EXHIBIT 10.31
BOND PURCHASE AGREEMENT
$14,000,000
NORTHUMBERLAND COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY
WATER FACILITIES REVENUE REFUNDING BONDS
(AQUA PENNSYLVANIA, INC. PROJECT)
SERIES OF 2004
Bond Purchase Agreement dated November 16, 2004, among the
NORTHUMBERLAND COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY (the "Authority"), AQUA
PENNSYLVANIA, INC., a Pennsylvania corporation (the "Company"), and SOVEREIGN
SECURITIES CORPORATION, LLC, a Pennsylvania limited liability company, (the
"Underwriter").
1. BACKGROUND.
(a) The Authority proposes to enter into a Financing
Agreement (the "Financing Agreement") dated as of November 15, 2004 with the
Company, under which the Authority will agree to loan to the Company funds to
currently refund (the " Project") the Authority's Exempt Facilities Revenue
Bonds (Roaring Creek Water Company Project) Series of 1993 (the "1993 Bonds"),
which were issued to finance the construction of an eight (8) million gallon per
day treatment facility, an interconnecting water main, and laboratory and
service facilities, located in Northumberland and Columbia Counties
(collectively, the "Facilities") and pay all costs of issuance of the 1993
Bonds. To finance the loan under the Financing Agreement, the Authority proposes
to issue and sell $14,000,000 aggregate principal amount of Northumberland
County Industrial Development Authority Water Facilities Revenue Refunding
Bonds, (Aqua Pennsylvania, Inc. Project) Series of 2004 (the "2004 Bonds") to
the Underwriter, who will in turn reoffer the 2004 Bonds for sale to the public.
(b) The 2004 Bonds will be issued pursuant to the
Pennsylvania Economic Development Financing Law, Act of August 23, 1967, P.L.
251, as amended and supplemented (the "Act"), resolutions adopted by the
Authority on September 20, 2004 (the "Authority Resolution") and under a Trust
Indenture dated as of November 15, 2004 (the "Trust Indenture"), between the
Authority and Wachovia Bank, National Association, as trustee (the "Trustee").
The 2004 Bonds will have such terms as are set forth in Schedule I attached
hereto.
The 2004 Bonds will be payable out of payments by the Company
under the Financing Agreement, including payments under its First Mortgage Bond
issued with respect to the 2004 Bonds in the principal amount of $14,000,000
(the "First Mortgage Bond"). The First Mortgage Bond will be issued under and
secured by the Company's Indenture of Mortgage dated as of January 1, 1941 (the
"Indenture of Mortgage"), from the Company to ▇.▇. ▇▇▇▇▇▇ Trust Company,
National Association, as trustee (successor to The Pennsylvania Company for
Insurance on Lives and Granting Annuities, The Pennsylvania Company for Banking
and Trusts, The First Pennsylvania Banking and Trust Company, First Pennsylvania
Bank, N.A., CoreStates Bank, N.A., Mellon Bank, N.A. and Chase Manhattan Trust
Company, National Association)
(the "Mortgage Trustee"), as presently amended and supplemented and as to be
further supplemented by a Thirty-Eighth Supplemental Indenture of Mortgage to be
dated as of November 15, 2004 (the "Thirty-Eighth Supplemental Mortgage," which
together with the Indenture of Mortgage, as amended and supplemented, is
referred to hereinafter as the "Mortgage"). The First Mortgage Bond will be
issued in the same principal amount and will mature on the date and bear
interest at the rate of the 2004 Bonds that it secures. All of the Authority's
rights under the Financing Agreement to receive and enforce repayment of its
loan to the Company and to enforce payment of the 2004 Bonds, including all of
the Authority's rights to the First Mortgage Bond, and all of the Authority's
rights to moneys and securities in the Project Fund, the Revenue Fund and the
Debt Service Fund (and the accounts within all such Funds applicable to the 2004
Bonds) established by the Trust Indenture, except for the Authority's rights to
certain fees and reimbursements for expenses, indemnification and notice
thereunder and rights relating to amendments of and notices under the Financing
Agreement, will be assigned to the Trustee as security for the 2004 Bonds
pursuant to the Trust Indenture.
(c) The Project will refinance the acquisition,
construction, installation and equipping of facilities for the furnishing of
water for purposes of Section 142(a)(4) of the Internal Revenue Code of 1986, as
amended (the "Code"), so that the interest on the Bonds will not be includable
in gross income for federal income tax purposes under the Code and the
Underwriter may offer the 2004 Bonds for sale without registration under the
Securities Act of 1933, as amended (the "1933 Act) or qualification of the Trust
Indenture under the Trust Indenture Act of 1939, as amended (the "1939 Act").
(d) A Preliminary Official Statement dated November 9, 2004,
including theAppendices thereto and all documents incorporated therein by
reference (the "Preliminary Official Statement"), has been supplied to the
parties hereto, and a final Official Statement to be dated as of the date
hereof, including the Appendices thereto and all documents incorporated therein
by reference, prepared for use in such offerings will be supplied to the parties
hereto as soon as it is available, subject to Section 10 hereof (such final
Official Statement, as it may be amended or supplemented with the consent of the
Authority, the Underwriter and the Company, is hereinafter referred to as the
"Official Statement").
2. PURCHASE, SALE AND CLOSING. On the terms and conditions herein
set forth, the Underwriter will buy from the Authority, and the Authority will
sell to the Underwriter, all (but not less than all) of the 2004 Bonds at a
purchase price equal to $14,000,000, consisting of the aggregate principal
amount of the 2004 Bonds. The Underwriter will be paid an Underwriting fee of
$210,000.00 by the Company for its services rendered under this Agreement.
Payment shall be made in immediately available funds to the Trustee for the
account of the Authority. Closing (the "Closing") will be at the offices of
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP, Philadelphia, Pennsylvania bond counsel,
at 10:00 a.m., Eastern Daylight Time, on November 30, 2004 or at such other
date, time or place or in such other manner as may be agreed on by the parties
hereto. The 2004 Bonds will be delivered as a single, fully registered Bond, in
the aggregate principal amount of the Bonds for in the name of Cede & Co., as
nominee for The Depository Trust Company ("DTC"), with a CUSIP number printed
thereon, and shall conform in all respects to DTC's Book-Entry Only System.
Delivery of the 2004 Bonds will be made at the office of DTC in New York, New
York (or such other location as is acceptable to the Underwriter). If the
Underwriter so requests, the 2004 Bonds shall be made available to the
Underwriter (prior to their delivery to DTC) in Philadelphia, Pennsylvania at
least three full business days before the Closing for purposes of inspection.
The Underwriter agrees to make a bona fide public offering of the 2004
Bonds at the initial offering prices or yields set forth in the Official
Statement; provided, however, that the Underwriter reserves the right (and the
Authority and the Company hereby expressly acknowledge such right): (i) to make
concessions to dealers; (ii) to effect transactions that stabilize or maintain
the market price of the 2004 Bonds above that which might otherwise prevail in
the open market and to discontinue at any time such stabilizing transactions;
and (iii) to change such initial offering prices, all as the Underwriter shall
deem necessary in connection with the marketing of the 2004 Bonds.
3. AUTHORITY'S REPRESENTATIONS AND WARRANTIES. The Authority makes
the following representations and warranties, all of which shall survive
Closing; that:
(a) The Authority is a body politic and corporate, duly
created and existing under the Constitution and laws of the Commonwealth of
Pennsylvania (the "Commonwealth"), and has, and at the date of Closing will
have, full legal right, power and authority to: (i) enter into this Bond
Purchase Agreement; (ii) execute and deliver the 2004 Bonds, the Trust
Indenture, the Financing Agreement, and the Authority's tax certificate and the
other various certificates executed by the Authority in connection therewith
(collectively, with the Authority Resolution, the "Authority Financing
Documents"); (iii) issue, sell and deliver the 2004 Bonds to the Underwriter as
provided herein; and (iv) carry out and consummate the transactions contemplated
by the Authority Financing Documents and the Official Statement to be carried
out and/or consummated by it;
(b) The Authority Resolution was duly adopted at a public
meeting of the Authority at which a quorum was present and acted throughout; and
the Authority Resolution is in full force and effect and has not been amended,
repealed or superseded in any way.
(c) The sections entitled "INTRODUCTORY STATEMENT" (insofar
as it relates to the Authority) and "THE AUTHORITY" contained in the Preliminary
Official Statement as of its date did not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements contained therein, in the light of
the circumstances under which they were made, not misleading;
(d) The sections entitled "INTRODUCTORY STATEMENT" (insofar
as it relates to the Authority) and "THE AUTHORITY" contained in the Official
Statement as of its date does not or will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements contained therein, in the light of
the circumstances under which they were made, not misleading;
(e) The Authority has complied, and will at the Closing be
in compliance, in all material respects with the provisions of the Act;
(f) To the extent required by law, the Authority has duly
authorized and approved the Preliminary Official Statement and the Official
Statement; and has duly authorized
and approved the execution and delivery of, and the performance by the Authority
of the obligations on its part contained in, the Authority Financing Documents;
(g) To the best of the knowledge of the officer of the
Authority executing this Bond Purchase Agreement, the Authority is not in
material breach of or in default under any applicable law or administrative
regulation of the Commonwealth or the United States; and the execution and
delivery of the Authority Financing Documents, and compliance with the
provisions of each thereof, do not and will not conflict with or constitute a
breach of or default under any existing law, administrative regulation,
judgment, decree, loan agreement, note, resolution, agreement or other
instrument to which the Authority is a party or is otherwise subject;
(h) All approvals, consents and orders of any governmental
authority, board, agency or commission having jurisdiction that would constitute
a condition precedent to the Authority's legal ability to issue the 2004 Bonds
or to the Authority's performance of its obligations hereunder and under the
Authority Financing Documents have been obtained or will be obtained prior to
the Closing;
(i) The 2004 Bonds, when issued, authenticated and delivered
in accordance with the Trust Indenture and sold to the Underwriter as provided
herein, will be validly issued and will be valid and binding limited obligations
of the Authority enforceable against the Authority in accordance with their
terms (except as enforcement of remedies may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws or legal or equitable
principles affecting the enforcement of creditors' rights ("Creditors' Rights
Limitations"));
(j) The terms and provisions of the Authority Financing
Documents when executed and delivered by the respective parties thereto will
constitute the valid, legal and binding obligations of the Authority enforceable
against the Authority in accordance with their respective terms (except as
enforcement of remedies may be limited by Creditors' Rights Limitations);
(k) There is no action, suit, proceeding, inquiry or
investigation, at law or in equity, before or by any court, or public board or
body, pending or, to the knowledge of the Authority after due inquiry,
threatened against the Authority, affecting the existence of the Authority or
the titles of its officers to their respective offices or seeking to prohibit,
restrain or enjoin the sale, issuance or delivery of the 2004 Bonds or of the
revenues or assets of the Authority pledged or to be pledged to pay the
principal of and interest on the 2004 Bonds, or the pledge thereof, or in any
way contesting or affecting the validity or enforceability of the Authority
Financing Documents or contesting in any way the completeness or accuracy of the
Preliminary Official Statement or the Official Statement, or contesting the
power or authority of the Authority with respect to the issuance of the 2004
Bonds or the execution, delivery or performance of any of the Authority
Financing Documents, wherein an unfavorable decision, ruling or finding would
affect in any way the validity or enforceability of any of the Authority
Financing Documents;
(l) The net proceeds received from the 2004 Bonds and
applied in accordance with the Trust Indenture and Financing Agreement shall be
used in accordance with the Act as described in the Official Statement;
(m) The Authority has not been notified of any listing or
proposed listing by the Internal Revenue Service to the effect that the
Authority is a bond issuer whose arbitrage certifications may not be relied
upon; and
(n) Any certificate signed by any of the authorized officers
of the Authority and delivered to the Underwriter shall be deemed a
representation and warranty by the Authority to the Underwriter as to the
statements made therein.
4. COMPANY'S REPRESENTATIONS AND WARRANTIES. The Company makes the
following representations and warranties, all of which will survive the Closing:
(a) The Company has not sustained since September 30, 2004
any material loss or interference with its business from fire, explosion, flood
or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree; and since the
respective dates as of which information is given in the Official Statement,
there have not been any material changes in the outstanding capital stock or the
long-term debt of the Company or any material adverse change, or a development
involving a prospective material adverse change, in or affecting the general
affairs, management, financial position, stockholders' equity or results of
operations of the Company, otherwise than as set forth or contemplated in the
Official Statement.
(b) The Company was organized, is in good standing and
subsists as a corporation under the laws of the Commonwealth, with power
(corporate and other) to own its properties and conduct its business as
described in the Official Statement.
(c) Each First Mortgage Bond has been duly authorized; and,
when issued and delivered as contemplated by this Bond Purchase Agreement, will
have been duly executed, authenticated, issued and delivered and will constitute
a valid and legally binding obligation of the Company entitled to the benefits
provided by the Mortgage.
(d) The Original Indenture has been duly authorized,
executed and delivered by the Company, and the Thirty-Eighth Supplemental
Mortgage has been duly authorized by the Company. When the Thirty-Eighth
Supplemental Mortgage, in substantially the form approved by the Company, has
been executed and delivered by the Company and assuming due authorization and
execution by the Mortgage Trustee, and recorded as required by law, the Mortgage
(i) will constitute a valid and legally binding instrument enforceable against
the Company in accordance with its terms except as enforceability may be limited
by Creditors' Rights Limitations; (ii) will constitute a direct, valid and
enforceable first mortgage lien (except as enforceability of such lien may be
limited by Creditors' Rights Limitations) upon all of the properties and assets
of the Company (not heretofore released as provided for in the Mortgage)
specifically or generally described or referred to in the Mortgage as being
subject to the lien thereof, excepting permitted liens under the Mortgage and
excepting property and assets that the Mortgage expressly excludes from the lien
thereof; and (iii) and will create a mortgage upon all
properties and assets acquired by the Company after the execution and delivery
of the Thirty-Eighth Supplemental Mortgage and required to be subjected to the
lien of the Mortgage pursuant thereto when so acquired, except for permitted
liens under the Mortgage. The Original Indenture has been and the Thirty-Eighth
Supplemental Mortgage will be duly filed, recorded or registered in each place
in the Commonwealth in which such filing, recording or registration was or is
required to protect and preserve the lien of the Mortgage; and all necessary
approvals of regulatory authorities, commissions and other governmental bodies
having jurisdiction over the Company required to subject the mortgaged
properties and assets or trust estate (as defined in the Mortgage) to the lien
of the Mortgage have been duly obtained.
(e) In each of the following cases with such exceptions as
are not material and do not interfere with the conduct of the business of the
Company, the Company has good and marketable title to (i) all of its real
property currently held in fee simple; and (ii) all of its other interests in
real property (other than certain rights of way, easements, occupancy rights,
riparian and flowage rights, licenses, leaseholds, and real property interests
of a similar nature). In each case such title is free and clear of all liens,
encumbrances and defects except such as may be described in the Official
Statement, the lien of the Mortgage, permitted liens under the Mortgage or such
as do not materially affect the value of such property and do not interfere with
the use made and proposed to be made of such property by the Company. Any real
property and buildings held under lease by the Company are held by it under
valid, subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made of such
property and buildings by the Company.
(f) In each of the following cases except for such
exceptions that are not material and do not interfere with the conduct of the
business of the Company, the Company has all licenses, franchises, permits,
authorizations, rights, approvals, consents and orders of all governmental
authorities or agencies necessary for the ownership or lease of the properties
owned or leased by it and for the operation of the business carried on by it as
described in the Official Statement, and all water rights, riparian rights,
easements, rights of way and other similar interests and rights described or
referred to in the Mortgage necessary for the operation of the business carried
on by it as described in the Official Statement. Except as otherwise set forth
in the Official Statement, all such licenses, franchises, permits, orders,
authorizations, rights, approvals and consents are in full force and effect and
contain no unduly burdensome provisions; except as otherwise set forth in the
Official Statement, there are no legal or governmental proceedings pending or,
to its knowledge after due inquiry, threatened that would result in a material
modification, suspension or revocation thereof. The Company has the legal power
to exercise the rights of eminent domain for the purposes of conducting its
water utility operations.
(g) The issue and sale of the 2004 Bonds, the issue and
delivery of the First Mortgage Bond and the compliance by the Company with all
of the applicable provisions of the First Mortgage Bond and the Mortgage and the
execution, delivery and performance by the Company of the Thirty-Eighth
Supplemental Mortgage, the Financing Agreement, this Bond Purchase Agreement and
the Continuing Disclosure Agreement will not conflict with or result in a breach
of any of the terms or provisions of, or constitute a default under, or result
in the creation or imposition of any lien, charge or encumbrance (other than the
lien of the Mortgage) upon any of the property or assets of the Company pursuant
to the terms of any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company
is a party or by which the Company is bound or to which any of the property or
assets of the Company are subject, nor will such action result in a violation of
the provisions of the Articles of Incorporation, as amended, or the Bylaws of
the Company or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of its
property. No consent, approval, authorization, order, registration or
qualification of or with any court or any such regulatory authority or other
governmental body (other than those already obtained) is required for the issue
and sale of the 2004 Bonds, the issue and delivery of the First Mortgage Bond,
the execution, delivery and performance by the Company of this Bond Purchase
Agreement, the Financing Agreement, the Thirty-Eighth Supplemental Mortgage, the
First Mortgage Bond and the Continuing Disclosure Agreement, or the consummation
by the Company of the other transactions contemplated by this Bond Purchase
Agreement or the Mortgage.
(h) The Pennsylvania Public Utility Commission by order has
duly authorized the issuance and delivery of the First Mortgage Bond on terms
not inconsistent with this Bond Purchase Agreement.
(i) The Company is not a holding company, a registered
holding company or an affiliate of a registered holding company within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
(j) There are no legal or governmental proceedings pending
to which the Company is a party or to which any property of the Company is
subject, other than as set forth in the Official Statement and other than
litigation incident to the kind of business conducted by the Company, wherein an
unfavorable ruling, decision or finding is likely that would have a material
adverse effect on the financial position, stockholders' equity or results of
operations of the Company; and, to the best of the Company's knowledge after due
diligence, no such proceedings are threatened by governmental authorities or
threatened by others.
(k) (i) The Project consists of either land or property of a
character subject to depreciation for federal income tax purposes and will be
used to furnish water that is or will be made available to members of the
general public (including electric utility, industrial, agricultural, or
commercial users); (ii) the rates for the furnishing or sale of the water have
been established or approved by a State or political subdivision thereof, by an
agency or instrumentality of the United States, or by a public service or public
utility commission or other similar body of any State or political subdivision
thereof; and (iii) all other information supplied by the Company to the
Underwriter with respect to the exclusion from gross income pursuant to Section
103 of the Code of the interest on the 2004 Bonds is correct and complete;
(l) The Company has not, within the immediately preceding
ten (10) years, defaulted in the payment of principal or interest on any of its
bonds, notes or other securities, or any legally authorized obligation issued by
it; and
(m) The information with respect to the Company and the
Project and the descriptions of the First Mortgage Bond and the Mortgage
contained in the Preliminary Official Statement and the Official Statement
(including appendices A and B thereto) do not contain an untrue statement of a
material fact or omit to state a material fact necessary to make such
information and descriptions, in the light of the circumstances under which they
were made, not misleading.
5. AUTHORITY'S COVENANTS. The Authority will:
(a) furnish such information, execute such instruments and
take such other action in cooperation with the Underwriter as the Underwriter
may reasonably request to qualify the 2004 Bonds for offer and sale under the
Blue Sky or other securities laws and regulations of such states and other
jurisdictions in the United States of America as the Underwriter may designate
and will assist, if necessary therefor, in the continuance of such
qualifications in effect so long as required for distribution of the 2004 Bonds;
provided, however, that the Authority shall in no event be required to file a
general consent to suit or service of process or to qualify as a foreign
corporation or as a dealer in securities in any such state or other
jurisdiction;
(b) not, on its part, amend or supplement the Official
Statement without prior notice to and the consent of the Underwriter and the
Company and will advise the Underwriter and the Company promptly of the
institution of any proceedings by any governmental agency or otherwise affecting
the use of the Official Statement in connection with the offer and sale of the
2004 Bonds; and
(c) refrain from knowingly taking any action (and permitting
any action with regard to which the Authority may exercise control) which would
result in the loss of the exclusion from gross income for federal income tax
purposes of interest on the 2004 Bonds referred to under the caption "TAX
MATTERS" in the Official Statement.
6. COMPANY'S COVENANTS. The Company agrees that it will:
(a) refrain from knowingly taking any actions (and from
permitting any action; with regard to which the Company may exercise control)
that would result in the loss of the exclusion from gross income for federal tax
purposes of interest on the 2004 Bonds;
(b) indemnify and hold harmless the Authority, its members,
directors, officers, agents, attorneys, and employees and the Underwriter, its
officers, directors, officials, agents, attorneys, employees, and each person,
if any, who controls the Underwriter within the meaning of Section 15 of the
1933 Act or Section 20 of the Securities Exchange Act of 1934, as amended (the
"1934 Act"), from and against all losses, claims, damages, liabilities and
expenses, joint or several, to which the Authority and the Underwriter, or
either of them, or any of their respective members, directors, officers, agents,
attorneys, and employees and each person, if any, who controls the Underwriter
within the meaning of the 1933 Act or 1934 Act as aforedescribed may become
subject, under federal laws or regulations, or otherwise, insofar as such
losses, claims, damages, liabilities and expenses (or actions in respect
thereof) arise out of or are based upon: (i) a breach of the Company's
representations included in this Agreement; (ii) any untrue statement or alleged
untrue statement of any material fact pertaining to the Project or the Company
set forth in the Official Statement, the Preliminary Official Statement or any
amendment to either, or (iii) the willful or negligent omission of (or the
alleged omission to state) a material fact in the Official Statement, in the
Preliminary Official Statement, or in any amendment or supplement to either, as
such fact is required to be stated therein or necessary to
make the statements therein that pertain to the Company or the Project not
misleading in the light of the circumstances under which they were made, or (iv)
arising by virtue of the failure to register the 2004 Bonds under the 1933 Act
or the failure to qualify the Indenture under the 1939 Act;
(c) undertake, pursuant to the Continuing Disclosure
Agreement dated November 15, 2004 to be entered into between the Company and the
Trustee (the "Continuing Disclosure Agreement"), to provide annual reports and
notices of certain material events in accordance with Rule 15c2-12 under the
1934 Act, as amended ("Rule 15c2-12"). A description of this undertaking and the
Continuing Disclosure Agreement is set forth in the Preliminary Official
Statement and will also be set forth in the Final Official Statement; and
(d) not amend or supplement the Official Statement without
prior notice to, and the consent of, the Underwriter, and will advise the
Underwriter and the Authority promptly of the institution of any proceedings by
any governmental agency or otherwise affecting the use of the Official Statement
in connection with the offer and the sale of the 2004 Bonds.
7. UNDERWRITER'S COVENANT. By acceptance hereof the Underwriter
agrees to indemnify and hold harmless the Authority, its members, directors,
officers, agents, attorneys, and employees and the Company, its officers,
directors, agents, attorneys, and employees and each person if any, who controls
the Company within the meaning of Section 15 of the 1933 Act against all or
several claims, losses, damages, liabilities and expenses asserted against them,
or any of them, at law or in equity, in connection with (i) the offering and
sale of the 2004 Bonds on the grounds that the information under the caption
"UNDERWRITING" in the Preliminary Official Statement or the Official Statement
(or any supplement or amendment to said information) contains an untrue or
allegedly untrue statement of a material fact or omits or allegedly omits to
state any material fact necessary to make the statements therein not misleading
in the light of the circumstances under which they were made (it being
understood that the Underwriter furnished only the information under such
"UNDERWRITING" heading), or (ii) failure on the part of the Underwriter to
deliver an Official Statement to any purchaser. The Underwriter will reimburse
any legal or other expenses reasonably incurred by a party, person or entity
indemnifiable under this Section 7 in connection with investigating or defending
any such loss, claim, damage, liability or action. This indemnity agreement will
be in addition to any liability that the Underwriter may otherwise have. The
Underwriter shall not be liable for any settlement of, any such action effected
without its consent.
8. NOTICE OF INDEMNIFICATION; SETTLEMENT. Promptly after a party,
person or entity indemnifiable under Section 6 or 7 of this Bond Purchase
Agreement (an "Indemnitee") receives notice of the commencement of any action
against such Indemnitee in respect of which indemnity is to be sought by the
Indemnitee against the Company or an Underwriter, as the case may be (the
"Indemnifying Party"), the Indemnitee will notify the Indemnifying Party in
writing of such action, and the Indemnifying Party may assume the defense
thereof, including the employment of counsel and the payment of all expenses;
but the omission so to notify the Indemnifying Party will not relieve the
Indemnifying Party from any liability that it may have to the Indemnitee
otherwise than hereunder. The Indemnifying Party shall not be liable for any
settlement of any such action effected without its consent, but if settled with
the consent of the Indemnifying Party or if there is a final judgment for the
plaintiff in any such action, the
Indemnifying Party will indemnify and hold harmless the Indemnitee from and
against any loss or liability by reason of such settlement or judgment. The
indemnity agreements contained in this Bond Purchase Agreement (i) shall include
reimbursement for expenses reasonably incurred by an Indemnitee in investigating
the claim and in defending it if the Indemnifying Party declines to assume the
defense and (ii) shall survive delivery of the 2004 Bonds.
9. EQUITABLE CONTRIBUTION. If the indemnification provided for in
Section 6(b) of this Bond Purchase Agreement is unavailable to the Underwriter
(or any controlling person thereof) in respect of any losses, claims, damages or
liabilities referred to therein, then the Company shall, in lieu of indemnifying
the Underwriter, contribute to the amount paid or payable by the Underwriter as
a result of such losses, claims, damages or liabilities in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Underwriter, respectively, from the offering of the 2004 Bonds. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law, then the Company shall contribute to such amount paid or payable
by the Underwriter in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company and the
Underwriter, respectively, in connection with the statements or omission which
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative benefit received by the Company
or the Underwriter shall be deemed to be in the same proportion as the total
proceeds from the offering (before deducting issuance costs and expenses other
than underwriting fees and commissions) received by the Company, on the one
hand, bear to the total underwriting fees and commissions received by the
Underwriter, on the other hand. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
related to information supplied by the Company or the Underwriter and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Underwriter
agree that it would not be just and equitable if contribution pursuant to this
Section 9 were determined by pro rata allocation or by any other method of
allocation that does not take account of the equitable considerations referred
to above in this Section 9. The amount paid or payable by the Underwriter as a
result of the losses, claims, damages or liabilities referred to above in this
Section 9 shall be deemed to include any reasonable legal or other expenses
reasonably incurred by the Underwriter in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of this
Section 9, the Underwriter shall not be required to contribute any amount in
excess of the amount by which the total price at which the 2004 Bonds
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that the Underwriter has otherwise been
required to pay by reason of such untrue or allegedly untrue statement or
omission or alleged omission.
10. OFFICIAL STATEMENT; PUBLIC OFFERING.
(a) In order to enable the Underwriter to comply with Rule
15c2-12: (i) the Company has prepared (or caused to be prepared) the Preliminary
Official Statement, which the Company and the Authority (but, in the case of the
Authority, only with respect to the information therein under the headings "THE
AUTHORITY" and, insofar as it relates to the Authority, "INTRODUCTORY
STATEMENT") deem final and complete as of its date except for certain "Permitted
Omissions" as described in Rule 15c2-12; (ii) the Company shall provide
to the Underwriter sufficient copies of the Official Statement in sufficient
time to accompany any confirmation that requires payment from any customer and
in any event within seven business days after the date of this Bond Purchase
Agreement; and (iii) of which the Company has or gains knowledge would render
the Official Statement misleading in any material respect in the period from the
date of its delivery to the Underwriter by the Company (as that phrase is
defined in Rule 15c2-12) then the Company shall promptly give the Underwriter
notice thereof. The Authority and the Company hereby authorize the use of the
Preliminary Official Statement and the Official Statement by the Underwriter in
connection with the offering of the 2004 Bonds.
(b) After the Closing, and until the Underwriter has
informed the Authority and the Company that the Underwriter has sold all the
2004 Bonds, the Authority and the Company will not adopt or distribute any
amendment of or supplement to the Official Statement, except with the prior
written consent of the Underwriter; and if any event relating to or affecting
the Authority, the Company or the 2004 Bonds shall occur, the result of which
shall make it necessary, in the opinion of the Underwriter, to amend or
supplement the Official Statement in order to make it not misleading in the
light of the circumstances existing at that time, the Company shall forthwith
prepare, and the Company and the Authority shall approve for distribution, a
reasonable number of copies of an amendment of or supplement to the Official
Statement, in form and substance reasonably satisfactory to the Underwriter, so
that the Official Statement then will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances existing at that time, not
misleading. The Authority shall cooperate with the Company in the issuance and
distribution of any such amendment or supplement.
(c) Upon Closing, the Underwriter shall promptly provide a
Nationally Recognized Municipal Securities Information Repository ("NRMSIR") and
the Municipal Securities Rulemaking Board ("MSRB") with a copy of the Official
Statement for filing in accordance with Rule 15c2-12, and inform the Authority
and the Company in writing as to (i) the date and place of such filing and (ii)
the date of the end of the underwriting period.
11. CONDITIONS OF UNDERWRITER'S AND AUTHORITY'S OBLIGATIONS. The
Underwriter's obligations to purchase and pay for the 2004 Bonds and the
Authority's obligation to issue and deliver the 2004 Bonds are subject to
fulfillment of the following conditions at or before Closing:
(a) The representations of the Authority and the Company
herein shall be true in all material respects on and as of the date of the
Closing and shall be confirmed by appropriate certificates at Closing;
(b) Neither the Authority nor the Company shall be in
default in the performance of any of their respective covenants herein;
(c) The Underwriter shall have received:
(i) An opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇,
LLP, Bond Counsel, dated the date of Closing, substantially in the form
attached as Exhibit A hereto,
addressed to (or with reliance letters delivered in respect of) the
Authority, the Trustee and the Underwriter;
(ii) An opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & Ingersoll,
LLP, Bond Counsel, dated the date of Closing, substantially in the form
attached as Exhibit B hereto, addressed to the Underwriter;
(iii) An opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, counsel for the
Authority, dated the date of Closing, with respect to the matters set
forth in Exhibit C hereto, addressed to the Underwriter and in form and
substance reasonably satisfactory to the Underwriter and Bond Counsel;
(iv) Opinions of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ LLP, counsel to the
Company, and the Company's Senior Vice President - Law and
Administration, dated the date of Closing, substantially in the forms
attached as Exhibit D hereto, addressed to the Underwriter, the
Authority and Bond Counsel, in form and substance reasonably
satisfactory to the Underwriter and to Bond Counsel;
(v) An opinion of ▇▇▇▇▇ ▇▇▇▇▇▇ LLP and Booth &
▇▇▇▇▇▇, LLP, co-counsel for the Underwriter, in form and substance
reasonably satisfactory to the Underwriter;
(vi) An opinion of legal counsel to the "Bond
Insurer" in form and substance reasonably satisfactory to Bond Counsel
and the Underwriter, relating to the enforceability of a municipal bond
insurance policy from the Bond Insurer (the "Bond Insurance Policy") and
the information concerning the Bond Insurer in the Official Statement;
(vii) An agreed upon procedures letter dated the date
of the Official Statement and addressed to the Company from the
Company's auditor with respect to financial information set forth in
Appendix A to the Official Statement, in form and substance reasonably
satisfactory to the Underwriter;
(viii) A certificate dated the date of Closing executed
by the Chairman of the Authority to the effect that:
(A) the representations and warranties of
the Authority contained herein, to the best of the knowledge of
such Chairman, are true and correct in all material respects as
of the date of Closing; and
(B) to the best of the knowledge of such
Chairman, the Authority has complied in all material respects
with all agreements executed by the Authority in connection with
issuance of the 2004 Bonds and satisfied in all material
respects the Authority's covenants contained in Section 5 herein
and all of the conditions on its part to be performed or
satisfied at or prior to the Closing;
(ix) A certificate dated the date of Closing executed
by the chief financial officer of the Company to the effect that:
(A) the representations and warranties of
the Company in this Bond Purchase Agreement are true and correct
in all material respects as of the date of Closing;
(B) the Preliminary Official Statement and
the Official Statement, as of their respective dates, insofar as
they relate to the Company, do not contain any untrue statement
of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements
therein, under the circumstances in which they were made, not
misleading in any respect; and
(C) no event affecting the Company has
occurred since the date of the Bond Purchase Agreement that is
required to be disclosed in the Official Statement in order to
make the statements and information therein not misleading in
any material respect;
(x) Two executed copies of the Trust Indenture, the
Financing Agreement, the Bond Purchase Agreement, the Thirty-Eighth
Supplemental Mortgage and the Continuing Disclosure Agreement;
(xi) Two copies of the Articles of Incorporation and
By-laws of the Company, as amended to the date of Closing, and of the
resolutions of the Board of Directors of the Company authorizing and
approving the execution and delivery of this Bond Purchase Agreement,
the Financing Agreement, the First Mortgage Bond, the Thirty-Eighth
Supplemental Mortgage, the Continuing Disclosure Agreement and the
incurrence of indebtedness with respect thereto and all transactions
described in the Official Statement and contemplated by this Bond
Purchase Agreement, all certified by its Secretary or Assistant
Secretary;
(xii) Two copies of the Authority Resolution;
(xiii) One or more letters from the Company's auditor,
dated the date of the Preliminary Official Statement and the Official
Statement and addressed to the Company, consenting to the use of the
financial statements prepared by such firm and all references to such
firm contained in the Preliminary Official Statement and the Official
Statement;
(xiv) Evidence of the issuance of the Bond Insurance
Policy by the Bond Insurer, which policy shall unconditionally and
irrevocably guarantee the payment when due of the principal of and
interest on the 2004 Bonds;
(xv) Evidence satisfactory to the Underwriter of a
rating of "AAA" assigned by Standard & Poor's Ratings Services, a
Division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, and that such rating is in full
force and effect as of the date of Closing;
(xvi) Evidence satisfactory to Bond Counsel and the
Underwriter of the registration of a Securities Certificate relating to
the First Mortgage Bond and the 2004 Bonds with the Pennsylvania Public
Utility Commission; and
(xvii) Such additional documentation as the Underwriter
or its counsel or Bond Counsel may reasonably request to evidence
compliance with applicable law and the validity of the 2004 Bonds, the
Financing Agreement, the Trust Indenture, this Bond Purchase Agreement,
the Mortgage, the First Mortgage Bond and the Continuing Disclosure
Agreement, and to evidence that the interest on the 2004 Bonds is not
includable in gross income under the Code and the status of the offering
under the 1933 Act and the 1939 Act.
(d) At Closing there shall not have been any material
adverse change in the financial condition of the Company or any adverse
development concerning the business or assets of the Company that would result
in a material adverse change in the prospective financial condition or results
of operations of the Company from that described in the Official Statement,
which, in the judgment of the Underwriter, makes it inadvisable to proceed with
the sale of the 2004 Bonds; and the Underwriter shall have received certificates
of the Company certifying that no such material adverse change has occurred or,
if such a change has occurred, full information with respect thereto; and
(e) The Underwriter shall deliver at Closing a certificate
in form acceptable to Bond Counsel to the effect that the Underwriter has sold
to the public (excluding bond houses and brokers) a substantial amount of the
2004 Bonds at initial offering prices no higher than, or yields no lower than,
those shown on the cover page of the Official Statement and that such
certificate may be relied upon for purposes of determining compliance with
Section 148 of the Code.
12. EVENTS PERMITTING THE UNDERWRITER TO TERMINATE. The Underwriter
may terminate its obligation to purchase the 2004 Bonds at any time before
Closing if any of the following occurs:
(a) A legislative, executive or regulatory action or
proposed action, or a court decision, which in the reasonable judgment of the
Underwriter casts sufficient doubt on the legality of, or the exclusion from
gross income for federal income tax purposes of interest on, obligations such as
the 2004 Bonds so as to materially impair the marketability or materially lower
the market price of the 2004 Bonds; or
(b) Any action by the Securities and Exchange Commission or
a court that would require registration of the 2004 Bonds or the First Mortgage
Bond under the 1933 Act or qualification of the Indenture under the 1939 Act; or
(c) Any general suspension of trading in securities on the
New York Stock Exchange or the establishment, by the New York Stock Exchange, by
the Securities and Exchange Commission, by any federal or state agency, or by
the decision of any court, of any limitation on prices for such trading, or any
outbreak of hostilities or other national or international calamity or crisis,
or any material escalation in any such hostilities, calamity or crisis, the
effect of which on the financial markets of the United States of America shall
be such as to materially impair the marketability or materially lower the market
price of the 2004 Bonds; or
(d) Any event or condition occurring or arising after the
date hereof, which in the reasonable judgment of the Underwriter renders untrue
or incorrect, in any material respect as of the time to which the same purports
to relate, the information contained in the Official Statement, or which
requires that information not reflected in the Official Statement or Appendices
thereto should be reflected therein in order to make the statements and
information contained therein not misleading in any material respect as of such
time; provided that the Authority, the Company and the Underwriter will use
their best efforts to amend or supplement the Official Statement to reflect, to
the reasonable satisfaction of the Underwriter, such changes in or additions to
the information contained in the Official Statement; or
(e) Pending or threatened litigation affecting or arising
out of the ownership of the Facilities or any other facilities of the Company or
the issuance of the 2004 Bonds, which, in the reasonable judgment of the
Underwriter, would materially impair the marketability or materially lower the
market price of the 2004 Bonds; or
(f) Quantities of the Official Statement are not delivered
to the Underwriter in a timely manner as required by Section 10 hereof. If the
Underwriter terminates its obligation to purchase the 2004 Bonds because any of
the conditions specified in Section 11 hereof or this Section 12 shall not have
been fulfilled at or before the Closing, such termination shall not result in
any liability on the part of the Authority, the Underwriter, or, except for the
payment of such costs of issuance described in Section 13 hereof which are due
and payable, the Company.
13. EXPENSES. All expenses and costs of the authorization, issuance,
sale and delivery of the 2004 Bonds including, without limitation, accrued
interest and redemption premium due on the 1993 Bonds, the preparation of and
furnishing to the Underwriter of the Preliminary Official Statement and the
Official Statement, the preparation and execution of the 2004 Bonds, the
Financing Agreement, the Trust Indenture, the First Mortgage Bond, the
Thirty-Eighth Supplemental Mortgage and this Bond Purchase Agreement, the
Insurance Policy premium, rating agency fees, the issuance and closing fees of
the Authority, the fees and disbursements of counsel to the Authority, the fees
and disbursements of Bond Counsel, the fees and disbursements of counsel to the
Underwriter and the expenses incurred in connection with qualifying the 2004
Bonds for sale under the securities laws of various jurisdictions and preparing
Blue Sky and legal investment memoranda, shall be paid by the Company from funds
contributed by the Company and not from proceeds of the 2004 Bonds. The
Authority shall, bear no out-of-pocket expense in connection with the
transactions contemplated by this Bond Purchase Agreement. The Underwriter will
pay all other expenses of the Underwriter in connection with the public offering
of the 2004 Bonds.
14. EXECUTION IN COUNTERPARTS. This Bond Purchase Agreement may be
executed in any number of counterparts, all of which taken together shall
constitute one and the same instrument, and any of the parties hereto may
execute this Bond Purchase Agreement by signing any such counterpart.
15. NOTICES AND OTHER ACTIONS. All notices, requests, demands and
formal actions hereunder will be in writing mailed, faxed (with confirmation of
receipt) or delivered by nationally recognized, next-day delivery service to:
The Underwriter:
Sovereign Securities Corporation, LLC
Mail Code: 20-210-CPC LLC
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III
Managing Director
Fax #: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
The Company:
Aqua Pennsylvania, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, Vice President, Treasurer &
Rate Counsel
Fax #: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
The Authority:
Northumberland County Industrial Development Authority
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇, Executive Director
Fax #: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
16. GOVERNING LAW. This Bond Purchase Agreement shall be governed by
and construed in accordance with the laws of the Commonwealth of Pennsylvania,
excluding those relating to choice of laws or conflict of laws, and may not be
assigned by the Authority, the Company or the Underwriter.
17. SUCCESSORS. This Bond Purchase Agreement will inure to the
benefit of and be binding upon the parties and their respective successors and,
as to Sections 6, 7 and 8 hereof, the
Indemnitees, and will not confer any rights upon any other person. The term
"successor" shall not include any holder of any Bonds merely by virtue of such
holding.
18. LIMITATIONS ON LIABILITY. No personal recourse shall be had for
any claim based on this Bond Purchase Agreement or the 2004 Bonds against any
board member, officer, agent, employee, or attorney past, present or future, of
the Authority or any successor body as such, either directly or through the
Authority or any successor body, under any constitutional provision, statute, or
rule of law or by enforcement of any assessment or penalty or otherwise.
Notwithstanding any provision or obligation to the contrary in this Bond
Purchase Agreement, the liability of the Authority for payments of any kind,
nature or description provided for herein or in any other document executed
pursuant hereto shall be limited to the revenues derived by the Authority from
the Financing Agreement.
IN WITNESS WHEREOF, the Authority, the Company and the Underwriter have
caused their duly authorized Underwriters to execute and deliver this Bond
Purchase Agreement as of the date first written above.
NORTHUMBERLAND COUNTY
INDUSTRIAL DEVELOPMENT AUTHORITY
By: ▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
Chairman
AQUA PENNSYLVANIA, INC.
By: ▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------------
Vice President, Treasurer and
Rate Counsel
SOVEREIGN SECURITIES CORPORATION, LLC
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III
---------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III
Managing Director
SCHEDULE I
Terms of Bonds
Principal Amounts: $14,000,000
Dated Date: November 30, 2004
Maturity Date: October 1, 2039
Interest Payment Dates: April 1 and October 1, commencing April 1, 2005
Rate of Interest: 5.05%
Redemption provisions:
The 2004 Bonds are subject to redemption as follows:
OPTIONAL REDEMPTION. The 2004 Bonds are subject to optional redemption
prior to maturity by the Authority, at the direction of the Company, on or after
October 1, 2014, as a whole or in part at any time, at a redemption price equal
to one hundred percent (100%) of the principal amount thereof, plus interest
accrued to the date fixed for redemption.
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 of 100% of the
principal amount of the Bonds to be redeemed, plus interest accrued thereon to
the date fixed for redemption, if any of the following events shall have
occurred:
(a) 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
(b) the taking by condemnation, or the threat thereof, 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
(c) in the Company's reasonable opinion, (1) unreasonable burdens or
excessive liabilities shall have been imposed upon the Company with respect to
the Project Facilities or the operation thereof, including, but not 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 property taxes
presently levied upon privately owned property used for the same general
purposes as the Project Facilities, or (2) the continued operation of the
Project Facilities is impractical, uneconomical or undesirable for any reason.
Any such redemption shall be on any date within 180 days following the
occurrence of one of the events listed above permitting the exercise of the
option.
EXHIBIT A
FORMS OF APPROVING OPINIONS OF
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP
(SEE APPENDIX D OF OFFICIAL STATEMENT)
A-1
EXHIBIT B
FORM OF SUPPLEMENTAL OPINION OF
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & INGERSOLL, LLP
November [__], ▇▇▇▇
▇▇▇▇▇▇▇▇▇ Securities Corporation, LLC
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: $14,000,000 aggregate principal amount of Northumberland
County Industrial Development Authority Water Facility
Revenue Refunding Bonds (Aqua Pennsylvania, Inc.
Project) Series of 2004
Ladies and Gentlemen:
Reference is made to our opinion as bond counsel identified as
Closing Item No. [__] delivered to you concurrently herewith and relating to the
above - referenced Bonds (the "Bonds"). At your request we have undertaken a
review of certain other matters pertaining to the Bonds. All terms are used
herein with the same meanings ascribed to them in the Official Statement dated
November [__], 2004 (the "Official Statement") prepared in connection with the
public offering of the Bonds.
Based on the review described in our bond opinion, it is our
opinion that:
The Bond Purchase Agreement dated November 16, 2004 (the "Bond
Purchase Agreement"), among you, the Company and the Authority has been duly
authorized, executed and delivered by the Authority and constitutes the legal,
valid and binding obligation of the Authority enforceable against the Authority
in accordance with its terms, except as enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally and general principles of equity.
The information in the Official Statement under the captions:
"INTRODUCTORY STATEMENT - Description of the Bonds" and "- Security for the
Bonds," "THE BONDS" (other than the information under the sub-caption
"Book-Entry Only System") and "SECURITY FOR THE BONDS" (other than the
information under the sub-captions "Mortgage" and "Additional Parity
Indebtedness") and the information set forth in Appendix C to the Official
Statement (other than information under the headings "THE FIRST MORTGAGE BOND
AND THE MORTGAGE") is accurate and fairly presents the information intended to
be shown with respect thereto. The information in the Official Statement under
the caption "TAX MATTERS" fairly summarizes our firm's opinion with respect to
the tax-exempt status of the Bonds in all material respects.
B-1
It is not necessary in connection with the offering and sale of
the Bonds to register the Bonds under the Securities Act of 1933, as amended, or
to qualify the Indenture under the Trust Indenture Act of 1939, as amended.
This letter is furnished by us solely for your benefit in
connection with the provisions of the Bond Purchase Agreement and may not be
relied upon by any other persons for any purpose without our express written
permission.
Very truly yours,
B-2
EXHIBIT C
Points to be covered in Opinion of Counsel for the Authority
(Terms defined in Bond Purchase Agreement are used here with same meanings)
1. The Authority is a body corporate and politic constituting an
instrumentality of the Commonwealth and is duly created and existing pursuant to
the Act.
2. The Authority Resolution was duly adopted by the Authority at a
public meeting held in accordance with the provisions of Section 13 of the act
of July 3,1986, (P.L. 388, No. 84, as amended), known as the Pennsylvania
Sunshine Act; and the Authority resolution remains in full force and effect and
has not been amended, repealed or superseded in any way.
3. The Authority has by proper action duly authorized the execution
and issuance of the 2004 Bonds and the execution and delivery of the Authority
Financing Documents. The 2004 Bonds have been duly and validly issued by the
Authority and the Authority Financing Documents have each been duly and validly
executed and delivered by the Authority and the 2004 Bonds and each of such
documents are valid and binding agreements of the Authority, enforceable against
the Authority in accordance with their respective terms, except as enforcement
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
laws or legal or equitable principles affecting the enforcement of creditor's
rights.
4. To the knowledge of such counsel, the execution and the issuance
by the Authority of the 2004 Bonds, the execution and delivery by the Authority
of the Authority Financing Documents and performance by the Authority of the
Authority's obligations under the 2004 Bonds and the Authority's Financing
Documents, do not conflict with or constitute on a part of the Authority a
violation of, breach of or default under any existing constitutional provision
or statute of the Commonwealth, or, to our knowledge without having undertaken
any independent investigation, any indenture, mortgage, deed of trust,
resolution, note agreement or other agreement or instrument to which the
Authority is a party or by which the Authority is bound, or, to our knowledge,
any order, rule or regulation of any court, governmental agency or body of the
Commonwealth having jurisdiction over the Authority or any of its activities or
property.
5. To the knowledge of such counsel, there is no action, suit,
proceeding, inquiry or investigation, at law or in equity, before or by any
court, public board or body, pending or threatened against the Authority,
wherein an unfavorable decision, ruling or finding would materially and
adversely affect the transactions contemplated by the 2004 Bonds.
6. The Authority has approved the distribution of the Preliminary
Official Statement and the Official Statement by the Underwriter in connection
with the sale of the 2004 Bonds.
7. The information contained in the Preliminary Official Statement
and the Official Statement under the headings "INTRODUCTORY STATEMENT - The
Authority" and "THE AUTHORITY" has been reviewed by us and nothing has come to
our attention which would
C-1
lead us to believe that such information contains any untrue statement of a
material fact or omits to state a material fact which is required to be stated
therein or which is necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading in any material
respect.
C-2
EXHIBIT D
FORM OF OPINIONS OF THE COMPANY'S LEGAL COUNSEL AND
COMPANY'S SENIOR VICE PRESIDENT - LAW AND ADMINISTRATION
November 30, 2004
Northumberland County Industrial
Development Authority
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Sovereign Securities Corporation, LLC
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
RE: $14,000,000 AGGREGATE PRINCIPAL AMOUNT OF NORTHUMBERLAND COUNTY
INDUSTRIAL DEVELOPMENT AUTHORITY WATER FACILITIES REVENUE
REFUNDING BONDS (AQUA PENNSYLVANIA, INC. PROJECT) SERIES OF 2004
Ladies and Gentlemen:
We have acted as counsel to Aqua Pennsylvania, Inc. (the "Company") in
connection with (i) the issuance by Northumberland County Industrial Development
Authority (the "Authority"), and the sale to Sovereign Securities Corporation,
LLC pursuant to that certain Bond Purchase Agreement dated ____________, 2004
(the "Purchase Agreement"), of $14000,000 aggregate principal amount of
Northumberland County Industrial Development Authority Water Facilities Revenue
Refunding Bonds (Aqua Pennsylvania, Inc.) Series of 2002 (the "Authority
Bonds"), and (ii) the issuance and delivery of $14,000,000 principal amount of
the Company's First Mortgage Bond, 5.05% Series due 2039 (the "First Mortgage
Bond"), issued under an Indenture of Mortgage (the "Original Mortgage") dated as
of January 1, 1941, as amended and supplemented by supplemental indentures
thereto, including the Thirty-Eighth Supplemental Indenture dated as of November
15, 2004 (the "Thirty-Eighth Supplemental Indenture") under which ▇.▇. ▇▇▇▇▇▇
Trust Company, National Association is trustee (the "Mortgage Trustee"). The
Original Mortgage as amended and supplemented is hereinafter called the
"Mortgage". Capitalized terms used herein and not otherwise defined shall have
the meanings ascribed to such terms in the Purchase Agreement.
We have examined and reviewed, among other things:
(a) a copy of the Articles of Incorporation of the Company, as
amended and restated and now in effect;
D-1
(b) a copy of the bylaws of the Company as now in effect;
(c) resolutions of the Board of Directors of the Company authorizing
the execution and delivery of the Purchase Agreement, the
Financing Agreement, the Thirty-Eighth Supplemental Indenture,
the First Mortgage Bond, the Continuing Disclosure Agreement and
the Official Statement;
(d) the Purchase Agreement;
(e) the Financing Agreement dated as of November 15, 2004 (the
"Financing Agreement") between the Authority and the Company;
(f) the Continuing Disclosure Agreement dated ___________, 2004 (the
"Continuing Disclosure Agreement") between the Company and ▇.▇.
▇▇▇▇▇▇ Trust Company, National Association, as trustee for the
Authority Bonds (the "Trustee");
(g) the Official Statement relating to the Authority Bonds dated
November _, 2004 (the "Official Statement");
(h) the Securities Certificate relating to the issue and sale of the
First Mortgage Bond, filed by the Company with the Pennsylvania
Public Utility Commission pursuant to the provisions of Chapter
19 of the Pennsylvania Public Utility Code, and a copy of the
Order of the Public Utility Commission registering such
Securities Certificate, certified by the Secretary of the
Pennsylvania Public Utility Commission;
(i) a Subsistence Certificate from the Secretary of the Commonwealth
with respect to the Company;
(j) executed counterparts of the Original Mortgage and of the
Thirty-Eighth Supplemental Indenture supplemental thereto and
evidence satisfactory to us of the due recordation thereof in
the Counties of Adams, Berks, Bradford, Bucks, Carbon, ▇▇▇▇▇▇▇,
Columbia, Cumberland, Delaware, Forest, Juniata, Lackawanna,
▇▇▇▇▇▇▇▇, Luzerne, Mercer, Monroe, ▇▇▇▇▇▇▇▇▇▇, Northampton,
Northumberland, Pike, Schuylkill, ▇▇▇▇▇▇, Susquehanna, ▇▇▇▇▇ and
Wyoming, Pennsylvania;
(k) the documents delivered to the Mortgage Trustee in connection
with the authentication of the First Mortgage Bond pursuant to
the provisions of Sections 2(B) and 3 of Article IV of the
Original Mortgage;
(l) the First Mortgage Bond delivered to the Trustee at the Closing
held today;
(m) the certificates of the Company and other documents delivered to
the Mortgage Trustee at the Closing;
(n) a certificate of the Company and various bringdown title
searches by Commonwealth Land Title Insurance Company in the
Counties of Adams, Berks, Bradford, Bucks, Carbon, ▇▇▇▇▇▇▇,
Columbia, Cumberland, Delaware, Forest,
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Juniata, Lackawanna, ▇▇▇▇▇▇▇▇, Luzerne, Mercer, Monroe,
▇▇▇▇▇▇▇▇▇▇, Northampton, Northumberland, Pike, Schuylkill,
▇▇▇▇▇▇, Susquehanna, ▇▇▇▇▇ and Wyoming, Pennsylvania, each dated
as of a recent date (collectively, "Title Searches"), as to
matters relating to title to real estate and the lien of the
Mortgage thereon, on which certificate and searches we are
relying for the purposes of this opinion; and
(o) various certificates of officers of the Company relating to
title to real property and the priority of any lien thereon.
In rendering this opinion, we have assumed that all signatures on
documents and instruments examined by us are genuine (except signatures of the
Company on the Purchase Agreement, the Thirty-Eighth Supplemental Indenture, the
Financing Agreement (collectively, the "Company Documents") and the Official
Statement), the authenticity of all documents submitted to us as originals and
the conformity with the original documents of all documents submitted to us as
copies. We have also assumed, with your permission, that none of the signatories
of the documents and instruments referred to above is an affiliate of the
Company within the meaning of 66 Pa.C.S. Section 2101 (1989).
As to questions of fact material to the opinions hereinafter expressed,
we have relied solely and without investigation upon certificates of public
officials, certificates of officers of the Company and the representations of
the Company contained in the Company Documents (including the exhibits and
schedules to such documents) and the certificates and other documents delivered
pursuant thereto. To the extent that the opinions contained herein are given to
the best of our knowledge, such knowledge means the actual knowledge of those
attorneys within our firm who have provided substantive representation to the
Company, without investigation and inquiry, and does not include matters of
which such attorneys could be deemed to have constructive knowledge.
In rendering this opinion, we have also assumed that each of the Company
Documents has been duly authorized, executed and delivered by each party thereto
(other than the Company) and that each of the Company Documents is binding and
enforceable against each such party in accordance with its respective terms.
Further, as to matters relating to title to real estate and the lien of
the Mortgage, we have relied exclusively upon various certificates of officers
of the Company and the Title Searches and we have not made, nor undertaken to
make, any investigation or inquiry with respect to title to real property or the
priority of any lien thereon.
We are generally familiar with the Company's operations as a public
utility within the Commonwealth of Pennsylvania (the "Commonwealth").
Based upon the foregoing and such other examination of fact and law as
we have deemed necessary for purposes of this opinion, we are of the opinion
that:
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1. The Company was organized and subsists under the laws of the
Commonwealth, with power (corporate and other) to own its properties and conduct
its business as described in the Official Statement.
2. The Company has the corporate power and authority to enter into
and perform the Purchase Agreement, the Financing Agreement, the First Mortgage
Bond, the Thirty-Eighth Supplemental Indenture and the Continuing Disclosure
Agreement. The execution, delivery and performance by the Company of the
Financing Agreement, the Bond Purchase Agreement, the First Mortgage Bond, the
Thirty-Eighth Supplemental Indenture and the Continuing Disclosure Agreement
have been duly authorized by all requisite corporate action.
3. The Purchase Agreement, the Financing Agreement and the
Continuing Disclosure Agreement constitute legal, valid and binding obligations
of the Company, enforceable against the Company in accordance with their
respective terms.
4. The First Mortgage Bond has been duly authorized, executed,
authenticated, issued and delivered and each constitutes a valid and legally
binding obligation of the Company entitled to the benefits provided by the
Mortgage.
5. The First Mortgage Bond is not subject to the registration
requirements of the 1933 Act.
6. The Mortgage constitutes a direct, valid and enforceable
mortgage lien (except as enforceability of such lien may be limited by
bankruptcy, insolvency, reorganization or other laws affecting the enforcement
of creditors' rights) upon all of the properties and assets of the Company (not
heretofore released as provided for in the Mortgage) specifically or generally
described or referred to in the Mortgage as being subject to the lien thereof,
except for permitted liens under the Mortgage; the Original Mortgage and the
Thirty-Eighth Supplemental Mortgage have been properly recorded in the Counties
of Adams, Berks, Bradford, Bucks, Carbon, ▇▇▇▇▇▇▇, Columbia, Cumberland,
Delaware, Forest, Juniata, Lackawanna, ▇▇▇▇▇▇▇▇, Luzerne, Mercer, Monroe,
▇▇▇▇▇▇▇▇▇▇, Northampton, Northumberland, Pike, Schuylkill, ▇▇▇▇▇▇, Susquehanna,
▇▇▇▇▇ and Wyoming in the Commonwealth and such recordations are the only
recordations necessary in order to establish, preserve, protect and perfect the
lien of the Mortgage on all real estate and fixed property of the Company
(excluding easement and other similar rights) described in the Mortgage as
subject to the lien thereof.
7. In each of the following cases with such exceptions as are not
material and do not interfere with the conduct of the business of the Company,
the Company has good and marketable title to all of its real property currently
held in fee simple; good and marketable title to all of its other interests in
real property (other than to certain rights of way, easements, occupancy rights,
riparian and flowage rights, licenses, leaseholds, and real property interests
of a similar nature); and good and marketable title to all personal property
owned by it; in each case free and clear of all liens, encumbrances and defects
except such as may be described in the Official Statement, the lien of the
Mortgage, permitted liens under the Mortgage or such as do not materially affect
the value of such property and do not interfere with the use made and proposed
to be made of such property by the Company; and any real property and buildings
held
D-4
under lease by the Company are held by it under valid, subsisting and
enforceable leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and buildings by the
Company.
8. The Company is not a holding company, a registered holding
company or an affiliate of a registered holding company within the meaning of
the Public Utility Company Holding Act of 1935, as amended.
9. The Mortgage and the First Mortgage Bond conform in all material
respects as to legal matters to the descriptions thereof in the Official
Statement.
Without having undertaken to determine independently the accuracy,
completeness and fairness of the statements contained in the Official Statement,
nothing has come to our attention in connection with our representation of the
Company in respect of the issuance of the First Mortgage Bond which leads us to
believe that the information with respect to the Company contained in the
Official Statement (including Appendix A and the information incorporated
therein by reference) contain any untrue statement of a material fact or omit to
state a material fact which is required to be stated therein or which is
necessary to make such information and descriptions, in the light of the
circumstances under which they were made, not misleading in any material
respect.
The foregoing opinions are subject to the following
qualifications:
(i) The opinions expressed in paragraphs 3 and 4 are subject
to the qualifications that the enforceability of the First Mortgage Bond is
subject to (i) applicable bankruptcy, insolvency, reorganization, moratorium,
and other similar laws of general application relating to or affecting
creditors' rights, (ii) certain provisions of Pennsylvania law affecting the
availability of certain remedies, and (iii) the further qualification that the
availability of specific performance, injunctive relief or other equitable
remedies is subject to the discretion of the court before which any proceeding
therefor may be brought.
(ii) Our opinions are subject to limitations imposed by
general principles of equity, including principles of commercial reasonableness,
good faith and fair dealing (regardless of whether enforcement is considered in
proceedings at law or in equity).
(iii) We express no opinion as to the enforceability with
respect to any provisions purporting to waive the effect of applicable laws and
remedies and any provisions releasing any party from, or requiring
indemnification for, liability for gross negligence, recklessness or willful
misconduct.
(iv) Any requirements in any of the documents specifying that
provisions of a document may only be waived in writing may not be enforced to
the extent that an oral agreement or an implied agreement by trade practice or
course of conduct has been created modifying any provision of such document.
D-5
(v) We express no opinion as to the applicability to the
transactions contemplated by the Company Documents of Section 548 of the
Bankruptcy Code or any applicable state law relating to fraudulent transfers and
obligations.
(vi) Other applicable local, state and federal laws,
regulations and ordinances, court decisions and constitutional requirements may
limit or render unenforceable certain of the rights or remedies contained in the
Company Documents, but in our opinion, none of the same would materially impair
the practical realization of the benefits intended to be provided by the Company
pursuant to the Company Documents.
(vii) Our opinion is limited in all respects to the laws of
the Commonwealth in effect as of the date hereof and we express no opinion as to
the laws of any other jurisdiction.
(viii) This opinion is limited to the matters set forth herein,
no opinion may be inferred or implied beyond the matters expressly stated
herein, and our statements contained in the opinion portion of this letter must
be read in conjunction with the assumptions, limitations, exceptions and
qualifications set forth in this letter.
(ix) The opinions herein are expressed as of the date hereof
only and not as of some future date. We undertake no responsibility to advise
you of any change in law or new laws, regulations or judicial decisions in the
future. Nor do we assume any obligation to update or supplement this opinion to
reflect any facts or circumstances which may hereafter come to our attention.
References to "laws," "regulations" and "judicial decisions" herein shall
include only officially published laws and regulations of the Commonwealth of
Pennsylvania.
This opinion is solely for the benefit of each of you and the benefit of
any subsequent holder of the First Mortgage Bond or the Authority Bonds and may
not be relied upon by any other person or for any other purpose.
Very truly yours,
D-6
[Letterhead of Aqua Pennsylvania]
November 30, 2004
Sovereign Securities Corporation, LLC
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
RE: $14,000,000 Aggregate Principal Amount of Northumberland County
Industrial Development Authority Bonds (Aqua Pennsylvania, Inc.
Project), Series of 2004 (the "Authority Bonds")
Ladies and Gentlemen:
I am Senior Vice President-Law and Administration for Aqua Pennsylvania,
Inc. (the "Company").
Pursuant to Section 11(c)(iv) of the Bond Purchase Agreement dated
November __, 2004 (the "Purchase Agreement") among the Authority, the
Underwriter and the Company (f/k/a Pennsylvania Suburban Water Company, as
successor by merger to Philadelphia Suburban Water Company) relating to the
Authority Bonds, I have been asked to render an opinion to you regarding certain
matters involving the Company. Capitalized terms used herein and not otherwise
defined shall have the definitions ascribed to such terms in the Purchase
Agreement.
In rendering this opinion, I have assumed the following:
i. the genuineness of all signatures (other than
the signatures of the Company on the Thirty-Eighth Supplemental Mortgage, as
hereinafter defined);
ii. the authenticity and completeness of all
documents submitted to me as originals;
iii. the conformity to original documents of all
documents submitted to me as copies, and the authenticity of the originals of
such copies;
iv. the entity executing the Mortgage as trustee is
duly organized and validly existing, in good standing under the laws of the
jurisdiction of its organization, is properly qualified to do business in all
jurisdictions in which the business conducted by it makes such qualification
necessary and has all necessary legal and corporate power and authority to enter
into and perform its obligations under the Mortgage;
v. the due authorization, execution and delivery of
the Mortgage by or on behalf of the party thereto other than the Company;
D-7
vi. the enforceability against each party thereto
(other than the Company) of the Mortgage in accordance with its respective
terms; and
vii. that the execution, delivery and performance of
the Mortgage by the entity other than the Company which is party thereto does
not and will not conflict with, result in any breach of, or constitute a default
under any order, writ, injunction or decree of any court or governmental
authority, or any agreement, indenture or other instrument, to which any such
party is a party or by which it or its properties are bound, and that all
necessary approvals, consents, permits, registrations, filings or other notices
to or grants of authority from any federal or local governmental body necessary
for the execution, delivery and performance of the Mortgage by each party
thereto (other than the Company) have been duly received or made, with all
appeal periods expired and no appeals taken.
I am making each of the foregoing assumptions with your permission and
with the disclaimer that we make no representation as to the accuracy of such
assumptions, although I have no knowledge that any such assumption is untrue.
In my opinion:
1. In each of the following cases with such exceptions as are not
material and do not materially interfere with the conduct of the business of the
Company; (a) the Company has all licenses, franchises, permits, authorizations,
rights, approvals, consents and order of all governmental authorities or
agencies necessary for the ownership or lease of the properties owned or leased
by it and for the operation of the business carried on by it as described in the
Official Statement, and all water rights, riparian rights, easements, rights of
way and other similar interests and rights described or referred to in the
Mortgage necessary for the operation of the business carried on by it as
described in the Official Statement; (b) except as otherwise set forth in the
Official Statement, all such licenses, franchises, permits, orders,
authorizations, rights, approvals and consents are in full force and effect and
contain no unduly burdensome provisions; (c) to the best of my knowledge, except
as otherwise set forth in the Official Statement, there are no legal or
governmental proceedings pending or, to my knowledge, threatened that would
result in a material modification, suspension or revocation thereof; and (d) the
Company has the legal power to exercise the rights of eminent domain for the
purposes of conducting its water utility operations.
2. The issue and sale of the Bonds; the issue and delivery of the
First Mortgage Bond and the compliance by the Company with all of the applicable
provisions of the First Mortgage Bond and the Mortgage; and the execution,
delivery and performance by the Company of the Thirty-Eighth Supplemental
Mortgage, the Financing Agreement, the Purchase Agreement and the Continuing
Disclosure Agreement will not materially conflict with or result in a material
breach of any of the terms or provisions of, or constitute a material default
under, or result in the creation or imposition of any material lien, charge or
encumbrance (other than the lien of the Mortgage) upon any of the property or
assets of the Company pursuant to the terms of, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company is a
party or by which the Company is bound or to which any of the property or assets
of the Company is subject, nor will such action result in a violation of the
provisions of the Articles of Incorporation, as amended, or the Bylaws of the
Company or any statute or any order,
D-8
rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its property. No consent, approval,
authorization, order, registration or qualification of or with any court or any
such regulatory authority or other governmental body not already obtained is
required for the issue and delivery of the First Mortgage Bonds, the execution,
delivery and performance of the Purchase Agreement, the Financing Agreement, the
Thirty-Eighth Supplemental Mortgage, the First Mortgage Bonds and the Continuing
Disclosure Agreement, or the consummation of the other transactions contemplated
by the Purchase Agreement or the Mortgage.
3. There are no legal or governmental proceedings pending to which
the Company is a party or of which any property of the Company is the subject,
other than as set forth in the Official Statement and other than litigation
incident to the kind of business conducted by the Company, wherein an
unfavorable ruling, decision or finding is likely that would have a material
adverse effect on the financial position, stockholders' equity or results of
operations of the Company.
4. Each of the Indenture of Mortgage dated as of January 1, 1941
(the "Original Mortgage"), between the Company and The Philadelphia Company for
Insurance on Lives and Exacting Annuities (now ▇.▇. ▇▇▇▇▇▇ Trust Company,
National Association, as successor in interest), as trustee (the "Trustee") and
the thirty-eight indentures supplemental thereto, including the Thirty-Eighth
Supplemental Indenture dated as of November 15, 2004 between the Company and the
Trustee (the Original Mortgage as so supplemented and amended, the "Mortgage")
was duly authorized, executed and delivered by the Company and the Mortgage
constitutes a legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms (subject to applicable
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other
similar laws relating to creditors' rights generally from time to time in
effect, and subject, as to enforceability, to general principles of equity,
regardless of whether such enforceability is considered in a proceeding in
equity or at law).
The foregoing opinions are subject to the following qualifications:
i. The enforceability of the Mortgage, including,
without limitation, any nonjudicial and self-help remedies and waivers contained
therein, may be limited by bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or other similar laws affecting the rights of creditors
generally and are subject to limitations imposed by general principles of
equity, including principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is considered in proceedings at law
or in equity), public policy and applicable law which may limit the availability
of the remedies provided for therein,
ii. I express no opinion as to the adequacy of any
notice with respect to the disposition of any collateral. I also express no
opinion as to the effectiveness or enforceability of provisions relating to
waivers of notice or waivers of other rights, severability, prepayment fees or
penalties, choice of law, or any provisions which release or limit the Company's
liability or relate to cumulative remedies or, to the extent they purport to or
would have the effect of compensating the Company in amounts in excess of any
actual loss suffered by the Company, provisions relating to the payment of a
default rate of interest.
D-9
iii. I express no opinion as to enforceability with
respect to any provisions in the Mortgage executed by the Company purporting to
waive the effect of applicable laws and remedies and any provisions releasing
any party from, or requiring indemnification for, liability for gross
negligence, recklessness or wilful misconduct.
iv. Requirements in the Mortgage specifying that
provisions of the Mortgage may only be waived in writing may not be enforced to
the extent that an oral agreement or an implied agreement by trade practice or
course of conduct has been created modifying any provision of such Mortgage.
v. My opinion is limited in all respects to laws of
the Commonwealth of Pennsylvania in effect as of the date hereof and we express
no opinion as to the laws of any other jurisdiction.
vi. This opinion is limited to the matters set forth
herein, no opinion may be inferred or implied beyond the matters expressly
stated herein, and our statements contained in the opinion portion of this
letter must be read in conjunction with the assumptions, limitations, exceptions
and qualifications set forth in this letter.
vii. The opinions herein are expressed as of the date
hereof only and not as of some future date. I undertake no responsibility to
advise you of any change in law or new laws, regulations or judicial decisions
in the future nor do I assume any obligation to update or supplement this
opinion to reflect any facts or circumstances which may hereafter come to our
attention. References to "laws," "regulations" and "judicial decisions" herein
shall include only officially published laws and regulations of the Commonwealth
of Pennsylvania.
This opinion is solely for your benefit and may not be relied upon by
any other person or for any other purpose.
Very truly yours,
▇▇▇ ▇. ▇▇▇▇▇
D-10
