EXHIBIT 1.1
415,000 SHARES
THE YORK WATER COMPANY
COMMON STOCK
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UNDERWRITING AGREEMENT
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Philadelphia, Pennsylvania
July 15, 2004
JANNEY MONTGOMERY SCOTT LLC
1801 Market Street
Philadelphia, PA 19103
Ladies and Gentlemen:
The York Water Company, a Pennsylvania corporation ("York Water"),
proposes, subject to the terms and conditions stated herein, to sell to Janney
Montgomery Scott LLC (the "Underwriter"), an aggregate of 415,000 shares of York
Water's Common Stock, no par value per share ("Common Stock"). The Common Stock
to be sold to the Underwriter by York Water is referred to herein as the "Firm
Shares." The Firm Shares shall be offered to the public at a public offering
price of $17.80 per Firm Share (the "Offering Price").
In order to cover over-allotments in the sale of the Firm Shares,
the Underwriter may, at its election and subject to the terms and conditions
stated herein, purchase up to 62,250 additional shares of Common Stock from York
Water. Such 62,250 additional shares of Common Stock are referred to herein as
the "Optional Shares." If any Optional Shares are purchased, the Optional Shares
shall be purchased for offering to the public at the Offering Price and in
accordance with the terms and conditions set forth herein. The Firm Shares and
the Optional Shares are referred to collectively herein as the "Shares."
In consideration of the mutual agreements contained herein, York
Water and the Underwriter, intending to be legally bound, hereby confirm their
agreement as follows:
1. REPRESENTATIONS AND WARRANTIES OF YORK WATER. York Water represents and
warrants to, and agrees with, the Underwriter that:
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(a) York Water has prepared, in conformity with the requirements of
the Securities Act of 1933, as amended (the "Act"), and the rules and
regulations (the "Regulations") of the Securities and Exchange Commission (the
"SEC") thereunder and has filed with the SEC a registration statement on Form
S-3 (File No. 333-115937) and one or more amendments thereto for the purpose of
registering the Shares under the Act. Copies of such registration statement and
any amendments thereto, and all forms of the related prospectus contained
therein, have been delivered to the Underwriter. Any preliminary prospectus
included in such registration statement or filed with the SEC pursuant to Rule
424(a) of the Regulations, as of its date, is hereinafter called a "Preliminary
Prospectus." The various parts of such registration statement, including all
exhibits thereto and the information contained in the form of the final
prospectus filed with the SEC pursuant to Rule 424(b) of the Regulations in
accordance with Section 5(a) of this Agreement and deemed by virtue of Rule 424
of the Regulations to be part of the registration statement at the time it was
declared effective, each as amended at the time the registration statement
became effective, including the information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A of the
Regulations and the Current Report on Form 8-K in the form mutually agreed to
by York Water and the Underwriter to be filed on July 16, 2004, are hereinafter
collectively called the "Registration Statement." The final prospectus in the
form included in the Registration Statement or first filed with the SEC pursuant
to Rule 424(b) of the Regulations and any amendments or supplements thereto,
including the information (if any) deemed to be part of that prospectus at the
time of effectiveness pursuant to Rule 430A of the Regulations, as of its date,
is hereinafter called the "Prospectus." All references to the Registration
Statement, the Preliminary Prospectus and the Prospectus include all documents
incorporated therein by reference as of the effective date of the Registration
Statement or as of the date of the Preliminary Prospectus or Prospectus, as the
case may be. If York Water has filed an abbreviated registration statement to
register additional shares of Common Stock pursuant to Rule 462(b) under the Act
(the "Rule 462 Registration Statement"), then any reference herein to the term
"Registration Statement" shall be deemed to include such Rule 462 Registration
Statement.
(b) The Registration Statement has become effective under the Act,
and the SEC has not issued any stop order suspending the effectiveness of the
Registration Statement or preventing or suspending the use of the Preliminary
Prospectus, nor has the SEC instituted or threatened to institute proceedings
with respect to such an order. No stop order suspending the sale of the Shares
in any jurisdiction designated by the Underwriter as provided for in Section
5(f) hereof has been issued, and no proceedings for that purpose have been
instituted or threatened. York Water has complied in all material respects with
all requests of the SEC, or requests of which York Water has been advised of any
state or foreign securities commission in a state or foreign jurisdiction
designated by the Underwriter as provided for in Section 5(f) hereof, for
additional information to be included in the Registration Statement, any
Preliminary Prospectus or the Prospectus. Each Preliminary Prospectus, at the
time of filing thereof, conformed in all material respects to all the
requirements of the Act and the Regulations in all material respects and did not
contain any untrue statement of material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading. The Registration Statement, on the date on which it was declared
effective by the SEC (the "Effective Date") and when any post-effective
amendment thereof shall become effective, and the Prospectus, at the time it is
filed with the SEC including, if applicable, pursuant to Rule 424(b), and on the
Closing Date (as defined in Section 4 hereof) and any Option
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Closing Date (as defined in Section 5(b) hereof), conformed and will conform in
all material respects to all the requirements of the Act and the Regulations,
and did not and will not, as of such dates, 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 not misleading. The two preceding
sentences do not apply to statements in or omissions from the Registration
Statement, any Preliminary Prospectus or the Prospectus based upon written
information furnished to York Water by or on behalf of the Underwriter for use
therein.
(c) The documents incorporated by reference into the Prospectus
pursuant to Item 12 of Form S-3 under the Act, at the time they were filed with
the SEC, did not contain any untrue statement of material fact or omit to state
a material fact required to be stated therein, or necessary to make the
statements therein not misleading.
(d) There are no legal or governmental proceedings pending or, to
the knowledge of York Water, threatened to which York Water is a party or to
which any of the properties of York Water are subject that are required to be
described in the Registration Statement or the Prospectus and are not so
described or any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the Prospectus or to
be filed as exhibits to the Registration Statement that are not described or
filed.
(e) York Water is a corporation duly organized, validly subsisting
and in good standing under the laws of the Commonwealth of Pennsylvania, with
all necessary corporate power and authority, to own or lease and operate its
properties and to conduct its current business as described in the Prospectus,
and to execute, deliver and perform this Agreement. York Water is not qualified
as a foreign corporation in any jurisdiction and is not required to be so
qualified in order to operate its business as now conducted or currently
proposed to be conducted.
(f) Except for 25,310 shares of common stock of Columbia Water
Company, York Water does not own any stock or other interest whatsoever, whether
equity or debt, in any corporation, limited liability company, partnership or
other entity.
(g) This Agreement has been duly authorized, executed and delivered
by York Water and constitutes its legal, valid and binding obligation,
enforceable against York Water in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency or other similar laws
affecting the enforcement of creditors' rights generally and subject to
applicability of general principles of equity and except as rights to indemnity
and contribution may be limited by federal and state securities laws or
principles of public policy.
(h) The execution, delivery and performance of this Agreement and
the transactions contemplated herein, do not and will not, with or without the
giving of notice or the lapse of time, or both, (i) conflict with any term or
provision of York Water's Articles of Incorporation or Bylaws; (ii) result in a
breach of, constitute a default under, result in the termination or modification
of, result in the creation or imposition of any lien, security interest, charge
or encumbrance upon any of the properties of York Water or require any payment
by York Water or impose any liability on York Water pursuant to, any contract,
indenture, mortgage, deed of trust, commitment or other agreement or instrument
to which York Water is a
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party or by which any of its properties are bound or affected other than this
Agreement; (iii) assuming compliance with Blue Sky laws and the rules of the
National Association of Securities Dealers, Inc. (the "NASD") applicable to the
offer and sale of the Shares, violate any law, rule, regulation, judgment, order
or decree of any government or governmental agency, instrumentality or court,
domestic or foreign, having jurisdiction over York Water or any of its
respective properties or businesses; or (iv) result in a breach, termination or
lapse of York Water's corporate power and authority to own or lease and operate
its respective properties and conduct its respective business, except, in the
case of clauses (ii), (iii) and (iv) above, as would not have a material adverse
effect on the management, assets, properties, condition (financial or
otherwise), shareholders' equity or results of operations of the business
(collectively, the "Business Conditions") of York Water.
(i) As of March 31, 2004, York Water had the capitalization set
forth in the Prospectus under the caption "Capitalization" and would have had,
taking into account the issuance of the Firm Shares on the Closing Date, the as
adjusted capitalization set forth therein. On the Effective Date, the Closing
Date and any Option Closing Date, there will be no options or warrants or other
outstanding rights to purchase, agreements or obligations to issue or agreements
or other rights to convert or exchange any obligation or security into, capital
stock of York Water or securities convertible into or exchangeable for capital
stock of York Water, except as described in the Prospectus.
(j) The currently outstanding shares of York Water's capital stock
have been duly authorized and are validly issued, fully paid and non-assessable,
and none of such outstanding shares of York Water's capital stock has been
issued in violation of any preemptive rights of any security holder of York
Water. The holders of the outstanding shares of York Water's capital stock are
not subject to personal liability solely by reason of being such holders. All
previous offers and sales of the outstanding shares of York Water's capital
stock, whether described in the Registration Statement or otherwise, were made
in conformity with applicable federal, state and foreign securities laws. The
authorized capital stock of York Water, including, without limitation, the
outstanding Common Stock and the Shares, conform or will conform in all material
respects with the descriptions thereof in the Prospectus, and such descriptions
conform in all material respects with the instruments defining the same.
(k) There are no contracts, agreements or understandings between
York Water and any person granting such person the right to require York Water
to file a registration statement under the Act with respect to any securities of
York Water owned or to be owned by such person or to require York Water to
include such securities in the securities registered pursuant to the
Registration Statement or in any securities being registered pursuant to any
other registration statement filed by York Water under the Act.
(l) The Shares have been duly and validly authorized, and, when
issued and delivered against payment therefor as contemplated by this Agreement,
will be validly issued, fully paid and non-assessable, and the holders thereof
will not be subject to personal liability solely by reason of being such
holders. The certificates representing the Shares are in proper legal form
under, and conform in all respects to the requirements of, the Pennsylvania
Business Corporation Law of 1988, as amended (the "PBCL"). Neither the filing of
the Registration Statement nor the offering or sale of Shares as contemplated by
this Agreement gives any
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security holder of York Water any rights for or relating to the registration of
any Common Stock or any other capital stock of York Water or any rights to
convert or have redeemed or otherwise receive anything of value with respect to
any other security of York Water.
(m) No consent, approval, authorization, order, registration,
license or permit of, or filing or registration with, any court, government,
governmental agency, instrumentality or other regulatory body or official is
required for the valid and legal execution, delivery and performance by York
Water of this Agreement and the consummation of the transactions contemplated
hereby or described in the Prospectus, except such as may be required for the
registration of the Shares under the Act or to list the Shares on the Nasdaq
National Market, filings under the Securities Exchange Act of 1934, as amended
("Exchange Act"), and for compliance with the applicable state securities or
Blue Sky laws or the Bylaws, rules and other pronouncements of the NASD.
(n) The Common Stock (including the Shares) is registered pursuant
to Section 12(g) of the Exchange Act. The issued and outstanding shares of
Common Stock are included for quotation on the Nasdaq National Market. Neither
York Water nor, to York Water's knowledge, any other person has taken any action
designed to cause, or likely to result in, the termination of the registration
of the Common Stock under the Exchange Act. York Water has not received any
notification that the SEC or the NASD is contemplating terminating such
registration or inclusion.
(o) The statements in the Registration Statement and Prospectus,
insofar as they are descriptions of or references to contracts, agreements or
other documents, are accurate in all material respects and present or summarize
fairly, in all material respects, the information required to be disclosed under
the Act or the Regulations, and there are no contracts, agreements or other
documents, instruments or transactions of any character required to be described
or referred to in the Registration Statement or Prospectus or to be filed as
exhibits to the Registration Statement that have not been so described, referred
to or filed.
(p) Each contract or other instrument (however characterized or
described) to which York Water is a party or by which any of its properties or
businesses is bound or affected and which is material to the conduct of York
Water's business has been duly and validly executed by York Water and, to the
knowledge of York Water, has been duly and validly executed by the other parties
thereto. To the knowledge of York Water, each such contract or other instrument
is in full force and effect. York Water has not received written notice from the
other parties to such contracts of their intent to suspend or terminate the
services being provided thereunder. To the knowledge of York Water, no other
party is in default under any such contract or other instrument, and no event
has occurred that, with the lapse of time or the giving of notice, or both,
would constitute a default under any such contract or other instrument, except
for defaults that would not have a material adverse effect on the Business
Conditions of York Water. All necessary consents under such contracts or other
instruments to the disclosure in the Prospectus with respect thereto have been
obtained.
(q) The financial statements of York Water (including the notes
thereto) filed as part of or incorporated by reference in, the Prospectus and
the Registration Statement present fairly, in all material respects, the
financial position of York Water as of the respective dates
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thereof, and the results of operations and cash flows of York Water for the
periods indicated therein, and have been prepared in conformity with generally
accepted accounting principles, except as described therein. The financial
information included in the Prospectus under the captions "Prospectus Summary -
Summary Financial Information," "Selected Financial Data," and "Capitalization"
presents fairly the information shown therein and has been compiled on a basis
consistent with that of the audited financial statements included in the
Registration Statement.
(r) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as otherwise stated
therein, there has not been (i) any material adverse change, or development
involving a prospective material adverse change, in the Business Conditions of
York Water; (ii) any material adverse change, loss, reduction, termination or
non renewal of any contract to which York Water is a party which is material to
the conduct of York Water's business; (iii) any transaction entered into by York
Water not in the ordinary course of its business that is material to York Water;
(iv) any dividend or distribution of any kind declared, paid or made by York
Water on its capital stock, except for and to the extent described in the
Prospectus; (v) any liabilities or obligations, direct or indirect, incurred by
York Water that are material to York Water; (vi) any change in the
capitalization of York Water; or (vii) any change in the indebtedness of York
Water that is material to York Water. York Water has no contingent liabilities
or obligations that are material and that are not expressly disclosed in the
Prospectus.
(s) York Water has not distributed, and will not distribute, any
offering material in connection with the offering and sale of the Shares other
than the Registration Statement, a Preliminary Prospectus, the Prospectus and
other material, if any, permitted by the Act and the Regulations. Neither York
Water nor, to York Water's knowledge, any of its officers, directors or
affiliates has (i) taken, nor shall York Water or such persons take, directly or
indirectly, any action designed to, or that might be reasonably expected to,
cause or result in stabilization or manipulation of the price of the Common
Stock, or (ii) since the filing of the Registration Statement (A) sold, bid for,
purchased or paid anyone any compensation for soliciting purchases of, the
Shares or (B) paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of York Water.
(t) York Water has filed with the appropriate federal, state and
local governmental agencies, and all foreign countries and political
subdivisions thereof, all material tax returns that are required to be filed or
have duly obtained extensions of time for the filing thereof and have paid all
material taxes shown on such returns or otherwise due and all material
assessments received by them to the extent that the same have become due, other
than those which York Water is contesting in good faith. York Water not has
executed or filed with any taxing authority, foreign or domestic, any agreement
extending the period for assessment or collection of any income or other tax and
is not a party to any pending action or proceeding by any foreign or domestic
governmental agency for the assessment or collection of taxes, and no claims for
assessment or collection of taxes have been asserted against York Water that
would materially adversely affect the Business Conditions of York Water.
(u) Beard Miller Company LLP and Stambaugh Ness, PC, each of which
has given its report on certain financial statements included as part of or
incorporated by reference in
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the Registration Statement, are firms of independent certified public
accountants as required by the Act and the Regulations.
(v) York Water is not in violation of, or in default under, any of
the terms or provisions of (i) its Articles of Incorporation or Bylaws or
similar governing instruments, (ii) any indenture, mortgage, deed of trust,
contract, commitment or other agreement or instrument to which it is a party or
by which it or any of its assets or properties is bound or affected, (iii) any
law, rule, regulation, judgment, order or decree of any government or
governmental agency, instrumentality or court, domestic or foreign, having
jurisdiction over it or any of its properties or business, or (iv) any license,
permit, certification, registration, approval, consent or franchise, except with
respect to clauses (ii), (iii) or (iv) above, where any such default would not
reasonably be expected to have a material adverse effect on the Business
Conditions of York Water.
(w) Except as expressly disclosed in the Prospectus, there are no
claims, actions, suits, protests, proceedings, arbitrations, investigations or
inquiries pending before, or, to York Water's knowledge, threatened or
contemplated by, any governmental agency, instrumentality, court or tribunal,
domestic or foreign, or before any private arbitration tribunal to which York
Water is or may be made a party that could reasonably be expected to affect the
validity of any of the outstanding Common Stock, or that, if determined
adversely to York Water would have a material adverse effect on the Business
Conditions of York Water, nor to York Water's knowledge is there any reasonable
basis for any such claim, action, suit, protest, proceeding, arbitration,
investigation or inquiry. There are no outstanding orders, judgments or decrees
of any court, governmental agency, instrumentality or other tribunal enjoining
York Water from, or requiring York Water to take or refrain from taking, any
action, or to which York Water or their properties, assets or businesses are
bound or subject.
(x) York Water owns, or possesses adequate rights to use, all
patents, patent applications, trademarks, trademark registrations, applications
for trademark registration, trade names, service marks, licenses, inventions,
copyrights, know-how (including any unpatented and/or unpatentable proprietary
or confidential technology, information, systems, design methodologies and
devices or procedures developed or derived from or for York Water's business),
trade secrets, confidential information, processes and formulations and other
proprietary information necessary for, used in, or proposed to be used in, the
conduct of the business of York Water as described in the Prospectus
(collectively, the "Intellectual Property"), except failures to own or possess
rights to use that would not have a material adverse effect on the Business
Conditions of York Water. To York Water's knowledge, York Water has not
infringed, is not infringing nor has received any notice of conflict with, the
asserted rights of others with respect to the Intellectual Property that,
individually or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would materially adversely affect the Business Conditions of
York Water, and York Water knows of no reasonable basis therefor. To the
knowledge of York Water, no other parties have infringed upon or are in conflict
with any Intellectual Property. York Water is not a party to, or bound by, any
agreement pursuant to which royalties, honorariums or fees are payable by York
Water to any person by reason of the ownership or use of any Intellectual
Property.
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(y) York Water has good and marketable title to all property
described in the Prospectus as being owned by it, free and clear of all liens,
security interests, charges or encumbrances and the like, except such as are
expressly described or referred to in the Prospectus or such as do not
materially adversely affect the Business Conditions or the conduct of the
business of York Water as described in the Prospectus. York Water has insured
its property against loss or damage by fire or other casualty, in amounts
reasonably believed by York Water to be adequate, and maintains insurance
against such other risks as management of York Water deems appropriate. All real
and personal property leased by York Water, as described or referred to in the
Prospectus, is held by York Water, under valid leases. The executive offices and
facilities of York Water (the "Premises"), and all operations presently or
formerly conducted thereon by York Water or any predecessors thereof, are now
and, since York Water began to use such Premises, always have been in compliance
with all federal, state and local statutes, ordinances, regulations, rules,
standards and requirements of common law concerning or relating to industrial
hygiene and the protection of health and the environment (collectively, the
"Environmental Laws"), except to the extent that any failure in such compliance
would not materially adversely affect the Business Conditions of York Water. To
the knowledge of York Water, the facilities of York Water produce water of
sufficient quantity to supply the current and planned customers and service
areas of York Water, and are not subject to any restriction on surface water
withdrawal under any federal, state or local law, regulation, rule, order or
permit, except as expressly described in the Prospectus or as provided in the
Commonwealth of Pennsylvania allocation permits and such as do not materially
adversely affect the Business Conditions or the conduct of the business of York
Water as described in the Prospectus. To the knowledge of York Water, there are
no conditions on, about, beneath or arising from the Premises or in close
proximity to the Premises that might give rise to liability, the imposition of a
statutory lien or require a "Response," "Removal" or "Remedial Action," as
defined herein, under any Environmental Law, or affect the quality of the
surface water withdrawn by York Water, and that would materially adversely
affect the Business Conditions of York Water, except as described in the
Prospectus. Except as expressly disclosed in the Prospectus, or which will not
materially adversely affect the Business Conditions of York Water (i) York Water
has not received notice or has knowledge of any claim, demand, investigation,
regulatory action, suit or other action instituted or threatened against York
Water or any portion of the Premises relating to any of the Environmental Laws
and (ii) York Water has not received any notice of material violation, citation,
complaint, order, directive, request for information or response thereto, notice
letter, demand letter or compliance schedule to or from any governmental or
regulatory agency arising out of or in connection with "hazardous substances"
(as defined by applicable Environmental Laws) on, about, beneath, arising from
or generated at the Premises. As used in this subsection, the terms "Response,"
"Removal" and "Remedial Action" shall have the respective meanings assigned to
such terms under Sections 101(23)-101(25) of the Comprehensive Environmental
Response, Compensation and Liability Act, as amended by the Superfund Amendments
and Reauthorization Act, 42 U.S.C. 9601(23)-9601(25).
(z) York Water maintains a system of internal accounting controls
sufficient to provide reasonable assurances that: (i) transactions are executed
in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary in order to permit preparation of
financial statements in accordance with generally accepted accounting principles
and to maintain accountability for assets; (iii) access to assets is permitted
only in accordance with management's general or specific authorization; and (iv)
the recorded
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accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
(aa) York Water and any Related Employer (which for purposes of this
Paragraph means any entity that with York Water is a member of a controlled
group of corporations within the meaning of Section 414(b) of the Internal
Revenue Code of 1986, as amended (the "Code"), is, individually or collectively,
a trade or business under common control within the meaning of Section 414(c) of
the Code, or is a member of the same affiliated service group within the meaning
of Section 414(m) of the Code) have established, maintain, contribute to, are
required to contribute to, are a party to, or are bound by certain pension,
retirement, profit-sharing plans, deferred compensation, bonus, or other
incentive plans, or medical, vision, dental, or other health plans, or life
insurance or disability plans, or any other employee benefit plans, programs,
arrangements, agreements, or understandings, some of which are subject to the
Employee Retirement Income Security Act of 1974, as amended ("ERISA") and the
rules and regulations thereunder ("Plans"). Any disclosure regarding the Plans
required under the Act or the Exchange Act has been made in the Prospectus and
the documents incorporated therein. All Plans that are subject to ERISA are in
compliance with ERISA, in all material respects, and, to the extent a Plan is
intended to be tax-qualified within the meaning of Section 401(a) of the Code,
such Plan is in compliance with the Code in all material respects and is the
subject of a current favorable determination letter from the Internal Revenue
Service as to its tax qualification. No Plan is an employee pension benefit plan
that is subject to Part 3 of Subtitle B of Title I of ERISA, a defined benefit
plan subject to Title IV of ERISA, or a multiemployer plan. Neither York Water
nor any Related Employer maintains or has maintained retiree life or retiree
health insurance plans that are employee welfare benefit plans providing for
continuing benefit or coverage for any employee or any beneficiary of any
employee after such employee's termination of employment, except as required by
Section 4980B of the Code and except as disclosed in the Prospectus. No
fiduciary or other party in interest with respect to any of the Plans has caused
any of such Plans to engage in a prohibited transaction as defined in Section
406 of ERISA and Section 4975 of the Code. As used in this subsection, the terms
"defined benefit plan," "employee benefit plan," "employee pension benefit
plan," "employee welfare benefit plan," "fiduciary" and "multiemployer plan"
shall have the respective meanings assigned to such terms in Section 3 of ERISA.
(bb) No labor dispute exists with York Water's employees, and to
York Water's knowledge, no such labor dispute is threatened. York Water
currently has no knowledge of any existing or threatened labor disturbance by
the employees of any of the principal suppliers, contractors or customers of
York Water that would materially adversely affect the Business Conditions of
York Water.
(cc) York Water has not incurred any liability for any finder's fees
or similar payments in connection with the transactions contemplated herein
other than as disclosed in the Prospectus.
(dd) York Water is not, and after giving effect to the offering and
sale of the Shares and the application of the proceeds therefor described in the
Prospectus, will not be an "investment company" or an entity "controlled" by an
"investment company," as such terms are defined in the Investment Company Act of
1940, as amended.
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(ee) York Water has received all permits, licenses, franchises,
authorizations, registrations, qualifications and approvals (collectively,
"Permits") of governmental or regulatory authorities as may be required to own
its properties and conduct its businesses in the manner described in the
Prospectus subject to such qualifications as may be set forth in the Prospectus,
except for failures to have Permits that would have a material adverse effect on
the Business Conditions of York Water; and York Water has fulfilled and
performed all of their material obligations with respect to such Permits, and no
event has occurred which allows or, after notice or lapse of time or both, would
allow revocation or termination thereof or result in any other material
impairment of the rights of the holder of any such Permit, subject in each case
to such qualifications as may be set forth in the Prospectus except for
revocations, terminations or impairments that would not have a material adverse
effect on the Business Conditions of York Water; and, except as described in the
Prospectus, such Permits contain no restrictions that materially affect the
ability of York Water to conduct its businesses.
(ff) No transaction has occurred or is proposed between or among
York Water and any of its officers, directors or stockholders or any affiliate
of the foregoing, that is required to be described in and is not described in
the Registration Statement and the Prospectus.
(gg) Neither York Water nor any officer, director, employee,
partner, agent or other person acting on behalf of York Water has, directly or
indirectly, given or agreed to give any money, property or similar benefit or
consideration to any customer or supplier (including any employee or agent of
any customer or supplier) or official or employee of any agency or
instrumentality of any government (foreign or domestic) or political party or
candidate for office (foreign or domestic) or any other person who was, is or in
the future may be in a position to affect the Business Conditions of York Water
or any actual or proposed business transaction of York Water that (i) could
subject York Water to any liability (including, but not limited to, the payment
of monetary damages) or penalty in any civil, criminal or governmental action or
proceeding that would have a material adverse effect on the Business Conditions
of York Water or (ii) with respect to York Water, or any officer or director
thereof, violates any law, rule or regulation to which York Water is subject.
Any certificate signed by any officer of York Water in such capacity
and delivered to the Underwriter or to counsel for the Underwriter pursuant to
this Agreement shall be deemed a representation and warranty by York Water as
the case may be, to the Underwriter as to the matters covered thereby.
2. PURCHASE AND SALE OF FIRM SHARES. On the basis of the representations,
warranties, covenants and agreements contained herein, but subject to the terms
and conditions set forth herein, York Water shall sell the Firm Shares to the
Underwriter and the Underwriter shall purchase the Firm Shares from York Water
on a firm commitment basis at a net offering price of $17.09 per share
(representing the Offering Price less underwriting discounts and commissions of
$0.71 per share). The Underwriter shall offer the Shares to the public as set
forth in the Prospectus.
3. PAYMENT AND DELIVERY. The Firm Shares shall be issued in the form of
one or more fully registered global securities (the "Global Securities") in
book-entry form in such denominations and registered in the name of the nominee
of The Depository Trust Company
10
("DTC") or in such names as the Underwriter may request upon at least 48 hours'
prior notice to York Water and shall be delivered by or on behalf of York Water
to the Underwriter against payment by the Underwriter on its behalf of the
purchase price therefor by wire transfer of immediately available funds to such
accounts as York Water shall designate in writing (with all costs and expenses
incurred by the Underwriter in connection with such settlement in immediately
available funds, including, but not limited to, interest or cost of funds and
expenses, to be borne by York Water). The closing of the sale and purchase of
the Firm Shares shall be held at the offices of Ballard Spahr Andrews &
Ingersoll, LLP, 1735 Market Street, Philadelphia, Pennsylvania for the account
of the Underwriter. Such payment and delivery will be made at 10:00 a.m.,
Philadelphia, Pennsylvania time, on the third business day after the date of
this Agreement or at such other time on the same date as shall be agreed upon by
York Water and the Underwriter. Such time and date are referred to herein as the
"Closing Date."
4. OPTION TO PURCHASE OPTIONAL SHARES.
(a) For the purposes of covering any over-allotments in connection
with the distribution and sale of the Firm Shares as contemplated by the
Prospectus, subject to the terms and conditions herein set forth, the
Underwriter is hereby granted an option by York Water to purchase all or any
part of the Optional Shares (the "Over-allotment Option"). The purchase price to
be paid for the Optional Shares shall be as set forth in Section 2 hereof. The
Over-allotment Option granted hereby may be exercised by the Underwriter as to
all or any part of the Optional Shares at any time and from time to time within
30 days after the date of the Prospectus. The Underwriter shall not be under any
obligation to purchase any Optional Shares prior to an exercise of the
Over-allotment Option.
(b) The Over-allotment Option granted hereby may be exercised by the
Underwriter by giving notice to York Water by a letter sent by registered or
certified mail, postage prepaid, telex, telegraph, telegram or facsimile (such
notice to be effective when received), addressed as provided in Section 12
hereof, setting forth the number of Optional Shares to be purchased, the date
and time for delivery of and payment for the Optional Shares and stating that
the Optional Shares referred to therein are to be used for the purpose of
covering over-allotments in connection with the distribution and sale of the
Firm Shares. If such notice is given at least two full business days prior to
the Closing Date, the date set forth therein for such delivery and payment shall
be not earlier than the Closing Date. If such notice is given after two full
business days prior to the Closing Date, the date set forth therein for such
delivery and payment shall be a date selected by the Underwriter not later than
five full business days after the exercise of the Over-allotment Option. The
date and time set forth in such a notice is referred to herein as an "Option
Closing Date," and a closing held pursuant to such a notice is referred to
herein as an "Option Closing." Upon each exercise of the Over-allotment Option,
and on the basis of the representations, warranties, covenants and agreements
herein contained, and subject to the terms and conditions herein set forth, the
Underwriter shall become obligated to purchase from York Water the number of
Optional Shares specified in each notice of exercise of the Over-allotment
option.
(c) The Optional Shares shall be issued in the form of one or more
Global Securities in book-entry form in such denominations and registered in the
name of the nominee of DTC or in such names as the Underwriter may request upon
at least 48 hours' prior notice to
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York Water, and shall be delivered by or on behalf of York Water to the
Underwriter, against payment by the Underwriter on its behalf of the purchase
price therefor by wire transfer of immediately available funds to such accounts
as York Water shall designate in writing (with all costs and expenses incurred
by the Underwriter in connection with such settlement in immediately available
funds, including, but not limited to, interest or cost of funds and expenses, to
be borne by York Water). The closing of the sale and purchase of the Optional
Shares shall be held at the offices of Ballard Spahr Andrews & Ingersoll, LLP,
1735 Market Street, Philadelphia, Pennsylvania for the account of the
Underwriter. Such payment and delivery will be made at 10:00 a.m., Philadelphia,
Pennsylvania time, on the Option Closing Date.
5. CERTAIN COVENANTS AND AGREEMENTS OF YORK WATER. York Water covenants
and agrees with the Underwriter as follows:
(a) If Rule 430A of the Regulations is employed, York Water will
timely file the Prospectus pursuant to and in compliance with Rule 424(b) of the
Regulations and will advise the Underwriter of the time and manner of such
filing.
(b) York Water will not file with the SEC the Prospectus, any
amendment or supplement to the Prospectus or any amendment to the Registration
Statement, unless the Underwriter has received a reasonable period of time to
review any such proposed amendment or supplement and consented to the filing
thereof, such consent not to be unreasonably withheld, and will use its
reasonable best efforts to cause any such amendment to the Registration
Statement to be declared effective as promptly as possible. Upon reasonable
request of the Underwriter or counsel for the Underwriter, York Water will
promptly prepare and file with the SEC, in accordance with the Regulations of
the SEC, any amendments to the Registration Statement or amendments or
supplements to the Prospectus that may be necessary or advisable in connection
with the distribution of the Shares by the Underwriter and will use its
reasonable best efforts to cause any such amendment to the Registration
Statement to be declared effective as promptly as possible. If required, York
Water will file any amendment or supplement to the Prospectus with the SEC in
the manner and within the time period required by Rule 424(b) under the Act.
York Water will advise the Underwriter, promptly after receiving notice thereof,
of the time when the Registration Statement or any amendment thereof has been
filed or declared effective or the Prospectus or any amendment or supplement
thereto has been filed and will provide evidence to the Underwriter of each
filing or effectiveness.
(c) York Water will promptly advise the Underwriter, and confirm
such advice in writing, (i) when any post-effective amendment to the
Registration Statement is filed with the SEC under Rule 462(c) under the Act or
otherwise, (ii) any Rule 462(b) Registration Statement is filed, (iii) of the
receipt of any comments from the SEC concerning the Registration Statement, (iv)
when any post-effective amendment to the Registration Statement becomes
effective, or when any supplement to the Prospectus or any amended Prospectus
has been filed, (v) of any request of the SEC for amendment or supplementation
of the Registration Statement or Prospectus or for additional information, (vi)
during the period when the Prospectus is required to be delivered under the Act
and Regulations, of the happening of any event as a result of which the
Registration Statement or the Prospectus would include an untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein not misleading, (vii) during the period noted in clause (vi) above, of
the need to amend the
12
Registration Statement or supplement the Prospectus to comply with the Act,
(viii) of the issuance by the SEC of any stop order suspending the effectiveness
of the Registration Statement or of any order preventing or suspending the use
of any Preliminary Prospectus or the Prospectus, and (ix) of the suspension of
the qualification of any of the Shares for offering or sale in any jurisdiction
in which the Underwriter intends to make such offers or sales, or the initiation
or threatening of any proceedings for any of such purposes known to York Water.
York Water will use its reasonable best efforts to prevent the issuance of any
such stop order or of any order preventing or suspending such use, and if any
such order is issued, to obtain as soon as possible the lifting thereof.
(d) York Water will deliver to the Underwriter, without charge, from
time to time during the period when delivery of the Prospectus is required under
the Act, such number of copies of the Prospectus (as supplemented or amended) as
the Underwriter may reasonably request. York Water hereby consents to the use of
such copies of the Preliminary Prospectus and the Prospectus for purposes
permitted by the Act, the Regulations and the securities or Blue Sky laws of the
states or foreign jurisdictions in which the Shares are offered by the
Underwriter and by all dealers to whom Shares may be sold, both in connection
with the offering and sale of the Shares and for such period of time thereafter
as the Prospectus is required by the Act to be delivered in connection with
sales by the Underwriter or dealer. If requested by the Underwriter in writing,
York Water will furnish to the Underwriter at least one original signed copy of
the Registration Statement as originally filed and of all amendments and
supplements thereto, whether filed before or after the Effective Date, at least
one copy of all exhibits filed therewith and of all consents and certificates of
experts, and will deliver to the Underwriter such number of conformed copies of
the Registration Statement, including financial statements and exhibits, and all
amendments thereto, as the Underwriter may reasonably request.
(e) York Water will comply with the Act, the Regulations, the
Exchange Act and the Exchange Act Regulations so as to permit the continuance of
sales of and dealings in the Shares for as long as may be necessary to complete
the distribution of the Shares as contemplated hereby.
(f) York Water will furnish such information and pay such filing
fees and other expenses as may be required, and otherwise cooperate in the
registration or qualification of the Shares, or exemption therefrom, for
offering and sale by the Underwriter and by dealers under the securities or Blue
Sky laws of such jurisdictions in which the Underwriter determines to offer the
Shares, after consultation with York Water, and will file such consents to
service of process or other documents necessary or appropriate in order to
effect such registration or qualification; provided, however, that no such
qualification shall be required in any jurisdiction where, solely as a result
thereof, York Water would be subject to taxation or qualification as a foreign
corporation doing business in such jurisdiction where it is not now so qualified
or to take any action which would subject it to service of process in suits,
other than those arising out of the offering or sale of the Shares, in any
jurisdiction where it is not now so subject. York Water will, from time to time,
prepare and file such statements and reports as are or may be required to
continue such qualification in effect for so long a period as is reasonably
requested by the Underwriter for such offering and sale. York Water will furnish
such information and pay such filing fees and other expenses as may be required,
and otherwise cooperate in the inclusion of the Shares for quotation on the
Nasdaq National Market. York Water will, from time to time,
13
prepare and file such statements and reports as are or may be required to
continue such qualification in effect for a period of three years from the
Effective Date.
(g) Subject to Section 5(b) hereof, in case of any event (occurring
at any time within the period during which, in the opinion of counsel for the
Underwriter, a prospectus is required to be delivered under the Act or the
Regulations), as a result of which the Prospectus, as then amended or
supplemented, would contain an untrue statement of a material fact, or omit to
state any material fact necessary in order to make the statements therein not
misleading, or, if it is necessary at any time to amend the Prospectus to comply
with the Act or the Regulations or any applicable securities or Blue Sky laws,
York Water promptly will prepare and file with the SEC, and any applicable state
and foreign securities commission, an amendment, supplement or document that
will correct such statement or omission or effect such compliance and will
furnish to the Underwriter such number of copies of such amendments, supplements
or documents (in form and substance satisfactory to the Underwriter and counsel
for the Underwriter) as the Underwriter may reasonably request. For purposes of
this Section 5(g), York Water will provide such information to the Underwriter,
the Underwriter's counsel and counsel to York Water as shall be necessary to
enable such persons to consult with York Water with respect to the need to amend
or supplement the Registration Statement or Prospectus or file any document, and
shall furnish to the Underwriter and the Underwriter's counsel such further
information as each may from time to time reasonably request.
(h) York Water will make generally available to its security holders
not later than 45 days after the end of the period covered thereby, an earnings
statement of York Water (which need not be audited unless required by the Act or
the Regulations) that shall comply with Section 11(a) of the Act and Rule 158
thereunder and cover a period of at least 12 consecutive months beginning not
later than the first day of York Water's fiscal quarter next following the
Effective Date (or, if later, the effective date of the Rule 462(b) Registration
Statement).
(i) During the course of the distribution of the Shares, York Water
will not and York Water shall use commercially reasonable efforts to cause its
officers and directors not to, (i) take, directly or indirectly, any action
designed to, or that could reasonably be expected to, cause or result in
stabilization or manipulation of the price of the Common Stock or (ii) sell, bid
for, purchase or pay anyone any compensation for soliciting purchases of, the
Shares.
(j) York Water has caused each person listed on Schedule I hereto to
execute an agreement (a "Lock-up Agreement") in form and substance satisfactory
to the Underwriter and the Underwriter's counsel which provides that from the
date of the Lock-up Agreement and for a period of 90 days from the Effective
Date, such persons will not, subject to certain exceptions, without the prior
written consent of the Underwriter, directly or indirectly, sell, offer or
contract to sell, pledge, grant any option for sale or purchase of, agree to
sell or otherwise dispose of (collectively, "Disposition") any shares of Common
Stock (or any securities convertible into or exercisable or exchangeable for any
shares of Common Stock) or enter into a transaction which would have the same
effect, or enter into any swap, hedge or other arrangement that transfers, in
whole or in part, any of the economic consequences of ownership of Common Stock,
or publicly disclose the intention to make any such Disposition or enter into
any such transaction, swap, hedge or other arrangement. York Water has delivered
such agreements to the Underwriter prior to the date of this Agreement.
Appropriate stop transfer
14
instructions will be issued by York Water to the transfer agent for the Common
Stock and a copy of such instructions will be delivered to the Underwriter.
(k) As of the date of the Lock-up Agreement and for a period of 90
days after the Effective Date, York Water will not, without the prior written
consent of the Underwriter, issue or make a Disposition of any Common Stock or
any securities convertible into or exercisable or exchangeable for any Common
Stock or enter into a transaction which would have the same effect or enter into
any swap, hedge or other arrangement that transfers, in whole or in part, any of
the economic consequences of ownership of Common Stock, or publicly disclose the
intention to issue or make any such Disposition or enter into any such
transaction, swap, hedge or other arrangement, except the issuance of Common
Stock under York Water's Dividend Reinvestment Plan and Employee Stock Purchase
Plan.
(l) For a period of three years from the Effective Date, York Water
will use all reasonable efforts to maintain the listing of the Common Stock
(including, without limitation, the Shares) on the Nasdaq National Market or on
a national securities exchange.
(m) York Water will use the net proceeds from the sale of the Shares
to be sold by it hereunder substantially in accordance with the description set
forth under the caption "Use of Proceeds" in the Prospectus.
6. PAYMENT OF FEES AND EXPENSES.
(a) Whether or not the transactions contemplated by this Agreement
are consummated and regardless of the reason this Agreement is terminated, York
Water will pay or cause to be paid, and bear or cause to be borne, all costs and
expenses incident to the performance of the obligations of York Water under this
Agreement, including: (i) the fees and expenses of the accountants and counsel
for York Water incurred in the preparation of the Registration Statement and any
post-effective amendments thereto (including financial statements and exhibits),
Preliminary Prospectuses and the Prospectus and any amendments or supplements
thereto; (ii) printing and mailing expenses associated with the Registration
Statement and any post-effective amendments thereto, any Preliminary Prospectus,
the Prospectus and this Agreement; (iii) the costs and expenses (other than fees
and expenses of the Underwriter's counsel) incident to the authentication,
issuance, sale and delivery of the Shares to the Underwriter; (iv) the fees,
expenses and other costs of, or incident to, securing any review or approvals by
or from the NASD, (other than the fees and expenses of the Underwriter's
counsel), provided that the aggregate fees and expenses under this clause (iv)
and clause (iii) above shall not exceed $15,000; (v) the filing fees of the SEC;
(vi) the cost of furnishing to the Underwriter copies of the Registration
Statement, Preliminary Prospectuses and Prospectuses as herein provided; (vii)
York Water's travel expenses in connection with meetings with the brokerage
community and institutional investors; (viii) the costs and expenses associated
with settlement in same day funds (including, but not limited to, interest or
cost of funds expenses), if desired by York Water; (ix) any fees or costs
payable to the Nasdaq National Market as a result of the offering; (x) the cost
of preparing, issuing and delivery to the Underwriter of any certificates
evidencing the Shares; (xi) the costs and charges of any transfer agent; (xii)
the reasonable costs of advertising the offering the aggregate of which shall
not exceed $5,000; (xiii) all taxes, if any, on the issuance, delivery and
transfer of the Shares sold by York Water; and (xiv) all other costs
15
and expenses reasonably incident to the performance of York Water's obligations
hereunder that are not otherwise specifically provided for in this Section 8(a);
provided, however, that, except as specifically set forth in Section 8(c)
hereof, the Underwriter shall be responsible for their out-of-pocket expenses,
including those associated with meetings with the brokerage community and
institutional investors, other than York Water's travel expenses, and the fees
and expenses of their counsel for other than with respect to NASD matters.
(b) On the Closing Date, York Water shall pay the Underwriter a
non-accountable expense allowance in the amount of $45,000.
(c) If (i) the Underwriter is willing to proceed with the offering,
and the transactions contemplated by this Agreement are not consummated because
York Water elects not to proceed with the offering for any reason or (ii) the
Underwriter terminates this Agreement pursuant to Section 10(a) hereof, then
York Water will reimburse the Underwriter for its accountable out-of-pocket
expenses relating to the offering (including but not limited to the reasonable
fees and disbursements to its counsel); provided, however, such reimbursement
shall not exceed $60,000. The Underwriter shall present an accounting of all
expenses for which reimbursement is claimed hereunder. If this Agreement is
terminated or the offering is not consummated for any reason other than as set
forth in the preceding sentence, York Water will not be obligated to reimburse
the Underwriter for any amounts.
7. CONDITIONS OF UNDERWRITER'S OBLIGATIONS. The obligation of the
Underwriter to purchase and pay for the Firm Shares that it has agreed to
purchase hereunder on the Closing Date, and to purchase and pay for any Optional
Shares as to which it exercises its right to purchase under Section 4 on an
Option Closing Date, is subject at the date hereof, the Closing Date and any
Option Closing Date to the continuing accuracy and fulfillment of the
representations and warranties of York Water, to the performance by York Water
of its covenants and obligations hereunder, and to the following additional
conditions:
(a) If required by the Regulations, the Prospectus shall have been
filed with the SEC pursuant to Rule 424(b) of the Regulations within the
applicable time period prescribed for such filing by the Regulations. On or
prior to the Closing Date or any Option Closing Date, as the case may be, no
stop order or other order preventing or suspending the effectiveness of the
Registration Statement (including any document incorporated by reference
therein) or the sale of any of the Shares shall have been issued under the Act
or any state or foreign securities law, and no proceedings for that purpose
shall have been initiated or shall be pending or, to the Underwriter's knowledge
or the knowledge of York Water, shall be contemplated by the SEC or by any
authority in any jurisdiction designated by the Underwriter pursuant to Section
6(f) hereof. Any request on the part of the SEC or any state or foreign
securities authority for additional information shall have been complied with to
the reasonable satisfaction of counsel for the Underwriter.
(b) The Underwriter shall have received from the Underwriter's
counsel, Ballard Spahr Andrews & Ingersoll, LLP an opinion, dated as of the
Closing Date and any Option Closing Date, as the case may be, and addressed to
the Underwriter, which opinion shall be satisfactory in all respects to the
Underwriter.
16
(c) The Underwriter shall have received a copy of an executed
Lock-up Agreement from each of the persons listed on Schedule I hereto.
(d) On the Closing Date and any Option Closing Date, there shall
have been delivered to the Underwriter the opinion of Morgan, Lewis & Bockius
LLP, counsel for York Water, dated as of such date and addressed to the
Underwriter to the effect set forth in Exhibit A hereto or to such effect as is
otherwise reasonably satisfactory to the Underwriter.
(e) At the Closing Date and any Option Closing Date: (i) the
Registration Statement and any post-effective amendment thereto and the
Prospectus and any amendments or supplements thereto shall comply with the
requirements of the Act and the Regulations in all materials respects, and none
of the Registration Statement or any post-effective amendment thereto or the
Prospectus or any amendments or supplements thereto shall 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; or
(ii) since the respective dates as of which information is given in the
Registration Statement and any post-effective amendment thereto and the
Prospectus and any amendments or supplements thereto, except as otherwise stated
therein, there shall have been no material adverse change in the Business
Conditions of York Water from that set forth therein; (iii) since the respective
dates as of which information is given in the Registration Statement and the
Prospectus or any amendment or supplement thereto, there shall have been no
event or transaction, contract or agreement entered into by York Water other
than in the ordinary course of business and as set forth in the Registration
Statement or Prospectus, that has not been, but would be required to be, set
forth in the Registration Statement or Prospectus; (iv) since the respective
dates as of which information is given in the Registration Statement and any
post-effective amendment thereto and the Prospectus and any amendments or
supplements thereto, there shall have been no material adverse change, loss,
reduction, termination or non-renewal of any contract to which York Water is a
party, that has not been, but would be required to be set forth in the
Registration Statement or Prospectus; and (v) no action, suit or proceeding at
law or in equity shall be pending or threatened against York Water that would be
required to be set forth in the Prospectus, other than as set forth therein, and
no proceedings shall be pending or threatened against or directly affecting York
Water before or by any federal, state or other commission, board or
administrative agency wherein an unfavorable decision, ruling or finding would
materially adversely affect the Business Conditions of York Water.
(f) The Underwriter shall have received at the Closing Date and any
Option Closing Date certificates of the Chief Executive Officer and the Chief
Financial Officer of York Water dated, as of the date of the Closing Date or
Option Closing Date, as the case may be, and addressed to the Underwriter to the
effect that (i) the representations and warranties of York Water in this
Agreement are true and correct, as if made at and as of the Closing Date or the
Option Closing Date, as the case may be, and that York Water has complied with
all the agreements, fulfilled all the covenants and satisfied all the conditions
on its part to be performed, fulfilled or satisfied at or prior to the Closing
Date or the Option Closing Date, as the case may be, and (ii) the signers of the
certificate have carefully examined the Registration Statement and the
Prospectus and any amendments or supplements thereto, and the conditions set
forth in Section 9(e) hereof have been satisfied.
17
(g) On the date of this Agreement and on the Closing Date or any
Option Closing Date, as the case may be, Beard Miller Company LLP shall have
furnished to the Underwriter, at the request of the Company, letters, dated the
respective dates of delivery thereof and addressed to the Underwriters, in form
and substance reasonably satisfactory to the Underwriter, containing statements
and information of the type customarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and certain
financial information contained in the Registration Statement and the
Prospectus; provided, that the letter delivered on the Closing Date or the
Option Closing Date, as the case may be, shall use a "cut-off" date no more than
five business days prior to such Closing Date or such Option Closing Date, as
the case may be.
(h) All corporate and other proceedings and other matters incident
to the authorization and validity of this Agreement and the form of the
Registration Statement and Prospectus and all other legal matters related to
this Agreement and the transactions contemplated hereby shall be reasonably
satisfactory in all respects to counsel to the Underwriter. York Water shall
have furnished to such counsel all documents and information that they shall
have reasonably requested to enable them to pass upon such matters.
(i) The Shares shall have been authorized for quotation on the
Nasdaq National Market.
(j) At the Closing Date and any Option Closing Date, the Underwriter
shall have been furnished such additional documents, information and
certificates as they shall have reasonably requested.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are reasonably satisfactory
in form and substance to the Underwriter and the Underwriter's counsel. York
Water shall furnish the Underwriter with such conformed copies of such opinions,
certificates, letters and other documents as it shall reasonably request. If any
condition to the Underwriter's obligations hereunder to be fulfilled prior to or
at the Closing Date or any Option Closing Date, as the case may be, is not
fulfilled, the Underwriter may, terminate this Agreement with respect to the
Closing Date or such Option Closing Date, as applicable, or, if they so elect,
waive any such conditions which have not been fulfilled or extend the time for
their fulfillment. Any such termination shall be without liability of the
Underwriter to York Water.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) York Water shall indemnify and hold harmless the Underwriter,
and each person, if any, who controls the Underwriter within the meaning of the
Act, against any and all loss, liability, claim, damage and expense whatsoever,
including, but not limited to, any and all reasonable expenses incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever or in connection with any investigation or
inquiry of, or action or proceeding that may be brought against, the respective
indemnified parties, arising out of or based upon any breach of York Water's
representations and warranties made in this Agreement, any failure of the
documents incorporated by reference into the Prospectus pursuant to Item 12 of
Form S-3 under the Act, at the time they were filed with the
18
SEC, to comply in all material respects with the requirements of the Exchange
Act and the Regulations, or any untrue statements or alleged untrue statements
of material fact contained in any Preliminary Prospectus, the Registration
Statement or any Prospectus, or the omission or alleged omission from either any
such Preliminary Prospectus, Prospectus or the Registration Statement of a
material fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that the foregoing indemnity shall
not apply in respect of any statement or omission made in reliance upon and in
conformity with written information furnished to York Water by the Underwriter
expressly for use in any Preliminary Prospectus, the Registration Statement or
Prospectus, or any amendment or supplement thereto; and further provided,
however, that the indemnification contained in this Section 8(a) with respect to
any Preliminary Prospectus shall not inure to the benefit of the Underwriter (or
to the benefit of any person controlling the Underwriter) on account of any such
loss, claim, liability or expense arising from the sale of the Shares by such
Underwriter to any person if a copy of the Prospectus shall not have been
delivered or sent to such person within the time required by the Act and the
regulations thereunder, and the untrue statement or alleged untrue statement or
omission or alleged omission of a material fact contained in such Preliminary
Prospectus was corrected in the Prospectus, provided that York Water has
delivered the Prospectus to the Underwriter in requisite quantity on a timely
basis to permit such delivery or sending. The obligations of York Water under
this Section 8(a) will be in addition to any liability York Water may otherwise
have.
(b) The Underwriter shall indemnify and hold harmless York Water,
each of the directors of York Water, each of the officers of York Water who
shall have signed the Registration Statement, and each other person, if any, who
controls York Water within the meaning of the Act to the same extent as the
foregoing indemnities from York Water to the Underwriter, but only with respect
to any and all loss, liability, claim, damage or expense resulting from
statements or omissions, or alleged statements or omissions, if any, made in any
Preliminary Prospectus, Registration Statement or Prospectus or any amendment or
supplement thereof in reliance upon, and in conformity with written information
furnished to York Water by the Underwriter expressly for use in any Preliminary
Prospectus, the Registration Statement or Prospectus or any amendment or
supplement thereof. The obligations of the Underwriter under this Section 8(b)
will be in addition to any liability which the Underwriter may otherwise have.
(c) If any action, inquiry, investigation or proceeding is brought
against any person in respect of which indemnification may be sought pursuant to
Section 8(a) or (b) hereof, such person (hereinafter called the "indemnified
party") shall, promptly after formal notification of, or receipt of service of
process for, such action, inquiry, investigation or proceeding, notify in
writing the party or parties against whom indemnification is to be sought
(hereinafter called the "indemnifying party") of the institution of such action,
inquiry, investigation or proceeding. The indemnifying party, upon the request
of the indemnified party, shall assume the defense of such action, inquiry,
investigation or proceeding, including, without limitation, the employment of
counsel and payment of expenses. No indemnification provided for in this Section
8 shall be available to any indemnified party who shall fail to give such notice
if the indemnifying party does not have knowledge of such action, inquiry,
investigation or proceeding and such indemnifying party has been materially
prejudiced by the failure to give such notice, but the omission to so notify the
indemnifying party shall not relieve the indemnifying party otherwise than under
this Section 8. Such indemnified party shall have the right to employ its or
their own
19
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of such indemnified party unless the employment of such counsel
shall have been authorized in writing by the indemnifying party in connection
with the defense of such action or if the indemnifying party shall not have,
within a reasonable period of time in light of the circumstances, employed
counsel to have charge of the defense if such action, inquiry, investigation or
proceeding or if such indemnified party or parties shall have been advised by
counsel that there may be a conflict between the positions of the indemnifying
party or parties and of the indemnified party or parties or that there may be
legal defenses available to such indemnified party or parties different from or
in addition to those available to the indemnifying party or parties, in any of
which events the indemnified party or parties shall be entitled to select
counsel to conduct the defense to the extent determined by such counsel to be
necessary to protect the interests of the indemnified party or parties, and the
reasonable fees and expenses of such counsel shall be borne by the indemnifying
party. The indemnifying party shall be responsible for the fees and
disbursements of only one such counsel so engaged by the indemnified party or
parties as a group. Expenses covered by the indemnification in this Section 8,
as the case may be, shall be paid by the indemnifying party as they are incurred
by the indemnified party. In the event that it is determined that the
indemnified party was not entitled to receive payments for expenses pursuant to
this Section 8, the indemnified party shall return all sums that have been paid
pursuant hereto. No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or threatened
action in respect of which any indemnified party is or could have been a party
and indemnity could have been sought hereunder by such indemnified party unless
such settlement includes an unconditional release of such indemnified party from
all liability on any claims that are the subject matter of such action. Anything
in this Section 8 or Section 9 to the contrary notwithstanding an indemnifying
party shall not be liable for any settlement of a claim effected without its
written consent, which consent shall not be unreasonably withheld.
(d) If the indemnification provided for in this Section 8 is
unavailable or insufficient to hold harmless an indemnified party under Section
8(a) or (b) hereof in respect of any losses, liabilities, claims, damages or
expenses (or actions, inquiries, investigations or proceedings in respect
thereof) referred to therein, except by reason of the failure to give notice as
required in Section 8(c) hereof (provided that the indemnifying party does not
have knowledge of the action, inquiry, investigation or proceeding and to the
extent such party has been materially prejudiced by the failure to give such
notice), then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, liabilities,
claims, damages or expenses (or actions, inquiries, investigations or
proceedings in respect thereof in such proportion as is appropriate to reflect
the relative benefits received by York Water on the one hand and the Underwriter
on the other from the offering of the Shares. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law, then each indemnifying party shall contribute to such amount paid or
payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of York
Water on the one hand and the Underwriter on the other in connection with the
statements or omissions which resulted in such losses, liabilities, claims or
expenses (or actions, inquiries, investigations or proceedings in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by York Water on the one hand and the Underwriter on the other
shall be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by
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York Water bears to the total underwriting discount and commissions received by
the Underwriter, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by York Water on the one hand or the Underwriter on the other hand and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
York Water and the Underwriter agree that it would not be just and
equitable if contributions to this Section 8(d) were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to above in this Section 8(d). The amount
paid or payable by an indemnified party as a result of the losses, liabilities,
claims, damages or expenses (or actions, inquiries, investigations or
proceedings in respect thereof) referred to above in this Section 8(d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 8(d), (i) the
Underwriter shall not be required to contribute any amount in excess of the
underwriting discounts and commissions applicable to the Shares purchased by the
Underwriter, and (ii) no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
9. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. Except as the
context otherwise requires, all representations, warranties and agreements
contained in this Agreement shall be deemed to be representations, warranties
and agreements at the Closing Date and any Option Closing Date. All such
representations, warranties and agreements of the Underwriter and York Water,
including, without limitation, the indemnity and contribution agreements
contained in Section 8 hereof and the agreements contained in Sections 6, 9 and
10 hereof, shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Underwriter or any controlling person,
and shall survive delivery of the Shares and termination of this Agreement,
whether before or after the Closing Date or any Option Closing Date.
10. EFFECTIVE DATE OF THIS AGREEMENT AND TERMINATION HEREOF. This
Agreement shall become effective when the parties hereto have executed and
delivered this Agreement. The Underwriter shall have the right to terminate this
Agreement at any time prior to the Closing Date or any Option Closing Date if
any of the following have occurred: (a) since the respective dates as of which
information is given in the Registration Statement and the Prospectus, any
material adverse change or any development involving a prospective material
adverse change in or affecting the Business Conditions of York Water, whether or
not arising in the ordinary course of business, that would, in the Underwriter's
opinion, make the offering or delivery of the Shares impracticable; (b) any
outbreak of hostilities or other national or international calamity or crisis or
change in economic, political or financial market conditions if the effect on
the financial markets of the United States of such outbreak, calamity, crisis or
change would, in the Underwriter's opinion, make the offering or delivery of the
Shares impracticable; (c) any suspension or limitation of trading generally in
securities on the New York Stock Exchange, the American Stock Exchange or the
Nasdaq National Market or any setting of minimum prices for
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trading; (d) the enactment, publication, decree or other promulgation of any
federal or state statute, regulation, rule or order of any court or other
governmental authority which in the Underwriter's opinion materially and
adversely affects or will materially or adversely affect the Business Conditions
of York Water ; (e) declaration of a banking moratorium by the United States,
New York or Pennsylvania authorities; (f) the taking of any action by any
federal, state or local government or agency in respect of its monetary or
fiscal affairs that in the Underwriter's opinion has a material adverse effect
on the securities markets in the United States; or (g) trading in any securities
of York Water shall have been suspended or halted by NASD or the SEC.
11. INFORMATION FURNISHED BY THE UNDERWRITER. The date the Underwriter
expects to deliver the Firm Shares on the cover page, the identity of the
Underwriter set forth on the cover page and in the first paragraph under the
heading "Underwriting," the third paragraph under the caption "Underwriting"
regarding concessions and reallowances, the disclosure with respect to
stabilization activities in the eighth paragraph under the heading
"Underwriting," the ninth paragraph under the heading "Underwriting" regarding
short sales, the tenth paragraph under the heading "Underwriting" regarding
passive market making, the representations of the Underwriter in the eleventh
paragraph under the heading "Underwriting" and the statement regarding
discretionary authority in the twelfth paragraph under the heading
"Underwriting" constitute the only written information furnished by reference or
on behalf of the Underwriter referred to in Sections 1(b) and 8 hereof.
12. NOTICE. All communications hereunder, except as herein otherwise
specifically provided, shall be in writing and, if sent to the Underwriter,
shall be mailed, delivered, telexed, telegrammed, telegraphed or telecopied and
confirmed to Janney Montgomery Scott LLC, 1801 Market Street, Philadelphia,
Pennsylvania 19103, Attention: Mr. William L. Rulon-Miller, facsimile number
(215) 665-6197, with a copy to Ballard Spahr Andrews & Ingersoll, LLP, 1735
Market Street, Philadelphia, Pennsylvania 19103, Attention: Justin P. Klein,
Esquire, facsimile number (215) 864-8999; and if sent to York Water, shall be
mailed, delivered, telexed, telegrammed, telegraphed or telecopied and
confirmed to The York Water Company, 130 East Market Street, York, Pennsylvania
17401, Attention: Jeffrey Osman, facsimile number (717) 852-0058, with a copy
to Morgan, Lewis & Bockius LLP, 1701 Market Street, Philadelphia, PA 19103,
Attention: Howard L. Meyers, Esquire, facsimile number (215) 963-5001.
13. PARTIES. This Agreement shall inure solely to the benefit of, and
shall be binding upon, the Underwriter, York Water and the controlling persons,
directors and officers thereof, and their respective successors, assigns, heirs
and legal representatives, and no other person shall have or be construed to
have any legal or equitable right, remedy or claim under or in respect of or by
virtue of this Agreement or any provision herein contained. The terms
"successors" and "assigns" shall not include any purchaser of the Shares merely
because of such purchase.
14. DEFINITION OF BUSINESS DAY. For purposes of this Agreement, "business
day" means any day on which the Nasdaq National Market is opened for trading.
15. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and all such counterparts will constitute one and the same
instrument.
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16. CONSTRUCTION. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania applicable to
agreements made and performed entirely within such Commonwealth.
23
If the foregoing correctly sets forth your understanding of our
agreement, please sign and return to York Water the enclosed duplicate hereof,
whereupon it will become a binding agreement in accordance with its terms.
Very truly yours,
THE YORK WATER COMPANY
By: /s/ Jeffrey S. Osman
---------------------------
Jeffrey S. Osman
President and Chief Executive Officer
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
JANNEY MONTGOMERY SCOTT LLC
By:/s/ John Chuff
----------------------------------
Name: John Chuff
Title: Executive Vice President and Director
of Equity Capital Markets
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SCHEDULE I
Jeffery S. Osman
Kathleen M. Miller
Vernon L. Bracey
Duane R. Close
Jeffrey R. Hines, P.E.
Bruce C. McIntosh
William T. Morris, P.E.
Irvin S. Naylor
Chloe R. Eichelberger
John L. Finlayson
Michael W. Gang
George W. Hodges
George Hay Kain, III
Thomas C. Norris
S-I
EXHIBIT A
Matters to be Covered in the Opinion of
Morgan, Lewis & Bockius LLP
Counsel for York Water
1. York Water is validly subsisting as a corporation under the laws
of the Commonwealth of Pennsylvania with corporate power and authority to own
its properties and conduct its business as described in the Prospectus.
2. York Water has authorized and outstanding capital stock as set
forth in the Prospectus and the authorized shares of Common Stock have been duly
authorized. All of the Shares conform to the description thereof contained in
the Prospectus. Certificates for the Shares are in due and proper form under the
PBCL. The Shares have been duly authorized by York Water and will be validly
issued, fully paid and non-assessable when issued and sold by York Water to, and
paid for by, the Underwriter in accordance with the terms of the Underwriting
Agreement,; and no preemptive rights of shareholders, by operation of law, or to
the knowledge of such counsel, by contract exists with respect to any of the
Shares or the issue and sale thereof.
3. The Registration Statement has become effective under the Act,
and, to our knowledge, no stop order proceedings with respect thereto have been
instituted or are pending or threatened under the Act.
4. The Registration Statement and the Prospectus and each amendment
or supplement thereto, comply as to form in all material respects with the
requirements of the Act, as applicable, and the applicable rules and regulations
thereunder (except that such counsel need express no opinion as to the financial
statements, schedules, notes, other financial, accounting or statistical data
and information about internal controls over financial reporting included or
incorporated by reference therein).
5. The statements set forth under the caption "Description of
Capital Stock" in the Prospectus, insofar as such statements purport to
summarize certain provisions of the articles of incorporation and bylaws of York
Water, provide a fair summary of such provisions in all material respects.
6. To such counsel's knowledge, there are no contracts, licenses,
agreements, leases or documents of a character that are required to be filed as
exhibits to the Registration Statement, or to be summarized or described in the
Prospectus, which have not been so filed, summarized, or described.
7. To such counsel's knowledge, there are no legal proceedings
pending or threatened against York Water before or by any federal or state
governmental or regulatory commission, board, body, authority or agency that are
required to be described in the Prospectus and that are not so described as
required.
8. This Agreement has been duly authorized, executed and delivered
by York Water, and, assuming due execution by the Underwriter, is a valid and
binding obligation of
A-1
York Water enforceable against York Water in accordance with its terms, except
as enforcement of rights to indemnity and contribution thereunder may be limited
by federal or state securities laws or principles of public policy, and subject
to the qualification that the enforceability of obligations of the Company
thereunder may be limited by bankruptcy, insolvency, fraudulent conveyance and
similar laws affecting rights and remedies of creditors generally, and by
general principles of equity. The execution and delivery of this Agreement and
the consummation of the transactions herein contemplated do not and will not
result in a breach of, or constitute a default under (nor constitute any event
that, with notice, lapse of time, or both, would result in any breach of or
default under), or conflict with the provision of the articles of incorporation
or bylaws of York Water, or any provision of any agreement or instrument filed
as an exhibit to, or incorporated by reference in, the Registration Statement.
9. No consent, authorization, approval or order of or filing with
any federal or state governmental or regulatory commission, board, body,
authority or agency is required to be obtained or made by York Water in
connection with the issuance and sale of the Shares, and the consummation by
York Water of the transactions contemplated by this Agreement, other than such
as have previously been obtained, including, without limitation, registration of
the Shares under the Securities Act and of the Common Stock under the Exchange
Act and the issuance of a Securities Certificate by the Pennsylvania Public
Utility Commission; provided, however, that such counsel need express no opinion
as to (a) state securities or blue sky laws or foreign securities laws of the
various jurisdictions in which the Shares are being offered by the underwriters
thereof, and (b) the approval by the National Association of Securities Dealers
of the terms and conditions of this Agreement.
10. York Water is not and, after giving effect to the offering and
sale of the Shares, will not be, an "investment company," as such term is
defined in the Investment Company Act of 1940, as amended.
11. There is no further Pennsylvania governmental approval in the
nature of a franchise for service territory presently necessary in order for
York Water to provide service as a regulated public water utility within the
territory defined by (and subject to the terms of) the Certificates of Public
Convenience which have been issued to York Water by the Pennsylvania Public
Utility Commission. There is no further Pennsylvania governmental approval
required, other than such approval obtained from the Pennsylvania Public Utility
Commission, for York Water to issue and sell the Shares.
12. The conditions to the use of Form S-3 by the Company have been
satisfied.
13. Such opinion shall also include a statement to the effect that
such counsel has participated in conferences with officers and other
representatives of York Water, representatives of the Underwriter and its
counsel, and representatives of the independent public accountants of York
Water, at which conferences the contents of the Registration Statement and the
Prospectus were discussed. Although such counsel is not passing upon and does
not assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus, on the
basis of the foregoing and the information disclosed to such counsel, but
without independent check and verification, and relying as to
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materiality on representations and statements of officers and other
representatives of York Water, such counsel will confirm to you that no fact
came to the attention of those lawyers at such firm who have participated in the
preparation of the Registration Statement and the Prospectus that would lead
such counsel to have reason to believe that the Registration Statement, or any
post-effective amendment thereto, as of the time it was declared effective,
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 not misleading, or that the Prospectus, as of its date and on
the Closing Date or Option Closing Date, as the case may be, contained or
contains any untrue statement of material fact, or omitted or omits to state any
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; except that such counsel need express any belief with respect to the
financial statements, schedules, notes, other financial, accounting or
statistical data or information about internal controls over financial reporting
included in, or incorporated by reference into, the Registration Statement or
the Prospectus.
The foregoing opinion may be limited to the laws of the United
States and the laws of the Commonwealth of Pennsylvania. Such counsel may rely
as to questions of fact upon the representations of York Water set forth in this
Agreement and upon certificates of officers of York Water and of government
officials, all of which certificates must be satisfactory in form and scope to
counsel for the Underwriter.
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