by wire transfer of immediately available funds, provided
that written instructions designating the account number and bank in New
York, New York (or other bank consented to by the Company) shall have been
received by the Trustee not less than ten (10) days prior to such Interest
Payment Date. Once such wire transfer instructions have been received by the
Trustee they shall remain in effect unless (i) the Trustee is notified, in
writing, of a change thereof not less than ten (10) days prior to an Interest
Payment Date; or (ii) the registered holder no longer holds an aggregate
principal amount of at least $10,000,000 of Certificated Bonds having the
same Interest Payment Date.
The principal amount hereof, premium, if any, and interest due on
the Redemption Date or at the Maturity Date will be paid on the Redemption
Date or at the Maturity Date in immediately available funds by wire transfer
to such account at a bank in New York, New York (or such other bank consented
to by the Company) as such holder of the bond of the Medium Term Note Series
shall have designated for such payment or for the payment of interest as
provided above. Payment to a registered holder of bonds of the Medium Term
Note Series for which appropriate instructions for payment have not been
received by the Trustee not later than ten (10) days prior to the related
date of payment shall be made by check mailed by the Trustee to the person
entitled thereto at such person's address appearing in the registry
maintained by the Trustee. Wire transfer instructions received by the
Trustee in connection with the payment of principal, premium, if any, and
interest due on the Redemption Date or the Maturity Date of the bond of the
Medium Term Note Series shall remain in effect unless the Trustee is notified
of a change thereof not less than ten (10) days prior to the Redemption Date
or Maturity Date. Payment of principal, premium, if any, and interest due on
the Redemption Date or the Maturity Date on the bond of the Medium Term Note
Series shall only be made against presentation and surrender of this bond at
an office designated by the Trustee and maintained for that purpose in New
York, New York, or at such other office or agency of the Company as the
Company shall designate.
So long as the bonds of the Medium Term Note Series are in book-
entry form represented by Global Bonds registered in the name of Cede & Co.,
or another nominee of DTC, then Cede & Co., or such other nominee of DTC, as
the case may be, will be considered the sole owner or holder of the bonds of
the Medium Term Note Series represented by such Global Bond for the purpose
of receiving payment on the bonds of the Medium Term Note Series, receiving
notices and for all other purposes under the Indenture or the Global Bond.
Ownership of beneficial interests in Global Bonds will be limited to persons
who have accounts with DTC (the "participants") or persons that may hold
interests through participants. Beneficial interests in a Global Bond will
be evidenced only by, and transfers thereof will be effected only through,
records maintained by DTC. Ownership of beneficial interests in such Global
Bonds by persons that hold through participants will be shown on, and the
24
transfer of that ownership interest within such participant will be effected
only through, records maintained by such participant. In the case of
Certificated Bonds, subject to certain restrictions set forth on the face
hereof and in the Indenture, this bond may be transferred at the aforesaid
office of the Trustee by surrendering this bond for cancellation, accompanied
by a written instrument of transfer in form satisfactory to the Trustee and
duly executed by the registered holder hereof in person or by the holder's
attorney duly authorized in writing, and thereupon the Trustee will issue in
the name of the transferee or transferees, in exchange hereof, a new bond or
bonds having identical terms and provisions and having a like aggregate
principal amount in authorized denominations, subject to the terms and
conditions set forth herein; provided, however, that the Trustee will not be
required to register the exchange or transfer of any bond of the Medium Term
Note Series after the first notice of redemption of such bond has been mailed
or during a period beginning at the opening of business ten (10) days
preceding an Interest Payment Date. Bonds of the Medium Term Note Series are
exchangeable at said office for other bonds of the Medium Term Note Series of
other authorized denominations of equal aggregate principal amount and having
identical terms and provisions. All such exchanges of bonds of the Medium
Term Note Series will be free of charge, but the Company may require payment
of a sum sufficient to cover any tax or other governmental charge in
connection therewith. All bonds of the Medium Term Note Series surrendered
for exchange shall be accompanied by a written instrument of transfer in the
form attached hereto to the Trustee and executed by the registered holder in
person or by the holder's attorney duly authorized in writing.
To the extent permitted by and as provided in the Indenture,
modifications or alterations of the Indenture, or of any indenture
supplemental thereto, and of the rights and obligations of the Company and of
the holders and registered owners of bonds issued and to be issued thereunder
may be made with the consent of the Company by an affirmative vote of the
holders and registered owners of not less than 75% in principal amount of
bonds then outstanding under the Indenture and entitled to vote, at a meeting
of the bondholders called and held as provided in the Indenture, and, in case
one or more but less than all of the series of bonds then outstanding under
the Indenture are so affected, by an affirmative vote of the holders and
registered owners of not less than 75% in principal amount of bonds of any
series then outstanding under the Indenture and entitled to vote on and
affected by such modification or alteration, or by the written consent of the
holders and registered owners of such percentages of bonds; provided,
however, that no such modification or alteration shall be made which shall
reduce the percentage of bonds the consent of the holders or registered
owners of which is required for any such modification or alteration or which
shall affect the terms of payment of the principal of or interest on the
bonds, or permit the creation by the Company of any lien prior to or on a
parity with the lien of the Indenture with respect to any property subject to
the lien of the Indenture as a first mortgage lien thereon, or which shall
affect the rights of the holders or registered owners of less than all of the
bonds of any series affected thereby.
The bonds of the Medium Term Note Series are subject to redemption
at the option of the Company on or after the Initial Redemption Date
specified on the face hereof, either as a whole or in part, on any Interest
Payment Date in coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts at
the Redemption Price equal to the Initial Redemption Percentage specified on
the face hereof of the principal amount hereof, which shall decline on each
anniversary of the Initial Redemption Date by the Annual Redemption Reduction
Percentage specified on the face hereof of the principal amount to be
redeemed until the Redemption Price is 100% of such principal amount, in each
case plus accrued interest to the Redemption Date.
25
The bonds of the Medium Term Note Series are subject to mandatory
redemption (i) in connection with the sale to or other acquisition by or on
behalf of one or more governments or municipal corporations or other
governmental subdivisions, bodies, authorities or agencies of all or
substantially all of the property of the Company, or (ii) in connection with
any voluntary or involuntary liquidation, dissolution or winding up of the
Company, occurring in connection with or subsequent to the acquisition of all
or substantially all of the stock of the Company ordinarily entitled to
voting rights by or on behalf of one or more governments or municipal
corporations or other governmental subdivisions, bodies, authorities or
agencies. In such a mandatory redemption, the bonds of the Medium Term Note
Series are redeemable in such coin or currency of the United States of
America as at the time of payment is legal tender for the payment of public
and private debts, at one hundred per cent (100%) of the principal amount
thereof, together with interest accrued thereon to the Redemption Date.
Any redemption shall be effected by notice mailed to the registered
owners thereof, as provided in the Indenture, at least thirty (30) days
before the Redemption Date, all on the conditions and in the manner provided
in the Indenture.
If this bond or any portion hereof is called for redemption and
payment thereof is duly provided for as specified in the Indenture, interest
shall cease to accrue hereon or on such portion, as the case may be, from and
after the Redemption Date. In the event of redemption of this bond in part
only, a new bond for the unredeemed portion hereof shall be issued in the
name of the holder hereof upon the surrender hereof.
The principal hereof may be declared or may become due prior to its
Maturity Date on the conditions, in the manner and with the effect set forth
in the Indenture upon the happening of an event of default, as in the
Indenture provided; subject, however, to the right, under certain
circumstances, of the registered owners of a majority in principal amount of
bonds then outstanding under the Indenture, including the bonds of the Medium
Term Note Series, to annul such declaration.
The Company, the Trustee and any Paying Agent may deem and treat
the registered owner of this bond as the absolute owner hereof for the
purpose of receiving payment of or on account of the principal hereof and the
interest hereon, and for all other purposes, and shall not be affected by any
notice to the contrary.
When any notice to holders of the Medium Term Notes requesting
consents, waivers, votes or other actions of such holders is given by the
Trustee hereunder at any time that the Medium Term Notes are represented by
Global Bonds registered in the name of Cede & Co., or another nominee of DTC,
such notice shall be sent by the Trustee to DTC with a request that DTC
forward (or cause to be forwarded) the notice to the DTC participants so that
DTC participants may forward (or cause to be forwarded) the notice to the
beneficial owners. The Trustee shall be entitled to rely on any omnibus
proxy delivered by DTC and to consider those DTC participants to whose
account the Medium Term Notes are credited on any record date or special
record date, as appropriate, and identified in a listing attached to the
omnibus proxy, as owners of the aggregate amount of Medium Term Notes set
forth on such listing for purposes of any consent, waiver, vote or other
action of holders of such Medium Term Notes.
26
No recourse shall be had for the payment of the principal of or
interest on this bond or for any claim based hereon or otherwise in respect
hereof or of the Indenture or of any indenture supplemental thereto against
any incorporator or any past, present or future stockholder, officer or
director of the Company or of any predecessor or successor corporation, as
such, either directly or through the Company, or through any such predecessor
or successor corporation or through any receiver or trustee in bankruptcy, by
virtue of any constitutional provision, statute or rule of law or equity, or
by the enforcement of any assessment or penalty or otherwise; all such
liability being, by the acceptance hereof and as part of the consideration
for the issue hereof, expressly waived and released by every holder or
registered owner hereof, as more fully provided in the Indenture.
The bonds of the Medium Term Note Series and related documentation
may be amended or supplemented from time to time by the Company without the
consent of any holder of bonds of the Medium Term Note Series to modify the
restrictions on and procedures for resale and other transfers of the bonds of
the Medium Term Note Series to reflect any change in applicable law or
regulation (or the interpretation thereof) or provide alternative procedures
in compliance with applicable law and practices relating to the resale or
other transfer of restricted securities generally. Each holder of any bond of
the Medium Term Note Series will be deemed, by the acceptance of such bond,
to have agreed to any such amendment or supplement.
The Company agrees to make available to any holder of bonds of the
Medium Term Note Series or a prospective purchaser of bonds of the Medium
Term Note Series, each of whom is a Qualified Institutional Buyer as defined
in Rule 144A of the Securities Act of 1933, as amended, such information
required by Rule 144A to enable resales of the bonds of the Medium Term Note
Series to be made pursuant to Rule 144A. However, the Company shall not be
required to provide more information than was required by Rule 144A as
originally adopted but may elect to do so, if necessary, under subsequent
revisions of Rule 144A.
This bond shall not be entitled to any benefit under the Indenture
or any indenture supplemental thereto, or become valid or obligatory for any
purpose, until CoreStates Bank, N.A., as Trustee under the Indenture, or a
successor trustee thereunder, shall have signed the certificate of
authentication endorsed hereon.
This bond of the Medium Term Note Series shall be deemed to be a
contract and shall be construed in accordance with and governed by the laws
of the State of New York (excluding laws governing conflicts of law).
IN WITNESS WHEREOF, Philadelphia Suburban Water Company has caused
this bond to be signed by its President or a Vice President and its corporate
seal to be hereto affixed and attested by its Secretary or an Assistant
Secretary, and this bond to be dated ____________.
PHILADELPHIA SUBURBAN
Attest: WATER COMPANY
By:
- -------------------------- -----------------------------
Assistant Secretary Vice President and Treasurer
27
[Form of Trustee's Certificate]
This bond is one of the bonds, of the series designated therein,
referred to in the within-mentioned Twenty-Ninth Supplemental Indenture.
CORESTATES BANK, N.A., TRUSTEE
Dated: By:
-------------------- -----------------------------
Authorized Officer
[Form of Certificate of Transfer]
(To be delivered only with a Certificated Bond to the Trustee)
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
(please print or typewrite name and address including postal zip code of
assignee and insert Taxpayer Identification No.)
this bond and all rights hereunder, hereby irrevocably constituting and
appointment attorney to transfer this bond the books of the Company with full
power of substitution in the premises.
CERTIFICATE OF TRANSFER
(The following is not required for sales or other transfers of this
bond to or through the Company or a Placement Agent).
In connection with any transfer of this bond occurring prior to the
date which is three years after the later of (a) the Original Issue Date of
this bond, or (b) the last date the Company or any of its affiliates was the
beneficial owner of this bond, the undersigned confirms that:
[ ] This bond is being transferred by the undersigned to a transferee
that is, or that the undersigned reasonably believes to be, a
"qualified institutional buyer" (as defined in Rule 144A under the
Securities Act of 1933, as amended) pursuant to the exemption from
registration under the Securities Act of 1933, as amended, provided
by Rule 144A thereunder.
If the foregoing box is not checked, then, so long as the
accompanying bond shall bear a legend on its face restricting resales and
other transfers thereof (except in the case of a resale or other transfer
made (i) to the Placement Agent referred to in such legend or to the Company
or (ii) through the Placement Agent or by the Placement Agent acting as
principal to a "qualified institutional buyer" as defined in Rule 144A under
the Securities Act of 1933, as amended, in a transaction approved by the
Placement Agent) the Trustee shall not be obligated to register this bond in
the name of any person other than the registered owner hereof.
Dated:
NOTICE: The signature of the beneficial owner to this assignment
must correspond with the name as written on the face of this bond in every
particular, without alteration or enlargement or any change whatsoever.
TO BE COMPLETED BY PURCHASER IF THE BOX ABOVE IS CHECKED:
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The undersigned represents and warrants that it is a "qualified
institutional buyer" as defined in Rule 144A under the Securities Act of
1933, as amended, and acknowledges that it has received such information
regarding the Company as the undersigned has requested pursuant to Rule 144A
or has determined not to request such information and that it is aware that
the registered owner is relying upon the undersigned's foregoing
representations in order to claim the exemption from registration provided by
Rule 144A.
Dated:
NOTICE: To be executed by an officer.
and;
WHEREAS, all acts and things necessary to make the Bonds, when
executed by the Company and authenticated and delivered by the Trustee as in
this Twenty-Ninth Supplemental Indenture provided and issued by the Company,
valid, binding and legal obligations of the Company, and this Twenty-Ninth
Supplemental Indenture a valid and enforceable supplement to said Original
Indenture, have been done, performed and fulfilled, and the execution of this
Twenty-Ninth Supplemental Indenture has been in all respects duly authorized:
NOW, THEREFORE, THIS TWENTY-NINTH SUPPLEMENTAL INDENTURE
WITNESSETH: That, in order to secure the payment of the principal and
interest of all bonds issued under the Original Indenture and all indentures
supplemental thereto, according to their tenor and effect, and according to
the terms of the Original Indenture and of any indenture supplemental
thereto, and to secure the performance of the covenants and obligations in
said bonds and in the Original Indenture and any indenture supplemental
thereto respectively contained, and to provide for the proper issuing,
conveying and confirming unto the Trustee, its successors in said trust and
its and their assigns forever, upon the trusts and for the purposes expressed
in the Original Indenture and in any indenture supplemental thereto, all and
singular the estates, property and franchises of the Company thereby
mortgaged or intended so to be, the Company, for and in consideration of the
premises and of the sum of One Dollar ($1.00) in hand paid by the Trustee to
the Company upon the execution and delivery of this Twenty-Ninth Supplemental
Indenture, receipt whereof is hereby acknowledged, and of other good and
valuable consideration, has granted, bargained, sold, aliened, infefted,
released and confirmed and by these presents does grant, bargain, sell,
alien, enfeoff, release and confirm unto CoreStates Bank, N.A., as Trustee,
and to its successors in said trust and its and their assigns forever:
All and singular the premises, property, assets, rights and
franchises of the Company, whether now or hereafter owned, constructed or
acquired, of whatever character and wherever situated (except as herein
expressly excepted), including among other things the following, but
reference to or enumeration of any particular kinds, classes, or items of
property shall not be deemed to exclude from the operation and effect of the
Original Indenture or any indenture supplemental thereto any kind, class or
item not so referred to or enumerated:
29
I.
REAL ESTATE AND WATER RIGHTS.
The real estate described in the deeds from the grantors named in
Exhibit A hereto, dated and recorded as therein set forth, and any other real
estate and water rights acquired since the date of the Twenty-Eighth
Supplemental Indenture.
II.
BUILDINGS AND EQUIPMENT.
All mains, pipes, pipe lines, service pipes, buildings,
improvements, standpipes, reservoirs, wells, flumes, sluices, canals, basins,
cribs, machinery, conduits, hydrants, water works, plants and systems, tanks,
shops, structures, purification systems, pumping stations, fixtures, engines,
boilers, pumps, meters and equipment which are now owned or may hereafter be
acquired by the Company (except as herein expressly excepted), including all
improvements, additions and extensions appurtenant to any real or fixed
property now or hereafter subject to the lien of the Original Indenture or
any indenture supplemental thereto which are used or useful in connection
with the business of the Company as a water company or as a water utility,
whether any of the foregoing property is now owned or may hereafter be
acquired by the Company.
It is hereby declared by the Company that all property of the kinds
described in the next preceding paragraph, whether now owned or hereafter
acquired, has been or is or will be owned or acquired with the intention of
using the same in carrying on the business or branches of the business of the
Company, and it is hereby declared that it is the intention of the Company
that all thereof (except property hereinafter specifically excepted) shall be
subject to the lien of the Original Indenture.
It is agreed by the Company that so far as may be permitted by law
tangible personal property now owned or hereafter acquired by the Company,
except such as is hereafter expressly excepted from the lien hereof, shall be
deemed to be and construed as fixtures and appurtenances to the real property
of the Company.
III.
FRANCHISES AND RIGHTS OF WAY.
All the corporate and other franchises of the Company, all water
and flowage rights, riparian rights, easements and rights of way, and all
permits, licenses, rights, grants, privileges and immunities, and all
renewals, extensions, additions or modifications of any of the foregoing,
whether the same or any thereof, or any renewals, extensions, additions or
modifications thereof, are now owned or may hereafter be acquired, owned,
held, or enjoyed by the Company.
IV.
AFTER ACQUIRED PROPERTY.
All real and fixed property and all other property of the character
hereinabove described which the Company may hereafter acquire.
30
TOGETHER WITH all and singular the tenements, hereditaments and
appurtenances belonging or in any way appertaining to the aforesaid property
or any part thereof, with the reversion and reversions, remainder and
remainders, tolls, rents, revenues, issues, income, product and profits
thereof, and all the estate, right, title, interest and claim whatsoever, at
law as well as in equity, which the Company now has or may hereafter acquire
in and to the aforesaid premises, property, rights and franchises and every
part and parcel thereof.
EXCEPTING AND RESERVING, HOWEVER, certain premises, not used or
useful in the supplying of water by the Company, expressly excepted and
reserved from the lien of the Original Indenture and not subject to the terms
thereof.
AND ALSO SAVING AND EXCEPTING from the property hereby mortgaged
and pledged, all of the following property (whether now owned by the Company
or hereafter acquired by it): all bills, notes and accounts receivable, cash
on hand and in banks, contracts, choses in action and leases to others (as
distinct from the property leased and without limiting any rights of the
Trustee with respect thereto under any of the provisions of the Original
Indenture or of any indenture supplemental thereto), all bonds, obligations,
evidences of indebtedness, shares of stock and other securities, and
certificates or evidences of interest therein, all automobiles, motor trucks,
and other like automobile equipment and all furniture, and all equipment,
materials, goods, merchandise and supplies acquired for the purpose of sale
in the ordinary course of business or for consumption in the operation of any
properties of the Company other than any of the foregoing which may be
specifically transferred or assigned to or pledged or deposited with the
Trustee hereunder or required by the provisions of the Original Indenture or
any indenture supplemental thereto so to be; provided, however, that if, upon
the happening of a completed default, as specified in Section I of Article XI
of the Original Indenture, the Trustee or any receiver appointed hereunder
shall enter upon and take possession of the mortgaged property, the Trustee
or any such receiver may, to the extent permitted by law, at the same time
likewise take possession of any and all of the property described in this
paragraph then on hand and any and all other property of the Company then on
hand, not described or referred to in the foregoing granting clauses, which
is used or useful in connection with the business of the Company as a water
company or as a water utility, and use and administer the same to the same
extent as if such property were part of the mortgaged property, unless and
until such completed default shall be remedied or waived and possession of
the mortgaged property restored to the Company, its successors or assigns.
SUBJECT, HOWEVER, to the exceptions, reservations and matters
hereinabove and in the Original Indenture recited, to releases executed since
the date of the Original Indenture in accordance with the provisions thereof,
to existing leases, to easements and rights of way for pole lines and
electric transmission lines and other similar encumbrances and restrictions
which the Company hereby certifies, in its judgment, do not impair the use of
said property by the Company in its business, to liens existing on or claims
against, and rights in and relating to, real estate acquired for right-of-way
purposes, to taxes and assessments not delinquent, to alleys, streets and
highways that may run across or encroach upon said lands, to liens, if any,
incidental to construction, and to Permitted Liens, as defined in the
Original Indenture; and, with respect to any property which the Company may
hereafter acquire, to all terms, conditions, agreements, covenants,
exceptions and reservations expressed or provided in such deeds and other
instruments, respectively, under and by virtue of which the Company shall
hereafter acquire the same and to any and all liens existing thereon at the
time of such acquisition.
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TO HAVE AND TO HOLD, all and singular the property, rights,
privileges and franchises hereby conveyed, transferred or pledged or intended
so to be unto the Trustee and its successors in the trust heretofore and
hereby created, and its and their assigns forever.
IN TRUST NEVERTHELESS, for the equal pro rata benefit and security
of each and every person or corporation who may be or become the holders of
bonds and coupons secured by the Original Indenture or by any indenture
supplemental thereto, or both, without preference, priority or distinction as
to lien or otherwise of any bond or coupon over or from any other bond or
coupon, so that each and every of said bonds and coupons issued or to be
issued, of whatsoever series, shall have the same right, lien and privilege
under the Original Indenture and all indentures supplemental thereto and
shall be equally secured hereby and thereby, with the same effect as if said
bonds and coupons had all been made, issued and negotiated simultaneously on
the date thereof; subject, however, to the provisions with reference to
extended, transferred or pledged coupons and claims for interest contained in
the Original Indenture and subject to any sinking or improvement fund or
maintenance deposit provisions, or both, for the benefit of any particular
series of bonds.
IT IS HEREBY COVENANTED, DECLARED AND AGREED, by and between the
parties hereto, that all such bonds and coupons are to be authenticated,
delivered and issued, and that all property subject or to become subject
hereto is to be held subject to the further covenants, conditions, uses and
trusts hereinafter set forth, and the Company, for itself and its successors
and assigns, does hereby covenant and agree to and with the Trustee and its
successor or successors in said trust, for the benefit of those who shall
hold said bonds and coupons, or any of them, issued under this Indenture or
any indenture supplemental hereto, or both, as follows:
32
ARTICLE I.
Form, Authentication and Delivery of the Bonds;
Redemption Provisions
SECTION 1. There shall be a thirty-fifth series (and later series
as described herein) of bonds, limited in aggregate principal amount to
$100,000,000 designated as "Philadelphia Suburban Water Company First
Mortgage Bonds, Medium Term Note Series, Subseries __" (the "Bonds"). The
Bonds may be issued at any time during the Offering Period in a single
subseries or from time to time during the Offering Period in more than one
subseries pursuant to this Twenty-Ninth Supplemental Indenture and the
Original Indenture. Each subseries of the Bonds issued hereunder shall
constitute a separate series for purposes of this Twenty-Ninth Supplemental
Indenture and the Original Indenture. Each subseries of the Bonds shall be
initially authenticated and delivered from time to time upon delivery to the
Trustee of the items specified in Article IV of the Original Indenture,
including the initial authorizing resolution of the Board of Directors of the
Company for the issuance of the Bonds and a certificate of an authorized
officer of the Company issued pursuant to said resolution (a "Subseries
Authorizing Certificate") specifying the principal amount of the Bonds of
such subseries to be issued on the specified date of issuance, the numbers,
denominations, redemption date or dates, maturity date or dates, redemption
prices and interest rate or rates of such Bonds.
Interest on each subseries of the Bonds shall be payable
semiannually on May 15 and November 15 (each an "Interest Payment Date") in
each year commencing on the first Interest Payment Date next succeeding the
date of authentication of such Bond (the "Original Issue Date"), unless the
Original Issue Date occurs between a Record Date, as defined below, and the
next succeeding Interest Payment Date, in which case commencing on the second
Interest Payment Date succeeding the Original Issue Date, to the registered
holders of the Bonds on the Record Date with respect to such Interest Payment
Date, and on the maturity date specified on the face of the Bond (the
"Maturity Date") or any date fixed for redemption pursuant to the terms of
such Bond (the "Redemption Date"). Interest on each subseries of Bonds will
accrue from the most recent Interest Payment Date to which interest has been
paid or duly provided for or, if no interest has been paid, from its Original
Issue Date, until the principal has been paid or made duly available for
payment. If the Maturity Date (or any Redemption Date) or an Interest
Payment Date falls on a day which is not a Business Day, as defined below,
principal (and premium, if any) or interest payable with respect to such
Maturity Date (or Redemption Date) or Interest Payment Date will be paid on
the next succeeding Business Day with the same force and effect as if made on
such Maturity Date (or Redemption Date) or Interest Payment Date, as the case
may be, and no interest shall accrue with respect to such payment for the
period from and after such Maturity Date (or Redemption Date) or Interest
Payment Date. The term "Record Date" as used in this Section 1 with respect
to any regular Interest Payment Date shall mean the 1st day of the calendar
month in which such Interest Payment Date occurs. As used herein, "Business
Day" means any day other than a Saturday or Sunday, on which the Trustee or
banks in New York, New York are not required or authorized by law to close.
Each subseries of the Bonds shall be stated to mature (subject to
the right of earlier redemption at the prices and dates and upon the terms
and conditions hereinafter set forth) and shall bear interest at the rates
set forth in the Subseries Authorizing Certificate.
The Bonds shall be issuable only as registered bonds without
coupons, shall be in the form hereinabove recited, in the minimum
denomination of $100,000 or any integral multiple of $1,000 in excess
thereof, shall be lettered "R", and shall bear such numbers as the Company
may reasonably require.
33
The principal of, and premium, if any, and interest on the Bonds
shall be payable in such coin or currency of the United States of America as
at the time of payment is legal tender for the payment of public and private
debts; provided, however, that each installment of interest may be paid by
check to the order of the person entitled thereto, mailed to such person's
address as the same appears on the books maintained for such purpose by or on
behalf of the Company, or by bank wire transfer of immediately available
funds pursuant to instructions incorporated in an agreement between such
person and the Trustee or the Company.
The person in whose name any Bond is registered at the close of
business on any Record Date with respect to any Interest Payment Date shall
be entitled to receive the interest payable on such Interest Payment Date
notwithstanding the cancellation of such Bond upon any transfer or exchange
subsequent to the Record Date and prior to such Interest Payment Date;
provided, however, that if and to the extent the Company shall default in the
payment of the interest due on such Interest Payment Date, such defaulted
interest shall be paid to the persons in whose names outstanding Bonds are
registered at the close of business on a subsequent Record Date established
by notice given by mail by or on behalf of the Company to the holders of
Bonds not less than fifteen (15) days preceding such subsequent Record Date,
such Record Date to be not less than ten (10) days preceding the date of
payment of such defaulted interest.
Exchange of any Bonds shall be effected in accordance with the
applicable provisions of Sections 7, 8 and 9 of Article II of the Original
Indenture.
The text of the Bonds and of the certificate of the Trustee upon
such Bonds shall be, respectively, substantially of the tenor and effect
hereinbefore recited.
SECTION 2. Each subseries of the Bonds shall be subject to
redemption at the option of the Company on and after the Initial Redemption
Date indicated on the face of the Bonds. On and after the Initial Redemption
Date, the Bonds of such subseries may be redeemed in whole or in part in
increments of $1,000 (provided that any remaining principal hereof shall be
at least $100,000) at the option of the Company at the Redemption Price
(hereinafter defined), together with interest thereon payable to the
Redemption Date.
The Redemption Price shall initially be the Initial Redemption
Percentage specified on the face of such subseries of the Bonds of the
principal amount of such subseries and, if applicable, shall decline on each
anniversary of the Initial Redemption Date by the Annual Redemption Reduction
Percentage specified on the face of such Subseries of the Bonds, of the
principal amount to be redeemed until the Redemption Price is 100% of such
principal amount.
SECTION 3. Each subseries of the Bonds shall be subject to
mandatory redemption (i) in connection with the sale to or other acquisition
by or on behalf of one or more governments or municipal corporations or other
governmental subdivisions, bodies, authorities or agencies of all or
substantially all of the property of the Company, or (ii) in connection with
any voluntary or involuntary liquidation, dissolution or winding up of the
Company, occurring in connection with or subsequent to the acquisition of all
or substantially all of the stock of the Company ordinarily entitled to
voting rights by or on behalf of one or more governments or municipal
corporations or other governmental subdivisions, bodies, authorities or
agencies. The Bonds are redeemable in such coin or currency of the United
States of America as at the time of payment is legal tender for the payment
of public and private debts, at one hundred per cent (100%) of the principal
amount thereof, together with interest accrued thereon to the date fixed for
redemption.
34
SECTION 4. Any redemption of the Bonds shall be effected in
accordance with the provisions of Article V of the Original Indenture.
SECTION 5. During the Offering Period, there will be delivered to
the Trustee an adequate number of executed Bonds which will have the Bond
number, principal amount, Original Issue Date, interest rate, Maturity Date,
Initial Redemption Date, Initial Redemption Percentage and Annual Redemption
Reduction Percentage left blank. Each Bond will be signed and sealed
manually or by facsimile on behalf of the Company, to be held in safekeeping
by the Trustee for the account of the Company. If an officer of the Company
whose signature is on a Bond no longer holds such office at the time the
Trustee delivers the Bond in accordance with this Agreement, the Bond will be
valid nevertheless. Each subseries of the Bonds may be executed by the
Company and delivered to the Trustee and shall be authenticated by the
Trustee and delivered to or upon the order of the Company, upon receipt by
the Trustee of the resolutions, certificates, opinions or other instruments
or all of the foregoing required to be delivered upon the issue of bonds
pursuant to the provisions of the Original Indenture and receipt of a Series
Authorizing Resolution for such subseries.
ARTICLE II.
Maintenance or Improvement Deposit.
SECTION 1. The Company covenants that it will deposit with the
Trustee on or before the March 1 next occurring after the bonds of the 5 1/2%
Series due 1996 cease to be outstanding, or on or before the March 1 next
occurring after the bonds of the 7 7/8% Series due 1997, cease to be
outstanding, or on or before the March 1 next occurring after the bonds of
the 8.44% Series due 1997 cease to be outstanding, or on or before the March
1 next occurring after the bonds of the 9.20% Series due 2001 cease to be
outstanding, or on or before the March 1 next occurring after the bonds of
the 8.40% Series due 2002 cease to be outstanding, or on or before the March
1 next occurring after the bonds of the 12.45% Series due 2003 cease to be
outstanding, or on or before the March 1 next occurring after the bonds of
the 13% Series due 2005 cease to be outstanding, or on or before the March 1
next occurring after the bonds of the 10.65% Series due 2006 cease to be
outstanding, or on or before the March 1 next occurring after the bonds of
the 9.89% Series due 2008, or on or before the March 1 next occurring after
the bonds of the 7.15% Series due 2008 cease to be outstanding, or on or
before the March 1 next occurring after the bonds of the 9.93% Series due
2013, or on or before the next March 1 next occurring after the bonds of the
9.97% Series due 2018 cease to be outstanding, or on or before the March 1
next occurring often the bonds of the 9.12% Series due 2010 cease to be
outstanding, or on or before the March 1 next occurring after the bonds of
the 9.29% Series due 2026 cease to be outstanding, or on or before the March
1 next occurring after the bonds of the 9.17% Series due 2021 shall cease to
be outstanding, or on or before the March 1 next occurring after the bonds of
the 6.50% Series due 2010 shall cease to be outstanding, whichever is latest,
and on or before March 1 in each year thereafter if and so long as any of the
Bonds are outstanding, an amount in cash (the "Maintenance or Improvement
Deposit") equal to 9% of the Gross Operating Revenues of the Company during
the preceding calendar year less, to the extent that the Company desires to
take such credits, the following:
(a) the amount actually expended for maintenance during such
calendar year; and
(b) the Cost or Fair Value, whichever is less, of Permanent
Additions acquired during such calendar year which at the time of
taking such credit constitute Available Permanent Additions; and
35
(c) the unapplied balance, or any part thereof, of the Cost
or Fair Value, whichever is less, of Available Permanent Additions
acquired by the Company during the five calendar years preceding
such calendar year and specified in the Officers' Certificates
delivered to the Trustee pursuant to Section 2 of this Article, but
only to the extent that the Permanent Additions with respect to
which such Cost or Fair Value was determined shall at the time of
taking such credit constitute Available Permanent Additions.
SECTION 2. The Company covenants that it will on or before March 1
in each year, beginning with the first deposit made with the Trustee under
the provisions of Section 1 of this Article, as long as any of the Bonds are
outstanding, deliver to the Trustee the following:
(A) An Officers' Certificate, which shall state:
(i) The amount of the Gross Operating Revenues for
the preceding calendar year;
(ii) 9% of such Gross Operating Revenues;
(iii) The amount actually expended by the Company
for maintenance during such calendar year;
(iv) The amount set forth in subparagraph (xii) of
each Officers' Certificate delivered to the Trustee pursuant
to the provisions of this Section during the preceding five
calendar years (specifying each such Officers' Certificate),
after deducting from each such amount the aggregate of (a) the
Cost or Fair Value, whichever is less, of all Permanent
Additions represented by such amount which have ceased to be
Available Permanent Additions; and (b) any part of such amount
for which the Company has previously taken credit against any
Maintenance or Improvement Deposit (specifying the Officers'
Certificate in which such credit was taken); and (c) any part
of such amount for which the Company then desires to take
credit against the Maintenance or Improvement Deposit;
(v) An amount which shall be the aggregate of all
amounts set forth pursuant to the provisions of clause (c) of
the foregoing subparagraph (iv);
(vi) The Cost or Fair Value, whichever is less, of
Available Permanent Additions acquired by the Company during
the preceding calendar year;
(vii) That part of the amount set forth in
subparagraph (vi) which the Company desires to use as a credit
against the Maintenance or Improvement Deposit;
(viii) The amount of cash payable to the Trustee
under the provisions of Section 1 of this Article, which shall
be the amount by which the amount set forth in subparagraph
(ii) hereof exceeds the sum of the amounts set forth in
subparagraphs (iii), (v) and (vii) hereof;
(ix) The sum of all amounts charged on the books of
the Company against any reserve for retirement or depreciation
during the preceding calendar year representing the aggregate
of the Cost when acquired of any part of the Company's plants
and property of the character described in the granting
clauses hereof which has been permanently retired or
abandoned;
36
(x) The aggregate of the amounts set forth in
subparagraphs (v) and (vii) hereof;
(xi) The amount by which the amount set forth in
subparagraph (x) exceeds the amount set forth in subparagraph
(ix), being the amount required to be deducted from the Cost
or Fair Value of Available Permanent Additions in order to
determine a Net Amount of Available Permanent Additions
pursuant to the provisions of Section 9 of Article I of the
Original Indenture;
(xii) The amount set forth in subparagraph (vi)
after deducting the amount, if any, set forth in subparagraph
(vii); and
(xiii) That all conditions precedent to the taking
of the credit or credits so requested by the Company have been
complied with.
(B) In the event that the Officers' Certificate delivered to the
Trustee pursuant to the provisions of paragraph (A) of this Section shall
state, pursuant to the requirements of subparagraph (vi), the Cost or Fair
Value of Available Permanent Additions acquired by the Company during the
preceding calendar year, the documents specified in paragraphs 2, 3, 5, 6 and
7 of subdivision (B) of Section 3 of Article IV of the Original Indenture.
(C) An amount in cash equal to the sum set forth in subparagraph
(viii) of the Officers' Certificate provided for in paragraph (A) hereof.
SECTION 3. All cash deposited with the Trustee as part of any
Maintenance or Improvement Deposit provided for in Section 1 of this Article,
may, at the option of the Company, be applied to the purchase of bonds under
the provisions of Section 2 of Article X of the Original Indenture or to the
redemption of bonds under the provisions of Section 3 of Article X of the
Original Indenture or may be withdrawn by the Company at any time to
reimburse the Company for the cost of a Net Amount of Available Permanent
Additions (excluding, however, from any such Available Permanent Additions
all Permanent Additions included in any certificate delivered to the Trustee
for the purpose of obtaining a credit against any Maintenance or Improvement
Deposit provided for in Section 1 of this Article to the extent that such
Permanent Additions have been used for any such credit). The Trustee shall
pay to or upon the written order of the Company all or any part of such cash
upon the receipt by the Trustee of:
(a) A Resolution requesting such payment; and
(b) The documents specified in paragraphs 2, 5, 6 and 7 of
subdivision (B) of Section 3 of Article IV of the Original
Indenture, with such modifications, additions and omissions as
may be appropriate in the light of the purposes for which they
are used.
ARTICLE III.
Covenants of the Company.
SECTION 1. The Company hereby covenants and agrees with the
Trustee, for the benefit of the Trustee and all the present and future
holders of the Bonds, that the Company will pay the principal of and premium,
if any, and interest on all bonds issued or to be issued as aforesaid under
and secured by the Original Indenture as hereby supplemented, as well as all
bonds which may be hereafter issued in exchange or substitution therefor, and
will perform and fulfill all of the terms, covenants and conditions of the
Original Indenture and of this Twenty-Ninth Supplemental Indenture with
respect to the additional bonds to be issued under the Original Indenture as
hereby supplemented.
37
SECTION 2. The Company covenants and agrees that so long as any of
the Bonds are outstanding (a) the Company will not make any Stock Payment if,
after giving effect thereto, its retained earnings, computed in accordance
with generally accepted accounting principles consistently applied, will be
less than the sum of (i) Excluded Earnings, if any, since December 31, 1994,
and (ii) $20,000,000; (b) Stock Payments made more than forty (40) days after
the commencement, and prior to the expiration, of any Restricted Period shall
not exceed 65% of the Company's Net Income during such Restricted Period; and
(c) the Company will not authorize a Stock Payment if there has occurred and
is continuing an event of default under subsections (a) and (b) of Section 1
of Article XI of the Original Indenture.
For the purposes of this Section 2 the following terms shall have
the following meanings:
"Stock Payment" shall mean any payment in cash or property (other
than common stock of the Company) to any holder of shares of any class of
capital stock of the Company as such holder, whether by dividend or upon the
purchase, redemption, conversion or other acquisition of such shares, or
otherwise.
"Excluded Earnings" shall mean 35% of the Company's Net Income
during any Restricted Period.
"Restricted Period" shall mean a period commencing on any
Determination Date on which the total Debt of the Company is, or as the
result of any Stock Payment then declared or set aside and to be made
thereafter will be, more than 70% of Capitalization, and continuing until the
third consecutive Determination Date on which the total Debt of the Company
does not exceed 70% of Capitalization.
"Net Income" for any particular Restricted Period shall mean the
amount of net income properly attributable to the conduct of the business of
the Company for such Period, as determined in accordance with generally
accepted accounting principles consistently applied, after payment of or
provision for taxes on income for such Period.
"Determination Date" shall mean the last day of each calendar
quarter. Any calculation with respect to any Determination Date shall be
based on the Company's balance sheet as of such date.
"Debt" means (i) all indebtedness, whether or not represented by
bonds, debentures, notes or other securities, for the repayment of money
borrowed, (ii) all deferred indebtedness for the payment of the purchase
price of property or assets purchased (but Debt shall not be deemed to
include Customer Advances for Construction or any bonds issued under the
Indenture which are not Outstanding Bonds), (iii) leases which have been or,
in accordance with generally accepted accounting principles, should be
recorded as capital leases and (iv) guarantees of the obligations of another
of the nature described in clauses (i), (ii) or (iii) which have been or, in
accordance with generally accepted accounting principles, should be recorded
as debt.
"Outstanding Bonds" shall mean bonds which are outstanding within
the meaning indicated in Section 20 of Article I of the Original Indenture
except that, in addition to the bonds referred to in clauses (a), (b) and (c)
of said Section 20, said term shall not include bonds for the retirement of
which sufficient funds have been deposited with the Trustee with irrevocable
instructions to apply such funds to the retirement of such bonds at a
specified time, which may be either the maturity thereof or a specified
redemption date, whether or not notice of redemption shall have been given.
38
"Capitalization" shall mean the sum of (i) the aggregate principal
amount of all Debt at the time outstanding, (ii) the aggregate par or stated
value of all capital stock of the Company of all classes at the time
outstanding, (iii) premium on capital stock, (iv) capital surplus, and (v)
retained earnings.
SECTION 3. The Company covenants and agrees that so long as any of
the Bonds are outstanding neither the Company nor any subsidiary of the
Company will, directly or indirectly, lend or in any manner extend its credit
to, or indemnify, or make any donation or capital contribution to, or
purchase any security of, any corporation which directly or indirectly
controls the Company, or any subsidiary or affiliate (other than an affiliate
which is a subsidiary of the Company) of any such corporation.
ARTICLE IV.
The Trustee.
SECTION 1. The Trustee hereby accepts the trust hereby declared and
provided, and agrees to perform the same upon the terms and conditions in the
Original Indenture, as supplemented by this Twenty-Ninth Supplemental
Indenture, and in this Twenty-Ninth Supplemental Indenture set forth, and
upon the terms and conditions set forth in Article V hereof.
SECTION 2. Subject to the provisions of Article XIII of the
Original Indenture, the Trustee may execute any of the trusts or powers
hereof and perform any of its duties by or through and consult with
attorneys, agents, officers or employees selected by the Trustee in its sole
discretion. The Trustee shall be entitled to advice of counsel concerning
all matters of trusts hereof and the duties hereunder and may in all cases
pay such reasonable compensation to all such attorneys, agents, officers and
employees as may reasonably be employed in connection with the trusts hereof.
The Trustee may act and rely upon the opinion or advice of any attorney (who
may be the attorney or attorneys for the Company). The Trustee may act and
rely on written opinions of experts employed by the Trustee and such advice
shall be full and complete authorization and protection in respect of any
action taken, suffered or omitted by the Trustee hereunder in good faith and in
reliance thereon. The Trustee shall not be responsible for any loss or
damage resulting from any action or non-action in good faith taken in
reliance upon such opinion or advice. The Trustee shall not be bound to
confirm, verify or make any investigation into the facts or matters stated in
any financial or other statements, resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order or
other paper or document furnished pursuant to the terms hereof.
SECTION 3. Before the Trustee shall be required to foreclose on,
or to take control or possession of, the real property or leasehold interest
(the "Premises") which may be the subject of any mortgage or mortgages for
which the Trustee is mortgagee in connection with the issuance of the Bonds,
the Trustee shall be indemnified and held harmless by the holders and/or
beneficial owners of the Bonds from and against any and all expense, loss, or
liability that may be suffered by the Trustee in connection with any spill,
leak or release which may have occurred on or invaded the Premises or any
contamination by any Hazardous Substance (hereinafter defined), whether
caused by the Company or any other person or entity, including, but not
limited to, (1) any and all reasonable expenses that the Trustee may incur in
complying with any of the Environmental Statutes (hereinafter defined), (2)
any and all reasonable costs that the Trustee may incur in studying or
remedying any spill, leak or release which may have occurred on or invaded
the Premises or any contamination, (3) any and all fines or penalties
assessed upon the Trustee by reason of such contamination, (4) any and all
loss of value of the Premises or the improvements thereon by reason of such
contamination, and (5) any and all legal fees and costs reasonably incurred
by the Trustee in connection with any of the foregoing. As used in this
Section, contamination by any Hazardous Substance shall include contamination
39
arising from the presence, creation, production, collection, treatment,
disposal, discharge, release, storage, transport, or transfer of any
Hazardous Substance at or from the Premises or any improvements thereon. As
used in this Section, the term "Hazardous Substance" shall mean petroleum
hydrocarbons or any substance which (a) constitutes a hazardous waste or
substance under any applicable federal, state or local law, rule, order or
regulation now or hereafter adopted; (b) constitutes a "hazardous substance"
as such term is defined under the Comprehensive Environmental Response,
Compensation and Liability Act, as amended (42 U.S.C. *9601 et seq.) and the
regulations issued thereunder and any comparable state or local law or
regulation; (c) constitutes a "hazardous waste" under the Resource
Conservation and Recovery Act, (42 U.S.C. *6991) and the regulations issued
thereunder and any comparable state or local law or regulation; (d)
constitutes a pollutant, contaminant, chemical or industrial, toxic or
hazardous substance or waste as such terms are defined under the Federal
Clean Water Act, as amended (33 U.S.C. *1251 et seq.), the Toxic Substances
Control Act, as amended (15 U.S.C. * 2601 et seq.), or any comparable state
or local laws or regulations; (e) exhibits any of the characteristics
enumerated in 40 C.F.R. Sections 261.20-261.24, inclusive; (f) those
extremely hazardous substances listed in Section 302 of the Superfund
Amendments and Reauthorization Act of 1986 (Public Law 99-499, 100 Stat.
1613) which are present in threshold planning or reportable quantities as
defined under such act; (g) toxic or hazardous chemical substances which are
present in quantities which exceed exposure standards as those terms are
defined under Sections 6 and 8 of the Occupational Safety and Health Act, as
amended (29 U.S.C. **655 and 657 and 29 C.F.R. Part 1910, subpart 2); and (h)
any asbestos, petroleum-based products or any Hazardous Substance contained
within or released from any underground or aboveground storage tanks. As
used in this Section, the term "Environmental Statutes" shall mean the
statutes, laws, rules, orders and regulations referred to in (a) through (h)
inclusive in the preceding sentence.
ARTICLE V.
Miscellaneous.
SECTION 1. This instrument is executed and shall be construed as
an indenture supplemental to the Original Indenture, and shall form a part
thereof, and except as hereby supplemented, the Original Indenture and the
First, Second, Third, Fourth, Fifth, Sixth, Seventh, Eighth, Ninth, Tenth,
Eleventh, Twelfth, Thirteenth, Fourteenth, Fifteenth, Sixteenth, Seventeenth,
Eighteenth, Nineteenth, Twentieth, Twenty-First, Twenty-Second, Twenty-Third,
Twenty-Fourth, Twenty-Fifth, Twenty-Sixth, Twenty-Seventh and Twenty-Eighth
Supplemental Indentures are hereby confirmed. All references in this
Twenty-Ninth Supplemental Indenture to the Original Indenture shall be deemed
to refer to the Original Indenture as heretofore amended and supplemented,
and all terms used herein shall be taken to have the same meaning as in the
Original Indenture, as so amended, except in the cases where the context
clearly indicates otherwise.
SECTION 2. Any notices to the Trustee under this Twenty-Ninth
Supplemental Indenture shall be delivered to the Trustee by registered or
certified mail, hand delivery or other courier or express delivery service
(with receipt confirmed) or by telecopy (with receipt confirmed) at the
following address:
CoreStates Bank, N.A.
Corporate Trust Administration
510 Walnut Street, 6th Floor
F.C. 1-9-6-69
Philadelphia, PA 19106
Attention: Philadelphia Suburban Water
Administrator
Telecopy: (215) 973-2955
Any change in such address or telecopy number may be made by notice to the
Company delivered in the manner set forth above.
40
SECTION 3. All recitals in this Twenty-Ninth Supplemental
Indenture are made by the Company only and not by the Trustee; and all of the
provisions contained in the Original Indenture in respect of the rights,
privileges, immunities, powers and duties of the Trustee shall be applicable
in respect hereof as fully and with like effect as if set forth herein in
full.
SECTION 4. Although this Twenty-Ninth Supplemental Indenture is
dated for convenience and for the purpose of reference as of March 1, 1995,
the actual date or dates of execution hereof by the Company and the Trustee
are as indicated by their respective acknowledgments annexed hereto.
SECTION 5. In order to facilitate the recording or filing of this
Twenty-Ninth Supplemental Indenture, the same may be simultaneously executed
in several counterparts, each of which shall be deemed to be an original and
such counterparts shall together constitute but one and the same instrument.
41
IN WITNESS WHEREOF the parties hereto, intending to be legally
bound, have caused their corporate seals to be hereunto affixed and their
Presidents or Vice-Presidents, under and by the authority vested in them,
have hereto affixed their signatures, and their Secretaries or Assistant
Secretaries have duly attested the execution hereof, as of the first day of
March, 1995.
[CORPORATE SEAL] PHILADELPHIA SUBURBAN WATER
COMPANY
Attest: Suzanne Falcone By: Michael P. Graham
------------------- -------------------
Assistant Secretary Vice President and
Treasurer
[CORPORATE SEAL] CORESTATES BANK, N.A., as Trustee
Attest: Cathy Wiedecke By: Charles J. Adomanis
------------------- -------------------
Authorized Signer Vice President
42
COMMONWEALTH OF PENNSYLVANIA )
) SS.:
COUNTY OF MONTGOMERY )
On the 29th day of March 1995, before me, the Subscriber, a Notary
Public for the Commonwealth of Pennsylvania, personally appeared Michael P.
Graham, who acknowledged himself to be the Senior Vice President-Finance and
Treasurer of Philadelphia Suburban Water Company, a corporation, and that he
as such Senior Vice President-Finance and Treasurer, being authorized to do
so, executed the foregoing Twenty-Ninth Supplemental Indenture as and for the
act and deed of said corporation and for the uses and purposes therein
mentioned, by signing the name of the corporation by himself as such officer.
In Witness Whereof I hereunto set my hand and official seal.
(NOTARIAL SEAL)
Patricia M. Mycek
---------------------------
43
COMMONWEALTH OF PENNSYLVANIA )
) SS.:
COUNTY OF MONTGOMERY )
On the 29th day of March 1995, before me, the Subscriber, a Notary
Public for the Commonwealth of Pennsylvania, personally appeared Charles J.
Adomanis, who acknowledged himself to be a Vice President of CoreStates Bank,
N.A., Trustee, a corporation, and that he as such Vice President, being
authorized to do so, executed the foregoing Twenty-Ninth Supplemental
Indenture as and for the act and deed of said corporation and for the uses
and purposes therein mentioned, by signing the name of the corporation by
himself as such officer.
In Witness Whereof I hereunto set my hand and official seal.
I am not a director a officer of said CoreStates Bank, N.A.
(NOTARIAL SEAL)
John Sohier
----------------------
44
SCHEDULE A
BONDS REDEEMED OR PAID AT MATURITY
Principal Amount
Paid of Redeemed
(If less than all Date
Series Bonds of Series) Paid Maturity
- --------------------------------------------------------------------------------------
3.25% Series Due 1971 12/31/70 Redemption
9.625% Series Due 1975 6/15/75 Maturity
9.15% Series Due 1977 11/1/77 Maturity
3% Series Due 1978 7/1/78 Maturity
3.375% Series Due 1982 7/1/82 Maturity
3.90% Series Due 1983 7/1/83 Maturity
3.5% Series Due 1986 1/1/86 Maturity
4.5% Series Due 1987 1/1/87 Maturity
4.125% Series Due 1988 5/1/88 Maturity
5% Series Due 1989 9/1/89 Maturity
4.625% Series Due 1991 5/1/91 Maturity
4.70% Series Due 1992 4/1/92 Maturity
6.875% Series Due 1993 1/1/93 Maturity
4.55% Series Due 1994 3/1/94 Maturity
10.125% Series Due 1995 $6,300,000 ------------ Sinking Fund
10.125% Series Due 1995 $3,700,000 5/17/93 Redemption
9.20% Series Due 2001 $3,850,000 ------------ Sinking Fund
9.20% Series Due 2001 $3,150,000 5/1/93 Redemption
8.40% Series Due 2002 $5,400,000 ------------ Sinking Fund
5.95% Series Due 2002 $800,000 ------------ Sinking Fund
12.45% Series Due 2003 $1,000,000 8/1/93 Sinking Fund
12.45% Series Due 2003 $9,000,000 8/2/93 Redemption
8.875% Series Due 2010 $800,000 ------------ Sinking Fund
8.875% Series Due 2010 $7,200,000 6/30/92 Redemption
45
EXHIBIT A
COUNTY AND COMPANY'S REAL RECORDED IN
GRANTOR ESTATE INDEX NO. DATE OF DEED BOOK PAGE
- ----------------------------------------------------------------------------------------------------------
Grandstaff vi-E-33 12/22/94 3845 0389
46
EXHIBIT 10.12
===============================================================================
FIRST MORTGAGE BONDS, MEDIUM-TERM NOTE SERIES
Up to U.S. $100,000,000
Maturities from One Year to Thirty Years
PLACEMENT AGENCY AGREEMENT
By and Between
PHILADELPHIA SUBURBAN WATER COMPANY
as Issuer
and
PAINEWEBBER INCORPORATED
as Agent
Dated as of March 30, 1995
===============================================================================
47
PHILADELPHIA SUBURBAN WATER COMPANY
U.S. $100,000,000
First Mortgage Bonds, Medium Term Note Series
with Maturities from One Year
to Thirty Years from Date of Issue
Placement Agency Agreement
New York, New York
March 30, 1995
PaineWebber Incorporated
1285 Avenue of the Americas
New York, NY 10019
Dear Sirs:
Philadelphia Suburban Water Company, a corporation organized and
existing under the laws of the Commonwealth of Pennsylvania (the "Issuer")
which is a wholly-owned subsidiary of Philadelphia Suburban Corporation, a
Pennsylvania corporation ("PSC"), confirms its agreement with you with
respect to the issue and sale by the Issuer of its First Mortgage Bonds,
Medium Term Note Series (the "Notes"). The Notes will be issued under and
secured in accordance with the Twenty-Ninth Supplemental Indenture dated as
of March 1, 1995 (the "Supplemental Indenture") to the Indenture of Mortgage
dated as of January 1, 1941 (the "Indenture of Mortgage") between the Issuer
and CoreStates Bank, N.A. (as successor in interest to The Pennsylvania
Company for Insurance on Lives and Granting Annuities), as Trustee (the
"Trustee"). The Notes may be sold during the two year period from March 17,
1995 through March 16, 1997 (the "Offering Period"), by the Issuer in an
aggregate principal amount of up to U.S. $100,000,000. It is understood,
however, that the Issuer may from time to time, if permitted under the
Indenture of Mortgage and pursuant to subsequent supplemental indentures,
authorize the issuance of additional Notes or extend the Offering Period, and
that such additional Notes may be sold through or to you subject to and in
accordance with the terms of this Placement Agency Agreement (the
"Agreement"), all as though the issuance of such additional Notes or the sale
of Notes after the expiration of the Offering Period were authorized as of
the date hereof. The Notes will be offered during the Offering Period from
time to time on a private placement basis without being registered under the
Securities Act of 1933, as amended (the "Securities Act"), in reliance upon
the exemption therefrom provided by Section 4(2) of the Securities Act. The
Notes will be offered only to "Qualified Institutional Buyers" (as defined in
Rule 144A under the Securities Act) pursuant to this Placement Agreement.
All Notes having a common issue date, maturity date, interest rate and
otherwise identical terms are referred to herein as a "Tranche". The Notes
will be issued, and the terms thereof established, in accordance with the
terms of the Indenture of Mortgage and the Supplemental Indenture, and in the
case of Notes sold pursuant to Section 2(a), in accordance with the the
Medium Term Notes Administrative Procedures attached hereto as Exhibit A (the
"Administrative Procedures"). The Notes will be payable in accordance with a
Paying Agency Agreement dated as of March 30, 1995 (the "Paying Agency
Agreement"), among the Issuer, CoreStates Bank, N.A., as paying agent (the
"Paying Agent"), the Trustee and the Agent. The Administrative Procedures
48
set forth in Exhibit A shall remain in effect with respect to sales solicited
by the Agent until changed by the Issuer, the Agent and the Paying Agent.
For the purposes of this Agreement, the term "Agent" shall refer to each
addressee named on Schedule I hereto acting severally and not jointly in the
sole capacity as agent for the Issuer pursuant to Section 2(a) and not as
principal; the term "Purchaser" shall refer to each addressee named on
Schedule I hereto acting severally and not jointly in the sole capacity as
principal pursuant to Section 2(b) and not as agent; and the term "you" shall
refer to each or any addressee named on Schedule I hereto acting severally
and not jointly in both such capacities or in either such capacity.
1. Representations and Warranties. The Issuer represents and
warrants to you as of the date hereof, and shall be deemed to represent and
warrant to you at and as of each time the Issuer gives a notice requesting
you to solicit offers as Agent, at and as of each acceptance of an offer by
the Issuer, at and as of the date of each Terms Agreement (as defined in
Section 2(b)), and upon the delivery to the purchaser (or its agent) pursuant
to such offer or to the Purchaser of any Note pursuant to such Terms
Agreement, as the case may be, that:
(a) The Issuer confirms that it has prepared a confidential
Offering Memorandum (defined below) and authorizes you to distribute
copies thereof in connection with the offering of Notes as provided
herein. The Offering Memorandum does not and will not contain any
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the foregoing representation and warranty shall not apply
to statements or omissions in the Offering Memorandum made in reliance
upon and in conformity with information furnished to the Issuer in
writing by you or on your behalf which has been furnished by a person
authorized to do so, specifically for use therein. As used in this
Agreement, the term "Offering Memorandum" means the confidential
offering memorandum dated the same date as this Agreement relating to
the Notes, as it may be amended or supplemented from time to time,
including with respect to each Tranche, the related pricing supplement
(each, a "Pricing Supplement"), any documents expressly incorporated by
reference therein and any quarterly or annual reports of the Issuer or
PSC delivered to any Agent for delivery together with the Offering
Memorandum, which amendment or supplement may be in the form of a
separate document that does not state that it is a supplement to the
Offering Memorandum, and any reference to the terms "amend", "amendment"
or "supplement" with respect to the Offering Memorandum shall refer to
and include the filings with the Securities and Exchange Commission (the
"Commission") of any documents expressly incorporated by reference into
the Offering Memorandum after the date hereof.
(b) The financial statements and schedules included in, or as an
exhibit, attachment or appendix to, the Offering Memorandum present
fairly the consolidated financial condition of the Issuer as of the
respective dates thereof, and the consolidated results of operations and
changes in financial condition of the Issuer for the respective periods
covered thereby, all in conformity with generally accepted accounting
principles applied on a consistent basis throughout the entire period
involved, except as otherwise disclosed in the Offering Memorandum.
KPMG Peat Marwick (the "Accountants"), who have reported on the annual
financial statements and schedules of the Issuer, are independent
certified public accountants with respect to the Issuer and its
subsidiaries within the meaning of Rule 1.01 of the Code of Professional
Conduct of the American Institute of Certified Public Accountants.
49
(c) Subsequent to the respective dates as of which information is
given in the Offering Memorandum, except as otherwise set forth therein,
(i) there has been no material adverse change, or to the knowledge of
the Issuer any development involving a prospective material adverse
change, in the financial condition, earnings, business or business
prospects or properties of the Issuer and its subsidiaries, considered
as a single enterprise (a "Material Adverse Effect"), (ii) neither the
Issuer nor any of its subsidiaries have incurred any material
liabilities or obligations, direct or contingent, nor have any of them
entered into any material transactions other than pursuant to this
Agreement, the Supplemental Indenture and the Paying Agency Agreement
and the transactions referred to herein and therein and (iii) no rating
of any of the securities of the Issuer has been lowered by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) of the Securities Act) (each, a "Rating
Agency"), nor has there been any notice given by any Rating Agency of
any intended or potential decrease in any such rating or of a possible
change in any such rating where such notice does not indicate the
direction of the possible change.
(d) The Issuer and each of its subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation. The Issuer and each of its subsidiaries
has full power and authority to conduct all the activities conducted by
it, to own or lease all the assets owned or leased by it and to conduct
its business as described in the Offering Memorandum. The Issuer and
each of its subsidiaries is duly licensed or qualified to do business
and in good standing as a foreign corporation in all jurisdictions in
which the nature of the activities conducted by it or the character of
the assets owned or leased by it makes such license or qualification
necessary, except where the failure to so qualify or be in good standing
would not have a Material Adverse Effect.
(e) Except for stock of its subsidiaries, or as disclosed in the
Offering Memorandum, the Issuer does not own, directly or indirectly,
any shares of stock or any other equity or long-term debt securities of
any corporation or have any equity interest in any firm, partnership,
joint venture, association or other entity, other than equity
investments made by the Issuer for business development purposes or
otherwise which are not material to the Issuer.
(f) The Issuer has full corporate power and authority to enter
into this Agreement, the Supplemental Indenture, and the Paying Agency
Agreement, to issue the Notes, and to perform its obligations under this
Agreement, the Supplemental Indenture, the Paying Agency Agreement and
the Notes. This Agreement, the Supplemental Indenture and the Paying
Agency Agreement have been duly authorized, executed and delivered by
the Issuer and, when authorized, executed and delivered by the other
parties hereto and thereto, will constitute valid and binding agreements
of the Issuer and will be enforceable against the Issuer in accordance
with their terms (subject to applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and other similar laws
affecting creditors' rights generally from time to time in effect, and
subject, as to enforceability, to general principles of equity,
regardless of whether such enforceability is considered in a proceeding
in equity or at law). The Supplemental Indenture and the Paying Agency
Agreement conform in all material respects to the descriptions thereof
in the Offering Memorandum.
50
(g) The execution and delivery of the Notes has been duly
authorized by all necessary corporate action on the part of the Issuer;
each Note, when completed, executed, authenticated and delivered in
accordance with the Indenture of Mortgage and the Supplemental Indenture
against payment of the consideration therefor will constitute a legal,
valid and binding obligation of the Issuer, enforceable against the
Issuer in accordance with the terms of such Note (subject to applicable
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and other similar laws affecting creditors' rights generally from time
to time in effect, and subject, as to enforceability, to general
principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law), and will entitle its
holder to the benefits of the Indenture of Mortgage and the Supplemental
Indenture. Each Note will conform in all material respects to the
description thereof in the Offering Memorandum.
(h) Other than the liens created by the Indenture of Mortgage and
the Supplemental Indenture, the performance by the Issuer of this
Agreement and the Paying Agency Agreement, the issuance of any Notes and
the consummation of the transactions contemplated hereby and thereby
will not result in the creation or imposition of any lien, charge or
encumbrance upon any of the assets of the Issuer or any of its
subsidiaries pursuant to the terms or provisions of, or result in a
breach or violation of any of the terms or provisions of, or constitute
a default under, or give any other party a right to terminate any of its
obligations under, or result in the acceleration of any obligation
under, the certificate of incorporation or by-laws of the Issuer or any
of its subsidiaries, any indenture, mortgage, deed of trust, voting
trust agreement, loan agreement, bond, debenture, note agreement or
other evidence of indebtedness, lease, contract or other agreement or
instrument to which the Issuer or any of its subsidiaries is a party or
by which the Issuer or any of its subsidiaries or any of its properties
is bound or affected, or violate or conflict with any judgment, ruling,
decree, order, statute, rule or regulations of any court or governmental
agency or body applicable to the business or properties of the Issuer or
any of its subsidiaries.
(i) Except as set forth in or contemplated by the Offering
Memorandum, there are no actions, suits or proceedings pending or
threatened against or affecting the Issuer or any of its subsidiaries,
or any of their respective officers or directors in their capacity as
such, before or by any Federal or state court, commission, regulatory
body, administrative agency or other governmental body, domestic or
foreign, wherein an unfavorable ruling, decision or finding is likely to
materially and adversely affect (i) the financial condition, earnings,
business or business prospects or properties of the Issuer and its
subsidiaries, considered as a single enterprise, or (ii) the ability of
the Issuer to perform its obligations under this Agreement, the
Supplemental Indenture, the Paying Agency Agreement and the Notes.
There are no such actions, suits or proceedings pending or, to the
knowledge of the Issuer, threatened, relating to the Notes, their
offering, or the Offering Memorandum.
(j) The Issuer and each of its subsidiaries has (i) all
governmental licenses, permits, consents, orders, approvals and other
authorizations (collectively, "Approvals") necessary to carry on its
business as described in the Offering Memorandum, except where the
failure to have such Approvals, either individually or in the aggregate,
would not have a Material Adverse Effect, (ii) complied with all laws,
regulations and orders applicable to it or its business, except where
the failure to so comply would not have a Material Adverse Effect and
51
(iii) performed all its obligations required to be performed by it, and
is not in default under any material contract or other instrument to
which it is a party or by which its property is bound or affected,
except where the failure to so perform or the existence of such default
would not have a Material Adverse Effect. To the best knowledge of the
Issuer, no other party under any material contract or other instrument
to which it is a party is in default in any respect thereunder that
would have a Material Adverse Effect. Neither the Issuer nor any of its
subsidiaries is in violation of any provision of its certificate of
incorporation or by-laws.
(k) The Issuer and each of its subsidiaries has good and
marketable title to all properties and assets described in the Offering
Memorandum as owned by it, free and clear of all liens, charges,
encumbrances or restrictions, except such as are described in the
Offering Memorandum or are not material to the business of the Issuer or
its subsidiaries. The Issuer and each of its subsidiaries has valid,
subsisting and enforceable leases for the properties described in the
Offering Memorandum as leased by it, with such exceptions as are not
material and do not materially interfere with the use made and proposed
to be made of such properties by the Issuer and such subsidiaries.
(l) No consent, approval, authorization or other order of, or any
filing with, any government, governmental or other administrative agency
or body is required in connection with the execution and delivery by the
Issuer of this Agreement, the Supplemental Indenture and the Paying
Agency Agreement, the solicitation of offers to purchase Notes, the
issuance of any Note or the performance by the Issuer of any of its
obligations hereunder or thereunder, except such as may be required
under the blue sky laws of any jurisdiction in connection with the issue
and sale of the Notes or as required by the Pennsylvania Public Utility
Commission. All necessary approvals have been obtained from the
Pennsylvania Public Utility Commission to authorize the issuance and
sale of the Notes and such approvals remain in full force and effect on
the date hereof.
(m) The Notes satisfy the requirements set forth in
paragraph (d)(3) of Rule 144A ("Rule 144A") under the Securities Act.
(n) Neither the Issuer nor any affiliate (which, for purposes of
this Agreement, shall have the meaning given in Rule 501(b) under the
Securities Act) of the Issuer has directly or indirectly, (i) sold,
offered for sale, solicited offers to buy or otherwise negotiated in
respect of, any of the Notes or, within the six-month period prior to
the date hereof, any other debt security of the same class as the Notes
which is or will be integrated with any sale of the Notes in a manner
that would require the registration of the Notes under the Securities
Act or (ii) engaged in any form of general solicitation or general
advertising (within the meaning of Rule 502(c) under the Securities Act)
in connection with the offering of the Notes.
(o) Assuming (A) compliance by you with the offering and transfer
procedures and restrictions described in the Offering Memorandum and
under Rule 144A and Section 4(2) of the Securities Act, (B) the accuracy
of the acknowledgments, representations, warranties and agreements made
in accordance with this Agreement and the Offering Memorandum by you and
the purchasers to whom you initially offer, sell or resell the Notes and
(C) purchasers to whom you initially offer, sell or resell the Notes
receive a copy of the Offering Memorandum prior to such sale or resale,
the offer, sale and delivery of the Notes in the manner contemplated by
52
this Agreement and the Offering Memorandum will be exempt from the
registration requirements of the Securities Act by reason of
Section 4(2) thereof, and the initial resale of the Notes in the manner
contemplated by this Agreement under the Securities Act by reason of
Rule 144A thereunder or Section 4(2) thereunder, as the case may be, and
the Notes are not required to be issued pursuant to an indenture that
qualifies under the Trust Indenture Act of 1939, as amended.
(p) Each Note will be an unconditional and direct debt obligation
of the Issuer and will rank pari passu with other senior secured
existing and future obligations of the Issuer.
(q) The Issuer is not an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.
(r) Neither the Issuer nor any agent thereof acting on behalf of
the Issuer has taken or will take any action that is reasonably likely
to cause this Agreement or the issuance or sale of the Notes to violate
Regulation G, Regulation T, Regulation U or Regulation X (collectively,
the "Margin Rules") of the Board of Governors of the Federal Reserve
System.
(s) The Issuer is in material compliance with all applicable
Federal, state and local environmental laws and regulations, including,
without limitation, those applicable to safe drinking water, emissions
to the environment, waste management and waste disposal (collectively,
the "Environmental Laws"), except for such noncompliance as is not
reasonably likely to have a Material Adverse Effect, or as disclosed in
the Offering Memorandum, and, to the knowledge of the Issuer, there are
no circumstances that would prevent, interfere with or materially
increase the cost of such compliance in the future.
(t) Except as disclosed in the Offering Memorandum, there is no
claim under any Environmental Law, including common law, pending or
threatened against the Issuer (an "Environmental Claim") which would be
reasonably likely to have a Material Adverse Effect and, to the
knowledge of the Issuer, under applicable law, there are not past or
present actions, activities, circumstances, events or incidents,
including, without limitation, releases of any material into the
environment, that are reasonably likely to form the basis of any
Environmental Claim against the Issuer which would be reasonably likely
to have a Material Adverse Effect.
(u) No statement, representation, warranty or covenant made by the
Issuer in this Agreement, or made in any certificate or document
required by this Agreement to be delivered to any Agent was or will be,
when made, inaccurate, untrue or incorrect.
2. Appointment of the Agent; Solicitation by the Agent of Offers
to Purchase; Sales of Notes to a Purchaser. (a)(i) Subject to the
terms and conditions set forth herein, the Issuer hereby appoints and
authorizes the Agent to act as its agent to solicit offers for the
purchase of Notes from the Issuer. The appointment by the Issuer of the
Agent shall not authorize such Agent to take any action on behalf of the
Issuer other than as set forth in this Agreement and the Administrative
Procedures. Other than Section 4(a)(v) of this Agreement, this
Agreement shall not in any way restrict or limit the Issuer from
selling, offering to sell or accepting offers to sell any debt
securities other than the Notes.
53
(ii) On the basis of the representations and warranties, and
subject to the terms and conditions, set forth herein, each Agent
agrees, as agent of the Issuer, to use its reasonable efforts to solicit
offers to purchase Notes from the Issuer upon the terms and conditions
described in the Offering Memorandum and in the Administrative
Procedures. In soliciting offers as agent, each Agent is acting solely
as agent of the Issuer and not as principal. Each Agent shall use its
reasonable efforts to assist the Issuer in obtaining performance by each
purchaser whose offer to purchase Notes has been solicited by such Agent
and accepted by the Issuer, however such Agent shall not have any
liability to the Issuer in the event any such purchase is not
consummated for any reason; provided that the foregoing shall not
operate to release the Agent from any liability it may otherwise have as
a result of its failure to perform its obligations under this Agreement.
Except as provided in Section 2(b), under no circumstances will any
Agent be obligated to purchase any Notes for its own account. It is
understood and agreed, however, that any Agent may purchase Notes for
its own account as Purchaser pursuant to Section 2(b) or otherwise as
may be agreed or permitted by the Issuer and such Agent.
(iii) The Issuer reserves the right, in its sole discretion, to
instruct the Agent to suspend at any time, for any period of time or
permanently, the solicitation of offers to purchase Notes. Within one
business day of receipt of instructions to that effect from the Issuer,
each Agent will forthwith suspend solicitation of offers to purchase
Notes from the Issuer until such time as the Issuer has advised it that
such solicitation may be resumed.
(iv) The Issuer agrees to pay each Agent a commission, upon
closing, with respect to each sale of Notes by the Issuer as a result of
a solicitation made by such Agent, including any sale for the account of
any affiliate of such Agent, in an amount equal to that percentage of
the aggregate principal amount of the Notes sold by the Issuer specified
on Schedule II hereto for Notes with the relevant term. Such commission
shall be payable as specified in the Administrative Procedures.
(v) Subject to the provisions of this Section 2(a) and to the
Administrative Procedures, offers for the purchase of Notes may be
solicited by the Agent, as agent for the Issuer, at such time and in
such amounts as the Agent and the Issuer deem advisable. The Issuer
may, subject to Section 4(a)(v) of this Agreement, from time to time
offer Notes for sale on its own behalf directly to purchasers otherwise
than through an Agent, in which case no commission would be payable with
respect to such sale. As long as this Agreement shall be in effect, the
Issuer shall not solicit or accept offers to purchase Notes through any
agent other than the Agent named on Schedule I hereto; provided,
however, that the Issuer may amend Schedule I hereto from time to time
to appoint additional Agents provided that the Issuer (i) has received
the consent of such appointment by each Agent named in Schedule I hereto
on such date of appointment, which consent shall not be unreasonably
withheld, (ii) has appointed such agent as an additional Agent hereunder
on the same terms and conditions as provided herein for the Agent, and
(iii) has caused such additional agent to execute this Agreement.
(vi) Each Agent may, in the exercise of its reasonable discretion,
reject any offer to purchase Notes received by it as agent of the Issuer
and not communicate such offer to the Issuer. Each Agent shall
communicate to the Issuer, orally or in writing, each such offer that it
does not reject and, if such Agent or any of its affiliates shall be the
offeror, shall advise the Issuer of that fact. The Issuer shall have
sole and absolute discretion to accept any offer, and may reject any
offer to purchase Notes in whole or, if permitted by the terms of such
offer, in part.
54
(vii) If the Issuer shall default in its obligations to deliver
Notes to a purchaser whose offer it has accepted, the Issuer shall hold
you harmless against any loss, claim or damage arising from or as a
result of such default by the Issuer (except to the extent that such
default by the Issuer shall result from the failure by you to perform
your obligations hereunder).
(b)(i) Subject to the terms and conditions stated herein, whenever
the Issuer and any one (or more) of you jointly determine that the
Issuer shall sell Notes directly to any one (or more) of you as the
Purchaser, each such sale of Notes shall be made in accordance with the
terms of this Agreement and, unless specifically waived by the
Purchaser, a supplemental agreement relating thereto between the Issuer
and the Purchaser. Each such supplemental agreement (which shall be
substantially in the form of Exhibit B) is herein referred to as a
"Terms Agreement". A Purchaser's commitment to purchase Notes pursuant
to any Terms Agreement shall be deemed to have been made on the basis of
the representations and warranties of the Issuer contained herein or
therein (if any) and shall be subject to the terms and conditions set
forth herein and in such Terms Agreement. Unless the context otherwise
requires, each reference contained herein to "this Agreement" shall be
deemed to include any applicable Terms Agreement between any one (or
more) of you and the Issuer. Each Terms Agreement shall describe the
Notes to be purchased by the Purchaser pursuant thereto, specify the
principal amount of such Notes, the price to be paid to the Issuer for
such Notes specified by reference to the principal amount of the Notes
and the discount to the Purchaser from the principal amount thereof, the
rate at which interest will be paid on such Notes, the date of issuance
of such Notes (the "Closing Date"), the place of delivery of the Notes
and payment therefor, the method of payment, any modification of, or
addition to, the requirements for the delivery of the opinions of
counsel set forth in Section 6(a)(ii), the certificates from the Issuer
or its officers and the letter from the Issuer's independent certified
public accountants, and such other terms and conditions as may be
specified therein from time to time. The discount to the Purchaser with
respect to any Notes sold pursuant to this Section 2(b) shall be equal
to that percentage of the principal amount thereof specified in Schedule
II hereto for Notes with the relevant term, unless a higher percentage
is specified in the applicable Terms Agreement.
(ii) The settlement details for Notes sold to a Purchaser pursuant
to any Terms Agreement shall be agreed to between the Issuer and such
Purchaser in the respective Terms Agreement. If there is no such Terms
Agreement, the settlement details specified in the Administrative
Procedures shall apply with the Purchaser filling the roles specified
therein of the Agent and the beneficial owner.
(iii) Nothing contained in this Agreement shall obligate an Agent to
enter into a Terms Agreement with the Issuer or to otherwise agree to
purchase Notes for its own account.
3. Offering and Sale of Notes. Each party hereto agrees to
perform the respective duties and obligations specifically provided to be
performed by it in the Administrative Procedures.
55
4. Agreements. (a) The Issuer agrees with you that:
(i) If information that is material to an investment in a Note is
not otherwise contained in the Offering Memorandum, or if at any time an
event occurs as a result of which the Offering Memorandum as then
amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, or if it is necessary at such time to amend
or supplement the Offering Memorandum to comply with any applicable law,
the Issuer promptly will prepare an amendment or supplement which will
correct such statement or omission or effect such compliance, and will
not effect any amendment or supplement to the Offering Memorandum
without your consent, which consent shall not be unreasonably withheld;
provided, however, that the foregoing requirement shall not apply to
periodic filings with the Commission by the Issuer or PSC of Current
Reports on Form 8-K or Quarterly Reports on Form 10-Q under the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
Neither your consent to, nor your delivery of, any such amendment or
supplement shall constitute a waiver of any of the conditions set forth
in Section 5 hereto.
(ii) The Issuer shall furnish to you such information and documents
relating to the business, operations and affairs of the Issuer, the
Offering Memorandum and any amendments thereof or supplements thereto,
the Notes, the Supplemental Indenture, this Agreement, any Terms
Agreement, the Administrative Procedures, the Paying Agency Agreement
and the performance by the parties hereto of their respective
obligations hereunder and thereunder as you may from time to time and at
any time prior to the termination of this Agreement reasonably request
in connection with soliciting offers to purchase Notes. The Issuer
shall notify you promptly (1) if at any time any event occurs which
constitutes (or after notice or lapse of time or both would constitute)
a default or an event of default under the Notes, the Supplemental
Indenture, the Paying Agency Agreement or this Agreement or (2) of any
material adverse change, or to the knowledge of the Issuer any
development involving a prospective material adverse change, in the
financial condition, earnings, business or business prospects or
properties of the Issuer and its subsidiaries considered as a single
enterprise.
(iii) The Issuer shall, whether or not any sale of Notes is
consummated, (1) pay, or reimburse if paid by any Agent, all reasonable
costs and expenses incident to the performance of its obligations under
this Agreement and any Terms Agreement, including, but not limited to,
the cost of preparation, printing or other production and delivery of
the Offering Memorandum, all amendments thereof and supplements thereto,
the Supplemental Indenture, the Paying Agency Agreement, this Agreement,
any Terms Agreement and all other documents relating to the offering of
Notes pursuant hereto and thereto, the cost of preparing, printing,
packaging and delivering the Notes, the fees and disbursements of
counsel to and accountants for the Issuer, the fees and disbursements of
the Trustee, the fees and disbursements of the Paying Agent, and the
fees of any Rating Agency, (2) reimburse you on a quarterly basis for
all reasonable out-of-pocket expenses incurred by you in connection with
this Agreement and the transactions contemplated hereby and (3) pay the
reasonable fees and expenses of Cravath, Swaine & Moore incurred in
connection with this Agreement and the transactions contemplated hereby.
56
(iv)(A) On each date of settlement for any Tranche of Notes (a
"Settlement Date"), or if at any time that the Offering Memorandum is
amended or supplemented (including incorporation of documents by
reference), in the reasonable judgement of the Agent the information
disclosed in such amendment or supplement is of such a nature that an
officer's certificate and an opinion of counsel need be furnished, the
Issuer shall deliver or cause to be delivered promptly to you an
officer's certificate, an opinion of counsel and an opinion of its
Senior Vice President-Law and Administration or General Counsel, dated
the Settlement Date or the date of such amendment or supplement, as the
case may be, in form reasonably satisfactory to the Agent, of the same
tenor as the certificate and opinions referred to in Sections 5(a)(ii)
and (iii), but modified to relate to the Offering Memorandum, this
Agreement and the Paying Agency Agreement, each as then in effect.
(B) Each time that the Offering Memorandum is amended or
supplemented to include or incorporate additional financial information,
the Issuer shall cause the Accountants promptly to furnish you a letter,
dated the date of such amendment or supplement, in form reasonably
satisfactory to the Agent, of the same tenor as the letter referred to
in Section 5(a)(vi) hereof, but modified to reflect the amended or
supplemented financial information included or incorporated by reference
in the Offering Memorandum, as amended or supplemented to the date of
such letter; provided, however, that if the Offering Memorandum is
amended or supplemented solely to include or incorporate by reference
financial information as of and for a fiscal quarter, the Accountants
may limit the scope of such letter, in form reasonably satisfactory to
the Agent, to the unaudited financial statements, the related
"Management's Discussion and Analysis of Financial Condition and Results
of Operations" and any other information of an accounting, financial or
statistical nature included in such amendment or supplement, unless, in
the reasonable judgement of the Agent, such letter should cover other
information or changes in specific financial statement line items.
(v) Unless otherwise specified in any Terms Agreement, the Issuer
shall not, without the prior consent of the Purchaser thereunder, issue
or announce the proposed issuance of any of its debt securities
(including Notes), which are denominated in the same currency as, and
have similar maturities, similar interest rates and other terms
(including in respect of the method of computing interest) substantially
similar to those of, the Notes being purchased pursuant to such Terms
Agreement, during the period commencing on the date on which the Issuer
accepts an offer to purchase any Note in accordance with such Terms
Agreement and terminating on the Closing Date for the sale of such Note.
(vi) The Issuer shall furnish to you without charge, from time to
time, as many copies of the following as you may reasonably request:
(A) the Offering Memorandum and any amendment or supplement that has
been prepared with respect thereto, (B) any Pricing Supplement, and
(C) any financial statements and other periodic reports that the Issuer
may furnish generally to holders of its debt securities.
(vii) The Issuer shall furnish to you in written form all quarterly
financial statement information for the first three fiscal quarterly
periods of the Issuer and PSC promptly upon publication of such
quarterly information and, within two months of the end of each such
quarterly period, cause the Offering Memorandum to be supplemented to
include such financial information and corresponding information for the
comparable period of the preceding fiscal year, as well as such other
information and explanations as shall be necessary for an understanding
of such financial information, which supplement may be in the form of a
separate quarterly report, or a report filed by the Issuer or PSC under
the Exchange Act.
57
(viii) The Issuer shall furnish to you the audited consolidated
financial statements updating the audited consolidated financial
statements and the financial information included in the Offering
Memorandum for each corresponding fiscal year as promptly as practicable
after the publication of such financial statements, but in any event not
later than four months after the end of such fiscal year, and cause the
Offering Memorandum to be supplemented to include such audited financial
statements and the accountants' report with respect thereto, as well as
such other information and explanations as shall be necessary for an
understanding of such financial statements, which supplement may be in
the form of a separate annual report or report filed by the Issuer or
PSC under the Exchange Act.
(ix) The Issuer shall (1) furnish to you copies of any proposed
supplement or amendment to the Offering Memorandum (including any
document incorporated by reference therein) at least five business days
in advance of using such supplement or amendment, except for Current
Reports on Form 8-K and Quarterly Reports on Form 10-Q, copies of which
filings the Issuer will cause to be delivered to the Agent by fascimile
or other means of delivery, on or prior to the date of filing with the
Commission, and (2) permit you to review and comment as to the form and
content thereof and, subject to the proviso in Section 4(a)(i), shall
not use any such amendment or supplement to which you have objected in
good faith; provided, however, that an amendment or supplement prepared
to set forth terms and conditions of any Notes, including any Pricing
Supplement, need not be furnished to or reviewed by those of you who are
not named therein, who shall not have solicited offers for such Notes
and who are not to be Purchasers of such Notes. Any Agent who shall
have an objection in good faith to such proposed amendment or supplement
may immediately terminate this Agreement as to such Agent by notice to
the Issuer. At the request of any Agent so terminating, the Issuer
shall promptly amend and supplement the Offering Memorandum and Schedule
I hereto to indicate those firms that remain Agents.
(x) The Issuer shall not offer or sell any securities under
circumstances which would require the registration of any of the Notes
under the Securities Act.
(xi) The Issuer will take appropriate steps to ensure that the
aggregate principal amount of Notes issued during the Offering Period
does not exceed U.S. $100,000,000, will not issue any Notes if such
issuance would cause such limit to be exceeded, will promptly notify you
in the event that at any time such limit has been reached and will
promptly notify you if such limit is increased pursuant to this
Agreement.
(xii) The Issuer shall not, without having given prior written
notice to you, consent to any amendment of the Paying Agency Agreement.
The Issuer shall promptly notify you of any resignation or removal of
the Paying Agent and the appointment of any successor thereto.
(xiii) For so long as any of the Notes are outstanding, the Issuer
will provide to any holder of Notes that are "restricted securities"
within the meaning of Rule 144(a)(3) under the Securities Act, and to
any prospective purchaser of such Notes designated by a holder thereof,
upon the request of such holder or prospective purchaser in connection
with a transfer or proposed transfer pursuant to Rule 144A, any
information required to be provided to such holder or prospective
purchaser to comply with the conditions set forth in Rule 144A as in
effect as of the date the Notes of the corresponding Tranche shall have
been first issued (together with any such information added by an
amendment to Rule 144A after such date, to the extent such information
can be provided without unreasonable additional expense to the Issuer).
58
(xiv) You shall not be liable or responsible to the Issuer for any
losses, damages or liabilities suffered or incurred by the Issuer,
including any losses, damages or liabilities under the Securities Act,
arising from or relating to any resale or transfer of a Note by a holder
(other than yourself) in any manner that does not comply with the
applicable restrictions on resale and transfer or the procedures
required for resale and transfer set forth herein, in the Offering
Memorandum and in the Notes; provided that each of you, severally and
not jointly, shall remain liable for the performance of your own
obligations under this Agreement.
(xv) The Issuer will at all times ensure that all approvals,
authorizations, consents or other orders of, and all filings with, any
governmental or other administrative agency or body will be, prior to
the time required (taking into account any permitted extensions),
obtained or made (1) so that the Issuer may lawfully perform its
obligations under the Notes, the Supplemental Indenture, this Agreement,
the Administrative Procedures and the Paying Agency Agreement and (2) so
that performance of such obligations will, in all respects material to
the Issuer and its subsidiaries considered as a single enterprise, or
material to the Issuer's ability to perform its obligations under the
Notes, the Supplemental Indenture, this Agreement, the Administrative
Procedures and the Paying Agency Agreement, comply with any laws,
decrees, regulations, judgments or orders of any court, government,
governmental authority or agency to which the Issuer or any of its
subsidiaries or any of their respective properties or assets is subject.
(xvi) The Issuer will send to you a copy of every notice of a
meeting of the holders of the Notes (or any of them) that is sent by the
Issuer or the Trustee to such holders at the same time it is sent to
such holders and will promptly notify you immediately upon its becoming
aware that a meeting of the holders of the Notes (or any of them) has
been convened by any of such holders.
(xvii) The Issuer shall promptly notify you of any lowering in the
ratings of any of the Issuer's securities by any Rating Agency, or of
any notice given by any Rating Agency of any intended or possible
decrease in any such rating or of any possible change in any such rating
where such notice does not indicate the direction of the possible
change.
(xviii) During the six-month period following the issue date of any
Note, neither the Issuer nor any affiliate of the Issuer will directly
or indirectly, sell, offer for sale, solicit offers to buy or otherwise
negotiate in respect of, any of the Notes or any other security (as
defined in the Securities Act) which will be integrated with such sale
of Notes in a manner that would require the registration of the Notes
under the Securities Act.
(xix) The Issuer will apply the net proceeds from the offering and
sale of the Notes in the manner set forth in the Offering Memorandum
under "Use of Proceeds".
(b) The obligations of the Issuer under Sections 4(a)(i), (ii),
(iv), (vi), (vii), (viii) and (ix) shall be suspended during any period of
time during which the Issuer shall have suspended the solicitation of offers
to purchase Notes by written notice to each Agent; provided, however, that
such obligations of the Issuer shall remain in effect (i) for a period of two
years following the date of notice of such suspension if such Agent shall own
any Notes with the intention of reselling them as contemplated by
59
Section 2(b) or (ii) if the Issuer has accepted an offer to purchase Notes
solicited by such Agent pursuant to this Agreement and the settlement for
such sale shall not have occurred. At least one week prior to the end of any
such period during which solicitations shall have been suspended, the Issuer
shall notify you of any event or change contemplated by Section 4(a)(i) or by
the last sentence of Section 4(a)(ii) of which the Issuer would have been
obligated to notify you, and shall provide you all written information,
documents and supplements referred to in Sections 4(a)(ii), (iv), (vii),
(viii) and (ix) that the Issuer would have been obligated to deliver to you,
had the Issuer not so suspended the solicitation of offers.
5. Conditions to the Obligations of the Agent. (a) The
obligations of each Agent to solicit offers to purchase any Notes shall be
subject to the accuracy of the representations and warranties on the part of
the Issuer contained herein as of the date hereof and as of each time the
Issuer gives a notice requesting any Agent to solicit offers as Agent, at and
as of each acceptance of an offer by the Issuer and upon delivery of any Note
to the purchaser (or its agent) pursuant to such offer, to the accuracy of
the statements of the Issuer made in any certificates delivered pursuant to
the provisions hereof as of the respective dates of such certificates, to the
performance and observance by the Issuer of all covenants and agreements
herein contained on its part to be performed and observed and to the
following additional conditions precedent:
(i) The Issuer shall have obtained all authorizations, consents
and approvals of any court or governmental or other regulatory agency or
body required in connection with the issuance and sale of the Notes and
the performance of its obligations hereunder and under the Notes, the
Supplemental Indenture and the Paying Agency Agreement.
(ii) The Issuer shall have furnished to you an accurate certificate
dated as of the date hereof, signed by the Chief Executive Officer or
the Chief Financial Officer of the Issuer, in form and substance
satisfactory to you, to the effect that, to the best of his or her
knowledge after reasonable inquiry:
(1) the representations and warranties of the Issuer in this
Agreement are true and correct in all material respects on and as
of the date of the certificate and the Issuer has performed in all
material respects all its obligations and satisfied all the
conditions on its part to be satisfied at or prior to the date of
the certificate;
(2) since the date of the most recent financial statements
included in the current Offering Memorandum, there has been no
material adverse change, or to the knowledge of the Issuer any
development involving a prospective material adverse change, in the
financial condition, earnings, business or business prospects or
properties of the Issuer and its subsidiaries, considered as a
single enterprise, except as set forth in the Offering Memorandum;
and
(3) the Offering Memorandum (other than statements made
therein in reliance upon and in conformity with information
furnished to the Issuer in writing by any Agent specifically for
use therein, as to which no representation shall be made) does not
contain any untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading.
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(iii)(A) The Issuer shall have furnished to each Agent the opinion
of Dilworth, Paxson, Kalish & Kauffman, counsel to the Issuer,
substantially in the form of Exhibit C hereto, which may be subject to
any assumptions, qualifications and limitations that are reasonably
acceptable to each Agent.
(B) The Issuer shall have furnished to each Agent the opinion
of the Senior Vice President-Law and Administration or General Counsel
of the Issuer substantially in the form of Exhibit D hereto, which may
be subject to any assumptions, qualifications and limitations that are
reasonably acceptable to each Agent.
(iv) Each Agent shall have received from CoreStates Bank, N.A., as
Trustee under the Indenture of Mortgage and the Supplemental Indenture,
a certificate substantially in the form of Exhibit E hereto, which may
be subject to any assumptions, qualifications and limitations that are
reasonably acceptable to each Agent.
(v) Each Agent shall have received from Cravath, Swaine & Moore,
your counsel, such opinion with respect to the proposed issue and sale
of the Notes and other related matters as the Agent may reasonably
require.
(vi) KPMG Peat Marwick, independent accountants for the Issuer,
shall have furnished to the Agent an executed copy of a letter in the
form heretofore agreed to by the Agent.
(vii) The Issuer shall have furnished to each Agent such further
information, certificates and documents as any Agent may reasonably
request.
(b) The documents required to be delivered by this Section 5 shall
be delivered at, or transmitted by telecopy (with an undertaking promptly to
forward the original copies thereof) to, the offices of Cravath, Swaine &
Moore, counsel for the Agent, at Worldwide Plaza, 825 Eighth Avenue, New
York, New York, at 4:00 P.M., New York City time, on the date hereof, and an
original of each such document will be sent to you.
6. Conditions to the Obligations of a Purchaser. (a) The
obligations of any Purchaser to purchase any Notes shall be subject to the
accuracy of the representations and warranties on the part of the Issuer
contained herein or in the corresponding Terms Agreement, if any, at and as
of the date of the corresponding Terms Agreement and upon the delivery to any
Purchaser of any Note pursuant to such Terms Agreement, to the performance
and observance by the Issuer of all covenants and agreements herein or
therein contained on its part to be performed and observed and to the
following additional conditions precedent:
(i) The Issuer shall have obtained all authorizations, consents
and approvals of any court or governmental or other regulatory agency or
body required in connection with the issuance and sale of the Notes and
the performance of its obligations hereunder and under the Notes, the
Supplemental Indenture and the Paying Agency Agreement.
61
(ii) To the extent provided by such Terms Agreement, the Purchaser
shall have received, appropriately updated, (1) a certificate of the
Issuer dated as of the Closing Date to the effect set forth in
Section 5(a)(ii), (2) the opinion of Dilworth, Paxson, Kalish & Kauffman
dated the Closing Date to the effect set forth in Section 5(a)(iii)(A),
(3) the opinion of the Senior Vice President-Law and Administration or
General Counsel, dated the Closing Date to the effect set forth in
Section 5(a)(iii)(B), (4) the Trustee's certificate dated the Closing
Date to the effect set forth in Section 5(a)(iv), (5) the opinion of
Cravath, Swaine & Moore dated the Closing Date to the effect set forth
in Section 5(a)(v) and (6) the letter of KPMG Peat Marwick dated the
Closing Date to the effect set forth in Section 5(a)(vi).
(iii) Prior to the Closing Date, the Issuer shall have furnished to
the Purchaser such further information, certificates and documents as
the Purchaser may reasonably request.
(b) If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement and any Terms Agreement, or if any other event occurs which permits
cancellation under this Agreement, such Terms Agreement and all obligations
of the Purchaser thereunder and with respect to the Notes subject thereto may
be canceled at, or at any time prior to, the respective Closing Date by the
Purchaser. Notice of such cancellation shall be given to the Issuer in
writing or by telephone, promptly confirmed in writing, which confirmation
may be made by telex or telecopy.
7. Conditions to all Purchases. The consummation of the sale of
any Note pursuant to this Agreement shall be subject to the further condition
that, at the date of issuance thereof, in the reasonable judgment of the
Purchaser or the Agent that obtained the offer, (a) each condition set forth
in Section 5 or 6, as applicable, shall have been satisfied and (b)
subsequent to the respective dates as of which information is given in the
Offering Memorandum (current as of the date of such agreement to purchase a
Note), except as set forth therein or contemplated thereby, there shall not
have occurred any material adverse change, or to the knowledge of the Issuer
any development involving a prospective material adverse change, in or
affecting the financial condition, earnings, business or business prospects
or properties of the Issuer and its subsidiaries, considered as a single
enterprise, the effect of which makes it impracticable or inadvisable to
market the Notes or to proceed with completion of the sale and payment for
such Notes.
8. Restrictions on Offers and Sales of the Notes. Each party
hereto represents, warrants and agrees, severally and not jointly, as
follows:
(a) It will solicit offers to purchase Notes only from, and it
will offer and sell Notes only to, (i) institutional purchasers that are, or
that it reasonably believes are, "qualified institutional buyers" as such
term is defined in paragraph (a)(1) of Rule 144A ("QIBs") or (ii) any Agent.
If it is an Agent, any resales or transfers of Notes through, or arranged by,
such Agent similarly will be made only to QIBS. Neither it, its affiliates,
nor any person acting on its or their behalf (except that no representation
is made with respect to any other party to this Agreement) has engaged or
will engage in any form of general solicitation or general advertising
(within the meaning of Rule 502(c) under the Securities Act) in the United
States with respect to the Notes.
62
(b) It will make reasonable inquiry to determine whether a
purchaser is purchasing for such purchaser's own account as a QIB or for the
account of others and not with a view to, or for sale in connection with, the
public distribution thereof in any transaction that would be in violation of
Federal or state securities laws and, in the case of any purchaser acting on
behalf of one or more third parties, it shall make reasonable inquiry to
determine that each such third party is a QIB and that the amount being
purchased on behalf of each such third party is not less than the authorized
minimum denomination of such Notes; provided that the Issuer shall have no
duty to make any such inquiry in connection with sales to any Agent or
pursuant to offers transmitted to it by any Agent.
9. Indemnification and Contribution. (a) The Issuer agrees to
indemnify and hold harmless the Agent and each person who controls any Agent
within the meaning of either the Securities Act or Section 20 of the Exchange
Act against any and all losses, claims, damages or liabilities, joint or
several, to which any such person may become subject under the law of any
jurisdiction insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Offering Memorandum, in any amendment thereof or supplement thereto or in any
information provided by the Issuer and furnished to any purchaser of the
Notes pursuant to Section 4(a)(xiii), or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
and agrees to reimburse each such indemnified party, as incurred, for any
legal or other expenses reasonably incurred by it in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that (i) the Issuer will not be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon any such untrue statement or alleged untrue statement or omission
or alleged omission made in the Offering Memorandum or in any amendment
thereof or supplement thereto in reliance upon and in conformity with written
information furnished to the Issuer by the person seeking indemnification, or
on behalf of another person authorized to do so, specifically for use in
connection with the preparation thereof. This indemnity will be in addition
to any liability which the Issuer may otherwise have.
(b) Each Agent, severally and not jointly, agrees to indemnify and
hold harmless the Issuer and each person who controls the Issuer within the
meaning of either the Securities Act or the Exchange Act, to the same extent
as the foregoing indemnity from the Issuer, but only with reference to
written information relating the indemnifying party furnished to the Issuer
by it, or on its behalf by a person authorized to do so, specifically for
use, in the preparation of the Offering Memorandum or any amendment thereof
or supplement thereto. This indemnity will be in addition to any liability
which any Agent may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 9, notify the indemnifying party in writing of the
commencement thereof; however, the omission so to notify the indemnifying
party (i) will not relieve it from any liability under paragraph (a) or (b)
above unless and to the extent it did not otherwise learn of such action and
such failure results in the forfeiture by the indemnifying party of any
substantial rights and defenses and (ii) will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than
the indemnification obligation provided in paragraph (a) or (b) above. In
case any such action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof, the indemnifying
63
party will be entitled to participate therein, and to the extent that it may
elect by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof, with counsel satisfactory to such indemnified party;
provided, however, that if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, the indemnified party or parties
shall have the right to select separate counsel to assert such legal defenses
and to otherwise participate in the defense of such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of its election so to assume the defense of
such action and approval by the indemnified party of counsel (which approval
shall not be unreasonably withheld), the indemnifying party will not be
liable to such indemnified party under this Section 9 for any legal or other
expenses subsequently incurred by such indemnified party in connection with
the defense thereof unless (i) the indemnified party shall have employed
separate counsel in connection with the assertion of legal defenses in
accordance with the proviso to the next preceding sentence (it being
understood, however, that the indemnifying party shall not be liable for the
expenses of more than one separate counsel (in addition to any local
counsel), representing the indemnified parties under paragraph (a) of this
Section 9 who are parties to such action), (ii) the indemnifying party shall
not have employed counsel satisfactory to the identified party to represent
the indemnified party within a reasonable time after notice of commencement
of the action or (iii) the indemnifying party has authorized the employment
of counsel for the indemnified party at the expense of the indemnifying
party; and except that, if clause (i) or (iii) is applicable, such liability
shall be only in respect of the counsel referred to in such clause (i) or
(iii). The indemnifying party shall not be liable for any settlement of any
action or claim effected without its consent, which consent shall not be
unreasonably withheld.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this Section 9 is
due in accordance with its terms but is for any reason held by a court to be
unavailable on grounds of policy or otherwise, the Issuer and each Agent
shall contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) to which the Issuer and any Agent may be
subject in such proportion so that each Agent is responsible only for that
portion represented by the percentage that the aggregate commissions received
by each such Agent pursuant to Section 2 in connection with the Notes from
which such losses, claims, damages and liabilities arise (or, in the case of
Notes sold to a Purchaser, the discount to such Purchaser), bears to the
aggregate principal amount of such Notes sold, and the Issuer is responsible
for the balance; provided, however, that in no case shall any Agent be
responsible for any amount in excess of the commissions received by each such
Agent in connection with the Notes from which such losses, claims, damages
and liabilities arise (or, in the case of Notes sold to the Purchaser, the
discount to such Purchaser). For purposes of this Section 9, each person who
controls any Agent within the meaning of either the Securities Act or the
Exchange Act shall have the same rights to contribution as such Agent and
each person who controls the Issuer within the meaning of either the
Securities Act or the Exchange Act shall have the same rights to contribution
as the Issuer, subject in each case to the proviso to the preceding sentence.
No person guilty of fraudulent misrepresentation (within the meaning of
64
Section 11(f) of the Securities Act) shall be entitled to contribution
hereunder from any person who was not guilty of such fraudulent
misrepresentation. Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action, suit or proceeding against
such party in respect of which a claim or contribution may be made against
another party or parties under this paragraph (d), notify such party or
parties from whom contribution may be sought (which obligation to give notice
shall be deemed to be satisfied by the delivery of notice pursuant to
paragraph (c) of this Section 9), but the omission so to notify such party or
parties shall not relieve the party or parties from whom contribution may be
sought from any other obligation it or they may have hereunder or otherwise
than under this paragraph (d).
10. Termination. (a) This Agreement will continue in effect
until terminated as provided in this Section 10 or Section 4(a)(ix). This
Agreement may be terminated by the Issuer as to any Agent or, in the case of
any Agent by such Agent by giving at least 30 days' written notice of such
termination to the other parties hereto, at which time the Issuer shall cause
Schedule I hereto to be amended. Notwithstanding any such termination, the
rights and liabilities of each party under Sections 2(a)(iv) and (vii),
Sections 4(a)(iii), (xiv) and (xvi), Sections 8(a) and (b) (with respect to
resales and transfers of Notes), Section 9, Section 11 and any Terms
Agreement executed prior to the date of termination hereof shall survive any
termination of this Agreement, in whole or in part. In addition, if any
termination shall occur either (i) at a time when any Purchaser shall own any
Notes, purchased under this Agreement from the Issuer, with the intention of
reselling them or (ii) after the Issuer has accepted an offer to purchase
Notes and prior to the related settlement, all agreements, terms and
conditions relating to the purchase and sale of such Notes shall also remain
in effect.
(b) Each agreement to purchase Notes pursuant to a solicitation by
an Agent hereunder, and each agreement by a Purchaser to purchase Notes
hereunder, shall be subject to termination in the absolute discretion of such
Agent or the Purchaser (as the case may be), by notice given to the Issuer
prior to delivery of any payment for Notes to be purchased, if prior to such
time (i) trading in any securities issued by the Issuer or by PSC shall have
been suspended or halted on any exchange (whether U.S. or foreign), or
trading in securities generally on the New York Stock Exchange shall have
been suspended or limited or minimum or maximum prices shall have been
generally established on such Exchange, or additional material government
restrictions, not in force on the date of this Agreement or the date of any
Terms Agreement with respect to such Notes, shall have been imposed upon
trading in securities generally by such Exchange or by order of the
Commission or any court or other governmental authority, (ii) a general
banking moratorium shall have been declared by either U.S. Federal or New
York State authorities, (iii) there shall have been a lowering in the
ratings of any of the Issuer's securities by any Rating Agency or a notice
given by any Rating Agency of any intended or potential decrease in any such
rating or of any possible change in any such rating where such notice does
not indicate the direction of the possible change, or (iv) there shall have
occurred, in the reasonable judgment of such Agent or Purchaser (as the case
may be), a material change in national or international political, financial
or economic conditions that makes it impracticable or inadvisable to market
the Notes or to proceed with completion of the sale of and payment for such
Notes.
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of
the Issuer or its officers and of the Agent set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of any Agent or by or on behalf of the
Issuer or any of the controlling persons referred to in Section 9, and will
survive delivery of and payment for the Notes.
65
12. Increases in the Amount of the Notes; Extension of Offering
Period. The aggregate principal amount of Notes that may be sold by the
Issuer may be increased, or the Offering Period may be extended, if permitted
under the Indenture of Mortgage, pursuant to (x) a subsequent supplemental
indenture to the Indenture of Mortgage and (y) an amendment to this Agreement
in the form attached hereto as Exhibit F executed by the Issuer and the Agent
named in Schedule I hereto. Upon the execution and delivery of any such
amendment, to the extent agreed upon by the Issuer and the Agent, the Issuer
shall deliver to such Agent, appropriately updated, (a) a certificate of the
Issuer dated as of the date of such amendment to the effect set forth in
Section 5(a)(ii), (b) the opinion of Dilworth, Paxson, Kalish & Kauffman
dated the date of such amendment to the effect set forth in
Section 5(a)(iii)(A), (c) the opinion of its Senior Vice President-Law and
Administration or General Counsel, dated the Closing Date to the effect set
forth in Section 5(a)(iii)(B), (d) the certificate of the Trustee dated the
date of such amendment to the effect set forth in Section 5(a)(iv), and (e)
the letter of KPMG Peat Marwick dated the date of such amendment to the
effect set forth in Section 5(a)(vi), and the Issuer shall furnish to you
such further information, certificates and documents as you may reasonably
request.
13. Notices. All communications hereunder will be in writing, and
effective only on receipt, or (but only where specifically provided in the
Administrative Procedures) by telephone and, if sent to the Agent, will be
mailed, delivered, telecopied and confirmed or telexed and confirmed to the
Agent, at the address(es) specified in Schedule I hereto; or, if sent to the
Issuer, will be mailed, delivered, telecopied and confirmed or telexed and
confirmed to it at 762 Lancaster Avenue, Bryn Mawr, PA 19010, Attention:
Chief Financial Officer, (telephone: (215) 527-8000; telecopy: (215) 645-
1141).
14. Successors. This Agreement will inure to the benefit of and
be binding upon the parties hereto and their respective successors and the
controlling persons referred to in Section 9, and no other person will have
any right or obligation hereunder.
15. Applicable Law. THIS AGREEMENT WILL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (EXCLUDING
LAWS GOVERNING CONFLICTS OF LAW).
16. Counterparts. This Agreement may be signed in counterparts
with the same effect as if the signatures thereto and hereto were upon the
same instrument.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
between the Issuer and you.
Very truly yours,
PHILADELPHIA SUBURBAN WATER COMPANY,
by: Michael P. Graham
---------------------------
Name:
Title:
The foregoing Agreement is hereby confirmed and accepted as of the date
hereof.
PAINEWEBBER INCORPORATED,
by: David G. Zahka
----------------------
Name:
Title:
66
INDEX OF DEFINITIONS
Term Section
---- -------
Accountants 1(b)
Administrative Procedures Introductory Paragraph
Agent Introductory Paragraph
Agreement Introductory Paragraph
Closing Date 2(b)(i)
Commission 1(a)
Exchange Act 4(a)(viii)
Issuer Introductory Paragraph
Material Adverse Effect 1(c)
Notes Introductory Paragraph
Offering Memorandum l(a)
Offering Period Introductory Paragraph
Paying Agency Agreement Introductory Paragraph
Pricing Supplement 1(a)
PSC Introductory Paragraph
Purchaser Introductory Paragraph
QIBs 8(a)
Rating Agency 1(c)
Regulation D Introductory Paragraph
Rule 144A 1(i)
Securities Act Introductory Paragraph
Settlement Date 4(a)(iv)(A)
Terms Agreement 2(b)(i)
Tranche Introductory Paragraph
you Introductory Paragraph
67
SCHEDULE I
1. PaineWebber Incorporated
1285 Avenue of the Americas
New York, N.Y. 10019
Telephone: (212) 713-3130
Fascimile: (212) 713-4040
Attention of: David G. Zahka
68
SCHEDULE II
The Issuer agrees to pay each Agent a commission equal to the
following percentage of the principal amount of each Note sold by the Agent,
and to pay the Purchaser a commission in the form of a discount to the
purchase price equal to the following percentage of the principal amount of
each Note purchased by a Purchaser under Section 2(b):
Term Commission Rate
- ---- ---------------
Twelve months to less than two years 0.100%
Two years to less than three years 0.125%
Three years to less than four years 0.275%
Four years to less than five years 0.375%
Five years to less than six years 0.450%
Six years to less than seven years 0.500%
Seven years to less than ten years 0.550%
Ten years to less than fifteen years 0.600%
Fifteen years to less than twenty years 0.700%
Twenty years to not more than thirty years 0.750%
69
EXHIBIT A
MEDIUM TERM NOTE ADMINISTRATIVE PROCEDURES
March 30, 1995
First Mortgage Bonds, Medium Term Note Series, Subseries __ (the
"Notes"), due from one year to thirty years, are to be offered on a
continuing basis during the two year period from March 17, 1995 through March
16, 1997. The Agent or Agents listed on Schedule I to the Placement Agency
Agreement (collectively, the "Agent") have agreed to use reasonable efforts
to solicit offers to purchase Notes in fully registered form. The Agent may
also purchase Notes as principal for resale, but no Agent will be obligated
to purchase Notes for its own account.
The Notes are being sold pursuant to a Placement Agency Agreement
between the Issuer and the Agent dated as of the date hereof (the "Placement
Agency Agreement"). The Notes will be issued under and secured in accordance
with the Twenty-Ninth Supplemental Indenture dated as of March 1, 1995 (the
"Supplemental Indenture") to the Indenture of Mortgage dated as of January 1,
1941 (the "Indenture of Mortgage") between the Issuer and CoreStates Bank,
N.A. (as successor in interest to The Pennsylvania Company for Insurance on
Lives and Granting Annuities), as Trustee (the "Trustee").
All Notes shall be represented by Global Securities (as defined
hereinafter) registered in the name of Cede & Co., as nominee of The
Depository Trust Company ("DTC"), and beneficial ownership of such Notes will
be represented and maintained in book-entry form on the books of DTC (the
"Book-Entry Notes"). An owner of a Book-Entry Note will not be entitled to
receive a certificate representing such Note. However, if DTC is at any time
unwilling or unable to continue as depositary and a successor depositary is
not appointed by the Issuer within 90 days, the Issuer will issue Notes in
definitive registered form (the "Certificated Notes") in exchange for the
Global Security or Securities representing such Notes. In addition, the
Issuer may at any time and in its sole discretion determine not to have some
of or all the Notes represented by one or more Global Securities and, in such
event, will issue Notes in definitive registered form in exchange for all of
the Global Securities representing such Notes. In any such instance, an
owner of a beneficial interest in a Global Security will be entitled to
physical delivery of Certificated Notes represented by such Global Security
equal in amount to that represented by such beneficial interest and to have
such Certificated Notes registered in its name.
The procedures to be followed during, and the specific terms of,
the solicitation of offers by each Agent and the sale as a result thereof by
the Issuer are explained below. Administrative and record-keeping
responsibilities will be handled for the Issuer by its Treasurer. The Issuer
will advise each Agent and the Trustee in writing of those persons handling
administrative responsibilities with whom the Agent and the Trustee are to
communicate regarding offers to purchase Notes and the details of their
delivery. The Issuer will promptly advise each Agent and the Trustee in
writing if any such person shall cease to handle such responsibilities or of
the authorization of any additional person to handle such responsibilities.
70
Administrative procedures and specific terms of the offering are
explained below. Book-Entry Notes will be issued in accordance with the
administrative procedures set forth in Part I hereof, as adjusted in
accordance with changes in DTC's operating requirements, and Certificated
Notes will be issued in accordance with the administrative procedures set
forth in Part II hereof. Capitalized terms not defined herein shall have the
meanings assigned in the Placement Agency Agreement or, if not defined
therein, in the Supplemental Indenture or the Offering Memorandum. To the
extent the procedures set forth below conflict with the provisions of the
Notes, the Indenture of Mortgage, the Supplemental Indenture, DTC's operating
requirements or the Placement Agency Agreement, the relevant provisions of
the Notes, the Indenture of Mortgage, the Supplemental Indenture, DTC's
operating requirements and the Placement Agency Agreement shall control.
PART I
Administrative Procedures for
Book-Entry Notes
In connection with the qualification of the Book-Entry Notes for
eligibility in the book-entry system maintained by DTC, the Trustee will
perform the custodial, document control and administrative functions
described below, unless certain duties are otherwise designated to a duly
authorized paying agent, in accordance with its respective obligations under
a Letter of Representations from the Issuer and the Trustee to DTC dated as
of the date hereof and a Medium Term Note Certificate Agreement between the
Trustee and DTC dated as of November 28, 1990, as amended, and its
obligations as a participant in DTC, including DTC's Same-Day Funds
Settlement system ("SDFS").
Issuance: On any date of settlement (as defined
under "Settlement" below) for one or
more Notes, the Issuer will issue a
single global security in fully
registered form without coupons (a
"Global Security") representing all
such Notes that have the same rank
(senior or subordinated), original
issue date, original issue discount
provisions, if any, Interest Payment
Dates, Record Dates, Interest Payment
Period, redemption provisions, if
any, Maturity Date, and interest rate
(collectively, the "Terms"). Each
Global Security will be dated and
issued as of the date of its
authentication by the Trustee. Each
Global Security will bear an original
issue date, which will be (i) with
respect to an original Global
Security (or any portion thereof),
the original issue date specified in
such Global Security and (ii)
following a consolidation of Global
Securities, with respect to the
Global Security resulting from such
71
consolidation, the most recent Interest
Payment Date to which interest
has been paid or duly provided for on
the predecessor Global Securities,
regardless of the date of
authentication of such resulting
Global Security. No Global Security
will represent any Certificated Note.
Identification The Issuer has arranged with the
Numbers: CUSIP Service Bureau of Standard &
Poor's Corporation (the "CUSIP
Service Bureau") for the reservation
of one series of CUSIP numbers, which
consists of approximately 900 CUSIP
numbers and relates to Global
Securities representing Book-Entry
Notes. The Issuer has obtained from
the CUSIP Service Bureau a written
list of such reserved CUSIP numbers,
which the Issuer shall deliver to the
Trustee and DTC. The Issuer will
assign CUSIP numbers to Global
Securities as described below under
Settlement Procedure "B". DTC will
notify the CUSIP Service Bureau
periodically of the CUSIP numbers
that the Issuer has assigned to
Global Securities. At any time when
fewer than 100 of the reserved CUSIP
numbers remain unassigned to Global
Securities for either series, if it
deems necessary, the Issuer will
reserve additional CUSIP numbers for
assignment to Global Securities.
Upon obtaining such additional CUSIP
numbers, the Issuer shall deliver a
list of such additional CUSIP numbers
to the Trustee and DTC.
Registration: Global Securities will be issued only
in fully registered form without coupons.
Each Global Security will be
registered in the name of Cede & Co.,
as nominee for DTC, on the securities
register for the Notes maintained
under the Indenture of Mortgage. The
beneficial owner of a Book-Entry Note
(or one or more indirect participants
in DTC designated by such owner) will
designate one or more participants in
DTC (with respect to such Book-Entry
Note, the "Participants") to act as
agent or agents for such owner in
connection with the book-entry system
maintained by DTC, and DTC will
record in book-entry form, in
accordance with instructions provided
by such Participants, a credit
72
balance with respect to such
beneficial owner in such Book-Entry
Note in the account of such
Participants. The ownership interest
of such beneficial owner (or such
participant) in such Book-Entry Note
will be recorded through the records
of such Participants or through the
separate records of such Participants
and one or more indirect participants
in DTC.
Transfers: Transfers of a Book-Entry Note will
be accomplished by book entries made
by DTC and, in turn, by Participants
(and, in certain cases, one or more
indirect participants in DTC) acting
on behalf of beneficial transferors
and transferees of such Note.
Exchanges: The Trustee may deliver to DTC and
the CUSIP Service Bureau at any time
a written notice of consolidation (a
copy of which shall be attached to
the resulting Global Security
described below) specifying (i) the
CUSIP numbers of two or more
Outstanding Global Securities that
represent fixed rate Notes having the
same Terms and for which interest has
been paid to the same date, (ii) a
date, occurring at least thirty (30)
days after such written notice is
delivered and at least thirty (30)
days before the next Interest Payment
Date for such Book-Entry Notes, on
which such Global Securities shall be
exchanged for a single replacement
Global Security and (iii) the single
CUSIP number to be assigned to such
replacement Global Security (which
shall be the CUSIP number previously
assigned to the Global Security with
the earliest date of issuance). Upon
receipt of such a notice, DTC will
send to its Participants (including
the Trustee) a written reorganization
notice to the effect that such exchange
will occur on such date.
Prior to the specified exchange date,
the Trustee will deliver to the CUSIP
Service Bureau a written notice
setting forth such exchange date and
such single CUSIP number and stating
that, as of such exchange date, the
CUSIP numbers of the individual
Global Securities not assigned to the
replacement Global Security will no
73
longer be valid. On the specified
exchange date, the Trustee will
exchange such Global Securities for a
single Global Security bearing the
single CUSIP number and the CUSIP
numbers of the individual Global
Securities not assigned will, in
accordance with CUSIP Service Bureau
procedures, be retired and not reassigned.
Notwithstanding the foregoing, if the
Global Securities to be exchanged exceed
$150,000,000 in aggregate principal amount,
one Global Security will be authenticated and
issued to represent each $150,000,000
of principal amount of the exchanged
Global Securities and an additional
Global Security will be authenticated
and issued to represent any remaining
principal amount of such Global Securities
(see "Denominations" below).
Maturities: Each Book-Entry Note will mature on a
date not less than one year nor more
than thirty years after the
settlement date for such Note.
Denomination: Book-Entry Notes will be issued in a
minimum principal amount of $100,000
or an integral multiple of $1,000 in
excess thereof. Global Securities
will be denominated in principal
amounts not in excess of
$150,000,000. If one or more Book-
Entry Notes having an aggregate
principal amount in excess of
$150,000,000 would, but for the
preceding sentence, be represented by
a single Global Security, then one
Global Security will be authenticated
and issued to represent each
$150,000,000 principal amount of such
Book-Entry or Notes and an additional
Global Security will be authenticated
and issued to represent any remaining
principal amount of such Book-Entry
Note or Notes. In such a case, each
of the Global Securities representing
such Book-Entry Note or Notes shall
be assigned the same CUSIP number.
Interest: General. Interest, if any, on each
Book-Entry Note will accrue from the
original issue date for the first
interest period or the last date to
which interest has been paid, if any,
for each subsequent interest period,
on the Global Security representing
such Book-Entry Note, and will be
calculated and paid in the manner
described in such Book-Entry Note and
in the Offering Memorandum (as
74
defined in the Placement Agency
Agreement), as supplemented by the
applicable Pricing Supplement
thereto. Unless otherwise specified
therein, each payment of interest on
a Book-Entry Note will include
interest accrued up to but excluding
the Interest Payment Date or up to
but excluding the Maturity Date.
Interest payable upon Maturity of a
Book-Entry Note will be payable to
the Person to whom the principal of
such Note is payable. Standard &
Poor's Corporation will use the
information received in the pending
deposit message described under
Settlement Procedure "C" below in order
to include the amount of any interest
payable and certain other information
regarding the related Global Security
in the appropriate (daily or weekly)
bond report published by Standard &
Poor's Corporation.
Record Dates. The Record Date with
respect to any Interest Payment Date
shall be the May 1 or November 1
immediately preceding such Interest
Payment Date, whether or not such
date shall be a Business Day.
Interest Payment Dates. Interest
payments will be made semiannually on
May 15 and November 15 of each year
and at Maturity; provided, however,
that in the case of a Book-Entry Note
issued between a Record Date and an
Interest Payment Date, or on an
Interest Payment Date, the first
interest payment will be made on the
Interest Payment Date following the
next succeeding Record Date. If any
Interest Payment Date for a Book-
Entry Note is not a Business Day, the
payment due on such day shall be made
on the next succeeding Business Day
and no interest shall accrue on such
payment for the period from and after
such Interest Payment Date.
Calculation of Book-Entry Notes. Interest on Book-
Interest: Entry Notes (including interest for
partial periods) will be calculated
on the basis of a 360-day year of
twelve 30-day months.
75
Payments of Payment of Interest Only. Promptly
Principal and after each Record Date, the Trustee
Interest: will deliver to the Issuer and DTC a
written notice setting forth, by
CUSIP number, the amount of interest
to be paid on each Global Security on
the following Interest Payment Date
(other than an Interest Payment Date
coinciding with Maturity) and the
total of such amounts. DTC will
confirm the amount payable on each
Global Security on such Interest
Payment Date by reference to the
appropriate (daily or weekly) bond
reports published by Standard &
Poor's Corporation. The Issuer will
pay to the Trustee, as paying agent,
the total amount of interest due on
such Interest Payment Date (other
than at Maturity), and the Trustee
will pay such amount to DTC, at the
times and in the manner set forth
below under "Manner of Payment".
Payments at Maturity. On or about
the last Business Day of each month,
the Trustee will deliver to the
Issuer and DTC a written list of
principal, premium (if any) and
interest to be paid on each Global
Security maturing (on a Maturity or
Redemption Date or otherwise) in the
following month. The Trustee, the
Issuer and DTC will confirm the
amounts of such principal, premium
(if any) and interest payments with
respect to each such Global Security
on or about the fifth Business Day
preceding the Maturity of such Global
Security. On or before the Maturity
Date, the Issuer will pay to the
Trustee, as paying agent, the principal
amount of such Global Security,
together with any premium and
interest due at such Maturity. The
Trustee will pay such amount to DTC
at the times and in the manner set
forth below under "Manner of
Payment". If any Maturity of a
Global Security representing Book-
Entry Notes is not a Business Day, the
payment due on such day shall be made
on the next succeeding Business Day
and no interest shall accrue on such
payment for the period from and after
such Maturity. Promptly after
payment to DTC of the principal,
premium (if any) and interest due at
Maturity of such Global Security, the
Trustee will cancel such Global
76
Security in accordance with the
Indenture of Mortgage and so advise
the Issuer. On the first Business
Day of each month, the Trustee will
deliver to the Issuer a written
statement indicating the total
principal amount of Outstanding
Global Securities as of the
immediately preceding Business Day.
Manner of Payment. The total amount
of any principal, premium (if any)
and interest due on Global Securities
on any Interest Payment Date or at
Maturity shall be paid by the Issuer
to the Trustee in immediately
available funds no later than 9:30
a.m. (New York City time) on such
date. The Issuer will make such
payment on such Global Securities by
wire transfer of funds available for
immediate use to the Trustee. The
Issuer will confirm any such instructions
in writing to the Trustee. Prior to
10:00 a.m. (New York City time)
on the date of Maturity or as
soon as possible thereafter, the
Trustee will pay, from funds received
by the Issuer, by separate wire
transfer (using Fedwire message entry
instructions in a form previously
specified by DTC) to an account at
the Federal Reserve Bank of New York
previously specified by DTC, in funds
available for immediate use by DTC,
each payment of principal (together
with any premium and interest
thereon) due on a Global Security on
such date. On each Interest Payment
Date (other than at Maturity),
interest payments shall be made to
DTC, in funds available for immediate
use by DTC, in accordance with
existing arrangements between the
Trustee and DTC. On each such date,
DTC will pay, in accordance with its
SDFS operating procedures then in
effect, such amounts in funds available
for immediate use to the respective
Participants in whose names the
Book-Entry Notes represented by such
Global Securities are recorded in the
book-entry system maintained by DTC.
Neither the Issuer (as issuer or as
paying agent) nor the Trustee shall
have any direct responsibility or
liability for the payment by DTC to
such Participants of the principal of
and interest on the Book-Entry Notes.
77
Withholding Taxes. The amount of any
taxes required under applicable law
to be withheld from any interest
payment on a Book-Entry Note will be
determined and withheld by the
Participant, indirect participant in
DTC or other Person responsible for
forwarding payments and materials
directly to the beneficial owner of
such Note.
Procedure for Rate The Issuer and the Agent will
Setting and discuss from time to time the
Posting: aggregate principal amount of, the
issuance price of, and the interest
rates to be borne by, Book-Entry
Notes that may be sold as a result of
the solicitation of orders by the
Agent. If the Issuer decides to set
prices of, and rates borne by, any
Book-Entry Notes in respect of which
the Agent are to solicit orders (the
setting of such prices and rates to
be referred to herein as "posting")
or if the Issuer decides to change
prices or rates previously posted by
it, it will promptly advise the Agent
of the prices and rates to be posted.
Acceptance and Unless otherwise instructed by the
Rejection of Issuer, each Agent will advise the
Orders: Issuer promptly by telephone of all
orders to purchase Book-Entry Notes
received by such Agent, other than
those rejected by it in whole or in
part in the reasonable exercise of
its discretion. The Issuer has the
right to accept orders to purchase
Book-Entry Notes and may reject any
such orders in whole or in part.
Preparation of If any order to purchase a Book-
Pricing Supplement: Entry Note is accepted by or on
behalf of the Issuer, the Issuer,
with the approval of the Presenting
Agent (defined below) will prepare a
supplement (a "Pricing Supplement")
reflecting the terms of such Book-
Entry Note and will supply at least
ten copies thereof (and additional
copies if requested) to the Agent
which presented the order (the
"Presenting Agent") at the address set
forth on Schedule I to the Placement
Agency Agreement, and one copy
thereof to the Trustee, to be
delivered by overnight courier or
telecopy to arrive no later than
11:00 a.m., New York City time, on
the Business Day following the date
of acceptance.
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The Presenting Agent will cause an
Offering Memorandum and Pricing
Supplement to be delivered to the
purchaser of such Book-Entry Note.
Outdated Pricing Supplements (other
than those retained for files), will
be destroyed.
Suspension of The Issuer may instruct each Agent
Solicitation to suspend at any time, for any
period of time or permanently, the
solicitation of orders to purchase
Book-Entry Notes. Upon receipt of
such instructions, each Agent will
forthwith suspend solicitation until
such time as the Issuer has advised
them that such solicitation may be
resumed.
In the event that at the time the
Issuer suspends solicitation of
purchases there shall be any orders
outstanding for settlement, the
Issuer will promptly advise each
Agent and the Trustee whether such
orders may be settled and whether
copies of the Offering Memorandum as
in effect at the time of the
suspension, together with the
appropriate Pricing Supplement, may be
delivered in connection with the
settlement of such orders. The Issuer
will have the sole responsibility for
such decision and for any
arrangements that may be made in the
event that the Issuer determines that
such orders may not be settled or
that copies of such Offering
Memorandum or Pricing Supplement may
not be so delivered.
Procedure For When the Issuer has determined to
Rate Changes: change the interest rates of Book-
Entry Notes being offered, it will
promptly advise each Agent and each
Agent will forthwith suspend
solicitation of orders. Each Agent
will telephone the Issuer with
recommendations as to the changed
interest rates. At such time as the
Issuer has advised the Agent of the
new interest rates, the Agent may resume
solicitation of orders. Until such
time only "indications of interest"
may be recorded.
79
Delivery of A copy of the Offering Memorandum and
Offering any Pricing Supplement relating to a
Memorandum: Book-Entry Note must accompany or
precede the earliest of any written
offer of such Book-Entry Note,
confirmation of the purchase of such
Book-Entry Note and payment for such
Book-Entry Note by its purchaser. If
notice of a change in the terms of
the Book-Entry Notes is received by
the Agent between the time an order
for a Book-Entry Note is placed and
the time written confirmation thereof
is sent by the Presenting Agent to a
customer or his agent, such
confirmation shall be accompanied by
a Offering Memorandum and Pricing
Supplement setting forth the terms in
effect when the order was placed.
Subject to "Suspension of
Solicitation" above, the Presenting
Agent will deliver a Offering
Memorandum and Pricing Supplement as
herein described with respect to each
Book-Entry Note sold by it. The
Issuer will make such delivery if
such Book-Entry Note is sold directly
by the Issuer to a purchaser (other
than an Agent).
Confirmation: For each order to purchase a Book-
Entry Note solicited by any Agent and
accepted by or on behalf of the
Issuer, the Presenting Agent will issue
a confirmation to the purchaser, with
a copy to the Issuer, setting forth
the details set forth above and
delivery and payment instructions.
Settlement: The receipt by the Issuer of
immediately available funds in
payment for a Book-Entry Note and the
authentication and issuance of the
Global Security representing such
Book-Entry Note shall constitute
"settlement" with respect to such
Book-Entry Note. All orders accepted
by the Issuer will be settled on the
tenth Business Day following the date
of sale of such Book-Entry Note
pursuant to the timetable for
settlement set forth below unless the
Issuer and the purchaser agree to
settlement on another day which shall
be no earlier than one Business Day
following the date of sale.
Settlement Procedures with regard to each Book-
Procedures: Entry Note sold by the Issuer through
any Agent, as agent, shall be as
follows:
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A. The Presenting Agent will advise
the Issuer by telephone of the
following settlement
information:
1. Principal amount.
2. Maturity Date.
3. The interest rate.
4. Interest Payment Dates and
the Interest Payment
Period.
5. Redemption or repayment
provisions, if any.
6. Settlement date.
7. Price.
8. The Presenting Agent's DTC
participant account number
and commission, determined
as provided in Section 2 of
the Placement Agency
Agreement.
9. Whether such Book-Entry
Note is issued at an
original issue discount
("OID") and, if so, the
total amount of OID, the
yield to maturity and the
initial accrual period OID.
B. The Issuer will assign a CUSIP
number to the Global Security
representing such Book-Entry
Note and then advise the Trustee
and the Presenting Agent by
telephone (confirmed in writing
at any time on the same date) or
electronic transmission of the
information set forth in
Settlement Procedure "A" above,
such CUSIP number and the name
of the Presenting Agent.
C. The Trustee will enter a pending
deposit message through DTC's
Participant Terminal System
providing the settlement
information to DTC specified in
the Letter of Representations
from the Issuer and the Trustee
to DTC dated as of the date
hereof.
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D. To the extent the Issuer has not
already done so, the Issuer will
deliver to the Trustee a Global
Security in a form that has been
approved by the Issuer, the
Agent and the Trustee.
E. The Trustee will complete such
Global Security, stamp the
appropriate legend, as
instructed by DTC, if not
already set forth thereon, and
authenticate the Global Security
representing such Book-Entry
Note in accordance with the
terms of the written order of
the Issuer then in effect.
F. DTC will credit such Book-Entry
Note to the Trustee's
participant account at DTC.
G. Upon delivery of the pending
deposit message referenced in
"C" above, an SDFS deliver order
through DTC's Participant
Terminal System will be created
instructing DTC to debit such
Book-Entry Note to the Trustee's
participant account and credit
such Book-Entry Note to the
Presenting Agent's participant
account and debit the Presenting
Agent's settlement account and
credit the Trustee's settlement
account for an amount equal to
the price of such Book-Entry
Note less the Presenting Agent's
commission. The entry of such a
pending deposit message by the
Trustee shall constitute a
representation and warranty by
the Trustee to DTC that (i) the
Global Security representing
such Book-Entry Note has been
issued and authenticated and
(ii) the Trustee is holding such
Global Security pursuant to the
Medium Term Note Certificate
Agreement between the Trustee
and DTC.
H. The Presenting Agent will enter
an SDFS deliver order through
DTC's Participant Terminal
System instructing DTC (i) to
debit such Book-Entry Note to
the Presenting Agent's
participant account and credit
such Book-Entry Note to the
participant accounts of the
Participants with respect to such
82
Book-Entry Note and (ii) to
debit the settlement accounts of
such Participants and credit the
settlement account of the
Presenting Agent for an amount
equal to the price of such Book-
Entry Note.
I. Transfers of funds in accordance
with SDFS deliver orders
described in Settlement
Procedures "G" and "H" will be
settled in accordance with SDFS
operating procedures in effect
on the settlement date.
J. The Trustee will, upon receipt
of funds from the Agent in
accordance with Settlement
Procedure "G", credit to an
account of the Issuer maintained
at Mellon Bank, N.A., funds
available for immediate use in
the amount transferred to the
Trustee in accordance with
Settlement Procedure "G".
However, the Trustee shall not
credit the account of the Issuer
unless and until the Trustee has
confirmed receipt of the funds in the
appropriate amount transferred in
accordance with Settlement Procedure "G".
K. The Presenting Agent will
confirm the purchase of
such Book-Entry Note to
the purchaser either by
transmitting to the
Participants with respect
to such Book-Entry Note a
confirmation order or orders through
DTC's institutional delivery
system or by mailing a
written confirmation
to such purchaser.
Settlement For orders of Book-Entry Notes
Procedures solicited by any Agent and accepted
Timetable: by the Issuer for settlement on the
Business Day after the sale date,
Settlement Procedures "A" through "K"
set forth above shall be completed as
soon as possible but not later than
the respective times (New York City
time) set forth below:
83
Settlement
Procedure Time
---------- ----
A 11:00 a.m. on the sale date
B 12:00 Noon on the sale
date
C 2:00 p.m. on the sale date
D 3:00 p.m. on the day before
settlement
E 9:00 a.m. on settlement
date
F 10:00 a.m. on settlement
date
G-H 2:00 p.m. on settlement
date
I 4:30 p.m. on settlement
date
J-K 5:00 p.m. on settlement
date
If a sale is to be settled more than
one Business Day after the sale date,
Settlement Procedures "A", "B" and
"C" shall be completed as soon as
practicable but no later than 11:00
a.m. and 12:00 Noon on the first
Business Day after the sale date and
no later than 2:00 p.m. on the
Business Day before the settlement
date, respectively. Settlement
Procedure "I" is subject to extension
in accordance with any extension of
Fedwire closing deadlines and in the
other events specified in SDFS
operating procedures in effect on the
settlement date.
If settlement of a Book-Entry Note is
rescheduled or canceled, the Trustee
will deliver to DTC, through DTC's
Participant Terminal System, a
cancellation message to such effect
by no later than 2:00 p.m. on the
Business Day immediately preceding
the scheduled settlement date.
Failure to If the Trustee has not entered an
Settle: SDFS deliver order with respect to a
Book-Entry Note pursuant to
Settlement Procedure "G", then, upon
written request (which may be by
telecopy) of the Issuer, the Trustee
shall deliver to DTC, through DTC's
84
Participant Terminal System, as soon
as practicable, a withdrawal message
instructing DTC to debit such Book-
Entry Note to the Trustee's
participant account. DTC will
process the withdrawal message,
provided that the Trustee's participant
account contains a principal
amount of the Global Security
representing such Book-Entry Note that
is at least equal to the principal
amount to be debited. If a
withdrawal message is processed with
respect to all the Book-Entry Notes
represented by a Global Security, the
Trustee will cancel such Global
Security in accordance with the
Indenture of Mortgage and so advise
the Issuer, and will make appropriate
entries in its records. The CUSIP
number assigned to such Global
Security shall, in accordance with
CUSIP Service Bureau procedures, be
canceled and not immediately
reassigned. If a withdrawal message
is processed with respect to one or
more, but not all, of the Book-Entry
Notes represented by a Global
Security, the Trustee will exchange
such Book-Entry Note for two Global
Securities, one of which shall
represent such Book-Entry Notes and
shall be canceled immediately after
issuance and the other of which shall
represent the other Book-Entry Notes
previously represented by the
surrendered Global Security and shall
bear the CUSIP number of the
surrendered Global Security.
If the purchase price for any Book-
Entry Note is not timely paid to the
Participants with respect to such
Note by the beneficial purchaser
thereof (or a Person, including an
indirect participant in DTC, acting
on behalf of such purchaser), such
Participants and, in turn, the
Presenting Agent may enter SDFS
deliver orders through DTC's
Participant Terminal System debiting
such Note to such Presenting Agent's
participant account and crediting
such Note free to the participant
account of the Trustee and shall
notify the Trustee and the Issuer
thereof. Thereafter, the Trustee (i)
will promptly notify the Issuer
thereof, once the Trustee has
confirmed that such Note has been
85
credited to its participant account,
and the Issuer shall immediately
transfer by Fedwire (in immediately
available funds) to such Agent an
amount equal to the price of such
Note which was previously credited to
the account of the Issuer maintained
at Mellon Bank, N.A., or wire
transferred at the Issuer's direction
in accordance with Settlement
Procedure J and (ii) the Trustee will
deliver the withdrawal message and
take the related actions described in
the preceding paragraph. If such
failure shall have occurred for any
reason other than a default by the
Presenting Agent in the performance
of its obligations hereunder and
under the Placement Agency Agreement,
then the Issuer will reimburse the
Presenting Agent or the Trustee, as
applicable, on an equitable basis for
the loss of the use of the funds
during the period when they were
credited to the account of the
Issuer.
Notwithstanding the foregoing, upon
any failure to settle with respect to
a Book-Entry Note, DTC may take any
actions in accordance with its SDFS
operating procedures then in effect.
In the event of a failure to settle
with respect to one or more, but not
all, of the Book-Entry Notes to have
been represented by a Global
Security, the Trustee will provide,
in accordance with Settlement
Procedure "E", for the authentication
and issuance of a Global Security
representing the other Book-Entry
Notes to have been represented by
such Global Security and will make
appropriate entries in its records.
Trustee Not to Risk Nothing herein shall be deemed to
Funds: require the Trustee to risk or expend
its own funds in connection with any
payment to the Issuer, DTC, the Agent
or the purchaser, it being understood
by all parties that payments made by
the Trustee to the Issuer, DTC, the
Agent or the purchaser shall be made
only to the extent that funds are
provided to the Trustee for such
purpose.
86
Authenticity of The Issuer will cause the Trustee to
Signatures: furnish the Agent from time to time
with the specimen signatures of each
of the Trustee's officers, employees
or agents who have been authorized by
the Trustee to authenticate Book-
Entry Notes, but no Agent will have
any obligation or liability to the
Issuer or the Trustee in respect of
the authenticity of the signature of
any officer, employee or agent of the
Issuer or the Trustee on any Book-
Entry Note.
Payment of Each Agent shall forward to the
Expenses: Issuer, on a monthly basis, a
statement of the out-of-pocket expenses
incurred by such Agent during that
month that are reimbursable to it
pursuant to the terms of the
Placement Agency Agreement. The
Issuer will remit payment to each
Agent currently on a monthly basis.
Advertising The Issuer will determine with the
Costs: Agent the amount of advertising that
may be appropriate in soliciting
offers to purchase the Book-Entry
Notes. Advertising expenses will be
paid by the Issuer.
Periodic Statements Periodically, upon written request,
from the Trustee: the Trustee will send to the Issuer a
statement setting forth the principal
amount of Book-Entry Notes
outstanding as of that date and
setting forth a brief description of
any sales of Book-Entry Notes which
the Issuer has advised the Trustee
but which have not yet been settled.
Restrictions on No Note may be resold or transferred
Transfers: in any manner that does not comply
with the applicable restrictions on
resale or transfer or the procedures
required for resale or transfer set
forth in the Offering Memorandum, the
Placement Agency Agreement and on the
Note certificate.
Business Day: As used herein, "Business Day" means
any day other than a Saturday or
Sunday or a day on which the Trustee
or banks in New York, New York are
generally authorized or obligated by
law or executive order to close.
87
PART II
Administrative Procedures for Certificated Notes
The Trustee will serve as registrar and transfer agent,
authenticating agent and paying agent in connection with the Certificated
Notes, unless a paying agent is duly appointed by the Issuer to carry out
certain duties.
Issuance: Each Certificated Note will be dated
and issued as of the date of its
authentication by the Trustee. Each
Certificated Note will bear an
Original Issue Date, which will be (i)
with respect to an original
Certificated Note (or any portion
thereof), its original issuance date
(which will be the settlement date)
and (ii) with respect to any
Certificated Note (or portion
thereof) issued subsequently upon
transfer or exchange of a Certificated
Note or in lieu of a destroyed, lost or
stolen Certificated Note, the Original
Issue Date of the predecessor Certificated
Note, regardless of the date of
authentication of such subsequently
issued Certificated Note.
Registration: Certificated Notes will be issued
only in fully registered form without
coupons.
Transfers and A Certificated Note may be presented
Exchanges: for transfer or exchange at the
office designated by the Trustee
located in New York, New York, or at
such other office as the Issuer may
designate. Certificated Notes will
be exchangeable for other
Certificated Notes having identical
terms but different authorized
denominations without service charge.
Certificated Notes will not be
exchangeable for Book-Entry Notes.
Maturities: Each Certificated Note will mature on
a date not less than one year nor
more than thirty years after the
Original Issue Date (the settlement
date) for such Note.
Denominations: The denomination of any Certificated
Note denominated in U.S. dollars will
be a minimum of $100,000 or any
amount in excess thereof that is an
integral multiple of $1,000.
88
Interest: General. Interest, if any, on each
Certificated Note will accrue from
the Original Issue Date for the first
interest period or the last date to
which interest has been paid, if any,
for each subsequent interest period,
and will be calculated and paid in
the manner described in such Note and
in the Offering Memorandum, as
supplemented by the applicable
Pricing Supplement. Unless otherwise
specified therein, each payment of
interest on a Certificated Note will
include interest accrued up to but
excluding the Interest Payment Date
or up to but excluding the Maturity
Date.
Record Dates. The Record Date with
respect to any Interest Payment Date
shall be the May 1 or November 1
immediately preceding such Interest
Payment Date, whether or not such
date shall be a Business Day.
Interest Payment Dates. Unless
otherwise specified pursuant to
Settlement Procedure "A" below, interest
payments will be made semiannually on
May 15 and November 15 of each year
and at Maturity; provided, however,
that in the case of a Certificated
Note issued between a Record Date and
an Interest Payment Date, or on an
Interest Payment Date, the first
interest payment will be made on the
Interest Payment Date following the
next succeeding Record Date. If any
Interest Payment Date for, or the
Maturity of, a Certificated Note is
not a Business Day, the payment due
on such day shall be made on the next
succeeding Business Day and no
interest shall accrue on such payment
for the period from and after such
Interest Payment Date or Maturity, as
the case may be.
Calculation of Certificated Notes. Interest on
Interest: Certificated Notes (including
interest for partial periods) will be
calculated on the basis of a 360-day
year of twelve 30-day months.
89
Payments of No later than 11:00 a.m. on the due
Principal and date for any payment of principal,
Interest: premium (if any) or interest on each
Certificated Note, the Issuer will
pay to the Trustee, as paying agent,
the amount of principal, premium (if
any) and/or interest then due. The
Trustee will pay the principal amount
of each Certificated Note at Maturity
upon presentation of such Certificated
Note to the Trustee. Such payment,
together with payment of any premium
and interest due at Maturity of such
Certificated Note, will be paid to an
account at a bank in New York, New York
(or other bank consented to by the Issuer)
as the registered holder of the Notes shall
designate to the Trustee not less
than ten (10) days prior to the date
of payment, in funds available for
immediate use by the Trustee and in
turn by the Holder of such
Certificated Note. Certificated
Notes presented and surrendered to
the Trustee at Maturity for payment
will be cancelled by the Trustee in
accordance with the Indenture of
Mortgage. All interest payments on a
Certificated Note (other than
interest due at Maturity) and any
other payments for which appropriate
instructions for payment shall not
have been received by the Trustee not
less than ten (10) days prior to
payment will be made by check drawn
on the Trustee or another Person
appointed by the Trustee mailed by
the Trustee to the Person entitled
thereto as provided in such Note;
provided, however, that the holder of
$10,000,000 or more of Certificated
Notes with similar tenor and terms
will be entitled to receive payment
by wire transfer in U.S. dollars upon
receipt of written instructions by
the Trustee not less than ten (10)
days prior to payment. Within five
Business Days after each Record Date,
the Trustee will furnish the Issuer
with a list of interest payments to
be made on the following Interest
Payment Date for each group of
Certificated Notes bearing interest
at a particular rate and in total for
all Certificated Notes. Interest at
Maturity will be payable to the
Person to whom the payment of
principal is payable. The Trustee
will provide, on or about the last
Business Day of each month, to the
Issuer lists of principal and
interest, to the extent ascertainable,
to be paid on Certificated Notes
maturing (on a Maturity or Redemption
Date or otherwise) in the next
succeeding month.
90
The Issuer will be responsible for
withholding taxes on interest paid on
Certificated Notes as required by
applicable law.
Procedure for Rate The Issuer and the Agent will
Setting and discuss from time to time the
Posting: aggregate principal amount of, the
issuance price of, and the interest
rates to be borne by, Notes that may
be sold as a result of the solicitation
of orders by any Agent. If the
Issuer decides to set prices of, and
rates borne by, any Notes in respect
of which any Agent are to solicit
orders (the setting of such prices and
rates to be referred to herein as
"posting") or if the Issuer decides
to change prices or rates previously
posted by it, it will promptly advise
each Agent of the prices and rates to
be posted.
Acceptance and Unless otherwise instructed by the
Rejection of Issuer, each Agent will advise the
Orders: Issuer promptly by telephone of all
orders to purchase Certificated Notes
received by such Agent, other than
those rejected by it in whole or in
part in the reasonable exercise of
its discretion and, if such Agent or
any of its affiliates shall be the
offeror, shall advise the Issuer of
that fact. Unless otherwise agreed
by the Issuer and each Agent, the
Issuer has the sole right to accept
orders to purchase Certificated Notes
and may reject any such orders in
whole or in part. The Issuer will
forthwith advise such Presenting
Agent of the acceptance or rejection
of any offer received through such
Agent who shall then so advise the
offeror.
Preparation of If any order to purchase a
Pricing Certificated Note is accepted by or
Supplement: on behalf of the Issuer, and if so
required by Section 4(a)(i) of the
Placement Agency Agreement, the
Issuer, with the approval of the
Presenting Agent, will prepare a
Pricing Supplement reflecting the
terms of such Certificated Note and
will supply at least ten copies
thereof (and additional copies if
requested) to the Presenting Agent at
the address set forth on Schedule I
to the Placement Agency Agreement,
and one copy thereof to the Trustee,
to be delivered by overnight courier
91
or telecopy to arrive no later than
11:00 a.m., New York City time, on
the Business Day following the sale
date. The Presenting Agent will
cause a Offering Memorandum and
Pricing Supplement to be delivered to
the purchaser of such Certificated
Note.
Outdated Pricing Supplements (other
than those retained for files), will
be destroyed.
Suspension of Subject to the Issuer's representations,
Solicitation: warranties and covenants contained in
the Placement Agency Agreement, the
Issuer may instruct the Agent to suspend
at any time for any period of time or
permanently, the solicitation of orders
to purchase Certificated Notes. Upon
receipt of such instructions, each
Agent will forthwith suspend
solicitation until such time as the
Issuer has advised each Agent that
such solicitation may be resumed.
In the event that at the time the
Issuer suspends solicitation of
purchases there shall be any orders
outstanding for settlement, the
Issuer will promptly advise each
Agent and the Trustee whether such
orders may be settled and whether
copies of the Offering Memorandum as
in effect at the time of the
suspension, together with the
appropriate Pricing Supplement, may be
delivered in connection with the
settlement of such orders. The Issuer
will have the sole responsibility for
such decision and for any
arrangements that may be made in the
event that the Issuer determines that
such orders may not be settled or
that copies of such Offering
Memorandum may not be so delivered.
No such suspension shall excuse any
failure by the Issuer to fulfill a
contractual obligation to deliver any
Certificated Notes.
92
Procedure for When the Issuer has determined to
Rate Changes: change the interest rates of Certificated
Notes being offered, it will
promptly advise the Agent and each
Agent will forthwith suspend
solicitation of orders. Each Agent will
telephone the Issuer with recommendations
as to the changed interest rates. At
such time as the Issuer has advised the
Agent of the new interest rates, the Agent
may resume solicitation of orders. Until
such time only "indications of interest"
may be recorded.
Delivery of A copy of the Offering Memorandum and
Offering any Pricing Supplement relating to a
Memorandum: Certificated Note must accompany or
precede the earliest of any written
offer of such Certificated Note,
confirmation of the purchase of such
Certificated Note and payment for
such Certificated Note by its
purchaser. If notice of a change in
the terms of the Certificated Notes
is received by the Agent between the
time an order for a Certificated Note
is placed and the time written
confirmation thereof is sent by the
Presenting Agent to a customer or his
agent, such confirmation shall be
accompanied by a Offering Memorandum
and Pricing Supplement setting forth
the terms in effect when the order
was placed. Subject to "Suspension
of Solicitation" above, the
Presenting Agent will deliver a
Offering Memorandum and Pricing
Supplement as herein described with
respect to each Certificated Note
sold by it. The Issuer will make
such delivery if such Certificated
Note is sold directly by the Issuer
to a purchaser (other than any
Agent).
Confirmation: For each order to purchase a Certificated
Note solicited by any Agent and
accepted by or on behalf of the
Issuer, the Presenting Agent will
issue a confirmation to the
purchaser, with a copy to the Issuer,
setting forth the information
specified in paragraph A under
"Settlement Procedures" and delivery
and payment instructions.
Settlement: The receipt by the Issuer of immediately
available funds in exchange for
an authenticated Certificated Note
delivered to the Presenting Agent and
the Presenting Agent's delivery of
such Certificated Note against
receipt of immediately available
funds shall, with respect to such
Certificated Note, constitute
"settlement". All orders accepted by
93
the Issuer will be settled on the
tenth Business Day following the date
of sale pursuant to the timetable for
settlement set forth below, unless
the Issuer and the Purchaser agree to
settlement on another day which shall
be no earlier than one Business Day
following the date of sale.
Settlement Settlement Procedures with regard to
Procedures: each Certificated Note sold by the
Issuer through any Agent, as agent,
shall be as follows:
A. The Presenting Agent will advise
the Issuer by telephone of the
following settlement
information:
1. Name in which such Certificated
Note is to be registered
("Registered Owner").
2. Address of the Registered
Owner and address for
payment of principal and
interest.
3. Taxpayer identification
number of the Registered
Owner (if available).
4. Rank (senior or
subordinated).
5. Principal amount.
6. Maturity Date.
7. Interest Payment Dates and
the Interest Payment
Period.
8. Redemption or repayment
provisions, if any.
9. The settlement date.
10. Price (including currency).
11. Presenting Agent's
commission, determined as
provided in Section 2 of
the Placement Agency
Agreement.
12. Whether such Certificated
Note is issued at an
original issue discount
("OID"), and, if so, the
total amount of OID, the
yield to maturity and the
initial accrual period OID.
94
B. The Issuer will advise the
Trustee by telephone (confirmed
in writing at any time on the
sale date) or electronic
transmission of the information
set forth in Settlement
Procedure "A" above and the name
of the Presenting Agent.
C. The Issuer will deliver to the
Trustee an original Certificated
Note with customer confirmation
in triplicate in forms that have
been approved by Issuer, the
Agent and the Trustee.
D. The Trustee will complete such
Certificated Note and will
authenticate such Certificated
Note and deliver it (with the
confirmation) and two copies
thereof (clearly marked as such)
to the Presenting Agent, and the
Presenting Agent will
acknowledge receipt of the Note
by stamping or otherwise marking
the first copy and returning it
to the Trustee. Such delivery
will be made only against such
acknowledgment of receipt. In
the event that the instructions
given by the Presenting Agent
for payment to the account of
the Issuer are revoked, the
Issuer will as promptly as
possible wire transfer to the
account of the Presenting Agent
an amount of immediately
available funds equal to the
amount of such payment made.
E. The Presenting Agent will
deliver such Certificated Note
(with the confirmation) to the
customer against payment in
immediately payable funds. The
Presenting Agent will obtain the
acknowledgement of receipt of
such Certificated Note by
retaining the second copy
thereof.
F. Upon verification by the
Presenting Agent that a Note has
been prepared and properly
authenticated by the Trustee and
registered in the name of the
purchaser in the proper
principal amount, payment will
be made to the Issuer by the
Presenting Agent the same day in
95
immediately available funds.
Such payment shall be made only
upon prior receipt by the
Presenting Agent of immediately
available funds from or on
behalf of the purchaser unless
the Presenting Agent decides, at
its option, exercised in its
sole discretion, to advance its
own funds for such payment
against subsequent receipt of
funds from the purchaser. The
Presenting Agent shall
immediately notify the Issuer of
its decision to advance its own
funds for payment against
subsequent receipt of funds from
a purchaser.
G. The Trustee will send a third
copy of the Certificated Note
(clearly marked as such) to the
Issuer by first-class mail.
Settlement For orders of Certificated Notes
Procedures solicited by any Agent, as agent, and
Timetable: accepted by the Issuer, Settlement
Procedures "A" through "G" set forth
above shall be completed on or before
the respective times (New York City
time) set forth below:
Settlement
Procedure Time
---------- ----
A 2:00 p.m. on the day
before settlement
B-C 3:00 p.m. on the day
before settlement
D 2:15 p.m. on
settlement date
E 3:00 p.m. on
settlement date
F-G 5:00 p.m. on
settlement date
Failure to If a purchaser fails to accept
Settle: delivery of and make payment for any
Certificated Note, the Presenting
Agent will notify the Issuer and the
Trustee by telephone and return such
Certificated Note to the Trustee.
Upon receipt of such notice, the
Issuer will immediately wire transfer
to the account of the Presenting
Agent an amount equal to the amount
previously credited to the account of
Issuer in respect of such
Certificated Note. Such wire
transfer will be made on the
settlement date, if possible, and in
any event not later than the Business
Day following the settlement date.
If the failure shall have occurred
96
for any reason other than a default
by the Presenting Agent in the
performance of its obligations
hereunder and under the Placement
Agency Agreement, then the Issuer
will reimburse the Presenting Agent
on an equitable basis for its loss of
the use of the funds during the
period when they were credited to the
account of the Issuer. Immediately
upon receipt of the Certificated Note
in respect of which such failure
occurred, the Trustee will cancel
such Certificated Note in accordance
with the Indenture of Mortgage, as
supplemented, and so advise the
Issuer and will make appropriate
entries in its records.
Trustee Not to Risk Nothing herein shall be deemed to
Funds: require the Trustee to risk or expend
its own funds in connection with any
payment to the Issuer, the Agent or
the purchaser, it being understood by
all parties that payments made by the
Trustee to the Issuer, the Agent or
the purchaser shall be made only to
the extent that funds are provided to
the Trustee for such purpose.
Authenticity of The Issuer will cause the Trustee to
Signatures: furnish the Agent from time to time
with the specimen signatures of each
of the Trustee's officers, employees
or agents who has been authorized by
the Trustee to authenticate Certificated
Notes, but no Agent will have any
obligation or liability to the
Issuer or the Trustee in respect of
the authenticity of the signature of
any officer, employee or agent of the
Issuer or the Trustee on any
Certificated Note.
Payment of Each Agent shall forward to the
Expenses: Issuer, on a monthly basis, a
statement of the out-of-pocket expenses
incurred by such Agent during that
month that are reimbursable to it
pursuant to the terms of the
Placement Agency Agreement. The
Issuer will remit payment to each
Agent currently on a monthly basis.
Advertising Costs: The Issuer will determine with the
Agent the amount of advertising that
may be appropriate in soliciting
orders to purchase the Certificated
Notes. Advertising expenses will be
paid by the Issuer.
97
Periodic Statements Periodically, upon written request,
from the Trustee: the Trustee will send to the Issuer a
statement setting forth the principal
amount of Certificated Notes
outstanding as of that date and
setting forth a brief description of
any sales of Certificated Notes of
which the Issuer has advised the
Trustee but which have not yet been
settled.
Restrictions of No Note may be resold or transferred
Transfer: in any manner that does not comply
with the applicable restrictions on
resale or transfer or the procedures
required for resale or transfer set
forth on the Note certificate.
Business Day: As used herein, "Business Day" means
any day other than a Saturday or
Sunday or a day on which the Trustee
or banks in New York, New York are
generally authorized or obligated by
law or executive order to close.
98
EXHIBIT B
TERMS AGREEMENT
[Date]
To: PHILADELPHIA SUBURBAN WATER COMPANY
Subject in all respects to the terms and conditions of the
Placement Agency Agreement (the "Agreement") dated as of March 30, 1995
between PaineWebber Incorporated and you, the undersigned agrees to purchase
the following Notes of Philadelphia Suburban Water Company:
Principal Amount:
Interest Rate:
Maturity Date:
Discount to the Purchaser: __% of Principal Amount
Purchase Price:
Closing Date and Time:
Initial Redemption Date:
Initial Redemption Percentage:
Annual Redemption Reduction Percentage:
Requirements to deliver the
documents specified in
Section 6(a)(ii) of the Agreement:
Certificate contemplated by
clause (1): [Required/Not Required]
Opinion contemplated by
clause (2): [Required/Not Required]
Opinion contemplated by
clause (3): [Required/Not Required]
Certificate contemplated by
clause (4): [Required/Not Required]
Opinion contemplated by
clause (5): [Required/Not Required]
Letter contemplated by
clause (6): [Required/Not Required]
Period during which additional
Notes may not be sold
if not period between trade
date and Closing Date as specified
in Section 4(a)(v) of the Agreement:
Other Provisions:
PAINEWEBBER INCORPORATED
as Purchaser,
by: David G. Zahka
-------------------------
Name:
Title:
Accepted:
PHILADELPHIA SUBURBAN WATER COMPANY
by: Michael P. Graham
-----------------------
Name:
Title:
99
EXHIBIT C
(215) 575-7000
_____, 199_
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Re: Philadelphia Suburban Water Company
$100,000,000 First Mortgage Bonds,
Medium Term Note Series
Gentlemen:
We have acted as special counsel to Philadelphia Suburban Water Company,
a Pennsylvania corporation (the "Company"), in connection with the
transactions contemplated by (i) the Placement Agency Agreement dated March
30, 1995 (the "Placement Agency Agreement") between PaineWebber Incorporated
and the Company; (ii) the Paying Agency Agreement dated as of March 30, 1995
(the "Paying Agency Agreement"), among the Company, PaineWebber Incorporated
and CoreStates Bank, N.A., as paying agent; (iii) the Indenture of Mortgage
dated as of January 1, 1941 (the "Original Indenture"), between the Company
and CoreStates Bank, N.A. (as successor in interest to The Philadelphia
Company for Insurance on Lives and Exacting Annuities), as trustee (the
"Trustee"), as amended and supplemented by twenty-nine supplements thereto
(the Original Indenture, as so amended and supplemented, the "Indenture");
(iv) the Twenty-Ninth Supplemental Indenture dated as of March 1, 1995 (the
"Twenty-Ninth Supplemental Indenture") between the Company and the Trustee;
(v) the First Mortgage Bonds, Medium Term Note Series, to be issued in one or
more series pursuant to the Twenty-Ninth Supplemental Indenture (the
"Notes"); and (vi) the Confidential Offering Memorandum, dated as of March
30, 1995 relating to the offering of the Notes, including any documents
incorporated therein by reference, and any quarterly or annual reports of the
Company or the Company's parent, Philadelphia Suburban Corporation, a
Pennsylvania corporation ("PSC"), delivered therewith (collectively, the
"Offering Memorandum"). This opinion is being rendered to you pursuant to
Section 5(a)(iii) of the Placement Agency Agreement. Unless otherwise
specified, capitalized terms not otherwise defined herein shall have the
meanings specified in the Placement Agency Agreement, the Original Indenture
or the Twenty-Ninth Supplemental Indenture.
100
In connection with this opinion, we have examined the following
documents:
(a) the Placement Agency Agreement;
(b) the Paying Agency Agreement;
(c) the Indenture (including the Twenty-Ninth Supplemental Indenture);
(d) the form of Note;
(e) the Offering Memorandum;
(f) a copy of the Articles of Incorporation of the Company, as amended
and restated and now in effect;
(g) a copy of the Bylaws of the Company as now in effect;
(h) the Securities Certificate relating to the issue and sale of the
Notes, filed by the Company with the Pennsylvania Public Utility Commission
(the "PUC") pursuant to the provisions of Chapter 19 of the Pennsylvania
Public Utility Code and a copy of the Order of the PUC dated March 16, 1995
registering said Securities Certificate, and certified by the Secretary of
the PUC;
(i) evidence satisfactory to us of the due recordation of the Original
Indenture and the Twenty-Ninth Supplemental Indenture in the Counties of
Bucks, Chester, Delaware and Montgomery in the Commonwealth of Pennsylvania;
(j) the resolutions of the Board of Directors of the Company dated
March 7, 1995 authorizing the issuance of up to $100,000,000 aggregate
principal amount of Notes and the execution of the Twenty-Ninth Supplemental
Indenture, the Placement Agency Agreement and the Paying Agency Agreement;
and
(k) the certificates of the Company and other documents delivered to
you at the Closing.
In rendering the opinions set forth below, we have assumed the
genuineness of all signatures on documents and instruments examined by us
(except signatures of the Company on the Placement Agency Agreement, the
Twenty-Ninth Supplemental Indenture and the Paying Agency Agreement) and that
all documents submitted to us as copies conform with the originals thereof.
We have also relied, to the extent we have deemed such reliance to be
necessary and proper, on the factual matters contained in certificates of
public officials and officers of the Company.
To the extent any opinion below is made to our knowledge, such knowledge
shall mean the actual knowledge of attorneys within our firm who have
provided substantive representation to the Company, based solely upon such
limited investigation and inquiry as is set forth herein, and does not
include matters of which such attorneys could be deemed to have constructive
knowledge.
Based upon the foregoing and such other examination of fact and law as
we have deemed necessary for purposes of this opinion, and subject to the
assumptions and qualifications set forth herein, we are of the opinion that:
101
1. The Company is a corporation duly organized, validly existing and
in good standing under the laws of the Commonwealth of Pennsylvania. The
Company has full corporate power and authority to conduct all the activities
conducted by it, to own or lease all the assets owned or leased by it and to
conduct its business as described in the Offering Memorandum.
2. The Company has full corporate power and authority to enter into
the Placement Agency Agreement and the Paying Agency Agreement, to issue an
aggregate principal amount of $100,000,000 of the Notes, and to perform its
obligations under the Placement Agency Agreement, the Paying Agency Agreement
and the Notes. The Placement Agency Agreement has been duly authorized,
executed and delivered by the Company. The Paying Agency Agreement has been
duly authorized, executed and delivered by the Company and, assuming the due
authorization, execution and delivery by the other parties thereto,
constitutes a legal, valid and binding agreement of the Company and is
enforceable against the Company in accordance with its terms (subject to
applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or other similar laws relating to creditors' rights generally from
time to time in effect, and subject, as to enforceability, to general
principles of equity, regardless of whether such enforceability is considered
in a proceeding in equity or at law).
3. An aggregate principal amount of $100,000,000 of the Notes has been
duly authorized for issuance and sale pursuant to the Placement Agency
Agreement and, when executed by the Company and authenticated by the Trustee
and delivered pursuant to the provisions of the Indenture (including the
Twenty-Ninth Supplemental Indenture) and the Placement Agency Agreement
against payment of the consideration therefor specified in the Placement
Agency Agreement, the Notes will constitute legal, valid and binding
obligations of the Company, are entitled to the benefits and security of the
Indenture (including the Twenty-Ninth Supplemental Indenture) in accordance
with its terms and are secured thereby equally and ratably with all First
Mortgage Bonds of the Company outstanding under the Indenture, and are
enforceable against the Company in accordance with their terms (subject to
applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or other similar laws relating to creditors' rights generally from
time to time in effect, and subject, as to enforceability, to general
principles of equity, regardless of whether such enforceability is considered
in a proceeding in equity or at law).
4. The Company has full corporate power and authority to enter into
the Twenty-Ninth Supplemental Indenture. The Twenty-Ninth Supplemental
Indenture has been duly authorized, executed and delivered by the Company
and, assuming the due authorization, execution and delivery by the other
parties thereto, the Indenture, as supplemented by the Twenty-Ninth
Supplemental Indenture, constitutes a legal, valid and binding obligation of
the Company enforceable against the Company in accordance with its terms
(subject to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other similar laws relating to creditors'
rights generally from time to time in effect, and subject, as to
enforceability, to general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law). The
Original Indenture and the Twenty-Ninth Supplemental Indenture have been
properly recorded in the Counties of Bucks, Chester, Delaware and Montgomery
in the Commonwealth of Pennsylvania and are the only recordations and filings
necessary in order to establish, preserve, protect and perfect the lien of
the Indenture on all real estate and fixed property of the Company (excluding
easements and other similar rights) described in the Indenture as subject to
the lien thereof. The Indenture creates a valid, binding and direct lien
which it purports to create upon the interest of the Company in the real
estate and fixed property of the Company specifically described therein as
subject to the lien thereof.
102
5. The Indenture (including the Twenty-Ninth Supplemental Indenture)
and the form of Note conforms in all material respects as to legal matters to
the descriptions thereof in the Offering Memorandum. All descriptions in the
Offering Memorandum (not including documents incorporated by reference
therein) of statutes, regulations or legal or governmental proceedings are
accurate and fairly present the information.
6. The authorization, execution and delivery of the Twenty-Ninth
Supplemental Indenture and the issuance and sale of the Notes under the
circumstances described in the Placement Agency Agreement are not subject to
the provisions of the Public Utility Holding Company Act of 1935 in any
respect, and do not require that a declaration with respect thereto shall
have become effective under Section 7 of the Public Utility Holding Company
Act of 1935 or other authorization or approval of the Securities and Exchange
Commission shall have become effective under the provisions of said Act.
7. To the best of our knowledge, there are no actions, suits or
proceedings, pending or threatened, relating to the Notes, their offering, or
the Offering Memorandum.
8. The PUC has entered an Order dated March 16, 1995 (the "PUC
Order"), registering the Securities Certificate filed by the Company with
respect to the issuance and sale of the Notes, which order, on the date
hereof, is in effect and is final and nonappealable. Except for the PUC
Order and the recording of the Twenty-Ninth Supplemental Indenture as
described in paragraph 4 hereof, no other consent, approval, authorization or
order of, or any filing with, any government, governmental or other
administrative agency or body is required as of the date hereof in connection
with the execution and delivery by the Company of the Placement Agency
Agreement, the Paying Agency Agreement and the Twenty-Ninth Supplemental
Indenture, the solicitation of offers to purchase Notes, the issuance of any
Note or the performance by the Company of any of its obligations thereunder,
except such as may be required under the blue sky laws of any jurisdiction in
connection with the issue and sale of the Notes.
9. The Notes may be offered, issued, sold and delivered in the manner
contemplated by the Placement Agency Agreement, the Twenty-Ninth Supplemental
Indenture and the Offering Memorandum without registration thereof under the
Securities Act of 1933, as amended, and without qualification of an indenture
in respect of the Notes under the Trust Indenture Act of 1939, as amended, it
being understood that no opinion is expressed as to any subsequent resale of
any Notes.
10. Upon the issuance of the Notes and the payment of the consideration
therefore, the Trustee will have a valid and perfected security interest, for
the benefit of the Trustee and the holders of the Notes, to secure the full
and punctual performance of the Notes and all obligations of the Company
under the Indenture (including the Twenty-Ninth Supplemental Indenture), in
all real estate and fixed property (excluding easements and other similar
rights) specifically described in the Indenture (other than properties
released from the Indenture in accordance with the terms thereof).
11. We have not independently verified the accuracy, completeness or
fairness of the statements made or included in the Offering Memorandum and
take no responsibility therefor, except to the extent referred to paragraph 5
and in this paragraph. In the course of the preparation by the Company of
the Offering Memorandum, we participated in conferences with certain officers
and employees of the Company. Based upon our examination of the Offering
Memorandum, our investigation in connection with the preparation of the
Offering Memorandum and our participation in the conferences referred to
above, we have no reason to believe that the Offering Memorandum contains any
103
untrue statement of a material fact or omits to state any material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading (it being understood
that we express no opinion with respect to the financial statements and the
notes thereto, schedules and other financial, statistical data or operating
information included or incorporated by reference therein).
The foregoing opinions are subject to the following qualifications:
a. We express no opinion as to the adequacy of any notice
with respect to the disposition of any collateral. We also express no
opinion as to the effectiveness or enforceability of provisions relating to
waivers of notice or waivers of other rights, severability, prepayment fees
or penalties, choice of law, or any provisions which release or limit the
Company's liability or relate to cumulative remedies or, to the extent they
purport to or would have the effect of compensating the Company in amounts in
excess of any actual loss suffered by the Company, provisions relating to the
payment of a default rate of interest.
b. We express no opinion as to the enforceability with
respect to any provisions in the Indenture executed by the Company purporting
to waive the effect of applicable laws and remedies and any provisions
releasing any party from, or requiring indemnification for, liability for
gross negligence, recklessness or wilful misconduct.
c. Any requirements in the Indenture specifying that
provisions of the Indenture may only be waived in writing may not be enforced
to the extent that an oral agreement or an implied agreement by trade
practice or course of conduct has been created modifying any provision of the
Indenture.
d. This opinion is limited to the matters set forth herein,
no opinion may be inferred or implied beyond the matters expressly stated
herein, and our statements contained in the opinion portion of this letter
must be read in conjunction with the assumptions, limitations, exceptions and
qualifications set forth in this letter.
e. The opinions herein are expressed as of the date hereof
only and not as of some future date. We undertake no responsibility to
advise you of any change in law or new laws, regulations or judicial
decisions in the future. Nor do we assume any obligation to update or
supplement this opinion to reflect any facts or circumstances which may
hereafter come to our attention. References to "laws," "regulations" and
"judicial decisions" herein shall include only officially published laws and
regulations of the Commonwealth of Pennsylvania.
Our opinions expressed above are limited to the laws of the Commonwealth
of Pennsylvania, the Federal law of the United States of America and, upon
reliance on the opinion of your special counsel, Cravath, Swaine & Moore,
dated today and delivered to you pursuant to Section 5(a)(v) of the Placement
Agency Agreement, the laws of the State of New York, as to matters governed
by the laws of such state.
104
This opinion is furnished by us solely for the benefit of PaineWebber
Incorporated and the purchasers of the Notes and may not be relied upon by
any other person without the express written consent of our firm.
Very truly yours,
Dilworth, Paxson, Kalish & Kauffman
105
EXHIBIT D
[Letterhead of PSWC]
________, 1995
PaineWebber Incorporated
1285 Avenue of the Americas
New York, NY 10019
RE: $100,000,000 First Mortgage Bonds, Medium Term Note Series
Ladies and Gentlemen:
I am Senior Vice President-Law and Administration for Philadelphia
Suburban Water Company (the "Company").
Pursuant to Section ____ of the Placement Agency Agreement between you
and the Company of even date herewith relating to the $100,000,000 First
Mortgage Bonds, Medium Term Note Series, I have been asked to render an
opinion to you regarding certain matters involving the Company.
In my opinion:
(i) To the best of my knowledge, the Company has all governmental
licenses, permits, consents, orders, approvals and other authorizations
necessary to carry on its business as described in the Confidential Offering
Memorandum, except where the failure to do so would not have a material
adverse effect on the financial condition of the Company.
(ii) Except as set forth in the Confidential Offering Memorandum, there
are no actions, suits or proceedings pending (and of which the Company has
received notice) or, to the best of my knowledge, threatened against or
affecting the Company or any of its officers in their capacity as such,
before or by any Federal or state court, commission, regulatory body,
administrative agency or other governmental body, domestic or foreign,
wherein an unfavorable ruling, decision or finding is likely, which would
materially and adversely affect (i) the financial condition of the Company,
or (ii) the ability of the Company to perform its obligations under the
Placement Agency Agreement, the Paying Agency Agreement, the Original
Indenture (as supplemented by the Twenty-Ninth Supplemental Indenture) or the
Notes.
(iii) The Company (a) is not in violation of its Articles of
Incorporation, by-laws or other charter documents, (b) to the best of my
knowledge is not in default in the performance of any obligation, agreement
or condition contained in any indenture, mortgage, deed of trust, voting
trust agreement, loan agreement, note, debenture, note agreement or other
evidence of indebtedness, lease, contract or other agreement or instrument
known to me to which the Company is a party or by which it or its properties
is bound or affected where such default might have a material adverse effect
on the financial condition of the Company, and (c) to the best of my
knowledge the Company is not in violation of any judgment, ruling, decree,
order, franchise, license or permit known to me or any statute, rule or
regulation of any court or other governmental agency or body applicable to
the business or properties of the Company, where such violation might have a
material adverse effect on the financial condition of the Company.
106
(iv) The execution, delivery and performance of the Placement Agency
Agreement, the Twenty-Ninth Supplemental Indenture, the Paying Agency
Agreement and the consummation of the transactions therein contemplated will
not, of themselves, or upon notice, lapse of time, or both, conflict with or
result in a breach of any of the terms, conditions, or provisions of, or
constitute a default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any of the property or assets of the Company
(except as contemplated by the Indenture) pursuant to the terms of the
charter or bylaws of the Company, or any indenture, mortgage, deed of trust
or other agreement or instrument known to me to which the Company is a party
or by which the Company may be bound.
The information set forth herein is as of the date set forth above and
the Company and I disclaim any undertaking to provide any updates or changes
which thereafter may be brought to our attention.
This opinion is solely for your benefit and may not be relied upon by
any other person or for any other purpose.
Very truly yours,
Roy H. Stahl
107
EXHIBIT E
TRUSTEE'S CERTIFICATE
(Placement Agency Agreement)
The undersigned, CoreStates Bank, N.A. (hereinafter referred to as
the "Bank"), DOES HEREBY CERTIFY THAT:
1. It is Trustee under the Indenture of Mortgage dated as of
January 1, 1941, of Philadelphia Suburban Water Company (the "Company"), as
supplemented and amended by twenty-nine supplemental indentures including a
Twenty-Ninth Supplemental Indenture dated as of March 1, 1995 (the
"Twenty-Ninth Supplemental Indenture") between the Company and the Bank
relating to the authentication and delivery from time to time of an aggregate
principal amount of $100,000,000 of the Company's First Mortgage Bonds,
Medium Term Note Series, Subseries __ (the "Bonds").
2. The Twenty-Ninth Supplemental Indenture has been duly executed
in the name of and on behalf of the Bank by ______________, its Vice
President; the corporate seal of the Bank has been duly affixed thereto and
attested by Catherine Wiedecke, its Senior Corporate Trust Officer; and the
Twenty-Ninth Supplemental Indenture has been duly delivered on behalf of the
Bank.
3. The Bank, as Trustee, has:
a. pursuant to Section 5 to Article I of the Twenty-Ninth
Supplemental Indenture, authenticated the Global Bond, which consist of a
fully registered Bond as set forth in Exhibit "A" hereto, in the aggregate
principal amount of $______, bearing the interest rate and maturity date as
set forth in Section I of Article 1 of the Twenty-Ninth Supplemental
Indenture, by the execution of the Trustee's Certificate of Authentication
thereon by Catherine Wiedecke, its Senior Corporate Trust Officer; and
b. registered said Global Bond in the name of Cede & Co,
nominee of the Depository Trust Company ("DTC"), as the registered owner of
the Global Bond, which Global Bond is to be held by the Trustee as so
authenticated and registered on behalf of DTC pursuant to the Medium Term
Note Certificate Agreement dated as of November 28, 1990.
4. Set forth below, opposite the names and titles of the above
mentioned officers of the Bank, are specimens of their respective signatures.
Name Title Specimen Signatures
---- ----- -------------------
Charles J. Adomanis Vice President Charles J. Adomanis
Catherine Wiedecke Senior Corporate Catherine Wiedecke
Trust Officer
5. Charles J. Adomanis and Catherine Wiedecke were, at the time
of the acts referred to in paragraph 2 above, and are at the date hereof,
duly elected or appointed, qualified and acting officers of the Bank, holding
the offices indicated above and were duly authorized to perform such acts,
and the signatures appearing on the Twenty-Ninth Supplemental Indenture are
their genuine signatures; and Catherine Wiedecke was at the time of the acts
referred to in paragraph 3(a) above, and is at the date hereof, a duly
elected or appointed, qualified and acting Corporate Trust Officer of the
Bank duly authorized to perform such acts, and the signature appearing on
said Bonds is here genuine signature.
108
6. Attached hereto as Exhibit "B' is a true and correct copy of
resolutions as adopted by the Board of Directors of the Bank which, at the
date hereof, are still in full force and effect, giving requisite authority
to such officers to execute and deliver the Twenty-Ninth Supplemental
Indenture and to authenticate the Bonds.
IN WITNESS WHEREOF, CoreStates Bank, N.A. has caused this Trustee's
Certificate to be executed by its duly authorized officer, this ___ day of
March, 1995.
CORESTATES BANK, N.A.
by: Charles J. Adomanis
-------------------
Vice President
109
EXHIBIT F
PHILADELPHIA SUBURBAN WATER COMPANY
U.S. $
First Mortgage Bonds, Medium Term Note Series
With Maturities From One Year to
Thirty Years From Date of Issue
Amendment to Placement Agency Agreement
New York, New York
[Date]
PaineWebber Incorporated
1285 Avenue of the Americas
New York, NY 10019
Dear Sirs:
The Placement Agency Agreement dated March 30, 1995 (the
"Agreement"), between you and Philadelphia Suburban Water Company, a
corporation organized and existing under the laws of the Commonwealth of
Pennsylvania (the "Issuer"), is hereby amended to increase the aggregate
principal amount of Notes (as defined in the Agreement) at any time
outstanding to up to U.S. $ .
[The documents referred to in the second sentence of Section 12 of
the Agreement shall be delivered simultaneously herewith.]
In all other respects the Agreement shall remain in full force and
effect.
This amendment to the Agreement may be executed in counterparts,
and the executed counterparts shall together constitute a single instrument.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter shall represent a binding agreement between the Issuer
and each of you. This letter shall not constitute a binding agreement unless
and until it is executed by the Issuer and each of you.
Very truly yours,
PHILADELPHIA SUBURBAN WATER
COMPANY,
by: Michael P. Graham
-------------------------
Name:
Title:
The foregoing Agreement is
hereby confirmed and accepted
as of the date hereof.
PAINEWEBBER INCORPORATED
by: David G. Zahka
---------------------------
Name:
Title:
UT
3-MOS
DEC-31-1995
MAR-31-1995
PRO-FORMA
387,509
90
19,050
3,250
48,383
458,282
2,822
103,169
38,523
144,514
5,714
0
154,140
0
5,645
0
887
1,429
0
0
145,953
458,282
25,712
2,382
16,492
18,874
6,838
0
6,838
3,356
3,315
167
3,315
3,283
11,710
8,355
.28
.28