Exhibit 10.1
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ARTESIAN WATER COMPANY, INC.
TO
WILMINGTON TRUST COMPANY,
As Trustee
_____________________
EIGHTEENTH SUPPLEMENTAL INDENTURE
Dated as of August 1, 2005
_____________________
Supplemental to Indenture of Mortgage
Dated as of July 1, 1961
$25,000,000 First Mortgage Bonds, Series R, 5.96%
EIGHTEENTH SUPPLEMENTAL INDENTURE, dated as of August 1, 2005, made by
and between ARTESIAN WATER COMPANY, INC. (successor to Artesian Resources
Corporation, formerly named "Artesian Water Company", under the Original
Indenture hereinafter referred to), a corporation organized and existing under
the laws of the State of Delaware (hereinafter called the "COMPANY"), party of
the first part, and WILMINGTON TRUST COMPANY, a corporation organized and
existing under the laws of the State of Delaware, having its principal office
and place of business at Tenth and Market Streets, in the City of Wilmington,
Delaware, as Trustee under the Original Indenture hereinafter referred to
(hereinafter called the "TRUSTEE"), party of the second part.
WHEREAS, the Company is a wholly-owned subsidiary of ARTESIAN RESOURCES
CORPORATION (its name having been changed from "Artesian Water Company"), a
corporation organized and existing under the laws of the State of Delaware
(hereinafter called the "CORPORATION"); and
WHEREAS, the Corporation has heretofore executed and delivered to the
Trustee an Indenture of Mortgage (hereinafter called the "ORIGINAL INDENTURE")
dated as of July 1, 1961, and duly recorded the Original Indenture in the
Recorder's Office at Wilmington, in Mortgage Record A Volume 56, Page 1 etc., on
the 13th day of November, A.D. 1961, for the purpose of securing First Mortgage
Bonds of the Corporation to be issued from time to time in one or more series as
therein provided; and
WHEREAS, there have been issued under the Original Indenture $1,600,000
principal amount of First Mortgage Bonds, Series A, 4 1/2%, all of which were
paid at maturity on November 1, 1978; and
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WHEREAS, there have been issued under the Original Indenture $1,000,000
principal amount of First Mortgage Bonds, Series B, 5 3/8%, the $912,750
remaining outstanding principal amount of which was paid at maturity on July 1,
1986; and
WHEREAS, there have been issued under the Original Indenture as
supplemented by a first supplemental indenture dated as of April 15, 1964
(hereinafter sometimes referred to as the "FIRST SUPPLEMENTAL INDENTURE"),
$1,250,000 principal amount of First Mortgage Bonds, Series C, 5 1/8%, the
$1,225,000 remaining outstanding principal amount of which was paid at maturity
on April 15, 1989; and
WHEREAS, there have been issued under the Original Indenture, as
supplemented by a second supplemental indenture dated as of June 1, 1970
(hereinafter sometimes referred to as the "SECOND SUPPLEMENTAL INDENTURE"),
$1,000,000 principal amount of First Mortgage Bonds, Series D, 9 3/4%, the
$640,000 remaining outstanding principal amount of which was paid at maturity on
June 1, 1990; and
WHEREAS, there have been issued under the Original Indenture as
supplemented by a third supplemental indenture dated as of January 1, 1973
(hereinafter sometimes referred to as the "THIRD SUPPLEMENTAL INDENTURE"),
$800,000 principal amount of First Mortgage Bonds, Series E, 8 1/2%, due January
1, 1998, all of which were redeemed on February 1, 1993; and
WHEREAS, there have been issued under the Original Indenture, as
supplemented by a fourth supplemental indenture dated as of November 1, 1975
(hereinafter sometimes referred to as the "FOURTH SUPPLEMENTAL INDENTURE"),
$1,500,000 principal amount of First Mortgage Bonds, Series F, 10 7/8%, due
November 1, 1995, the $225,000 remaining outstanding principal amount of which
was redeemed on February 1, 1993; and
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WHEREAS, there have been issued under the Original Indenture, as
supplemented by a fifth supplemental indenture dated as of March 1, 1977
(hereinafter sometimes referred to as the "FIFTH SUPPLEMENTAL INDENTURE"),
$1,800,000 principal amount of First Mortgage Bonds, Series G, 8 7/8% due March
1, 1997, the $1,080,000 remaining outstanding principal amount of which was
redeemed on February 1, 1993; and
WHEREAS, there have been issued under the Original Indenture, as
supplemented by a sixth supplemental indenture dated as of December 1, 1978
(hereinafter sometimes referred to as the "SIXTH SUPPLEMENTAL INDENTURE"),
$1,800,000 principal amount of First Mortgage Bonds, Series H, 9 3/4%, due
December 1, 1998, the $1,260,000 remaining outstanding principal amount of which
was redeemed on February 1, 1993; and
WHEREAS, there have been issued under the Original Indenture, as
supplemented by a seventh supplemental indenture dated as of November 1, 1981
(hereinafter sometimes referred to as the "SEVENTH SUPPLEMENTAL INDENTURE"),
$3,000,000 principal amount of First Mortgage Bonds, Series I, 11 7/8%, due
October 1, 1987, all of which were redeemed on October 1, 1986; and
WHEREAS, the Company was organized for stated purposes that encompass
the stated purposes of the Corporation in order that the Company could acquire
from the Corporation substantially all of the Mortgaged Property (as such term
is defined in the Original Indenture) as an entirety and to operate the same;
and
WHEREAS, the Corporation, the Company and the Trustee entered into an
eighth supplemental indenture dated as of July 1, 1984 (hereinafter sometimes
referred to as the "ORIGINAL EIGHTH SUPPLEMENTAL INDENTURE"), providing for the
succession and substitution of the Company to and for the Corporation with the
same effect as if the Company had been named in the Original Indenture as the
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mortgagor, and providing for the assumption by the Company of, and the release
and discharge of the Corporation from, all liability and obligation on and with
respect to the Bonds and coupons issued under the Original Indenture and all the
terms, covenants and conditions of the Original Indenture; and
WHEREAS, the Corporation, the Company and the Trustee executed a
certain corrected eighth supplemental indenture dated as of July 1, 1984
(hereinafter sometimes referred to as the "CORRECTED EIGHTH SUPPLEMENTAL
INDENTURE") which supplements and corrects certain descriptions of Mortgaged
Property set forth in the Original Indenture (the Original Eighth Supplemental
Indenture and the Corrected Eighth Supplemental Indenture being hereinafter
sometimes referred to collectively as the "EIGHTH SUPPLEMENTAL INDENTURE"); and
WHEREAS, on July 1, 1984, the Corporation conveyed and transferred
substantially all the Mortgaged Property as an entirety, subject to the lien of
the Original Indenture and all supplemental indentures thereto, to the Company;
and
WHEREAS, the Company has assumed and agreed that it will promptly pay
or cause to be paid, the principal of and any premium that may be due and
payable on and the interest on all the Bonds issued under the Original Indenture
and all indentures supplemental thereto, and has agreed to perform, observe and
fulfill, duly and punctually, all the terms, covenants and conditions of the
Original Indenture and all indentures supplemental thereto stated therein to be
performed, observed or fulfilled by the Corporation, and the Corporation has
been released and discharged from all liability and obligation on and with
respect to the Bonds and coupons issued under the Original Indenture and all
terms, covenants and conditions of the Original Indenture and the Trustee has
executed and delivered to the Company an instrument of partial defeasance dated
April 4, 1986 pursuant to Article II of the Eighth Supplemental Indenture; and
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WHEREAS, there have been issued under the Original Indenture, as
supplemented by a ninth supplemental indenture dated as of December 1, 1986
(hereinafter sometimes referred to as the "NINTH SUPPLEMENTAL INDENTURE"),
$5,000,000 principal amount of First Mortgage Bonds, Series J, 9.55%, all of
which were paid at maturity on December 1, 1996; and
WHEREAS, there have been issued under the Original Indenture, as
supplemented by a tenth supplemental indenture dated as of April 1, 1989
(hereinafter sometimes referred to as the "TENTH SUPPLEMENTAL INDENTURE"),
$7,000,000 principal amount of First Mortgage Bonds, Series K, 10.17%, due April
1, 2009, all of which were redeemed on December 29, 2000; and
WHEREAS, there have been issued under the Original Indenture, as
supplemented by a eleventh supplemental indenture dated as of February 1, 1993
(hereinafter sometimes referred to as the "ELEVENTH SUPPLEMENTAL INDENTURE"),
$10,000,000 principal amount of First Mortgage Bonds, Series L, 8.03%, all of
which were redeemed on January 31, 2003; and
WHEREAS, the Original Indenture has been further supplemented pursuant
to a twelfth supplemental indenture dated as of December 5, 1995 (hereinafter
sometimes referred to as the "TWELFTH SUPPLEMENTAL INDENTURE"), which provided
for the release from the Indenture of certain assets of the Company; and
WHEREAS, there have been issued under the Original Indenture, as
supplemented by a thirteenth supplemental indenture dated as of June 1, 1997
(hereinafter sometimes referred to as the "THIRTEENTH SUPPLEMENTAL INDENTURE"),
$10,000,000 principal amount of First Mortgage Bonds, Series M, 7.84%, due
December 31, 2007, all of which are to be redeemed prior to maturity with a
portion of the proceeds of the Bonds to be issued under this Eighteenth
Supplemental Indenture; and
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WHEREAS, there have been issued under the Original Indenture, as
supplemented by a Fourteenth Supplemental Indenture dated as of June 1, 1997
(hereinafter sometimes referred to as the "FOURTEENTH SUPPLEMENTAL INDENTURE"),
$5,000,000 principal amount of First Mortgage Bonds, Series N, due December 31,
2007, all of which are to be redeemed prior to maturity with a portion of the
proceeds of the Bonds to be issued under this Eighteenth Supplemental Indenture;
and
WHEREAS, there have been issued under the Original Indenture, as
supplemented by a Fifteenth Supplemental Indenture dated as of December 1, 2000
(hereinafter sometimes referred to as the "FIFTEENTH SUPPLEMENTAL INDENTURE"),
$20,000,000 principal amount of First Mortgage Bonds, Series 0, 8.17%, all of
which were outstanding as of the date hereof; and
WHEREAS, there have been issued under the Original Indenture, as
supplemented by a Sixteenth Supplemental Indenture dated as of January 31, 2003
(hereinafter sometimes referred to as the "SIXTEENTH SUPPLEMENTAL INDENTURE"),
$25,000,000 principal amount of First Mortgage Bonds, Series P, 6.58%, all of
which were outstanding as of the date hereof; and
WHEREAS, there have been issued under the Original Indenture, as
supplemented by a Seventeenth Supplemental Indenture dated as of December 1,
2003 (hereinafter sometimes referred to as the "SEVENTEENTH SUPPLEMENTAL
INDENTURE"), $15,400,000 principal amount of First Mortgage Bonds, Series Q,
4.75%, all of which were outstanding as of the date hereof; and
WHEREAS, the Company proposes to issue and sell not more than
$25,000,000 principal amount of a new series of bonds to be designated as First
Mortgage Bonds, Series R, 5.96% to be issued under and secured by the Original
Indenture, as supplemented by this Eighteenth Supplemental Indenture dated as of
August 1, 2005 (hereinafter sometimes referred to as the "EIGHTEENTH
SUPPLEMENTAL INDENTURE"); and
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WHEREAS, the Company, pursuant to the provisions of the Original
Indenture, has duly resolved and determined to make, execute and deliver to the
Trustee this Eighteenth Supplemental Indenture for the purpose of providing for
the creation of the First Mortgage Bonds, Series R, 5.96% to be issued under and
secured by the Original Indenture, as supplemented (the Original Indenture, the
First Supplemental Indenture, the Second Supplemental Indenture, the Third
Supplemental Indenture, the Fourth Supplemental Indenture, the Fifth
Supplemental Indenture, the Sixth Supplemental Indenture, the Seventh
Supplemental Indenture, the Eight Supplemental Indenture, the Ninth Supplemental
Indenture, the Tenth Supplemental Indenture, the Eleventh Supplemental
Indenture, the Twelfth Supplemental Indenture, the Thirteenth Supplemental
Indenture, the Fourteenth Supplemental Indenture, the Fifteenth Supplemental
Indenture, the Sixteenth Supplemental Indenture, the Seventeenth Supplemental
Indenture, this Eighteenth Supplemental Indenture and all indentures
supplemental to the Original Indenture hereafter executed, being hereinafter
sometimes called the "INDENTURE"); and
WHEREAS, all things necessary to make $25,000,000 aggregate principal
amount of the First Mortgage Bonds, Series R, 5.96% when duly executed by the
Company and authenticated and delivered by the Trustee, legally valid and
binding obligations of the Company entitled to the benefits and security of the
Indenture, and to make this Eighteenth Supplemental Indenture a legally valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms, have been done and performed; and
WHEREAS, the issuance of the First Mortgage Bonds, Series R, 5.96%, as
herein provided, has been in all respects duly authorized by the Company as
provided in the Indenture.
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NOW, THEREFORE, THIS INDENTURE WITNESSETH THAT ARTESIAN WATER COMPANY,
INC., in consideration of the premises and of the acceptance by the Trustee of
the trusts hereby created and of the purchase and acceptance of the First
Mortgage Bonds, Series R, 5.96% by CoBank, ACB (hereinafter sometimes referred
to as "COBANK") pursuant to the Bond Purchase Agreement dated as of August 1,
2005 (hereinafter sometimes referred to as the "BOND PURCHASE AGREEMENT") and of
One Dollar to the Company duly paid by the Trustee at or before the ensealing
and delivery of these presents, for itself and its successors, intending to be
legally bound hereby, does hereby ratify and confirm its mortgage and pledge to
the Trustee of all property described in the Original Indenture, the First
Supplemental Indenture, the Second Supplemental Indenture, the Third
Supplemental Indenture, the Fourth Supplemental Indenture, the Fifth
Supplemental Indenture, the Eighth Supplemental Indenture, the Thirteenth
Supplemental Indenture, the Fifteenth Supplemental Indenture, the Sixteenth
Supplemental Indenture, and the Seventeenth Supplemental Indenture (except such
thereof as may heretofore have been released from the lien of the Indenture in
accordance with the terms thereof);
TOGETHER with all and singular the tenements, hereditaments and
appurtenances belonging or in any wise appertaining to the aforesaid property
and rights or any part thereof, with the reversion and reversions, remainder and
remainders, and to the extent permitted by law, all tolls, rents, revenues,
issues, income, product and profits thereof, and all the estate, right, title,
interest and claim whatsoever, at law as well as in equity, that the Company now
has or may hereafter acquire in and to the aforesaid premises, property and
rights and every part and parcel thereof;
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SAVING AND EXCEPTING, HOWEVER, from the property hereby mortgaged and
pledged all of the property of every kind and type saved and excepted from the
Original Indenture, by the terms thereof;
SUBJECT, HOWEVER, to the exceptions, reservations and matters of the
kind and type recited in the Original Indenture;
TO HAVE AND TO HOLD all said premises, property and rights granted,
bargained, sold, released, conveyed, transferred, assigned, mortgaged, pledged,
set over and confirmed by the Company as aforesaid or intended so to be unto the
Trustee and its successors in the trust and their assigns forever;
IN TRUST, NEVERTHELESS, upon the terms and trusts set forth in the
Original Indenture for the equal and proportionate benefit and security of those
who shall hold or own the bonds and coupons issued and to be issued under the
Indenture, or any of them, without preference of any of said bonds and coupons
over any others thereof by reason of priority in the time of the issue or
negotiation thereof or by reason of the date or maturity thereof, or for any
other reason whatsoever; subject, however, to the provisions with respect to
extended, pledged and transferred coupons contained in Section 4.02 of the
Original Indenture.
AND THIS INDENTURE FURTHER WITNESSETH THAT, in consideration of the
premises and of such acceptance or purchase of the First Mortgage Bonds, Series
R, 5.96% by CoBank, and of said sum of One Dollar to the Company duly paid by
the Trustee at or before the ensealing and delivery of these presents, the
Company, for itself and its successors, intending to be legally bound hereby
does covenant to and agree with the Trustee and its successors in the trust, for
the benefit of those who shall hold or own such Bonds, or any of them, as
follows:
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ARTICLE I
FIRST MORTGAGE BONDS, SERIES R, 5.96%
Section 1.1 Designation and Amount. A series of Bonds to be issued
under the Original Indenture as heretofore supplemented and as supplemented
hereby and secured thereby and hereby is hereby created which shall be
designated as, and shall be distinguished from the Bonds of all other series by
the title, "First Mortgage Bonds, Series R, 5.96%," herein referred to as the
"Series R Bonds." The aggregate principal amount of the Series R Bonds shall not
exceed $25,000,000.
Section 1.2 Bond Terms. The Series R Bonds shall be dated the date of
their authentication and shall bear interest from such date, except as otherwise
provided for Bonds issued upon subsequent exchanges and transfers by Section
2.06 of the Original Indenture, shall mature and be due on December 31, 2028 (
the "MATURITY DATE"), and shall bear interest at 5.96% per annum, payable on the
first Business Day (as hereinafter defined) of October, January, April, and July
of each year, beginning with the first Business Day of October, 2005, and on the
Maturity Date, until the Company's obligation with respect to the payment of
principal, premium (if any) and interest shall be discharged. Business Day shall
mean any day that CoBank is open for business, except any day when Federal
Reserve Banks are closed.
The Series R Bonds shall be issuable as registered bonds without
coupons in the denominations of Five Hundred Thousand Dollars ($500,000) and any
multiple thereof, numbered RR-l and upwards.
Unless otherwise agreed to in writing by the Company and the holders of
the Series R Bonds, the payment of the principal of, premium (if any) and
interest on, the Series R Bonds shall be made by wire transfer of immediately
available funds for the advice and credit of CoBank to ABA No. 00000000-4,
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reference: CoBank for the benefit of Artesian Water Company, Inc. (or to such
other account as CoBank may direct by notice). Funds received by wire before
3:00 p.m. Eastern time shall be credited on the day received and funds received
by wire after 3:00 p.m. Eastern time shall be credited the next Business Day.
The Series R Bonds shall be redeemable as provided in the Original
Indenture, in whole or in part, at any time or from time to time, either (i) at
the option of the Company or (ii) pursuant to any provision of the Original
Indenture or the Bond Purchase Agreement requiring or authorizing such
redemption. Any redemption of the Series R Bonds shall be effected in accordance
with the provisions of Article V of the Original Indenture and the provisions of
this Section 1.2.
In accordance with the provisions of Section 6.07 of the Original
Indenture, in the event that either (i) all or substantially all the property of
the Company at the time subject to the lien of the Indenture as a first mortgage
lien thereon or (ii) all or substantially all of the property of the Company at
the time subject to the lien of the Indenture as a first mortgage lien thereon
that is used or useful in connection with the business of the Company as a water
company or as a water utility shall be released from the lien of the Indenture
under the provisions of Section 6.03 or Section 6.06 of the Original Indenture,
then all of the Bonds then outstanding including the Series R Bonds are to be
redeemed.
The redemption of any or all of the Series R Bonds shall be at a
redemption price equal to the sum of (i) the aggregate principal amount thereof
to be redeemed, plus (ii) the interest accrued thereon to the date fixed for
redemption plus (iii) a "REDEMPTION PREMIUM" (as hereinafter defined) determined
three (3) Business Days prior to the date fixed for redemption. CoBank will
furnish notice to the Company and the Trustee, by telecopy or other same-day
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written communication, on a date at least two (2) Business Days prior to the
date fixed for redemption of the Series R Bonds, of the Redemption Premium, if
any, applicable to such redemption and the calculations, in reasonable detail,
used to determine the amount of any such Redemption Premium. As used herein, the
term Redemption Premium shall mean and be calculated as follows:
(A) Determine the difference between: (i) CoBank's cost of
funds (determined in accordance with its standard methodology) on
August 1, 2005, minus (ii) CoBank's cost of funds (determined in
accordance with such methodology) on the Redemption Date or other date
fixed for redemption to fund the purchase of new bonds for a period
ending on the Maturity Date. For the purposes of the remaining
calculations, if such difference is negative, such difference shall be
deemed to equal zero.
(B) Add 1/2 of 1% to such difference (such that the minimum
result shall at all times be 1/2 of 1%).
(C) For each annual period (from each January 1) or part
thereof during which the Series R Bonds being redeemed were scheduled
to be outstanding, multiply the amount determined in (B) above by the
principal amount of the Series R Bonds being redeemed which was
scheduled to be outstanding during such annual period;
(D) Determine the present value of the amount determined in
(C) above based upon the scheduled time that interest on the Series R
Bonds redeemed would have been payable and a discount rate equal to the
rate referred to in (A)(ii) above. That result shall be the Redemption
Premium.
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The principal of the Series R Bonds may be declared or may become due
and payable prior to the Maturity Date, in the manner and with the effect and
subject to the conditions provided in the Original Indenture and this Eighteenth
Supplemental Indenture (i) upon the occurrence of an Event of Default as
provided in the Original Indenture or (ii) as provided in the Bond Purchase
Agreement. Upon the principal of the Series R Bonds becoming due and payable on
(i) the Maturity Date or (ii) a date prior to the Maturity Date as provided in
this Section 1.2, any unpaid principal, premium (if any) and interest payment
shall automatically accrue interest at 4% per annum in excess of the Base Rate
(as hereinafter defined). The Base Rate shall mean the rate of interest
established by CoBank from time to time as its CoBank Base Rate, which rate is
intended by CoBank to be a reference rate and not its lowest rate. The Base Rate
will change on the date established by CoBank as the effective date of any
change therein.
The Series R Bonds shall be registerable, transferable, and
exchangeable as provided in Article II of the Original Indenture and this
Section 1.2; provided that the Series R Bonds shall not be issued as coupon
Bonds.
Section 1.3 Form of Bond. The text of the registered Series R Bonds and
of the authentication certificate of the Trustee upon said Bonds shall be,
respectively, substantially as follows:
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FORM OF REGISTERED SERIES R BOND WITHOUT COUPONS
[THIS BOND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND MAY NOT BE OTHERWISE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS
REGISTERED PURSUANT TO THE PROVISIONS OF SAID SECURITIES ACT OR UNLESS AN
EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.]
THIS BOND HAS BEEN ISSUED PURSUANT TO AND SUBJECT TO THE TERMS AND CONDITIONS OF
AN AGREEMENT WITH THE COMPANY DATED AS OF AUGUST 1, 2005, A COPY OF WHICH IS ON
FILE AT THE PRINCIPAL OFFICE OF THE COMPANY.
No. RR-__ $__________
ARTESIAN WATER COMPANY, INC.
FIRST MORTGAGE BONDS, SERIES R, 5.96%
Due December 31, 2028
ARTESIAN WATER COMPANY, INC., a corporation organized and existing
under the laws of the State of Delaware (hereinafter called the "COMPANY", which
term shall include any successor corporation as defined in the Original
Indenture hereinafter referred to), for value received, hereby promises to pay
to ______________________________________ or registered assigns, on December 31,
2028 (the "MATURITY DATE"), the sum of _____________Dollars in coin or currency
of the United States of America that at the time of payment is legal tender for
the payment of public and private debts, and to pay in like coin or currency
interest thereon to the registered owner hereof, from the date hereof, at a rate
equal to 5.96% per annum, payable on the first Business Day of October, January,
April, and July of each year, beginning with the first Business Day of October,
2005, and on the Maturity Date, until the Company's obligation with respect to
the payment of such principal, premium (if any) and interest shall be
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discharged. Overdue payments of principal, premium (if any) and interest shall
bear interest as provided in the Eighteenth Supplemental Indenture hereinafter
mentioned. Unless otherwise agreed to in writing by the Company and the holders
of the Series R Bonds hereinafter mentioned, payments of principal, premium (if
any) and interest are to be made by wire transfer of immediately available funds
for the advice and credit to CoBank to ABA No. 00000000-4, reference: CoBank for
the benefit of Artesian Water Company, Inc. (or to such other account as CoBank
may direct).
This bond is one of an authorized issue of bonds of the Company known
as its First Mortgage Bonds (herein called the "Bonds"), not limited in
aggregate principal amount except as provided in the Original Indenture
hereinafter mentioned, all issued and to be issued in one or more series under
and equally secured by an Indenture of Mortgage dated as of July 1, 1961 (herein
called the "ORIGINAL INDENTURE"), executed by Artesian Resources Corporation
(then named Artesian Water Company), a corporation organized and existing under
the laws of the State of Delaware (hereinafter called the "CORPORATION") and by
Wilmington Trust Company, as trustee (herein called the "TRUSTEE"). The Original
Indenture has heretofore been supplemented by seventeen supplemental indentures,
including an Eighth Supplemental Indenture dated as of July 1, 1984, pursuant to
which the Company assumed all of the obligations of the Corporation under the
Original Indenture, and by an Eighteenth Supplemental Indenture dated as of
August 1, 2005 (hereinafter called the "EIGHTEENTH SUPPLEMENTAL INDENTURE").
Reference is hereby made to the Original Indenture as so supplemented for a
description of the property mortgaged and pledged, the nature and extent of the
security, the terms and conditions upon which the Bonds are and are to be issued
and secured and the rights of the holders or registered owners thereof and of
the Trustee in respect of such security. As provided in the Original Indenture,
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the Bonds may be issued in one or more series for various principal sums, may
bear different dates and mature at different times, may bear interest at
different rates and may otherwise vary as provided or permitted in the Original
Indenture, as supplemented. This Bond is one of the Bonds described in the
Eighteenth Supplemental Indenture and designated therein as "First Mortgage
Bonds, Series R, 5.96%" (hereinafter called the "SERIES R BONDS"). To the extent
permitted by, and as provided in, the Original Indenture or any indenture
supplemental thereto, modifications or alterations of the Original Indenture, or
of an indenture supplemental thereto, and of the rights and obligations of the
Company and of the rights of the holders of the Bonds issued and to be issued
thereunder, may be made with the consent of the Company by an affirmative vote
of the holders of not less than sixty-six and two-thirds per cent (66 2/3%) in
aggregate principal amount of the Bonds then outstanding under the Original
Indenture and entitled to vote and affected by such modification or alteration,
at a meeting of bondholders called and held as provided in the Original
Indenture, and, in case one or more but less than all of the series of the Bonds
then outstanding under the Original Indenture and entitled to vote would be
affected by the modification or alteration differently from or without affecting
the Bonds of any of the other series, by an affirmative vote of the holders of
not less than sixty-six and two-thirds per cent (66 2/3%) in aggregate principal
amount of the Bonds of each series so affected, or in either case by the written
consent of the holders of such percentages of Bonds; provided, however, that no
such modification or alteration may be made that would extend the maturity of,
or reduce the principal amount of, or reduce the rate of, or extend the time of
payment of interest on, or reduce any premium payable upon any redemption of,
this Bond, or modify the terms of payment of principal or interest, or reduce
the percentage required for the taking of any such action, without the express
consent of the holder hereof.
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No reference herein to the Original Indenture or to any indenture
supplemental thereto and no provision of this Bond or of the Original Indenture
or of any indenture supplemental thereto shall alter or impair the obligation of
the Company, which is absolute and unconditional, to pay the principal of,
premium (if any) and interest on this Bond at the time and place and at the rate
and in the coin or currency herein prescribed.
The Series R Bonds shall be redeemable as provided in the Original
Indenture and the Eighteenth Supplemental Indenture.
The principal of the Series R Bonds may be declared or may become due
prior to the Maturity Date, in the manner and with the effect and subject to the
conditions provided in the Original Indenture and the Eighteenth Supplemental
Indenture.
This Bond is transferable by the registered owner hereof, in person or
by duly authorized attorney, on books of the Company to be kept for that purpose
at the principal office of the Trustee in the City of Wilmington, Delaware, or,
if there be a successor trustee, at its principal office, upon surrender hereof
at such office for cancellation and upon presentation of a written instrument of
transfer duly executed, and thereupon the Company shall issue in the name of the
transferee or transferees, and the Trustee shall authenticate and deliver, a new
registered Bond or Series R Bonds, in an authorized denomination or
denominations, of a like aggregate principal amount; and the registered owner of
any registered Series R Bonds may surrender the same as aforesaid at said office
in exchange for a like aggregate principal amount of Bonds of like form of other
authorized denominations, all upon payment of the charges and subject to the
terms and conditions specified in the Original Indenture.
The Company and the Trustee may deem and treat the person in whose name
this Bond shall at the time be registered on the books of the Company as the
absolute owner hereof for all purposes whatsoever (except as otherwise provided
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in Article XIV of the Original Indenture with respect to bondholders' meetings
and consents); and payment of or on account of the principal of, premium (if
any) and interest on this Bond shall be made only to or upon the order in
writing of such registered owner hereof; and all such payments shall be valid
and effectual to satisfy and discharge the liability upon this Bond to the
extent of the sum or sums so paid.
No recourse under or upon any obligation, covenant or agreement
contained in the Original Indenture or in any indenture supplemental thereto, or
in any Bond thereby secured, or because of any indebtedness thereby secured,
shall be had against any incorporator or against any past, present or future
stockholder, officer or director, as such, of the Company or of any successor
corporation, either directly or through the Company or any successor corporation
under any rule of law, statute or constitutional provision or by the enforcement
of any assessment or by any legal or equitable proceeding or otherwise; it being
expressly agreed and understood that the Original Indenture, any indenture
supplemental thereto and the obligations thereby secured, are solely corporate
obligations, and that no personal liability whatever shall attach to, or be
incurred by, any incorporators, stockholders, officers or directors, as such, of
the Company or any successor corporation or any of them, because of the
incurring of the indebtedness thereby authorized, or under or by reason of any
of the obligations, covenants or agreements, expressed or implied, contained in
the Original Indenture or in any indenture supplemental thereto or in any of the
Bonds thereby secured.
This Bond shall not be entitled to any benefit under the Original
Indenture or any indenture supplemental thereto, and shall not become valid or
obligatory for any purpose until Wilmington Trust Company, as Trustee under the
Indenture, or a successor trustee thereunder, shall have signed the form of
authentication certificate endorsed hereon.
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IN WITNESS WHEREOF, ARTESIAN WATER COMPANY, INC., has caused this Bond
to be signed in its name by its President or a Vice President and its corporate
seal (or a facsimile thereof) to be hereto affixed and attested by its Secretary
or an Assistant Secretary, and this Bond to be dated August 1, 2005.
ARTESIAN WATER COMPANY, INC.
By:____________________________
Attest:
___________________________
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FORM OF TRUSTEE'S AUTHENTICATION CERTIFICATE
FOR SERIES R BONDS
TRUSTEE'S AUTHENTICATION CERTIFICATE
This Bond is one of the Bonds, of the series designated therein,
described in the within-mentioned Original Indenture, as supplemented.
WILMINGTON TRUST COMPANY, as Trustee,
By:________________________________
Authorized Officer
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ARTICLE II
COVENANTS OF THE COMPANY
The Company hereby covenants and agrees that, without the prior written
consent of the holders of not less than sixty-six and two-thirds percent
(66 2/3%) in principal amount of the Series R Bonds then outstanding, so long
as any of the Series R Bonds are outstanding:
Section 2.1 Series R Dividend Restriction. No dividends or other
distributions of cash or other assets shall be declared or paid, directly or
indirectly, on any shares of common stock of the Company, nor shall any shares
of common stock of the Company be purchased, redeemed, retired, or otherwise
acquired by the Company, if immediately after such declaration, payment,
retirement, redemption or acquisition, the aggregate capital of the Company and
its subsidiaries, on a consolidated basis, attributable to its common stock,
surplus and retained earnings would be less than $54,000,000. In determining the
aggregate consolidated capital of the Company and its subsidiaries attributable
to its common stock, its surplus, and its retained earnings for the purpose of
this Section 2.1, any write-up of assets, or write-down or write-off of the
excess over original cost of property made on the books of the Company
subsequent to December 31, 2004 shall be disregarded.
Section 2.2 Restrictions on Funded Indebtedness. The Company shall not
incur, assume, guarantee or in any other manner become liable, with respect to
any "FUNDED INDEBTEDNESS" (as hereinafter defined) or permit any subsidiary to
incur any Funded Indebtedness, if immediately thereafter, the total amount of
Funded Indebtedness then outstanding, would exceed sixty-six and two-thirds per
cent (66 2/3%) of the "TOTAL PERMANENT CAPITAL" (as hereinafter defined) of the
Company and its consolidated subsidiaries.
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Funded Indebtedness shall mean all bonds, debentures and other evidence
of indebtedness of the Company and its subsidiaries, secured or unsecured, for
money borrowed, but excluding (i) indebtedness maturing on demand or within one
year from the date incurred and not renewable or extendable at the option of the
debtor, (ii) indebtedness of the Company to any subsidiary and any indebtedness
of a subsidiary to the Company, and (iii) indebtedness that has been called for
redemption and for the payment of which monies have been irrevocably deposited
with a trustee. Funded Indebtedness shall include the portion of bonds, notes or
other indebtedness maturing, or required to be redeemed, within one year from
the date as of which Funded Indebtedness is being determined.
Total Permanent Capital shall mean, with respect to the Company and its
subsidiaries: (i) the sum of the par or stated value of all outstanding capital
stock of the Company and all paid-in premiums thereon; (ii) all surplus,
including capital and earned surplus but not including surplus from any
revaluation of the Company's assets after December 31, 2004; (iii) the minority
interest (if any) in consolidated subsidiaries, but not including any earned
surplus of subsidiaries prior to the date of acquisition of such subsidiaries;
and (iv) all Funded Indebtedness of the Company and such subsidiaries.
In all other respects, Funded Indebtedness and Total Permanent Capital
shall be computed as they would be for a consolidated balance sheet of the
Company and its subsidiaries on the applicable date, excluding all intercompany
items, and in accordance with generally accepted accounting principles; provided
that for purposes of computations under this Section 2.2, capitalized lease
obligations shall be excluded from Funded Indebtedness.
Section 2.3 Restrictions on Issuance of Additional Bonds. In addition
to the circumstances under which a Net Earnings Certificate is required to be
delivered to the Trustee under the terms of Sections 3.08 or 3.09 of the
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Original Indenture in connection with the issuance of Bonds by the Company
pursuant to either such Section, in all other circumstances under which the
Company proposes to issue additional Bonds under either Section 3.08 or 3.09 of
the Original Indenture, it shall be a requirement of such issuance and of the
authentication and delivery by the Trustee of any Bonds to be so issued that the
Trustee shall have received a Net Earnings Certificate.
Section 2.4 Transactions with Affiliates. The Company will not, and
will not permit any subsidiary to, engage in any material transaction with an
"AFFILIATE" (as hereinafter defined), including, without limitation, the
purchase from, sale to or exchange of property with, or the rendering of any
service by or for, any Affiliate, except upon terms that are at least as
favorable to the Company or such subsidiary in all material respects as terms
that could be obtained at the time in a comparable arms' length transaction with
a person other than an Affiliate. For purposes of this Section 2.4, an Affiliate
of any corporation shall mean any person or entity directly or indirectly
controlling, controlled by, or under direct or indirect common control with such
corporation; and a person or entity shall be deemed to control a corporation if
such person or entity possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of such corporation, whether
through the ownership of voting securities, by contract or otherwise.
ARTICLE III
THE TRUSTEE
Section 3.1 Trustee Acceptance. The Trustee hereby accepts the trust
hereby declared and provided and agrees to perform the same upon the terms set
forth in the Original Indenture as further supplemented by this Eighteenth
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Supplemental Indenture and upon the additional terms and conditions that the
Trustee shall not be responsible in any manner whatsoever for or in respect of
the validity or sufficiency of this Eighteenth Supplemental Indenture or the due
execution hereof by the Company or for or in respect of the recitals contained
herein, all of which recitals are made by the Company solely.
ARTICLE IV
MISCELLANEOUS
Section 4.1 Incorporation of Original Indenture Terms. This instrument
shall be construed as an indenture supplemental to the Original Indenture, and
shall form a part thereof. The Original Indenture as heretofore supplemented by
the First Supplemental Indenture, the Second Supplemental Indenture, the Third
Supplemental Indenture, the Fourth Supplemental Indenture, the Fifth
Supplemental Indenture, the Sixth Supplemental Indenture, the Seventh
Supplemental Indenture, the Eighth Supplemental Indenture, the Ninth
Supplemental Indenture, the Tenth Supplemental Indenture, the Eleventh
Supplemental Indenture, the Twelfth Supplemental Indenture, the Thirteenth
Supplemental Indenture, the Fourteenth Supplemental Indenture, the Fifteenth
Supplemental Indenture, the Sixteenth Supplemental Indenture, the Seventeenth
Supplemental Indenture and as further supplemented by this Eighteenth
Supplemental Indenture is hereby ratified and confirmed. Terms defined in the
Original Indenture that are used herein and not otherwise defined herein are
used as defined in the Original Indenture.
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Section 4.2 Counterparts. This Eighteenth Supplemental Indenture may be
simultaneously executed in any number of counterparts, each of which when so
executed shall be deemed to be an original; but such counterparts shall together
constitute but one and the same instrument.
(Signatures commence on following page.)
IN WITNESS WHEREOF, ARTESIAN WATER COMPANY, INC. has caused these
presents to be signed in its corporate name by its President or one of its Vice
Presidents and sealed with its corporate seal, attested by its Secretary or one
of its Assistant Secretaries, and WILMINGTON TRUST COMPANY, as Trustee, has
caused these presents to be signed in its corporate name by one of its Vice
Presidents and sealed with its corporate seal, attested by one of its Assistant
Secretaries, all as of the day and year first above written.
ARTESIAN WATER COMPANY, INC.
By: /s/ XXXXX X. XXXXXX
--------------------------
Xxxxx X. Xxxxxx
Vice President
[SEAL]
Attest: /s/ XXXXXX X. XXXXXXXX
------------------------
(Signatures continue on next page.)
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(Signatures continued from previous page.)
WILMINGTON TRUST COMPANY,
As Trustee,
By: /s/ X. X. XXXXXX XX
----------------------------
[SEAL]
Attest: /s/ XXXXXXX X. XXXXX, XX.
----------------------------
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STATE OF DELAWARE )
) SS.:
COUNTY OF NEW CASTLE )
On this, the 1st day of August, 2005, before me, the undersigned,
notary public, personally appeared Xxxxx X. Xxxxxx, who acknowledged himself to
be the Vice President of Artesian Water Company, Inc., a corporation organized
under the laws of the State of Delaware, and that he as such officer, being
authorized to do so, executed the foregoing Eighteenth Supplemental Indenture
for the purposes therein contained by signing the name of Artesian Water
Company, Inc. by himself as Vice President.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Xxxxx X. Xxxxxxxx Notary Public
----------------------------
Wilmington, New Castle County
My Commission Expires
5/6/2008
----------------------------
[Seal]
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XXXXX XX XXXXXXXX )
)SS.:
COUNTY OF NEW CASTLE )
On this, the 28th day of July, 2005, before me, the undersigned, notary
public, personally appeared W. Xxxxxx Xxxxxx, II, who acknowledged
himself/herself to be a Vice President of Wilmington Trust Company, a
corporation organized under the laws of the State of Delaware, and that he/she
as such officer, being authorized to do so, executed the foregoing Eighteenth
Supplemental Indenture for the purposes therein contained by signing the name of
Wilmington Trust Company by himself/herself as Vice President.
I certify that I am not an officer or director of said trust company.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Xxxxxxxx X. Xxxxxxxxx , Notary Public
--------------------------
Wilmington, New Castle County
My Commission Expires
4/9/2007
--------------------------
[Seal]
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RECORDATION
Recorded as follows:
1. In the office of the Recorder of Deeds, in and for New Castle County
and State of Delaware, in Mortgage Record ____________, Volume ______, Page
_____, on the _____day of ________________, 2005.
2. In the office of the Recorder of Deeds, in and for Kent County and
State of Delaware, in Mortgage Record ____________, Volume ______, Page _____,
on the _____day of ________________, 2005.
3. In the office of the Recorder of Deeds, in and for Sussex County and
State of Delaware, in Mortgage Record ____________, Volume ______, Page _____,
on the _____day of ________________, 2005.
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