Exhibit 10.51





Exhibit 10.51




BOND PURCHASE AGREEMENT




$141,385,000




PENNSYLVANIA ECONOMIC DEVELOPMENT FINANCING AUTHORITY




	 	 	 
	$45,180,000

Water Facilities Revenue Refunding Bonds

(Aqua Pennsylvania, Inc. Project) 

Series A of 2010
	 	$96,205,000

Water Facilities Revenue Bonds

(Aqua Pennsylvania, Inc. Project)

Series B of 2010






Bond Purchase Agreement dated October 27, 2010 (this “Bond Purchase Agreement”) among the
PENNSYLVANIA ECONOMIC DEVELOPMENT FINANCING AUTHORITY (the “Authority”), AQUA PENNSYLVANIA, INC., a
Pennsylvania corporation (the “Company”), and JEFFERIES & COMPANY, INC., a Delaware Corporation
(the “Representative”), on behalf of itself and as representative of the underwriters identified on
Schedule I attached hereto (collectively, the “Underwriters”).




Section 1. Background.



(a) The Authority proposes to enter into a Financing Agreement (the “Financing Agreement”)
dated as of October 15, 2010 with the Company, under which the Authority will agree to loan to the
Company funds: (i) to currently refund on November 18, 2010 (the “Refunding Project”) the
outstanding $25,000,000 Delaware County Industrial Development Authority Water Facilities Revenue
Bonds (Philadelphia Suburban Water Company Project), Series of 1999 (the “1999 Bonds”), which were
issued to finance the costs of the facilities located at various sites throughout the Company’s
existing water supply and distribution system, and to pay a portion of the costs of issuance of
such bonds (the “1999 Project Facilities”); and the outstanding $18,360,000 Mercer County
Industrial Development Authority Water Facilities Revenue Bonds, Series of 2000 (Consumers
Pennsylvania Water Company – Shenango Valley Division Project) (the “2000 Bonds”, and together with
the 1999 Bonds, the “Prior Bonds”), which were used to finance a portion of the cost of
acquisition, construction, installation and equipping of its water treatment and filtration
facilities located in Sharon, Pennsylvania, and pay a portion of the costs of issuance of such
bonds (the “2000 Project Facilities”, and together with the 1999 Project Facilities, the “Refunding
Project Facilities”), and related refunding financing costs; (ii) to finance certain capital costs
of the construction, acquisition and installation of modifications, expansions and replacements of
water distribution, treatment and related operating systems located in the counties of Bucks,
Chester, Delaware, Mercer, Montgomery and Warren Counties in Pennsylvania (the “Project Facilities”
and together with the Refunding Project Facilities the “Facilities”) that are part of the Company’s
System (the “Construction Project”, and together with the “Refunding Project”, the “Project”); and
(iii) the related financing costs.


 


 









 





To finance the loan under the Financing Agreement, the Authority proposes to issue and sell
$45,180,000 aggregate principal amount of its Water Facilities Revenue Refunding Bonds (Aqua
Pennsylvania, Inc. Project), Series A of 2010 (the “2010A Bonds”), and $96,205,000 aggregate
principal amount of its Water Facilities Revenue Bonds (Aqua Pennsylvania, Inc. Project), Series B
of 2010 (the “2010B Bonds”, and together with the 2010A Bonds, the “Bonds”) to the Underwriters,
who will in turn reoffer the Bonds for sale to the public.



(b) The 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”), a resolution adopted by
the Authority on September 15, 2010 (the “Authority Resolution”) and a Trust Indenture, dated as of
October 15, 2010 (the “Trust Indenture”), between the Authority and U.S. Bank National Association,
as trustee (the “Trustee”). The Bonds will have such terms as are set forth in Schedule II attached
hereto.



The Bonds will be payable out of payments by the Company under the Financing Agreement,
including payments under its First Mortgage Bond, 5.00% Series due December 1, 2033 in the
principal amount of $25,910,000; its First Mortgage Bond, 5.00% Series due December 1, 2034, in the
principal amount of $19,270,000; its First Mortgage Bond, 4.50% Series due December 1, 2042, in the
principal amount of $15,000,000; and its First Mortgage Bond, 5.00% Series due December 1, 2043, in
the principal amount of $81,205,000 (together, the “First Mortgage Bonds”) issued with respect to
the Bonds. The First Mortgage Bonds 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 The Bank of
New York Mellon Trust Company, N.A., 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., Chase Manhattan Trust Company, National Association and J.P. Morgan Trust
Company, National Association) (the “Mortgage Trustee”), as presently amended and supplemented and
as to be further supplemented by a Forty-sixth Supplemental Indenture of Mortgage to be dated as of
October 15, 2010 (the “Forty-sixth Supplemental Mortgage”, which together with the Indenture of
Mortgage, as amended and supplemented, is referred to hereinafter as the “Mortgage”). Each of the
First Mortgage Bonds will be issued in the same aggregate principal amount, and will mature on the
same date and bear interest at the same rate as the 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 Bonds, including all of the Authority’s rights to the First Mortgage
Bonds, and all of the Authority’s rights to moneys and securities in the Project Funds, the Revenue
Funds and the Debt Service Funds (and the accounts within all such Funds applicable to the 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 Bonds pursuant to the Trust Indenture.



(c) The proceeds of the 2010A Bonds and 2010B Bonds will be used to refinance and finance,
respectively, 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 Underwriters may offer the 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”).


 


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(d) A Preliminary Official Statement dated October 15, 2010, including the Appendices 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 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 Representative and the Company, is hereinafter referred to as the
“Official Statement”).



Section 2. Purchase, Sale and Closing. On the terms and conditions herein set forth, the
Underwriters will buy from the Authority, and the Authority will sell to the Underwriters, all (but
not less than all) of the Bonds at a purchase price equal to $141,764,215.45, which is equal to the
$141,385,000.00 aggregate principal amount of the Bonds, plus net original issue premium of
$1,838,245.45, less the underwriting discount of $1,459,030.00. Payment for the Bonds 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 Ballard Spahr LLP, Philadelphia, Pennsylvania (“Bond
Counsel”), at 10:00 a.m., Eastern Standard Time, on November 17, 2010 or at such other date, time
or place or in such other manner as may be agreed on by the parties hereto. The Bonds will be
delivered as fully registered bonds in the aggregate principal amount of $141,385,000 in the name
of Cede & Co., as nominee for The Depository Trust Company (“DTC”), with CUSIP numbers printed
thereon, and shall conform in all respects to DTC’s Book-Entry Only System. Delivery of the Bonds
to DTC will be made by delivering the Bonds to the Trustee utilizing the DTC FAST system. If the
Representative so requests, the Bonds shall be made available to the Underwriters (prior to their
delivery to DTC) in Philadelphia, Pennsylvania at least three full business days before the Closing
for purposes of inspection.



The Underwriters agree to make a bona fide public offering of the Bonds at the initial
offering prices or yields set forth in the Official Statement; provided, however, that the
Underwriters reserve the right (and the Authority and the Company hereby expressly acknowledge such
right): to make concessions to dealers; to effect transactions that stabilize or maintain the
market price of the Bonds above that which might otherwise prevail in the open market and to
discontinue at any time such stabilizing transactions; and to change such initial offering prices,
all as the Underwriters shall deem necessary in connection with the marketing of the Bonds.



Section 3. Authority’s Representations. The Authority makes the following representations on
and as of the date hereof, all of which shall survive Closing:



(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”), including the
“Act”, and has, and at the date of Closing will have, full legal right, power and authority to:
enter into this Bond Purchase Agreement; execute and deliver the Bonds, the Trust Indenture, the
Financing Agreement, this Bond Purchase 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”); issue, sell and deliver the Bonds to
the Underwriters as provided herein; and 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.


 


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(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” (solely insofar as it relates to the
Authority), “THE AUTHORITY” and “ABSENCE OF MATERIAL LITIGATION” (solely insofar as the information
set forth therein relates to 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” (solely insofar as it relates to the
Authority), “THE AUTHORITY” and “ABSENCE OF MATERIAL LITIGATION” (solely insofar as the information
set forth therein relates to 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
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) 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 Authority after due inquiry, 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 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.


 


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(i) The Bonds, when issued, authenticated and delivered in accordance with the Trust Indenture
and sold to the Underwriters 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 may be affected 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 Bonds or of the revenues or assets of the Authority pledged
or to be pledged to pay the principal of and interest on the 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 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.



(1) The net proceeds received from the Bonds and applied in accordance with the Trust
Indenture and the Financing Agreement shall be used in accordance with the Act as described in the
Official Statement.



(m) Any certificate signed by any of the authorized officers of the Authority and delivered to
the Representative shall be deemed a representation and warranty by the Authority to the
Underwriters as to the statements made therein.



Section 4. Company’s Representations and Warranties. The Company makes the following
representations and warranties on and as of the date hereof and as of the date of Closing, all of
which will survive the Closing:



(a) The Company has not sustained, since December 31, 2009, 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, stockholder’s equity
or results of operations of the Company, otherwise than as set forth or contemplated in the
Official Statement.


 


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(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) The First Mortgage Bonds have 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 valid and legally binding obligations of the Company enforceable
in accordance with their terms (except as may be affected by Creditors’ Rights Limitations)
entitled to the benefits provided by the Mortgage.



(d) The Indenture of Mortgage has been duly authorized, executed and delivered by the Company,
and the Forty-sixth Supplemental Mortgage has been duly authorized by the Company. When the
Forty-sixth Supplemental Mortgage, in substantially the form approved by the Representative and
Bond Counsel, 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 will constitute a
valid and legally binding instrument enforceable against the Company in accordance with its terms
except as enforceability may be affected by Creditors’ Rights Limitations; will constitute a
direct, valid and enforceable first mortgage lien (except as enforceability of such lien may be
affected 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 will create a mortgage upon all properties and assets acquired by the Company after
the execution and delivery of the Forty-sixth 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 Indenture of Mortgage has been and the Forty-sixth 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) With only 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, and 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.


 


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(f) With only such exceptions as 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 the knowledge of the Company 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 Bonds, the issue and delivery of the First Mortgage Bonds and
the compliance by the Company with all of the applicable provisions of the First Mortgage Bonds and
the Mortgage and the execution, delivery and performance by the Company of the Forty-sixth
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 to be obtained by the Company for
the issue and sale of the Bonds, the issue and delivery of the First Mortgage Bonds, the execution,
delivery and performance by the Company of this Bond Purchase Agreement, the Financing Agreement,
the Forty-sixth Supplemental Mortgage, the First Mortgage Bonds 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 Company has obtained from the Pennsylvania Public Utility Commission an order duly
authorizing the issuance and delivery of the First Mortgage Bonds by the Company and the incurring
of the debt evidenced thereby, on terms not inconsistent with this Bond Purchase Agreement.


 


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(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,
wherein an unfavorable ruling, decision or finding would have a material adverse effect on the
financial position, stockholder’s 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) 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); 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 all other information supplied by the Company to the Representative with
respect to the exclusion from gross income pursuant to Section 103 of the Code of the interest on
the 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.



(m) The information with respect to the Company and the Project and the descriptions of the
First Mortgage Bonds and the Mortgage contained in the Preliminary Official Statement and the
Official Statement (including appendices A and B thereto) do not contain any untrue statement of a
material fact or omit to state any material fact necessary to be stated therein in order to make
such information and descriptions, in the light of the circumstances under which they were made,
not misleading.




Section 5. Authority’s Covenants. The Authority will:



(a) Furnish such information, execute such instruments and take such other action in
cooperation with the Representative as the Representative may reasonably request to qualify the
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 Representative may designate and
will assist, if necessary therefor, in the continuance of such qualifications in effect so long as
required for distribution of the 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 Representative and the Company and will advise the Representative 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 Bonds.


 


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(c) Refrain from knowingly taking any action (and permitting any action with regard to which
the Authority may exercise control) that would result in the loss of the exclusion from gross
income for federal income tax purposes of interest on the Bonds.




Section 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 Bonds.



(b) Indemnify and hold harmless the Authority, its members, directors, officers, agents,
attorneys, and employees and the Underwriters, their respective officers, directors, officials,
agents, attorneys, employees, and each person, if any, who controls each of the Underwriters
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 Underwriters, or either of them, or any
of their respective members, directors, officers, agents, attorneys, and employees and each person,
if any, who controls the Underwriters 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; (iii) the willful or negligent omission of (or the alleged omission to state) a material
fact in the Official Statement, the Preliminary Official Statement, or 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; (iv) or arising by virtue of the failure to register the Bonds under
the 1933 Act or the failure to qualify the Trust Indenture under the 1939 Act; or (v) arising by
virtue of any audit or investigation conducted by a state or federal agency, department or entity
questioning, among other things, the tax-exempt status of the Bonds.



(c) Undertake, pursuant to the Continuing Disclosure Agreement dated as of November 17, 2010
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 l5c2-l2 under
the 1934 Act, as amended (“Rule 15c2-12”).



(d) Not amend or supplement the Official Statement without prior notice to, and the consent
of, the Representative, and will advise the Representative 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 Bonds.


 


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(e) Take all actions reasonably necessary to maintain in effect and to comply with the order
of the Pennsylvania Public Utility Commission dated October 21, 2010, registering the Securities
Certificate for the issuance of the First Mortgage Bonds in support of the Bonds.




Section 7. Underwriters’ Covenant and Compensation.



(a) By acceptance hereof, each of the Underwriters, on a several (according to their
respective percentages on Schedule I) but not joint basis, 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 the offering and sale of the 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 Underwriters furnished only the information under such “UNDERWRITING”
heading), or failure on the part of the Underwriters to deliver an Official Statement to any
purchaser. The Underwriters 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 Underwriters may otherwise have. The Underwriters shall not be
liable for any settlement of, any such action effected without its consent.



(b) The Underwriters will be paid an underwriting discount of $1,459,030.00 with respect to
the Bonds.



(c) The Underwriters acknowledge that the Authority is relying upon the accuracy of the
certification in clause (b) above on the date hereof as a condition precedent to lending the
proceeds of the Bonds to the Company.



Section 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 audit, investigation or action against such Indemnitee in respect
of which indemnity is to be sought by the Indemnitee against the Company or any of the respective
Underwriters, 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 failure 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


 


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 such settlement or judgment. The indemnity agreements contained in this Bond Purchase Agreement 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 shall survive delivery of the Bonds.
Notwithstanding the foregoing, in the event of an investigation or audit by the Internal Revenue
Service or the Securities and Exchange Commission or any other state or federal agency, department,
or entity with respect to the Bonds, the Authority shall have the right and duty to undertake its
own defense, including the employment of counsel, with full power to litigate, compromise or settle
the same on its own behalf, and the Company agrees that it will indemnify and hold the Authority
harness for all costs and expenses, including, but not limited to, attorney fees and expenses and
costs, of any such settlement.



Section 9. Equitable Contribution. If the indemnification provided for in Section 6(b) of
this Bond Purchase Agreement is unavailable to any of the respective Underwriters (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 each or any of the respective
Underwriters, contribute to the amount paid or payable by each or any of the Underwriters 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 Underwriters, respectively, from the
offering of the 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 Underwriters in such proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of the Company and each or any of the Underwriters,
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 Underwriters 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 Underwriters, 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 each of the Underwriters and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that it would not be just and equitable if
contribution pursuant to this Section 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 each of the Underwriters 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 such Underwriter in
connection with investigating or defending any such action or claim. Notwithstanding the provisions
of this Section 9, no Underwriter shall be required to contribute any amount in excess of the
amount of the discount allowed to each Underwriter as set forth in Section 7(b) hereof.



Section 10. Official Statement; Public Offering.


 


11









 





(a) In order to enable the Underwriters to comply with Rule l5c2-l2, the Company has prepared
(or caused to be prepared) the Preliminary Official Statement, which the Company and the Authority
(in the case of the Authority, only with respect to the information therein under the headings “THE
AUTHORITY” and, insofar as they relate to the Authority, “INTRODUCTORY STATEMENT” and “ABSENCE OF
MATERIAL LITIGATION”) deem final and complete as of its date except for certain permitted omissions
as described in Rule l5c2-l2. The Company shall provide to the Representative 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 (7) business days after the date of this Bond Purchase
Agreement. If the Company, during the period described in Section l0(b) below, has or gains
knowledge of a fact or circumstance that would render the Official Statement misleading in any
material respect, then the Company shall promptly give the Representative written notice thereof.
The Authority and the Company hereby authorize the use of the Preliminary Official Statement and
the Official Statement by the Underwriters in connection with the offering of the Bonds.



(b) 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 Representative. If from the
date hereof until the earlier of (i) ninety (90) days after the end of the underwriting period (as
defined in Rule l5c2-12) or (ii) the time when the Official Statement is available to any person
from the Repository with which it has been deposited, but in no case less than twenty-five (25)
days following the end of the underwriting period, any event relating to or affecting the
Authority, the Company or the Bonds shall occur, the result of which shall make it necessary, in
the opinion of the Representative, 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 Underwriters, 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 Representative shall promptly provide the Municipal Securities
Rulemaking Board with a copy of the Official Statement for filing in accordance with Rule 15c2-l2,
and inform the Authority and the Company in writing as to the date and place of such filing and the
date of the end of the underwriting period.



Section 11. Conditions of Underwriters’ and Authority’s Obligations. The Underwriters’
obligations to purchase and pay for the Bonds and the Authority’s obligation to issue and deliver
the Bonds are subject to fulfillment of the following conditions at or before Closing:



(a) The representations of the Authority and the Company herein, as applicable, 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, as applicable, shall be in default in the
performance of any of their respective covenants herein.


 


12









 






(c) The Representative shall have received:



(i) An opinion of Ballard Spahr LLP, Bond Counsel, dated the date of Closing, substantially in
the form attached as Appendix E to the Preliminary Official Statement, addressed to (or with
reliance letters delivered in respect of) the Authority, the Trustee, the Company and the
Representative.



(ii) An opinion of Ballard Spahr LLP, Bond Counsel, dated the date of Closing, substantially
in the form attached as Exhibit A hereto, addressed to the Representative.



(iii) An opinion of the Office of Chief Counsel of the Pennsylvania Department of Community
and Economic Development, as counsel for the Authority, dated the date of Closing, in form and
substance satisfactory to the Representative, addressed to the Representative, the Trustee, the
Company and Bond Counsel.



(iv) An opinion of Dilworth Paxson LLP, counsel to the Company, dated the date of Closing,
substantially in the form attached as Exhibit B hereto, addressed to the Representative, the
Authority and Bond Counsel.



(v) An agreed upon procedures letter dated the date of the Official Statement and addressed to
the Company and the Representative from the Company’s auditor with respect to financial information
set forth in Appendix A and Appendix B to the Official Statement, in form and substance reasonably
satisfactory to the Company’s auditor and the Representative.



(vi) A certificate dated the date of Closing executed by the Executive Director of the
Authority and addressed to the Representative to the effect that, to the best of his or her
respective knowledge:



(A) the representations and warranties of the Authority contained herein are true and correct
in all material respects as of the date of Closing; and



(B) the Authority has complied in all material respects with all agreements executed by the
Authority in connection with issuance of the 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.



(vii) A certificate dated the date of Closing executed by the chief financial officer of the
Company and addressed to the Representative to the effect that, to the best of his knowledge:



(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;


 


13









 





(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 this Bond Purchase Agreement
that is required to be disclosed in the Official Statement or necessary in order to make the
statements and information therein not misleading in any material respect.



(viii) Two executed copies of the Trust Indenture, the Financing Agreement, the Bond Purchase
Agreement, the Forty-sixth Supplemental Mortgage and the Continuing Disclosure Agreement and
specimen copies of the First Mortgage Bonds.



(ix) Two copies of the Articles of Incorporation and Bylaws 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 Bonds, the Forty-sixth 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.




(x) Two copies of the Authority Resolution.



(xi) 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 and the Representative,
consenting to the use of the financial statements reported upon by such firm and all references to
such firm contained in the Preliminary Official Statement and the Official Statement.



(xii) Evidence satisfactory to the Representative of a long-term credit rating of “AA-” and a
recovery rating of “1+” assigned by Standard & Poor’s Ratings Services, a Division of The
McGraw-Hill Companies, and that such ratings are in full force and effect as of the date of
Closing.



(xiii) Evidence satisfactory to Bond Counsel and the Representative of the receipt by the
Authority of a Preliminary Allocation relating to the Bonds and of the registration of a Securities
Certificate relating to the First Mortgage Bonds and the Bonds with the Pennsylvania Public Utility
Commission.



(xiv) Such additional documentation, including, without limitation, legal opinions, as the
Representative or its counsel, or Bond Counsel may reasonably request to evidence compliance with
applicable law and the validity of the Bonds, the Financing Agreement, the Trust Indenture, this
Bond Purchase Agreement, the Forty-sixth Supplemental Mortgage, the First Mortgage Bonds and the
Continuing Disclosure Agreement, and to evidence
that the interest on the Bonds is not includable in gross income under the Code and the status of
the offering under the 1933 Act and the 1939 Act.


 


14









 





(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 Representative, makes it inadvisable to proceed with the sale of the Bonds; and the
Representative 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.



(e) The Representative shall deliver at Closing a certificate in form acceptable to Bond
Counsel to the effect that the Underwriters have sold to the public (excluding bond houses and
brokers) a substantial amount of the 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.



Section 12. Events Permitting the Underwriters to Terminate. The Underwriters may terminate
their obligation to purchase the 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 Representative 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 Bonds so as to materially impair the marketability or materially lower the market price of
the Bonds.



(b) Any action by the Securities and Exchange Commission or a court that would require
registration of the Bonds or the First Mortgage Bonds under the 1933 Act or qualification of the
Trust Indenture under the 1939 Act.



(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 new 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 Bonds.



(d) Any event or condition occurring or arising after the date hereof, which in the reasonable
judgment of the Representative 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 Representative will use their best efforts to amend or supplement
the Official Statement to reflect, to the reasonable satisfaction of the Representative, such
changes in or additions to the information contained in the Official Statement.


 


15









 





(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 Bonds, which, in the
reasonable judgment of the Representative, would materially impair the marketability or materially
lower the market price of the Bonds.



(f) Quantities of the Official Statement are not delivered to the Underwriters in a timely
manner as required by Section 10 hereof.



If the Underwriters terminate their obligation to purchase the 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 Underwriters or the Company, except for the obligations of the Company under
Sections 6(b), 8, 9 and 14 which shall remain in full force and effect.




Section 13. [Intentionally Omitted]



Section 14. Expenses. All expenses and costs of the authorization, issuance, sale and
delivery of the Bonds including, without limitation, accrued interest, the preparation of and
furnishing to the Underwriters of the Preliminary Official Statement and the Official Statement,
the preparation and execution of the Bonds, the Financing Agreement, the Trust Indenture, the First
Mortgage Bonds, the Forty-sixth Supplemental Mortgage, the Continuing Disclosure Agreement and this
Bond Purchase Agreement, 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 Underwriters and the expenses incurred in connection with
qualifying the Bonds for sale under the securities laws of various jurisdictions and preparing a
Blue Sky memorandum, if any, shall be paid by the Company from funds contributed by the Company and
from proceeds of the Bonds. The Authority shall bear no out-of-pocket expense in connection with
the transactions contemplated by this Bond Purchase Agreement. Each of the respective Underwriters
will pay all other expenses it may incur in connection with the public offering of the Bonds.



Section 15. 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.


 


16









 





Section 16. 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 Underwriters:

	 	Jefferies & Company, Inc.,
	 	 

	 	as Representative of the Underwriters
	 	 

	 	1650 Market Street
	 	 

	 	36th Floor
	 	 

	 	Philadelphia, PA 19103
	 	 

	 	Attention: George C. Werner, III, Managing Director
	 	 

	 	Fax #: (610) 514-9852
	 	 

	 	Email: gwerner@Jefferies.com
	 	 
	 	 
	 	The Company:

	 	Aqua Pennsylvania, Inc.
	 	 

	 	762 Lancaster Avenue
	 	 

	 	Bryn Mawr, PA 19010
	 	 

	 	Attention: Diana Moy Kelly, Treasurer
	 	 

	 	Fax #: (610) 519-0989
	 	 

	 	Email: dmoykelly@aquaamerica.com
	 	 
	 	 
	 	The Authority:

	 	Pennsylvania Economic Development Financing Authority
	 	 

	 	Center for Private Financing
	 	 

	 	400 North Street, 4th Floor
	 	 

	 	Harrisburg, PA 17120-0225
	 	 

	 	Attention: Stephen Drizos, Executive Director
	 	 

	 	Fax #: (717) 787-0879
	 	 

	 	Email: sdrizos@state.pa.us






Section 17. 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
Underwriters.



Section 18. 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, 8 and 9 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.


 


17









 





Section 19. Limitations on Liability. No personal recourse shall be had for any claim based
on this Bond Purchase Agreement or the 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.



(Signatures on next page)



 


18









 







IN WITNESS WHEREOF, the Authority, the Company and the Underwriters have caused their duly
authorized officers to execute and deliver this Bond Purchase Agreement as of the date first
written above.



	 	 	 	 	 
	 	PENNSYLVANIA ECONOMIC DEVELOPMENT FINANCING

AUTHORITY

 	 
	 	By:  	Stephen M. Drizos
 	 
	 	 	STEPHEN M. DRIZOS 	 
	 	 	Executive Director 	 
	 
	 	AQUA PENNSYLVANIA, INC.

 	 
	 	By:  	Diana MoyKelly
 	 
	 	 	DIANA MOY KELLY 	 
	 	 	Treasurer 	 
	 
	 	JEFFERIES & COMPANY, INC., on its own behalf

and as Representative of the Underwriters

 	 
	 	By:  	George C. Werner, III
 	 
	 	 	GEORGE C. WERNER, III 	 
	 	 	Managing Director 	 



 


19









 





SCHEDULE I




Underwriters




	 	 	 	 	 
	Jefferies & Company, Inc.
	 	 	72.50	%
	PNC Capital Markets, LLC
	 	 	20.00	%
	TD Securities (USA) LLC
	 	 	7.50	%






 


20









 







SCHEDULE II




$141,385,000

PENNSYLVANIA ECONOMIC DEVELOPMENT FINANCING AUTHORITY




	 	 	 
	 
	 	 
	$45,180,000
	 	$96,205,000
	Water Facilities Revenue Refunding Bonds
	 	Water Facilities Revenue Bonds
	(Aqua Pennsylvania, Inc. Project)
	 	(Aqua Pennsylvania, Inc. Project)
	Series A of 2010
	 	Series B of 2010






2010A Bonds




	 	 	 	 	 	 	 	 	 	 	 
	$25,910,000
	 	5.00%
	 	Term Bond Due
	 	December 1, 2033
	 	Yield: 5.00%
	 	Price:100.000
	$19,270,000
	 	5.00%
	 	Term Bond Due
	 	December 1, 2034
	 	Yield: 5.05%
	 	Price: 99.306






2010B Bonds




	 	 	 	 	 	 	 	 	 	 	 
	$15,000,000
	 	4.50%
	 	Term Bond Due
	 	December 1, 2042
	 	Yield: 4.75%
	 	Price: 95.904
	$81,205,000
	 	5.00%
	 	Term Bond Due
	 	December 1, 2043
	 	Yield: 4.60%
	 	Price: 103.185*








	 	 	 
	*	 	Price shown to first optional redemption date of December 1, 2020.





Interest Payment Dates: June 1 and December 1, commencing June 1, 2011.



Redemption Provisions: The Bonds are subject to redemption as follows:




Optional Redemption



The 2010A Bonds are subject to optional redemption prior to maturity by the Authority, at the
direction of the Company, on and after December 1, 2020, as a whole or in part at any time, at a
redemption price equal to 100% of the principal amount thereof, plus interest accrued thereon to
the date fixed for redemption.



The 2010B Bonds are subject to optional redemption prior to maturity by the Authority, at the
direction of the Company, on and after December 1, 2020, as a whole or in part at any time, at a
redemption price equal to 100% of the principal amount thereof, plus interest accrued thereon to
the date fixed for redemption.



Extraordinary Optional Redemption- 2010A Bonds. The 2010A 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:


 


21









 





(a) the damage or destruction of all or substantially all of the Refunding 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
Facilities or the taking by condemnation of any part, use or control of the Refunding 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 Refunding 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 Financing Agreement other than ad
valorem property taxes presently levied upon privately owned property used for the same general
purposes as the Refunding Project Facilities, or (2) the continued operation of the Refunding
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.



Extraordinary Optional Redemption- 2010B Bonds. The 2010B 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 2010B 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 Financing 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.


 


22









 





Special Mandatory Redemption of the 2010B Bonds. The 2010B Bonds are subject to mandatory
redemption, in part, on the first interest payment date for which notice can be given in
accordance with the Trust Indenture after the Construction Project has been completed and the
certificate of the Company with respect thereto required by the Financing Agreement has been filed
with the Authority and the Trustee, to the extent of any amounts transferred from the 2010B Project
Fund to the 2010B Debt Service Fund pursuant to the Trust Indenture, at a Redemption Price of 100%
of the principal amount of the 2010B Bonds to be redeemed, plus accrued interest thereon to the
date fixed for redemption.




Selection shall be made and notice given in accordance with the Trust Indenture.



 


23









 







EXHIBIT A



 


 









 







EXHIBIT B