Not distributed, incorporate HHR additional comments;
blackline against bap4 and distribute Final version
BOND PURCHASE AGREEMENT
$30,000,000
Luzerne County Industrial Development Authority
Exempt Facilities Revenue Refunding Bonds,
1994 Series A
(Pennsylvania Gas and Water Company Project)
November 1, 1994
Luzerne County Industrial Development
Authority
Wilkes-Barre, Pennsylvania 18711
Attention: Executive Director
Pennsylvania Gas and Water Company
39 Public Square
Wilkes-Barre, Pennsylvania 18711
Attention: Chief Financial Officer
Gentlemen:
Wheat First Butcher Singer, as representative (in
such capacity, the "Representative"), on behalf of itself
and Legg Mason Wood Walker, Incorporated (individually, an
"Underwriter" and together, the "Underwriters"), offers to
enter into this Bond Purchase Agreement (the "Purchase
Agreement") relating to $30,000,0001 aggregate principal
amount of Luzerne County Industrial Development Authority
Exempt Facilities Revenue Refunding Bonds, 1994 Series A
(Pennsylvania Gas and Water Company Project) (the "Bonds")
of the Luzerne County Industrial Development Authority (the
"Issuer"). This offer is made subject to acceptance by the
Issuer and the Company (as hereinafter defined) prior to
5:00 P.M., prevailing time in Philadelphia, Pennsylvania, on
the date hereof, and upon such acceptance, as evidenced by
the due execution hereof by the Issuer and the Company, this
Purchase Agreement shall constitute a binding agreement
among the Issuer, the Representative, the Underwriters and
the Company in full force and effect according to the terms
hereof.
All capitalized terms used herein and not
otherwise defined shall have the meanings specified in the
Official Statement (defined below).
The Bonds shall mature and shall be subject to
mandatory and optional redemption and shall bear interest as
set forth in Exhibit A hereto and shall otherwise be as
described in the Official Statement hereinafter mentioned.
The Bonds shall be eligible for deposit at The Depository
Trust Company, New York, New York ("DTC") and for DTC's book-
entry only system for clearance and settlement of municipal
securities transactions.
The Bonds shall be issued pursuant to a Bond
Resolution of the Authority adopted on October 17, 1994 (the
"Bond Resolution"). The Bonds shall be as described in, and
shall be issued under and pursuant to, the Indenture.
The Bonds are special limited obligations of the
Issuer, payable solely from and secured by (i) the payments
to be made by the Company under and pursuant to the
Agreement and the 1994 First Mortgage Bonds, and (ii)
amounts on deposit from time to time in the funds and
accounts created pursuant to the Indenture. To evidence and
secure its obligations under the Agreement, the Company will
issue and deliver to the Issuer the Company's 1994 First
Mortgage Bonds in the principal amount of $30,000,000 issued
under and secured by the Indenture of Mortgage, as to be
further supplemented by the Twenty-Ninth Supplemental
Indenture to be dated as of November 1, 1994, providing for
the issuance of the 1994 First Mortgage Bonds.
Payment of the principal of and interest on the
Bonds will be insured by a municipal bond insurance policy
to be issued by AMBAC Indemnity Corporation ("AMBAC") on the
Closing Date.
Proceeds of the Bonds will be used to provide
funds sufficient, together with other available moneys
supplied by or on behalf of the Company, to reimburse Swiss
Bank Corporation, New York Branch ("SBC") for drawings on a
letter of credit (the "Letter of Credit") provided by SBC in
connection with the issuance of the 1987 Bonds. Proceeds of
the draws on the Letter of Credit will be used to enable the
Issuer, at the direction of the Company, to refund (the
"Refunding Program"), through redemption on December 1,
1994, the Issuer's 1987 Bonds. The estimated sources and
uses of proceeds of the Bonds, together with other available
moneys, is attached hereto as Exhibit B.
The Issuer and the Company hereby consent to and
confirm the prior use by the Underwriters of the Preliminary
Official Statement dated October 19, 1994 (the "Preliminary
Official Statement") in connection with the public offering
of the Bonds by the Underwriters, and further confirm the
authority of the Underwriters to use, and consent to the use
of, a final Official Statement, which has been or will be
approved by the Company, with respect to the Bonds, to be
dated the date hereof, and any amendments or supplements
thereto which shall be approved by the Company (as so
amended and supplemented, the "Official Statement") in
connection with the public offering, sale and distribution
of the Bonds. The Issuer, with respect to information
pertaining to the Issuer contained in the Preliminary
Official Statement, and the Company, with respect to all
information contained in the Preliminary Official Statement
other than information pertaining to the Issuer, hereby
represent and warrant that the Preliminary Official
Statement previously furnished to the Underwriters has been
"deemed final" by the Issuer and the Company as of its date
for purposes of Rule 15c2-12 ("Rule 15c2-12") of the
Securities and Exchange Commission (the "Commission")
promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), except for the omission of
such information as is permitted to be omitted in accordance
with paragraph (b)(1) of Rule 15c2-12.
The Issuer shall provide, or cause to be provided,
to the Representative as soon as practicable after the
Issuer's acceptance of this Purchase Agreement (but in no
event later than seven business days after the Issuer's
acceptance hereof, and in sufficient time to accompany any
confirmation that requests payment from any customer) copies
of the Official Statement, executed by the Issuer and the
Company (and conformed copies thereof) in sufficient
quantity to enable the Representative to comply with the
rules of the Commission and the Municipal Securities
Rulemaking Board.
The Issuer and the Company hereby authorize the
Representative and the Representative hereby agrees to file
the Official Statement with at least one of the nationally
recognized municipal securities information repositories
designated by the Commission. The Issuer and the Company
further authorize the Representative and the Representative
hereby agrees to file the Official Statement with the
Municipal Securities Rulemaking Board, or its designee.
1. Purchase, Sale and Closing. The Issuer
hereby agrees to sell to the Underwriters, and the
Underwriters, upon the basis of the representations,
warranties, covenants and agreements of the Company and the
Issuer contained herein, but subject to the conditions
hereinafter set forth, jointly and severally agree to
purchase from the Issuer, all (but not less than all) of the
Bonds at an aggregate purchase price of $30,000,000, plus
accrued interest on the Bonds from November 1, 1994, to the
Closing Date (as hereinafter defined). Payment for the
Bonds shall be made by wire transfer to the Trustee in
Federal funds. The closing for the delivery of and payment
for the Bonds shall take place at the offices of Ballard
Spahr Andrews & Ingersoll, 1735 Market Street, 51st Floor,
Philadelphia, Pennsylvania, at 9:00 am., local time in
Philadelphia, Pennsylvania, on November 15, 1994, or at such
other date, time or place as may be designated by the
Representative, with the approval of the Company and the
Issuer (the "Closing Date"). The Bonds will be delivered on
the Closing Date to DTC in New York, New York, in definitive
fully registered form without coupons, duly executed and
authenticated, registered in the name of DTC's nominee, Cede
& Co., and in the form of one Bond certificate in the
principal amount of $30,000,000 maturing December 1, 2017.
The Bonds will be made available to the Representative for
inspection at a place suitable for such inspection in New
York, New York at least 24 hours before the Closing Date.
As sole compensation for the services of the
Underwriters with respect to the Bonds the Company shall pay
the Underwriters concurrently with closing of the sale of
the Bonds a fee equal to $600,000.00 in connection with the
purchase and sale of the Bonds hereunder.
2. Authority of Representative; Public Offering
of Bonds. The Representative hereby represents and warrants
that it has been duly designated and authorized to execute
this Agreement on behalf of itself and the other Underwriter
and to act hereunder for and on behalf of itself and the
other Underwriter. The Underwriters agree to make a bona
fide public offering of the Bonds at not in excess of the
initial public offering prices set forth in the Official
Statement.
3. Representations and Warranties of Issuer. In
addition to the other representations and warranties made by
the Issuer in this Agreement, the Issuer hereby represents
and warrants to the Company and the Underwriters as follows:
(a) The Issuer is a body corporate and
politic constituting a public corporation and public
instrumentality duly created and validly existing under the
Pennsylvania Industrial and Commercial Development Authority
Law of 1967, as amended (the "Act"), and has (or at the
relevant time or times had) full power and authority (i) to
adopt the Bond Resolution, (ii) to execute, deliver and
perform its obligations under this Purchase Agreement, the
Indenture, the Agreement and all other Issuer documents
relating to the Refunding Program (the "Issuer Financing
Documents"), (iii) to issue, sell, execute and deliver the
Bonds to the Underwriters as provided in this Purchase
Agreement, and (iv) to finance the Project Facilities and to
undertake, carry out and consummate all other transactions
contemplated by each of the aforesaid documents.
(b) The Issuer has duly authorized by all
requisite corporate action (i) the execution and delivery
of, and the due performance of its obligations under, this
Purchase Agreement and the other Issuer Financing Documents,
(ii) the taking of any and all actions as may be required on
the part of the Issuer to carry out, give effect to and
consummate the transactions contemplated by this Purchase
Agreement and the other Issuer Financing Documents, and
(iii) the distribution of the Preliminary Official Statement
and the execution and distribution of the Official
Statement.
(c) The Bond Resolution has been duly
adopted by the Issuer and is in full force and effect. This
Purchase Agreement has been duly authorized, executed and
delivered by the Issuer. The Purchase Agreement is, and
when executed and delivered by the parties thereto, the
other Issuer Financing Documents will be, legal, valid and
binding obligations of the Issuer, enforceable in accordance
with their respective terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and
similar laws in effect from time to time affecting the
rights of creditors generally and except to the extent that
the enforceability thereof may be limited by the application
of general principles of equity. At the Closing Date, each
of the Issuer Financing Documents shall have been duly
executed and delivered by the Issuer.
(d) The Bonds have been duly authorized by
the Issuer and, when issued, authenticated by the Trustee,
and delivered and paid for by the Underwriters on the
Closing Date in accordance with the terms of this Purchase
Agreement, will constitute legal, valid and binding
obligations of the Issuer, enforceable in accordance with
their terms, and entitled to the benefits and security of
the Indenture, except as such enforceability may be limited
by bankruptcy, insolvency or other laws of general
application relating to or affecting creditors' rights and
by general principles of equity.
(e) The adoption of the Bond Resolution, the
execution and delivery by the Issuer of this Purchase
Agreement, the Bonds and the other Issuer Financing
Documents, and compliance with the provisions of the Bond
Resolution and of this Purchase Agreement, the Bonds and the
other Issuer Financing Documents, will not conflict with or
constitute a breach of, or a default under, any indenture,
commitment, agreement or other instrument to which the
Issuer is a party or by which it or any of its property is
bound, or any constitutional or statutory provision, rule,
regulation, ordinance, judgment, order or decree to which
the Issuer or any of its property is subject.
(f) There is no action, suit, proceeding,
inquiry or investigation before or by any court, arbitrator,
grand jury, public board or body, in which the Issuer has
been served or of which it has otherwise received official
notice or which, to the best knowledge of the Issuer after
due inquiry, is threatened against the Issuer (nor to the
best knowledge of the Issuer is there any basis therefor),
(i) which in any way questions the powers of the Issuer
referred to in subparagraph (a) of this Paragraph 3 or the
validity of the proceedings taken by the Issuer in
connection with the issuance and sale of the Bonds, or (ii)
wherein an unfavorable decision, ruling or finding would
adversely affect the transactions contemplated by this
Purchase Agreement or by the Official Statement, or (iii)
which in any way would adversely affect the legality,
validity or enforceability of the Issuer's obligations with
respect to the Bonds, the Bond Resolution, this Purchase
Agreement or the other Issuer Financing Documents.
(g) No approval, permit, consent,
authorization or order of any court or any governmental
agency, authority or body not already obtained (other than
any approvals that may be required under the Blue Sky or
securities laws of any jurisdiction, as to which no
representation is made) is required with respect to the
Issuer in connection with the issuance and sale of the
Bonds; the execution and delivery by the Issuer of, or the
performance by the Issuer of its obligations under, this
Purchase Agreement and the other Issuer Financing Documents;
or the transactions on the part of the Issuer contemplated
hereby and thereby.
(h) On and as of the date hereof and unless
an event of the nature described in Paragraph 5(c) hereof
subsequently occurs, at all times during the period from the
date hereof to and including the date which is 25 days
following the End of the Underwriting Period (as defined and
determined in accordance with Paragraph 11 hereof), the
information in the Official Statement with respect to the
Issuer and its affairs does not and will not contain any
untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in
light of the circumstances under which they are made, not
misleading.
(i) If the Official Statement is
supplemented or amended pursuant to Paragraph 5(c) hereof,
at the time of each such supplement or amendment to the
Official Statement and, unless the Official Statement is
subsequently supplemented or amended pursuant to Paragraph
5(c) hereof, at all times during the period from the date of
this Purchase Agreement to and including the date which is
25 days following the End of the Underwriting Period (as
defined and determined in accordance with Paragraph 11
hereof), the information with respect to the Issuer and its
affairs contained in the Official Statement, as so amended
or supplemented, will not contain any untrue statement of a
material fact or omit to state a material fact necessary to
make the statements therein, in light of the circumstances
under which they were made, not misleading.
4. Representations and Warranties of Company.
In addition to the other representations made by the Company
in this Purchase Agreement, the Company hereby represents
and warrants to the Issuer and the Underwriters as follows:
(a) The Company has been duly incorporated
and is validly existing as a corporation in good standing
under the laws of the Commonwealth of Pennsylvania, with
full corporate power and authority to own, lease and operate
its properties and conduct its business as its business is
described in Appendix A to the Preliminary Official
Statement. The Company is duly qualified as a foreign
corporation to transact business and is in good standing in
each jurisdiction in which it owns or leases properties or
in which the conduct of its business requires such
qualification, except to the extent that the failure to be
so qualified or be in good standing would not have a
material adverse effect on the business, financial (or
other) condition, results of operations or prospects of the
Company and its subsidiary considered as a whole.
(b) The financial statements of the Company,
together with related notes and schedules as set forth in
the Preliminary Official Statement, present fairly in all
material respects the financial position and the results of
operations of the Company at the indicated dates and for the
indicated periods. Such financial statements have been
prepared in accordance with generally accepted accounting
principles, consistently applied throughout the periods
presented except as noted in the accountant's reports
thereon or the notes thereto, and all adjustments necessary
for a fair presentation of the results for such periods have
been made; and the selected financial information included
in the Preliminary Official Statement presents fairly the
information shown therein and has been compiled on a basis
consistent with the financial statements presented therein.
(c) Since the date as of which information
is given in the Preliminary Official Statement (except to
the extent corrected or updated in the Official Statement),
there has not been any material adverse change or any
development involving a prospective material adverse change
in or affecting the business, financial (or other)
condition, operations, management or prospects of the
Company and its subsidiary taken as a whole, whether or not
occurring in the ordinary course of business, and there has
not been any material transaction entered into by the
Company or its subsidiary, other than transactions in the
ordinary course of business and changes and transactions
contemplated by the Preliminary Official Statement. Neither
the Company nor its subsidiary has any contingent
obligations which are or are reasonably likely to be
material to the Company and its subsidiary taken as whole
and which are required to be disclosed and are not disclosed
in the Preliminary Official Statement (except to the extent
such omission has been corrected in the Official Statement).
(d) The Preliminary Official Statement and
the Official Statement (together with any amendments or
supplements thereto), as of their respective dates did not,
and the Official Statement (together with any amendments or
supplements thereto) as of the Closing Date will not,
contain (as used hereinafter, the term "contain" shall
include information contained in documents incorporated by
reference therein) any untrue statement of a material fact
or omit to state a material fact required to be stated
therein in order to make the statements therein, in light of
the circumstances under which they were made, not misleading
(except to the extent any untrue statement or omission
contained in the Preliminary Official Statement was
corrected in the Official Statement); provided, however,
this representation and warranty shall not apply to
statements or omissions made in reliance upon and in
conformity with information furnished in writing to the
Company by or on behalf of any Underwriter through the
Representative expressly for use therein or as to
information relating to the Issuer.
(e) The Company, PEI, and their respective
subsidiaries are not in violation of their respective
Articles of Incorporation or By-Laws or in default in the
performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to
which any of them is a party or by which any of them or
their properties may be bound, other than such violations or
defaults that would not individually or in the aggregate
have a material adverse effect on the business, financial
(or other) condition, results of operations or prospects of
the Company, PEI and their respective subsidiaries
considered as a whole.
(f) On August 18, 1994, a securities
certificate was registered by the Pennsylvania Public
Utility Commission with respect to the issuance of the 1994
First Mortgage Bonds, and no other consent, approval,
authorization, registration, or order of any court or
governmental authority or agency was required to be made or
obtained by the Company for the offer and sale of the 1994
First Mortgage Bonds and the Bonds, except for filings and
applications pursuant to state securities or Blue Sky laws
and regulations.
(g) The 1994 First Mortgage Bonds have been
duly and validly authorized and, when issued and delivered
against payment therefor and in accordance with the
Mortgage, will be duly and validly issued and conform, in
all material respects, to the description of the 1994 First
Mortgage Bonds contained in the Preliminary Official
Statement and the Official Statement, and the 1994 First
Mortgage Bonds will be valid and binding obligations of the
Company, enforceable against the Company in accordance with
their terms, except as the enforcement thereof may be
limited by applicable bankruptcy, insolvency, reorganization
or other similar laws affecting creditors' rights generally
and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law); when the
1994 First Mortgage Bonds are issued in accordance with the
provisions of the Mortgage, such 1994 First Mortgage Bonds
will entitle the holders thereof to the rights and security
specified in such Mortgage, except as enforcement thereof
may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws affecting creditors'
rights generally and except as enforcement thereof is
subject to general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity
or at law); and the Mortgage conforms, in all material
respects, to the description thereof in the Preliminary
Official Statement and the Official Statement.
(h) Each of the Agreement, the Refunding
Agreement and the Twenty-Ninth Supplemental Indenture has
been duly authorized by the Company and each of the
Agreement and the Twenty-Ninth Supplemental Indenture
conforms, in all material respects, to the description
thereof contained in the Preliminary Official Statement and
the Official Statement.
(i) The execution and delivery of this
Purchase Agreement did not, and the issuance and sale of the
1994 First Mortgage Bonds and the Bonds, the execution and
delivery of the Agreement, the Refunding Agreement and the
Twenty-Ninth Supplemental Indenture, and the compliance by
the Company with all of the provisions of this Purchase
Agreement, the Refunding Agreement, the Agreement and the
Twenty-Ninth Supplemental Indenture (the "Company Financing
Documents") and the consummation of the transactions herein
and therein contemplated will not conflict with or
constitute a breach of, or default under any contract,
indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company, PEI or any of their
respective subsidiaries is a party, or by which any of them
may be bound or to which any of their property or assets is
subject (except for such conflicts, breaches, violations and
defaults that would not have a material adverse effect on
the financial condition or operations of the Company and its
subsidiary taken as a whole and that would not affect the
validity of the 1994 First Mortgage Bonds) nor will such
action result in any violation of the provisions of the
respective Articles of Incorporation or By-Laws of the
Company, PEI or any of their respective subsidiaries or any
law, administrative regulation or administrative or court
decree.
(j) Except in each case for such exceptions
(including those described in the Official Statement) as
would not, individually or in the aggregate, have a material
adverse effect on the business, financial (or other)
condition, results of operations or prospects of the Company
and its subsidiary considered as a whole, (i) the Company
and its subsidiary have such permits, licenses, franchises,
water rights, certificates, approvals and authorizations of
governmental or regulatory authorities ("Permits") as are
necessary to own their respective properties and to conduct
their respective businesses in the manner now being
conducted and as described in the Preliminary Official
Statement, and (ii) the Company and its subsidiary have each
fulfilled and performed all of their respective obligations
with respect to such Permits, and no event has occurred
which allows, or after notice or lapse of time would allow,
revocation or termination thereof or result in any other
impairment of the rights of the holder of any such Permit.
(k) There is no action, suit or proceeding
before or by any court or governmental agency or body,
domestic or foreign, now pending or, to the knowledge of the
Company, threatened against or affecting the Company or its
subsidiary which, in the opinion of management of the
Company after consultation with legal counsel handling such
matters, is reasonably likely to (i) result in any material
adverse change in the condition, financial or otherwise,
earnings, affairs or business prospects of the Company and
its subsidiary considered as a whole, except as set forth
in, or incorporated by reference in, the Preliminary
Official Statement or the Official Statement, or (ii)
materially and adversely affect the offering of the 1994
First Mortgage Bonds and the Bonds.
(l) This Purchase Agreement has been duly
authorized, executed and delivered by the Company.
(m) PEI is a "holding company" within the
meaning of the Public Utility Holding Company Act of 1935 as
amended ("PUHCA"), but is exempt, pursuant to Section 3(a)
of PUHCA, from all the provisions of PUHCA (except Section
9(a)(2) thereof) and the rules and regulations thereunder.
PEI has filed an annual exemption statement on Form U-3A-2
pursuant to Rule U-2 promulgated under PUHCA for each year
of its existence as required to maintain its exempt status.
The Commission has taken no action, nor threatened to take
any action, to terminate PEI's exemption and the Company and
PEI are not aware of any basis the Commission may have for
taking any such action.
(n) The Company is not subject to the
Natural Gas Act, 15 U.S.C. subsection 717 et seq.; all of the
conditions set forth in Section 1(c) of the Natural Gas Act,
15 U.S.C. subsection 717(c), for the non-application of the Natural
Gas Act to the Company are satisfied.
(o) Except as set forth in the Official
Statement, the Company and its subsidiary are in compliance
with all applicable laws, ordinances, rules or regulations,
and any order, judgment or decree to which each may be
subject, except where the failure to comply would not have a
material adverse effect on the business, financial (or
other) condition, operations or prospects of the Company and
its subsidiary taken as a whole.
(p) The Company and its subsidiary are in
compliance with all applicable environmental protection laws
and all applicable orders, rules and regulations promulgated
under such laws by governmental agencies having jurisdiction
therein, except for such failures to be in compliance as
would not, individually or in the aggregate, have a material
adverse affect on the business, financial (or other)
condition, results of operations or prospects of the Company
and its subsidiary considered as a whole. Neither the
Company nor its subsidiary have received any notice that
they are responsible parties or potentially responsible
parties or are subject to any evaluation under the
Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended (42 U.S.C. Section 9601 et
seq.) or the Resource Conservation and Recovery Act of
1976, as amended (42 U.S.C. Section 6901 et seq.) or
applicable state environmental laws, nor do any of them have
knowledge of any liability to which they may be subject
under such statutes, except where any such notice, claim,
evaluation or liability is not reasonably likely to result
in a material adverse effect on the business, financial (or
other) condition, results of operations or prospects of the
Company and its subsidiary taken as a whole. Except to the
extent that such matters would not individually or in the
aggregate have a material adverse effect on the business,
financial (or other) condition, results of operations or
prospects of the Company and its subsidiary considered as a
whole, there are no past or present events, conditions,
circumstances, activities, practices, incidents or actions
of the Company or its subsidiary that, to the knowledge of
the Company based on present legal and regulatory
requirements: (i) interfere with or prevent compliance or
continued compliance with applicable environmental laws or
with applicable orders, rules, and regulations promulgated
under such laws by government agencies having jurisdiction
with respect thereto; or (ii) would be reasonably likely to
give rise to any legal liability (whether statutory or at
common law) or form the basis of any claim, action, suit,
proceeding, notice of violation, investigation or demand
(whether for money damages, remediation, clean up or
performance of any evaluation, study or assessment or
injunctive or equitable relief) based on or relating to the
generation, handling, storage or release into the
environment of any pollutant, contaminant, chemical or
industrial, toxic or hazardous substance or waste.
(q) The Company and its subsidiary have such
title to, or other interest in, all real property and
personal property owned by them as is necessary for the
conduct of their respective businesses as currently being
conducted or as contemplated to be conducted as described in
the Preliminary Official Statement. The Company and its
subsidiary occupy their respective leased properties under
valid and binding leases.
5. Covenants of Issuer and Company. The Issuer
and the Company hereby covenant and agree with the
Representative and the Underwriters as follows:
(a) To cooperate with the Representative in
endeavoring to qualify the Bonds for offer and sale under
the state securities or Blue Sky laws of such jurisdictions
as the Representative may reasonably request and in
determining their eligibility for investment under the laws
of such jurisdictions as the Representative may reasonably
request, provided that the foregoing shall not require the
Issuer or the Company to qualify to do business in any
foreign jurisdiction or require the Issuer to submit to
service of process in any jurisdiction;
(b) Not to take, or omit to take any action
which it is required to take which will adversely affect the
exclusion of the interest on the Bonds from the gross income
of the holders thereof for Federal income tax purposes;
(c) To promptly notify the Representative
if, during the period from the date hereof to and including
the date which is 25 days following the End of the
Underwriting Period (as defined and determined in accordance
with Paragraph 11 hereof), any event shall occur which is
reasonably likely to, or would cause the Official Statement,
as then supplemented or amended, to contain any untrue
statement of a material fact or to omit to state a material
fact necessary to make the statements therein, in light of
the circumstances under which they were made, not
misleading, and if in the opinion of the Representative such
event requires the preparation and distribution of a
supplement or amendment to the Official Statement, to
prepare and furnish to the Representative (i) such number of
copies of the supplement or amendment to the Official
Statement, in form and substance mutually agreed upon by the
Issuer and the Company and approved by the Representative,
as the Representative may reasonably request, and (ii) if
such notification shall be given subsequent to the Closing
Date, such additional legal opinions, certificates,
instruments and other documents as the Representative may
reasonably deem necessary to evidence the truth and accuracy
of any such supplement or amendment to the Official
Statement; and
(d) In the case of the Company, concurrently
with the Company's acceptance hereof, to deliver to the
Representative a letter of Arthur Andersen LLP, independent
certified public accountants, substantially in the form set
forth in Exhibit C hereto.
6. Conditions Precedent. The obligations of the
Underwriters hereunder are subject to the satisfaction, or
waiver thereof by the Representative, of the following
conditions:
(a) At the time of Closing: (1) this
Purchase Agreement, and the other Issuer Financing Documents
and Company Financing Documents shall be in full force and
effect, and this Purchase Agreement shall not have been
amended, modified or supplemented prior to the Closing
except as may have been agreed to by the Representative; (2)
the Issuer and the Company shall have duly adopted, and
there shall be in full force and effect, such additional
resolutions or agreements as shall, in the opinion of Bond
Counsel, be necessary in connection with the transactions
contemplated hereby; (3) the representations and warranties
of the Issuer in the Issuer Financing Documents and of the
Company in the Company Financing Documents shall be true and
accurate in all material respects; (4) the Issuer and the
Company shall perform or shall have performed all
obligations required under or specified in this Purchase
Agreement to be performed at or prior to the Closing; and
(5) the proceeds of the sale of the Bonds shall be applied
as described in the Official Statement.
(b) The Representative may terminate this
Purchase Agreement by notification from the Representative
to the Issuer and the Company if at any time prior to the
Closing: (1) legislation shall be enacted by the Congress of
the United States or adopted by either House thereof or a
decision by a Court of the United States or the United
States Tax Court shall be rendered, or a ruling, regulation
or official release or statement by or on behalf of the
Treasury Department of the United States, the Internal
Revenue Service or other governmental agency shall be made
with respect to Federal taxation upon revenues or other
income of the general character expected to be derived by
the Issuer or upon interest received on bonds of the general
character of the Bonds which would have the effect of
changing, directly or indirectly, the Federal income tax
consequences of interest on bonds of the general character
of the Bonds in the hands of holders thereof, or which would
materially affect the market price of the Bonds adversely;
or (2) legislation shall be enacted or any action shall be
taken by the Securities and Exchange Commission which, in
the opinion of the counsel for the Representative, has the
effect of requiring the contemplated distribution of the
Bonds to be registered under the Securities Act of 1933, as
amended, or the Indenture to be qualified under the Trust
Indenture Act of 1939, as amended; or (3) there shall exist
any event which either (A) makes untrue or incorrect in any
material respect any statement or information contained in
the Preliminary Official Statement or the Official
Statement, or (B) is not reflected in the Preliminary
Official Statement or the Official Statement but should be
reflected therein in order to make the statements and
information contained therein, in the light of the
circumstances under which they are made, not misleading and
the effect of such event materially adversely impacts the
marketability of the Bonds; or (4) the United States shall
be engaged in any conflict or hostilities which have
resulted in a declaration of war, a national emergency or
any other national calamity, or there shall have occurred
any other conflict or outbreak of hostilities or an
escalation of any existing conflict or hostilities, the
effect of such outbreak or escalation on the financial
markets of the United States being such as, in the
reasonable belief of the Representative, materially and
adversely affects the ability of the Representative to
market or sell the Bonds; or (5) there shall be in force a
general suspension of trading on the New York Stock Exchange
or minimum or maximum prices for trading shall have been
fixed and be in force, or maximum ranges for prices for
securities shall have been required and be in force on the
New York Stock Exchange, whether by virtue of a
determination by the New York Stock Exchange or by order of
the Securities and Exchange Commission or any other
governmental authority having jurisdiction; or (6) a general
banking moratorium shall have been declared by Federal, New
York or Pennsylvania authorities having jurisdiction and be
in force; or (7) a stop order, ruling, regulation or
official statement by the Securities and Exchange Commission
shall be issued or made to the effect that the issuance,
offering or sale of the Bonds, or obligations of the general
character of the Bonds as contemplated hereby, is in
violation of any provision of the Securities Act of 1933, as
amended, the Securities Exchange Act of 1934, as amended, or
the Trust Indenture Act of 1939, as amended; or (8) a
supplement or amendment shall have been made to the Official
Statement subsequent to the date hereof which, in the
reasonable judgment of the Representative, materially
adversely affects the marketability of the Bonds or market
prices thereof.
(c) At the Closing, the Representative shall
receive the following documents:
1. Executed counterparts of the Company
Financing Documents and the Issuer Financing Documents;
2. A Certified copy of the Bond Resolution;
3. The approving opinion of Ballard Spahr
Andrews & Ingersoll, Bond Counsel, as to the Bonds,
addressed to the Issuer and the Representative in the form
attached as Exhibit D to the Official Statement with such
changes as are satisfactory to the Representative;
4. A supplemental opinion or opinions of
Bond Counsel addressed to the Company and the
Representative, in form satisfactory to the Representative,
to the effect that: (A) the Bonds are exempt securities
within the meaning of Section 3(a)(2) of the Securities Act
of 1933, and it is not necessary to qualify the Indenture
under the Trust Indenture Act of 1939, as amended, (B) each
of the Indenture and the Agreement has been duly authorized,
executed, and delivered and constitutes the valid and
binding obligation of the Issuer, and is enforceable in
accordance with its terms, subject to limitations on
creditors' rights generally, (C) the Purchase Agreement has
been duly authorized, executed, and delivered by the Issuer
and constitutes the legal, valid, and binding obligation of
the Issuer, enforceable in accordance with its terms, (D)
the descriptions, statements and summaries of provisions of
the Bonds, the Bond Resolution, the Indenture, and the
Agreement contained in the Official Statement under the
headings "INTRODUCTORY STATEMENT", "THE 1994 BONDS",
"SECURITY FOR THE 1994 BONDS", and "APPENDIX C -Summary of
Certain Provisions of the Indenture, the Agreement, The 1994
First Mortgage Bonds and the Mortgage" fairly summarize the
provisions of the documents or matters of law intended to be
summarized therein as of the date of the Official Statement,
and the descriptions and summaries contained on the cover
page and under the heading "TAX EXEMPTION" accurately
reflect the opinion of such counsel with respect to the
matters stated therein relating to Pennsylvania and Federal
tax law as applicable to the Bonds, and (E) all conditions
precedent to the defeasance of the 1987 Bonds have been
satisfied;
5. Certificates dated the date of Closing,
signed by the Chairman or Vice Chairman of the Issuer and by
an authorized officer of the Company, sufficient in form and
substance to show to the satisfaction of Bond Counsel and
the Representative that the Bonds will not be arbitrage
bonds under Section 148 of the Code and the regulations
thereunder;
6. A certificate, dated the day of Closing,
in form and substance satisfactory to Bond Counsel and the
Representative, signed by the chief financial officer of the
Company in which such officer states that (A) the
representations and warranties of the Company in this
Purchase Agreement are true and correct in all material
respects as of the date of Closing; (B) the Preliminary
Official Statement and the Official Statement, as of their
respective dates, insofar as they relate to the Company do
not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or
necessary to make the statements therein not misleading; and
(C) no event affecting the Company occurred since the date
of the Purchase Agreement which is required to be disclosed
in the Official Statement in order to make the statements
and information therein not misleading in any material
respect;
7. A certificate or certificates, dated the
date of Closing, signed by the Chairman, Vice Chairman, or
Secretary of the Issuer and in form and substance
satisfactory to Bond Counsel and the Representative in which
such official, to the best of his knowledge, states that:
(A) the representations of the Issuer herein contained are
true and correct as of the date of the Closing, and the
Official Statement insofar as it contains information with
respect to the Issuer, does not include any untrue statement
of a material fact or omit to state any material fact
required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which
they were made, not misleading; (B) no litigation is pending
or, to the knowledge of the Issuer after consultation with
its counsel, threatened (i) to restrain or enjoin the
issuance or delivery of the Bonds, the application of the
proceeds thereof, or the payment, collection or application
of revenues pursuant to the Indenture and the Agreement,
(ii) in any way contesting or affecting any authority for,
or the validity of the Bonds, the Indenture, the Agreement,
this Purchase Agreement, the application of the proceeds of
the Bonds or the payment, collection or application of
revenues, pursuant to the Indenture and the Agreement, or
(iii) in any way contesting the right and power of the
Issuer to act as described in the Bond Resolution and the
Indenture or the Agreement; and (C) to the knowledge of the
Issuer, no event affecting the Issuer has occurred since the
date of the Official Statement which should be disclosed in
the Official Statement for the purposes for which it is to
be used, or which it is necessary to disclose therein in
order to make the statements and information therein with
respect to the Issuer not misleading in any material
respect;
8. An opinion of LeBoeuf, Lamb, Greene &
MacRae, special counsel for the Company, addressed to the
Trustee, the Issuer and the Representative, dated the date
of Closing, substantially in the form of Exhibit D hereto;
9. An opinion and supplemental letter of
Hughes Hubbard & Reed, counsel for the Company, addressed
to the Trustee, the Issuer and the Representative, dated the
date of Closing, substantially in the form of Exhibit E
hereto;
10. An opinion of Hourigan, Kluger, Spohrer
& Quinn, Solicitors for the Issuer, addressed to the
Representative, the Company, and Bond Counsel, dated the
date of Closing, to the effect that: (A) the Issuer has been
duly incorporated and is validly existing as an
instrumentality of the Commonwealth of Pennsylvania, is in
good standing under the laws of the Commonwealth of
Pennsylvania and has the full power and authority to enter
into the Indenture and the Agreement and to issue and sell
the Bonds; (B) the Purchase Agreement, the Indenture, and
the Agreement have been duly and validly authorized,
executed and delivered by the Issuer and are valid and
binding obligations of the Issuer enforceable in accordance
with their respective terms except as enforceability may be
limited by applicable bankruptcy, reorganization,
insolvency, or other laws or equitable principles affecting
creditors' rights generally; (C) the Bonds have been duly
and validly authorized, executed, issued and delivered by
the Issuer and constitute the legal, valid and binding
limited obligations of the Issuer, enforceable in accordance
with their respective terms except as enforceability may be
limited by applicable bankruptcy, reorganization, insolvency
or other laws or equitable principles affecting creditors'
rights generally; (D) to the knowledge of such counsel,
there is no action, suit, proceeding or investigation, at
law or in equity, before or by any court, public board or
body, pending or threatened against or affecting the Issuer,
or which the Issuer is or may be a part or of which property
of the Issuer is or may be the subject, wherein an
unfavorable decision, ruling or finding would adversely
affect the transactions contemplated by the Official
Statement or the validity of the Bonds, the Indenture, the
Agreement, or the Purchase Agreement, or which is required
to be set forth in the Official Statement; (E) the execution
and delivery of, the consummation of the trans- actions
contemplated by, and the fulfillment and compliance with the
terms of, the Bonds, the Indenture, the Agreement, and the
Purchase Agreement, do not and will not conflict with or
constitute on the part of the Issuer a breach of or default
under any indenture, mortgage, deed of trust or other
instrument to which the Issuer is a party or by which it is
or may be bound of which we have knowledge after due
inquiry, or any existing law, regulation, administrative or
court order or decree to which the Issuer is a party or by
which it is or may be subject; (F) the Official Statement
has been duly authorized, approved, signed and delivered by
the Issuer; (G) the Bond Resolution was duly adopted by the
affirmative vote of a majority of the entire Board of the
Issuer at a public meeting duly called and held in
accordance with all applicable laws and the By-Laws of the
Issuer and has not been amended, modified or rescinded and
remains in full force and effect as of this date; (H) based
upon their participation in the preparation of the
Preliminary Official Statement and the Official Statement,
including conferences and telephone conferences, the
information in the Preliminary Official Statement and the
Official Statement insofar as it pertains to the Issuer is
true and correct in all material respects and does not
contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements
therein, in the light of the circumstances under which they
were made, not misleading; and (I) such other matters as the
Representative may reasonably request prior to the Closing;
11. A letter from Arthur Andersen LLP
addressed to the Representative and dated the date of
Closing reaffirming the matters set forth in Exhibit C
hereto, but with the procedures described being carried out
as of a date not more than five business days prior to the
date of Closing, and references to the Preliminary Official
Statement shall be updated to also include the Official
Statement;
12. Evidence that the ratings on the Bonds
of "AAA" by Standard and Poor's Corporation, "Aaa" by
Moody's Investors Service and "AAA" of Fitch Investors
Service, Inc. have not been reduced;
13. Pennsylvania Public Utility Commission
Securities Certificate and Order for the 1994 First Mortgage
Bonds;
14. Department of Commerce Notification;
15. An Information Return for Tax-Exempt
Private Activity Bond Issues (IRS Form 8038), in a form
satisfactory to Bond Counsel for filing, executed by the
Issuer;
16. Written calculations demonstrating that
the money deposited under the Refunding Agreement on the
Closing Date is sufficient to redeem the 1987 Bonds on
December 1, 1994;
17. A certified copy of the municipal bond
insurance policy of AMBAC in standard form and substance,
insuring the timely payment of principal of and interest on
the Bonds accompanied by:
(i) a certificate signed by an authorized
officer of AMBAC, or an opinion of counsel to AMBAC, to the
effect that the information relating to AMBAC appearing
under the caption "Municipal Bond Insurance" in the Official
Statement does not contain any untrue statement of a
material fact or omit to state a material fact necessary to
make the statements made therein, in light of the
circumstances under which they were made, not misleading;
and
(ii) an opinion of counsel to AMBAC to the
effect that: (A) AMBAC is duly organized and validly
existing under the laws of its state of incorporation and is
qualified to do business in the Commonwealth of Pennsylvania
and (B) the policy has been duly and validly issued by AMBAC
and constitutes the legal, valid and binding obligation of
AMBAC enforceable in accordance with its terms except as
limited by bankruptcy, insolvency, moratorium and other
similar laws or equitable principles affecting creditors'
rights generally;
18. A fully executed counterpart of the
Letter of Representations from the Issuer and the Trustee to
DTC with respect to the Bonds, in form and substance
satisfactory to the Representative and its counsel, which
Letter of Representations shall have been duly accepted by
DTC as evidenced by its execution thereof;
19. Evidence of the due filing in all
requisite filing offices of:
(i) The Mortgage
(ii) Financing Statements on Form UCC-l naming the
Issuer as debtor and the Trustee as secured party relative
to the
security interests created under the Indenture with
respect to the Bonds; and
(iii) Financing Statements on Form UCC-1 naming the
Company as debtor and the Mortgage Trustee as secured party,
relative to the security interests created under the Twenty-
Ninth Supplemental Indenture;
20. Such additional certificates or
documents as the Representative or its counsel or Bond
Counsel may reasonably request to evidence the authority of
the Trustee to act under the Indenture and the Refunding
Agreement; and
21. Such additional opinions, certificates,
or documentation as the Representative or Bond Counsel may
reasonably request.
7. Expenses. All costs and expenses incident to
the authorization, preparation, issuance, sale and delivery
of the Bonds including, without limitation, costs of the
preparation, printing, distribution, execution, delivery and
recording or filing, as the case may be, of the Preliminary
Official Statement and the Official Statement, together with
any amendments and supplements thereto, and the Indenture,
the Bonds, this Purchase Agreement, the Agreement and all
other documents, the fees and disbursements of Bond Counsel,
counsel to the Company, counsel to the Trustee, counsel to
the Issuer and firms of accountants and other consultants
and advisors retained by the Issuer or the Company in
connection with this transaction, all rating agency fees,
the premium for the bond insurance policy issued by AMBAC,
and all fees and expenses of the Trustee, shall be the
obligation of the Company or shall be paid from the proceeds
of the issuance and sale of the Bonds or otherwise. The
Underwriters shall pay the cost of qualifying the Bonds for
sale under the Blue Sky or securities laws of any
jurisdictions and all advertising costs and other expenses
and all costs and expenses of its counsel in connection with
the public offering of the Bonds and the transactions
contemplated thereby.
8. Indemnification and Contribution.
(a) The Company will indemnify and hold
harmless the Issuer and its members, officers and employees
and each Underwriter and each person, if any, who controls
(within the meaning of Section 15 of the Securities Act of
1933, as amended (the "Act") or Section 20 of the Exchange
Act) any Underwriter, from and against any and all losses,
claims, damages or liabilities, joint or several, to which
such indemnified person may become subject under the Act,
the Exchange Act or otherwise, 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 Preliminary Official Statement or the Official Statement
or any amendment or supplement thereto, or arise out of or
are based upon any 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
the Company agrees to reimburse such indemnified person for
any legal or other expenses reasonably incurred by such
indemnified person in connection with investigating,
preparing or defending any such loss, claim, damage,
liability, or action as such expenses are incurred;
provided, however, the Company will not be liable in any
such case to the extent that any such loss, claim, damages
or liability referred to in this sentence (x) arises out of
or is based upon an untrue statement or omission or alleged
untrue statement or omission based upon information
pertaining to the Issuer, (y) arises out of or is based upon
an untrue statement or omission or alleged untrue statement
or omission made in the Preliminary Official Statement or
the Official Statement in reliance upon and in conformity
with written information furnished to the Company by or on
behalf of such Underwriter expressly for use in the
Preliminary Official Statement, the Official Statement or
any amendment or supplement thereto, or (z) arises out of or
is based upon the fact that such Underwriter sold Bonds to a
person to whom there was not sent or given, at or prior to
the written confirmation of such sale, a copy of the
Official Statement (excluding documents incorporated by
reference), or of the Official Statement as then amended or
supplemented (excluding documents incorporated by
reference), in any case where such delivery is required by
the Municipal Securities Rulemaking Board or by Rule 15c2-12
if the Company has previously furnished copies thereof to
such Underwriter and the loss, claim, damage, liability or
expense of such Underwriter results from an untrue statement
contained in or the omission of a material fact from the
Preliminary Official Statement which was corrected in the
Official Statement (or the Official Statement as amended or
supplemented). This indemnity agreement will be in addition
to any liability or obligation which the Company may
otherwise have to the persons referred to above in this
Paragraph 8(a).
(b) Each Underwriter will indemnify and hold
harmless (i) the Issuer and its members, officers and
employees and (ii) the Company and each person, if any, who
controls the Company within the meaning of either Section 15
of the Act or Section 20 of the Exchange Act, in each case
from and against any and all losses, claims, damages or
liabilities to which such indemnified person may be subject
under the Act, the Exchange Act or otherwise, 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 Preliminary Official Statement or the
Official Statement (as amended or supplemented if the
Company or the Issuer shall have furnished any amendments or
supplements thereto), or arise out of or are based upon any
omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the
extent, but only to the extent that such untrue statement or
omission or alleged untrue statement or omission was made in
the Preliminary Official Statement, the Official Statement
or any amendment or supplement thereto in reliance upon or
in conformity with written information furnished to the
indemnified person by or on behalf of such Underwriter
expressly for use therein, and the Underwriters agree to
reimburse such indemnified person for any legal or other
expenses reasonably incurred by such indemnified person in
connection with investigating, preparing to defend or
defending any such action or claim.
(c) Promptly after receipt by an indemnified
person under subsection (a) or (b) above of notice of the
assertion of any claim or the commencement of any action,
such indemnified person or its affiliate that is a party to
this Purchase Agreement shall, if a claim in respect thereof
is to be made against the indemnifying party under such
subsection, notify the indemnifying party in writing of the
assertion or the commencement thereof; but the omission to
so notify the indemnifying party (i) shall not relieve it
from any liability which it may have to any indemnified
person under such subsection unless and to the extent such
failure prejudices the indemnifying party of substantial
rights or defenses; and (ii) shall not, in any event,
relieve the indemnifying party from any obligations to any
indemnified person other than the indemnification
obligations under such subsection. In case any such action
shall be brought against any indemnified person or its
affiliate that is a party to this Purchase Agreement, such
indemnified person shall notify the indemnifying party of
the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it
shall wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified person.
Notwithstanding the indemnifying party's election to appoint
counsel to represent the indemnified person in an action,
the indemnified person shall have the right to employ
separate counsel (including local counsel) and the
indemnifying party shall bear the reasonable fees, costs and
expenses of such separate counsel if and only if (i) the use
of counsel chosen by the indemnifying party to represent the
indemnified person would present such counsel with a
conflict of interest, (ii) the indemnifying party shall not
have employed counsel reasonably satisfactory to the
indemnified person to represent the indemnified person
within a reasonable time after notice of the institution of
such action, or (iii) the indemnifying party shall authorize
the indemnified person to employ separate counsel at the
expense of the indemnifying party. It is understood that
the indemnifying party shall, in connection with any such
action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the
reasonable fees and expenses of only one separate firm of
attorneys together with appropriate local counsel at any
time from all indemnified persons not having actual
differing interests with any other indemnified person. An
indemnifying party will not, without the prior written
consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in
respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified parties are
actual or potential parties to such claim or action) unless
such settlement, compromise or consent includes an
unconditional release of each indemnified person from all
liability arising out of such claim, action, suit or
proceeding.
(d) If for any reason whatsoever (other than
because and to the extent that any of the following are
applicable: (A) the exception to Paragraph 8(a) provided in
the first sentence of Paragraph 8(a) above, or (B) the
specific reasons set forth in the first sentence of
Paragraph 8(c) above pursuant to which an indemnified person
would not be entitled to indemnification pursuant to
Paragraph 8(a) above), the indemnification provided for in
Paragraph 8(a) or (b) above is unavailable to an indemnified
person referred to therein in respect of any losses, claims,
damages, liabilities, judgments or other expenses covered by
Paragraph 8(a) or (b), then each indemnifying party, in lieu
of indemnifying such indemnified person, shall contribute to
the amount paid or payable by such indemnified person as a
result of such losses, claims, damages, liabilities,
judgments and expenses (i) in such proportion as is
appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other
from the offering of the Bonds, or (ii) if the allocation
provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above
but also the relative fault of the Company on the one hand
and the Underwriters on the other in connection with the
actions, statements or omissions which resulted in such
losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the
Underwriters on the other shall be deemed to be in the same
proportion as the maximum total proceeds to be received, or
the actual proceeds received, by the Company from the sale
of the Bonds (before deducting expenses), whether or not
consummated, bear to the total fee received by the
Underwriters pursuant to the last paragraph of section 1 of
this Purchase Agreement (the "Underwriting Fee"). The
relative fault of the Company on the one hand and the
Underwriter on the other shall be determined by reference
to, among other things, whether any untrue or alleged untrue
statement of a material fact or the omission to state a
material fact relates to information supplied by the Company
or by the Underwriter, and the parties' relative intent,
knowledge, access to information and opportunity to correct
or prevent such statement or omission.
(e) The Company and the Underwriters agree
that it would not be just and equitable if contribution
pursuant to paragraph 8(d) were determined by pro rata
allocation or by any other method of allocation which does
not take account of the equitable considerations referred to
in the immediately preceding paragraph. The amount paid or
payable by an indemnified person as a result of the losses,
claims, damages, liabilities or judgments referred to in the
immediately preceding paragraph shall be deemed to include,
subject to the limitation set forth above, any legal or
other expenses reasonably incurred by such indemnified
person in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of
Paragraph 8(d), in no event shall any Underwriter be
required to contribute any amount in excess of the amount by
which one-half of the Underwriting Fee exceeds the amount of
any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty
of fraudulent misrepresentation (within the meaning of
Paragraph 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations
to contribute pursuant to Paragraph 8(d) are several on a co-
equal (i.e., 50-50) basis.
9. Survival of Representations, Warranties and
Agreements. All representations, warranties and agreements
of the Issuer and the Company, and all agreements of the
Underwriters, set forth in this Agreement shall remain
operative and in full force and effect regardless of (a) any
investigation, or statement as to the results thereof, made
by or on behalf of the Underwriters (b) delivery of and
payment for the Bonds, and (c) any termination of this
Agreement.
10. Information Furnished By Underwriters.
The Company acknowledges that the following
information constitutes the only written information
furnished by or on behalf of any Underwriter expressly for
inclusion in the Preliminary Official Statement or the
Official Statement (or any supplement thereto): (i) the
statements set forth in capital letters on the inside front
cover regarding stabilization, and (ii) the paragraph of
text on page 13 under the caption "Underwriting."
11. Determination of End of Underwriting Period.
(a) For purposes of this Agreement, the "End
of the Underwriting Period" shall mean the earlier of (i)
the Closing Date, unless the Issuer and the Company have
each been notified to the contrary by the Representative on
or prior to the Closing Date, or (ii) the date on which the
"end of the underwriting period" for the Bonds has occurred
under Rule 15c2-12; provided, however, that the Issuer and
the Company shall be entitled to treat as the End of the
Underwriting Period the date specified in the notification
of the Representative required under subparagraph (c) of
this Paragraph 11.
(b) The Representative shall provide to the
Issuer and the Company, upon request, such information as
may be reasonably required by the Issuer or the Company in
order to determine whether the "end of the underwriting
period" for the Bonds has occurred under Rule 15c2-12 with
respect to the unsold balance of Bonds that are held by any
Underwriter for sale to the public within the meaning of
Rule 15c2-12.
(c) As soon as practicable following receipt
thereof, the Representative shall deliver the Official
Statement, and any supplement or amendment thereto, to a
nationally recognized municipal securities information
repository approved by the Commission.
12. Section Headings; Execution in Counterparts.
Section headings in this Agreement are inserted for
convenience of reference only and shall not be considered a
part of, or used in the interpretation of any provisions of,
this Agreement. This Agreement may be executed and accepted
in any number of counterparts, all of which taken together
shall constitute one and the same instrument, and any of the
parties hereto may execute or accept this Agreement by
signing any such counterpart.
13. Notice and Other Actions. All notices,
requests, demands and formal actions hereunder shall be in
writing and mailed by registered or certified mail, postage
prepaid, or delivered personally or by any recognized
overnight delivery service with charges prepaid, to the
following address:
The Issuer:
Luzerne County Industrial Development
Authority
54 West Union Street
Wilkes-Barre, PA 18701
Attention: Secretary
with a copy to:
Hourigan, Kluger, Spohrer & Quinn, P.C.
700 Mellon Bank Center
8 West Market Street
Wilkes-Barre, PA 18701-1861
The Representative:
Wheat First Butcher Singer
600 Linden Street
Scranton, PA 18503
Attention: Kevin Finley
The Company:
Pennsylvania Gas and Water Company
Wilkes-Barre Center
39 Public Square
Wilkes-Barre, PA 18711-1601
Attention: Secretary
14. Parties In Interest. This Agreement is made
solely for the benefit of the Underwriters, the Company, the
Issuer and their respective successors and assigns, and no
other person or entity shall acquire or have any rights
under or by virtue of this Agreement. The terms
"successors" and "assigns" shall not include any purchaser
of Bonds from or through any Underwriter merely because of
such purchase.
15. Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the
Commonwealth of Pennsylvania.
16. Severability. The provisions of this
Agreement are intended to be severable. If any provision of
this Agreement shall be held invalid or unenforceable in
whole or in part in any jurisdictions such provision shall,
as to such jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without in any manner
affecting the validity or enforceability thereof in any
other jurisdiction or the remaining provisions hereof in any
jurisdiction.
17. Time of the Essence. Time shall be of the
essence in this Agreement.
18. Limitation of Issuer's Liability.
Notwithstanding anything to the contrary herein or in the
Bonds, the liability of the Issuer under this Purchase
Agreement or any other instrument, certificate or agreement
executed in connection with the issuance of the Bonds shall
be and hereby is limited for all purposes to the Issuer's
interest in the 1994 First Mortgage Bonds and the Agreement.
In taking any action under this Purchase Agreement or any
other instrument, certificate or agreement executed in
connection with the issuance of the Bonds, the Issuer shall
be entitled to rely upon written directions of the Company
and counsel of nationally recognized standing in matters
pertaining to bonds issued by states and their political
subdivisions and shall be
entitled to payment from the Company of all reasonable
costs, fees and expenses incurred or imposed by the Issuer
in connection with the Bonds.
Very truly yours,
WHEAT FIRST BUTCHER SINGER
By:
_
Title:
ACCEPTED AND AGREED as of the
date first above written:
LUZERNE COUNTY INDUSTRIAL
DEVELOPMENT AUTHORITY
By: _
Authorized Officer
PENNSYLVANIA GAS AND WATER COMPANY
By: _
Vice President, Finance
EXHIBIT A
DESCRIPTION OF CERTAIN PROVISIONS OF BONDS
Maturity Date: December 1, 2017
Interest Rate: 7.00%
Redemption Provisions: The Bonds are subject to redemption
as follows:
Optional Redemption. The Bonds are subject to
redemption prior to maturity, at the option of the Issuer,
upon direction of the Company, on any date on or after
December 1, 2004, in whole, or in part by lot, upon payment
of the applicable redemption price shown below (such price
being expressed as a percentage of the principal amount of
Bonds to be redeemed), plus interest accrued to the date
fixed for redemption.
[CAPTION]
Redemption Period Redemption Price
(both dates inclusive)
[S] [C]
December 1, 2004 through November 30, 2005 102%
December 1, 2005 through November 30, 2006 101%
December 1, 2006 and thereafter 100%
Extraordinary Optional Redemption. The Bonds are
subject to redemption at any time prior to maturity at the
option of the Authority, upon the direction of the Company,
in whole, at a redemption price equal to 100% of the
principal amount thereof, plus interest accrued to the date
fixed for redemption, if any of the following events shall
have occurred:
(i) the damage or destruction of all or substantially
all of the Project Facilities to such extent that, in the
reasonable opinion of the Company, the repair and
restoration thereof would not be economical; or
(ii) the condemnation of all or substantially all of
the Project Facilities or the taking by condemnation of any
part, use or control of the Project Facilities so as to
render them unsatisfactory to the Company for their intended
use; or
(iii) in the Company's reasonable opinion, (1)
unreasonable burdens or excess liabilities shall have been
imposed upon the Company with respect to the Project
Facilities or the operation thereof, including, but without
being limited to, federal, state or other ad valorem,
property, income or other taxes not being imposed on the
date of the Agreement other than ad valorem taxes presently
levied upon privately owned property used for the same
general purpose as the Project Facilities, or (2) the
continued operation of the Project Facilities is
impractical, uneconomical or undesirable for any reason; or
(iv) as a result of any change in the Constitution of
Pennsylvania or the Constitution of the United States of
America, or by legislative or administrative body (whether
state or federal), or by a final decree, a judgment or order
of any court or administrative body (whether state or
federal), after any contest thereof by the Company in good
faith, the Indenture, the Agreement or the Bonds shall
become void or unenforceable or impossible of performance in
accordance with the intent and purposes of the Issuer and
the Company as expressed in the Agreement.
Any such redemption shall be on any date within 180
days following the occurrence of one of the events listed
above.
Special Mandatory Redemption. The Bonds are subject to
mandatory redemption in whole at any time at a redemption
price equal to 100% of the principal amount thereof,
together with accrued interest to the date fixed for
redemption, within 180 days after the occurrence of any
"final determination" that, as a result of a failure by the
Company to observe any covenant, agreement or representation
in the Agreement, the interest payable on the Bonds or any
of them is includable for federal income tax purposes in the
gross income of any owner of a Bond, other than an owner who
is a "substantial user" of the Project Facilities or a
"related person" as provided in Section 147(a) of the
Internal Revenue Code of 1986, as amended (the "Code"). As
used in the preceding sentence, a "final determination"
shall be deemed to have occurred upon the issuance to that
effect of a published or private ruling or technical advice
by the Internal Revenue Service or a judicial decision in a
proceeding by any court of competent jurisdiction in the
United States (from which ruling, advice or decision no
further right of appeal exists), in all cases in which the
Company has participated or been a party or has been given
an opportunity to participate and has failed to do so;
provided, however, that if the final determination of
taxability shall include the determination that the interest
on an amount less than all of the Bonds outstanding is
includable in the gross income of the owners thereof, and
the loss of tax exemption can be cured by a partial
redemption of the Bonds, then only such amount of the Bonds
shall be redeemed (at the redemption price set forth above,
together with accrued interest to the date fixed for
redemption); and provided further, however, that no decree
or judgment by any court or action by the Internal Revenue
Service shall be considered a final determination unless (i)
the Issuer has given the Company and the Trustee prompt
written notice of the commencement of such action or
judicial proceeding which resulted in such decree or
judgment, and (ii) the Issuer offers the Company, at the
Company's expense, the opportunity to control the defense
thereof.
Notwithstanding the foregoing, if the lien of the Indenture
is discharged prior to the occurrence of a final
determination, the Bonds will not be redeemed as described
above.
EXHIBIT B
STATEMENT OF ESTIMATED SOURCES AND USES
As set forth in the Official Statement
EXHIBIT C
LETTER FROM ARTHUR ANDERSEN LLP
Pursuant to Paragraph 5(d) of the Purchase Agreement,
Arthur Andersen LLP shall furnish a letter to the
Underwriters to the effect that:
(i) They are independent certified public
accountants with respect to the Company and its subsidiaries
within the meaning of the Securities Act of 1933, as
amended, and the applicable published rules and regulations
thereunder;
(ii) In their opinion, the financial statements
and any supplementary financial information and schedules
audited by them and included or incorporated by reference in
the Preliminary Official Statement or the Official Statement
comply as to form in all material respects with the
applicable accounting requirements of the Act or the
Exchange Act, as applicable, and the published rules and
regulations thereunder;
(iii) The unaudited selected financial information
with respect to the results of operations and financial
position of the Company for the five most recent fiscal
years included in the Preliminary Official Statement and the
Official Statement agrees with the corresponding amounts in
the audited financial statements for such five fiscal years
which were included or incorporated by reference in the
Company's Annual Reports on Form 10-K for such fiscal years;
(iv) On the basis of limited procedures, not
constituting an examination in accordance with generally
accepted auditing standards, consisting of a reading of the
unaudited financial statements and other information
referred to below, a reading of the latest interim financial
statements of the Company and its subsidiaries, a reading of
the minute books of the Company and its subsidiaries since
the date of the latest audited financial statements included
or incorporated by reference in the Preliminary Official
Statement and the Official Statement, inquiries of officials
of the Company and its subsidiaries responsible for
financial and accounting matters and such other inquiries
and procedures as may be specified in such letter, nothing
came to their attention that caused them to believe that:
(A) the unaudited condensed statements of
income, balance sheets and statements of cash flows included
or incorporated by reference in the Company's Quarterly
Reports on Form 10-Q incorporated by reference in the
Preliminary Official Statement and the Official Statement do
not comply as to form in all material respects with the
applicable accounting requirements of the Securities
Exchange Act of 1934, as amended, as it applies to Form 10-Q
and the related published rules and regulations thereunder
or are not in conformity with generally accepted accounting
principles applied on a basis substantially consistent with
the basis for the audited statements of income, balance
sheets and statements of cash flows included or incorporated
by reference in the Company's Annual Report on Form 10-K for
the most recent fiscal year;
(B) any other unaudited income statement
data and balance sheet items included in the Preliminary
Official Statement and the Official Statement do not agree
with the corresponding items in the unaudited financial
statements from which such data and items were derived, and
any such unaudited data and items were not determined on a
basis substantially consistent with the basis for the
corresponding amounts in the audited financial statements
included or incorporated by reference in the Company's
Annual Report on Form 10-K for the most recent fiscal year;
(C) the unaudited financial statements which
were not included in the Preliminary Official Statement and
the Official Statement but from which were derived the
unaudited condensed financial statements referred to in
clause (A) and any unaudited income statement data and
balance sheet items included in the Preliminary Official
Statement and the Official Statement and referred to in
clause (B) were not determined on a basis substantially
consistent with the basis for the audited financial
statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent
fiscal year;
(D) any unaudited pro forma condensed
financial statements included or incorporated by reference
in the Preliminary Official Statement and the Official
Statement do not comply as to form in all material respects
with the applicable accounting requirements of the
Securities Act of 1933, as amended, and the published rules
and regulations thereunder or the pro forma adjustments have
not been properly applied to the historical amounts in the
compilation of those statements;
(E) as of a specified date not more than
five days prior to the date of such letter, there have been
any changes in the capital stock or any increase in the long-
term debt of the Company, or any decreases in net current
assets or net assets or other items specified by the
Underwriters, or any increases in any items specified by the
Underwriters, in each case as compared with amounts shown in
the last balance sheet included or incorporated by reference
in the Preliminary Official Statement and the Official
Statement, except in each case for changes, increases or
decreases which the Preliminary Official Statement and the
Official Statement disclose have occurred or may occur or
which are described in such letter; and
(F) for the period from the date of latest
financial statements included or incorporated by reference
in the Preliminary Official Statement and the Official
Statement to the specified date referred to in clause (E)
there were any decreases in total operating revenues or the
total or per share amounts of net income or other items
specified by the Underwriters, or any increases in any items
specified by the Underwriters, in each case as compared with
the comparable period of the preceding year and with any
other period of corresponding length specified by the
Underwriters, except in each case for increases or decreases
which the Preliminary Official Statement and the Official
statement disclose have occurred or may occur or which are
described in such letter; and
(v) In addition to the examination referred to in
their report(s) included or incorporated by reference in the
Preliminary Official Statement and the Official Statement
and the limited procedures, reading of minute books,
inquiries and other procedures referred to in paragraphs
(iii) and (iv) above, they have carried out certain
specified procedures, not constituting an audit in
accordance with generally accepted auditing standards, with
respect to certain amounts, percentages and financial
information specified by the Underwriters which are derived
from the general accounting records of the Company and its
subsidiaries, which appear in the Preliminary Official
Statement and the Official Statement (excluding documents
incorporated by reference) and have compared certain of such
amounts, percentages and financial information with the
accounting records of the Company and its subsidiaries and
have found them to be in agreement.
EXHIBIT D
FORM OF OPINION OF LE BOEUF, LAMB, GREENE & MAC RAE
[Date of Closing]
Ladies and Gentlemen:
We have acted as special counsel to Pennsylvania Gas
and Water Company, a Pennsylvania corporation (the
"Company"), in connection with the issuance and sale by the
Luzerne County Industrial Development Authority (the
"Authority") of $30,000,000 aggregate principal amount of
its Exempt Facilities Revenue Refunding Bonds, 1994 Series A
(Pennsylvania Gas and Water Company Project) (the "Bonds").
The Bonds are being sold to the underwriters (the
"Underwriters") named in the Bond Purchase Agreement dated
November 1, 1994 (the "Bond Purchase Agreement") among the
Company, the Authority and the Underwriters.
This opinion is being furnished to you in accordance
with Paragraph 6(c)(8) of the Bond Purchase Agreement.
Capitalized terms not otherwise defined herein shall have
the corresponding meanings given them (i) first, in order of
priority, in the Bond Purchase Agreement and, if not defined
therein, (ii) in the Official Statement dated November 1,
1994, relating to the Bonds (the "Official Statement").
In such capacity, we have participated in the
preparation of portions of (i) the Preliminary Official
Statement dated October 19, 1994 (the "Preliminary Official
Statement") relating to the Bonds, and (ii) the Official
Statement. We have also represented the Company before the
Pennsylvania Public Utility Commission ("PPUC"), the
Pennsylvania Department of Environmental Resources ("DER")
and in other regulatory matters. PPUC, DER and the United
States Environmental Protection Agency are collectively
referred to as the "Regulatory Authorities".
In rendering the opinions set forth below, we also have
examined such certificates of public officials, corporate
records and documents and other instruments, and have made
such other investigations, as we have deemed necessary in
connection with the opinions hereinafter set forth. As to
certain issues of fact material to such opinions, we have
relied upon certificates of officers of the Company and upon
the representations of the Company contained in the Bond
Purchase Agreement.
We have assumed that the documents we have reviewed in
connection with this opinion which purport to have been
executed by parties other than the Company or Pennsylvania
Enterprises, Inc., a Pennsylvania corporation, which is the
Company's parent ("PEI"), or the directors and officers of
the Company or PEI have been duly executed by such parties
and that such parties had all requisite power to enter into
and perform all obligations thereunder, that execution and
delivery thereof have been duly authorized by all requisite
action and that the subject instruments are valid and
binding upon said parties.
We have assumed the authenticity of all documents
submitted to us as originals, the genuineness of all
signatures thereon, and the legal capacity of natural
persons executing such documents and the conformity to
originals of all documents submitted to us as copies and the
authenticity of such originals.
Based upon the foregoing, and subject to the
limitations contained herein, we are of the opinion that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the Commonwealth of Pennsylvania, with full
corporate power and authority to own, lease and operate its
properties and conduct its business as described in the
Preliminary Official Statement and the Official Statement,
to issue the 1994 First Mortgage Bonds, to execute and
deliver the Bond Purchase Agreement, the Agreement, the
Refunding Agreement, the Twenty-Ninth Supplemental Mortgage
Indenture and all other documents being executed and
delivered by it at the Closing and to perform its
obligations thereunder.
(ii) The Bond Purchase Agreement, the Agreement,
the Refunding Agreement and the Twenty-Ninth Supplemental
Mortgage Indenture have been duly authorized, executed and
delivered by the Company and are valid, legally binding and
enforceable instruments in accordance with their terms,
except (a) as rights of indemnity or contribution are
limited by public policy or by law, (b) as enforcement
thereof may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws affecting creditors'
rights generally, and (c) as enforcement thereof is subject
to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at
law).
(iii) The 1994 First Mortgage Bonds have been duly
authorized, issued and executed by the Company and are the
legal, valid and binding obligations of the Company,
enforceable in accordance with their terms, and are entitled
to the benefits and security of the Mortgage in accordance
with its terms and are secured thereby equally and ratably
with all first mortgage bonds of the Company outstanding
under the Mortgage, except as enforcement thereof may be
limited by applicable bankruptcy, insolvency, reorganization
or other similar laws affecting creditors' rights generally
and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law).
(iv) The Company has filed with the PPUC, pursuant
to the provisions of Chapter 19 of the Pennsylvania Public
Utility Code, a securities certificate relating to the
issuance and sale of the 1994 First Mortgage Bonds, and such
securities certificate has been registered by Order of the
PPUC dated August 18, 1994, which Order is in effect as of
the date of this opinion and is not subject to any appeal or
modification which could affect the validity or terms of the
1994 First Mortgage Bonds. To the extent required by
applicable Pennsylvania law, all issued and outstanding
equity and debt securities of the Company have been issued
pursuant to valid security certificates registered by the
PPUC.
(v) Except for the Order of the PPUC referred to
in paragraph (iv) above, no approval by any other
governmental authorities, federal, state or otherwise, is
required in connection with the issue and sale of the 1994
First Mortgage Bonds and the execution and delivery of the
Agreement, the Bond Purchase Agreement, the Refunding
Agreement and the Twenty-Ninth Supplemental Mortgage
Indenture, except as may be required under state or foreign
securities or Blue Sky laws and regulations, as to which no
opinion is being rendered.
(vi) The Company possesses, with minor exceptions
or qualifications, such valid franchises, water rights,
licenses or permits, free from unduly burdensome
restrictions and of indeterminate duration, as are usual for
the adequate conduct of the business of the Company in the
Commonwealth of Pennsylvania.
(vii) The Twenty-Ninth Supplemental Mortgage
Indenture and a UCC-l financing statement in respect thereof
have been filed for recordation in such manner (including,
with respect to the financing statement, the notation on
such financing statement that the debtor is a transmitting
utility) and in such places as is required by law in order
to establish, preserve and protect the lien of the Mortgage
on all real estate and fixed property of the Company
(excluding easements and other similar rights) described in
the Mortgage as subject to the lien thereof, except as
described in paragraph (ix) below.
(viii) Under existing law, no recording,
registration, filing, re-recording, re-registration or re-
filing of the Mortgage, any indenture supplemental thereto,
any UCC-l financing statement or any other document is
necessary to maintain the lien of the Mortgage upon any such
property now subject to the lien thereof. However, as to
real property acquired after September 30, 1994, the lien of
the Mortgage will be an equitable lien rather than a legal
lien in the absence of recordation of a supplemental
indenture specifically conveying such property.
(ix) The Mortgage, as security for the Company's
obligations with respect to the 1994 First Mortgage Bonds,
creates a valid first lien on all real estate and fixed
property (excluding easements and other similar rights)
specifically described therein as subject to the lien
thereof other than property released from the Mortgage in
accordance with the terms thereof or parcels recently sold
for which a release has not yet been obtained but which are
not material, individually or in the aggregate, subject only
to (a) permitted encumbrances as defined in the Mortgage,
(b) other liens permitted under the Mortgage, (c) liens,
encumbrances and title defects not discoverable by a
diligent search of the public land records and judgments
indices, and (d) minor defects and encumbrances customarily
found in the case of properties of like size and character
and defects in rights-of-way and easements existing at the
time of acquisition thereof by the Company, none of which
impair the use of such properties by the Company. However,
as to real property acquired after September 30, 1994, the
lien of the Mortgage will be an equitable lien rather than a
legal lien in the absence of recordation of a supplemental
indenture specifically conveying such property.
(x) Neither the Company nor PEI is in violation
of any provision of their respective Articles of
Incorporation or By-Laws or, to our knowledge after due
inquiry, in violation of or default in the performance or
observance of any obligation, agreement, covenant or
condition contained in any material contract, indenture,
mortgage, loan agreement, note, lease or other instrument to
which any of them is a party or by which any of them or
their properties may be bound, which has been filed with or
submitted to any Regulatory Authority or the Securities and
Exchange Commission ("Filed Documents") (except for such
defaults that would not have a material adverse effect on
the financial condition or operations of the Company and its
subsidiary taken as a whole and that would not affect the
validity of the Bond Purchase Agreement, the Agreement, the
Twenty-Ninth Supplemental Mortgage Indenture, the 1994 First
Mortgage Bonds and the Refunding Agreement). Without
limitation of the foregoing, to our knowledge after due
inquiry, (a) no event has occurred which, with the giving of
notice or lapse of time or both, would be an event of
default under any Filed Documents governing indebtedness of
the Company or PEI, and (b) the execution and delivery of
the Bond Purchase Agreement, the Refunding Agreement, the
Twenty-Ninth Supplemental Mortgage Indenture and the
Agreement did not, and the issuance of the Bonds and the
1994 First Mortgage Bonds, the compliance by the Company
with all of the terms and provisions of the Bond Purchase
Agreement, the Agreement, the Twenty-Ninth Supplemental
Mortgage Indenture and the Refunding Agreement, and the
consummation of the transactions therein contemplated will
not, conflict with or constitute a breach of, or default
under, (except for such conflicts, breaches, and defaults
that would not have a material adverse effect on the
financial condition or operations of the Company and its
subsidiary taken as a whole and that would not affect the
validity of the Bond Purchase Agreement, the Agreement, the
Twenty-Ninth Supplemental Mortgage Indenture, the 1994 First
Mortgage Bonds and the Refunding Agreement), or result in
the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or
PEI pursuant to any Filed Documents to which the Company or
PEI is a party or by which it or any of them may be bound or
to which any of the property or assets of the Company or PEI
is subject, other than the Mortgage. The issuance of the
1994 First Mortgage Bonds and the Bonds (by the Issuer) does
not violate the provisions of the Articles of Incorporation
or By-Laws of the Company or PEI. To our knowledge after
due inquiry, the issuance of the 1994 First Mortgage Bonds
does not violate any law, published rule, regulation
administered or order issued by any Regulatory Authority or
any Filed Documents.
(xi) Except for such exceptions to the following
as do not or will not, individually or in the aggregate,
have a material adverse effect on the business, financial
(or other) conditions, results of operations or prospects of
the Company, (a) the Company has such Permits from any
Regulatory Authority as are necessary to own its properties
and to conduct its business in the manner now being
conducted and as described in the Preliminary Official
Statement and the Official Statement, (b) to our knowledge
after due inquiry the Company has fulfilled and performed
all of its obligations with respect to such Permits, and no
event has occurred which allows, or after notice or lapse of
time would allow, revocation or termination thereof or
result in any other impairment of the rights of the holder
of any such Permit, and (c) the Company has not received any
notice of proceedings relating to the revocation or
modification of any such Permit. To our knowledge after due
inquiry, there is no proceeding pending or threatened to be
brought before the PPUC against the Company that may cause
any Permit material to the operations of the Company to be
revoked, withdrawn, canceled, suspended or not renewed. To
our knowledge after due inquiry, the Company is in
substantial compliance with the provisions of the
Pennsylvania Public Utility Code, 66 Pa.C.S.A. subsection 101 et seq.,
and the rules and regulations of the PPUC thereunder and any
applicable orders of the PPUC and with all federal and state
drinking water statutes and regulations.
(xii) To our knowledge after due inquiry, except
as described or referred to in the Preliminary Official
Statement and the Official Statement, there is no action,
suit or proceeding before or by any court or Regulatory
Authority, now pending or threatened, against or affecting
the Company which might (i) result in any material adverse
change in the condition, financial or otherwise, earnings,
affairs or business prospects of the Company, (ii)
materially and adversely affect the properties or assets of
the Company, or (iii) materially and adversely affect the
issuance of the 1994 First Mortgage Bonds.
(xiii) Statements in Appendix A of the Preliminary
Official Statement and the Official Statement, to the extent
such statements describe regulation by, or action of, the
Regulatory Authorities, or laws administered by any of them,
constitute a fair and accurate summary of the legal matters,
terms, documents, proceedings or circumstances referred to
therein, and present or summarize fairly in all material
respects the information disclosed therein.
(xiv) The Company is not subject to the Natural
Gas Act, 15 U.S.C. subsection 717 et seq.
Where an opinion set forth above is qualified, (i) "to
our knowledge," it is intended to be limited to the actual
knowledge of the attorneys in this Firm who have
participated in our representation of the Company in the
issuance of the 1994 First Mortgage Bonds, or our
representation of the Company before the PPUC and in other
regulatory matters, and (ii) "after due inquiry," it
consists solely of a review of the subject matter of the
opinions so qualified with appropriate officers of the
Company and PEI and a review of such documents or agreements
as may have been identified by such officers of the Company
and PEI as being necessary to be reviewed in connection with
the subject matter of such opinions.
The opinions expressed above in paragraphs (vii) and
(ix) are based upon searches and opinions made by other or
prior counsel, and in our opinion such counsel are, or in
the case of prior opinions were, competent and qualified and
such opinions are satisfactory in scope and form and may be
relied upon.
The foregoing opinions are limited to the laws of the
United States and the Commonwealth of Pennsylvania.
In addition to the matters set forth above, this is to
confirm that, although we have not independently verified
and are not passing upon or assuming any responsibility for
the accuracy, completeness or fairness of the statements
contained in the Preliminary Official Statement and the
Official Statement (except in respect of the matters covered
by paragraph (xiii)) nothing has come to our attention
during the course of our representation of the Company in
connection with matters relating to the Preliminary Official
Statement and the Official Statement and our general
representation of the Company in regulatory matters that
causes us to believe that the Preliminary Official Statement
and the Official Statement (except as to the financial
statements, schedules and other financial information
contained or incorporated by reference therein or omitted
therefrom as to which we express no view) contained any
untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary in
order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
The opinions and beliefs expressed herein are for your
sole benefit, and may only be relied on by you. With
respect to the first sentence of paragraph (x) of the
foregoing opinion, as it applies to certain financial
covenants, we have only relied upon a certificate of John F.
Kell, Jr., Vice President of Finance of the Company and PEI,
relating to such financial covenants and have not undertaken
any investigation and do not express any opinion as to the
calculations required by such financial covenants. We
hereby consent to Hughes Hubbard & Reed relying on this
opinion as to the matters of Pennsylvania law in giving its
opinion to you on the date hereof with respect to matters
covered by this opinion.
Very truly yours,
LeBoeuf, Lamb, Greene & MacRae
EXHIBIT E
FORM OF OPINION OF HUGHES
HUBBARD & REED
[Date of Closing]
Ladies and Gentlemen:
We have acted as special counsel to Pennsylvania Gas
and Water Company, a Pennsylvania corporation (the
"Company"), in connection with the issuance and sale by the
Luzerne County Industrial Development Authority (the
"Authority") of $30,000,000 aggregate principal amount of
its Exempt Facilities Revenue Refunding Bonds, 1994 Series A
(Pennsylvania Gas and Water Company Project) (the "Bonds").
The Bonds are being sold to underwriters (the
"Underwriters") pursuant to the Bond Purchase Agreement
dated November 1, 1994 (the "Bond Purchase Agreement") among
the Company, the Authority and the Underwriters.
This opinion is being furnished to you at the request
of the Company pursuant to paragraph (9) of Section 6(c) of
the Bond Purchase Agreement. Except as otherwise indicated
herein, capitalized terms used in this Opinion Letter are
defined as set forth in the Bond Purchase Agreement or the
Accord (see below).
This Opinion Letter is governed by, and shall be
interpreted in accordance with, the Legal Opinion Accord
(the "Accord") of the ABA Section of Business Law (1991).
As a consequence, it is subject to a number of
qualifications, exceptions, definitions, limitations on
coverage and other limitations, all as more particularly
described in the Accord, and this Opinion Letter should be
read in conjunction therewith.
The law covered by the opinion set forth below is
limited to (a) the Public Utility Holding Company Act of
1935, as amended (the "PUHCA"), and the rules and
regulations under such statute, and (b) the Laws of the
State of New York.
In our capacity as special counsel, we have
participated with other counsel in the preparation of (i)
the Preliminary Official Statement dated October 19, 1994
(the "Preliminary Official Statement") relating to the Bonds
and (ii) the Official Statement. We have also represented
the Company or PEI (as defined below) in connection with, or
are otherwise generally familiar with, the agreements or
instruments listed on Annex A to this opinion (the "Covered
Agreements").
In rendering the opinion set forth below, we also have
examined such certificates of public officials, corporate
records and documents and other instruments, and have made
such other investigations as we have deemed necessary in
connection with the opinion hereinafter set forth. As to
certain issues of fact material to this opinion, we have
relied upon certificates of officers of the Company and upon
the representations of the Company contained in the Bond
Purchase Agreement.
We have assumed that the documents we have reviewed in
connection with this opinion which purport to have been
executed by parties other than the Company or Pennsylvania
Enterprises, Inc., a Pennsylvania corporation, which is the
Company's parent ("PEI"), or the directors and officers of
the Company or PEI, have been duly executed by such parties
and that such parties had all requisite power to enter into
and perform all obligations thereunder, that execution and
delivery thereof has been duly authorized by all requisite
action and that such documents are valid and binding upon
such parties.
We have assumed the authenticity of all documents
submitted to us as originals, the genuineness of all
signatures thereon, and the legal capacity of natural
persons executing such documents and the conformity to
originals of all documents submitted to us as copies.
Based upon the foregoing, we are of the opinion that:
(i) The terms of the 1994 First Mortgage Bonds and
the Mortgage conform, in all material respects, to the
description thereof contained in the Preliminary Official
Statement and the Official Statement.
(ii) To the Opinion Giver's Actual Knowledge, the
execution and delivery of the Bond Purchase Agreement, the
Agreement, the Refunding Agreement and the Twenty-Ninth
Supplemental Mortgage Indenture, and the issuance and sale
of the 1994 First Mortgage Bonds, do not constitute a
default under any of the Covered Agreements, except for such
defaults that would not have a material adverse effect on
the financial condition or operations of the Company and its
subsidiary taken as a whole and that would not affect the
validity of the 1994 First Mortgage Bonds.
(iii) PEI is a "holding company" within the
meaning of the Public Utility Holding Company Act of 1935
("PUHCA"), but is exempt, pursuant to Section 3(a) of PUHCA,
from all the provisions of PUHCA (except Section 9(a)(2)
thereof) and the rules and regulations thereunder, assuming
that, (A) no person, except PEI, directly or indirectly
owns, controls or holds with power to vote 10% or more of
the voting securities (as defined in PUHCA) of the Company,
and (B) no person, directly or indirectly, owns, controls
or holds with power to vote 10% or more of the voting
securities (as defined in the PUHCA) of PEI.
With respect to paragraph (ii) of the foregoing opinion
as it applies to certain financial covenants, we have relied
only upon a certificate of John F. Kell, Jr., Vice President
of Finance of the Company and PEI, relating to such
financial covenants and have not undertaken any
investigation and do not express any opinion as to the
calculations required by such financial covenants.
The opinion and beliefs expressed herein are for the
sole benefit of the Underwriters in connection with the
transactions referred to in the Bond Purchase Agreement and
may not be relied upon for any other purpose.
Very truly yours,
HUGHES HUBBARD & REED
HUGHES HUBBARD & REED
OPINION RIDER _
[Date of Closing]
[Addressees]
Ladies and Gentlemen:
This letter is being delivered to you pursuant to
paragraph (9) of Section 6(c) of the Bond Purchase
Agreement, dated November 1, 1994 (the "Bond Purchase
Agreement") among Pennsylvania Gas and Water Company,
Luzerne County Industrial Development Authority and Wheat
First Butcher Singer, on behalf of itself and Legg Mason
Wood Walker, Incorporated. All capitalized terms not
otherwise defined herein shall have the same meaning as in
the Bond Purchase Agreement.
In connection with the issuance of the Bonds, as
special counsel for the Company, we have assumed the truth
of information furnished to us and have not independently
verified and do not assume any responsibility for the
accuracy, completeness or fairness of the statements
contained in the Preliminary Official Statement or the
Official Statement except for and to the extent set forth in
paragraph (i) of our opinion to you of even date herewith.
We have participated in conferences with representatives of
the Company, other counsel for the Company, the independent
public accountants for the Company, your counsel and your
representatives, and bond counsel, at which conferences the
contents of the Preliminary Official Statement and the
Official Statement were discussed. Our examination of the
Preliminary Official Statement and the Official Statement
and our participation in such conferences have not led us to
believe that, as of their respective dates, the Preliminary
Official Statement or the Official Statement (except we
express no view as to (x) the financial statements and
schedules and exhibits and other financial or statistical
data contained therein or omitted therefrom, (y) documents
incorporated therein by reference including but not limited
to the documents specified under the heading "Incorporation
of Certain Documents by Reference" in Appendix A to the
Preliminary Official Statement and the Official Statement
and (z) information relating to the Issuer, AMBAC or the
Underwriters or information contained under the headings
"Book-Entry Only System", "Municipal Bond Insurance" or "Tax
Exemption" or in Appendix D or Appendix E to the Preliminary
Official Statement and the Official Statement) contained an
untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances
under which they were made, not misleading.
We call your attention to the fact that we are not
admitted to practice in the Commonwealth of Pennsylvania and
we do not have a regulated utility practice. Further, we
have not advised PEI, the Company or its subsidiary with
respect to their business operations, including federal and
state regulation of their gas and water businesses (other
than the Public Utility Holding Company Act of 1935),
litigation and agreements (other than the Agreements listed
on Annex A hereto).
This letter is furnished by us solely for the
benefit of the Underwriters in connection with the
transactions referred to in the Bond Purchase Agreement and
may not be relied upon for any other purpose without our
prior written consent in each instance.
Very truly yours,
HUGHES HUBBARD & REED
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