ARTESIAN WATER COMPANY, INC. TO WILMINGTON TRUST COMPANY, As Trustee TWENTIETH SUPPLEMENTAL INDENTURE Dated as of December 1, 2008 Supplemental to Indenture of Mortgage Dated as of July 1, 1961 $15,000,000 First Mortgage Bonds, Series S
ARTESIAN
WATER COMPANY, INC.
TO
WILMINGTON
TRUST COMPANY,
As
Trustee
_____________________
TWENTIETH
SUPPLEMENTAL INDENTURE
Dated
as
of December 1, 2008
_____________________
Supplemental
to Indenture of Mortgage
Dated
as
of July 1, 1961
$15,000,000
First Mortgage Bonds, Series S
TWENTIETH
SUPPLEMENTAL INDENTURE, dated as of December 1, 2008, 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 ½%, all of which were paid at maturity on
November 1, 1978; and
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 ½%, 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
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 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
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 were redeemed on August 1, 2005;
and
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 were redeemed on August 1, 2005;
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,
there have been issued under the Original Indenture, as supplemented by an
Eighteenth Supplemental Indenture dated as of August 1, 2005 (hereinafter
sometimes referred to as the “Eighteenth Supplemental
Indenture”), $25,000,000 principal amount of First Mortgage Bonds, Series
R, 5.96%, all of which were outstanding as of the date hereof; and
WHEREAS,
there is no “Nineteenth Supplemental Indenture” supplementing the Original
Indenture; and
WHEREAS,
the Company proposes to issue and sell not more than $15,000,000 principal
amount of a new series of bonds to be designated as First Mortgage Bonds, Series
S, to be issued under and secured by the Original Indenture, as supplemented
by
this Twentieth Supplemental Indenture dated as of December 1, 2008 (hereinafter
sometimes referred to as the “Twentieth Supplemental
Indenture”); and
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
Twentieth Supplemental Indenture for the purpose of providing for the creation
of the First Mortgage Bonds, Series S, 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, the Eighteenth Supplemental Indenture, this Twentieth 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 $15,000,000 aggregate principal amount of the
First
Mortgage Bonds, Series S, 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
Twentieth 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 S, as herein provided, has
been
in all respects duly authorized by the Company as provided in the
Indenture.
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 S, by CoBank, ACB (hereinafter sometimes referred to as “CoBank”) pursuant to the
Bond
Purchase Agreement dated as of December 1, 2008 (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, the Seventeenth Supplemental Indenture, and this
Twentieth 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;
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 S, 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:
ARTICLE
I
FIRST
MORTGAGE BONDS, SERIES S
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 S” herein referred to as the
“Series S Bonds.” The aggregate principal amount of the Series S
Bonds shall not exceed $15,000,000.
Section
1.2 Bond
Terms.
The
Series S 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 subject to redemption in a principal amount equal to
$150,000 per calendar quarter, payable on the first Business Day of January,
April, July and October in each year, beginning with the first Business Day
of
January, 2009, with all then outstanding principal due and payable on December
31, 2033 (the “Maturity
Date”). Business Day shall mean any day that CoBank is open
for business, except any day when Federal Reserve Banks are closed.
The
Series S Bonds shall initially bear interest at 6.73% per annum, from the date
of their authentication through and including, March 1, 2016 (the “Initial
Period”). Thereafter, the Series S Bonds shall bear interest
at a fixed annual interest rate to be quoted by CoBank in its sole and absolute
discretion for a period extending through the Maturity Date; provided, that
at
the request of the Company with CoBank’s written consent and upon terms
acceptable to CoBank in its sole and absolute discretion, the interest rate
on
the Series S Bonds may be fixed for such shorter period as shall be agreed
to by
the Company and CoBank. The Company shall request that CoBank fix the
interest rate on the Series S Bonds no later than three Business Days prior
to
(i) the expiration of the Initial Period and (ii) the expiration of each
successive interest period (each, an “Interest Period”) that
terminates prior to the Maturity Date (in each case, as agreed to by CoBank
in
its sole and absolute discretion). CoBank shall notify the Company of
its determination of the new interest rate within three days of a request by
the
Company to fix the interest rate.
For
any
period following the Initial Period that either (i) the Company does not request
that CoBank fix the interest rate on the Series S Bonds in accordance with
this
Twentieth Supplemental Indenture prior to the termination of an Interest Period
or (ii) CoBank does not fix the interest rate on the Series S Bonds within
three
days of a request by the Company, unless otherwise agreed to between the Company
and CoBank, each acting in their sole and absolute discretion, the Series S
Bonds shall bear interest at a variable annual interest rate equal, on any
day,
to the higher of (a) the Prime Rate (as hereinafter defined) or
(b) the sum of the Federal Funds Rate (as hereinafter defined) plus 0.50% (such
rate
of interest, the “Base
Rate”). Such Series S Bonds shall continue to accrue interest
at the Base Rate until, in the case of a failure by the Company to request
that
CoBank fix the interest rate on the Series S Bonds, three Business Days
following a request by the Company to CoBank to so fix the interest rate, or,
in
the case of CoBank not fixing the interest rate on the Series S Bonds within
three days of a request by the Company, until such time as CoBank fixes the
interest rate. The term “Prime Rate” shall mean a base
rate of interest per annum equal, on any day, to the rate of interest published
on such day in the Eastern Edition of The Wall Street Journal as
the average prime lending rate for 75% of the United States’ 30 largest
commercial banks, or if the Eastern Edition of The Wall Street Journal or
such rate is not published on such day, such rate as last published in the
Eastern Edition of The Wall
Street Journal. In the event the Eastern Edition of The Wall Street Journal
ceases to publish such rate or an equivalent, the term “Prime Rate” shall be
determined by reference to such other regularly published prime rate based
upon
any averaging of such 30 banks, as CoBank shall determine, or if no such
published average prime rate is available, then the term “Prime Rate” shall mean
a variable rate of interest per annum as determined by CoBank equal to the
highest of the “prime rate,” “reference rate,” “base rate” or other similar rate
announced from time to time by any of Bank of America or Citibank as selected
by
CoBank (with the understanding that any such rate may merely be a reference
rate
and may not necessarily represent the lowest or best rate actually charged
to
any customer by such bank). The “Prime Rate” shall change on a date
established by CoBank as the effective date of any change therein and CoBank
shall notify the Company of any such change. The term “Federal Funds Rate” shall
mean, for any day, the rate of interest per annum (rounded upward, if necessary,
to the nearest whole multiple of 1/100 of 1%) equal to the weighted average
of
the rates on overnight federal funds transactions with partners of the Federal
Reserve System arranged by federal funds brokers, as published by the Federal
Reserve Bank of New York on the Business Day next succeeding such day, provided that
(i) if such day is not a Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the next preceding Business Day
and
(ii) if no such rate is so published on the next succeeding Business Day,
the Federal Funds Rate for such day shall be the average rate quoted to CoBank
on such day on such transactions as determined by CoBank.
Interest
on the Series S Bonds is payable on the first Business Day (as hereinafter
defined) of January, April, July and October of each year, beginning with the
first Business Day of January, 2009, 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.
The
Series S Bonds shall be issuable as registered bonds without coupons in the
denominations of One Hundred Fifty Thousand Dollars ($150,000) and any multiple
thereof, numbered SR-l and upwards.
Unless
otherwise agreed to in writing by the Company and the holders of the Series
S
Bonds, the payment of the principal of, premium (if any) and interest on, the
Series S Bonds shall be made by wire transfer of immediately available funds
for
the advice and credit of 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 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 S 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, (ii) pursuant to any provision of the Original Indenture or the
Bond Purchase Agreement requiring or authorizing such redemption or (iii)
pursuant to Section 2.5 of this Twentieth Supplemental Indenture. Any
redemption of the Series S 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 S Bonds are to be
redeemed.
The
redemption of any or all of the Series S 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) except with respect to a redemption of any or all Series S Bonds (a)
pursuant to Section 2.5 of this Twentieth Supplemental Indenture or (b)
occurring on the last day of the Initial Period or any Interest Period
thereafter or while the Series S Bonds are accruing interest at the Base Rate,
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 written communication, on a date at
least
two (2) Business Days prior to the date fixed for redemption of the Series
S
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 December 1, 2008, 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
½
of
1% to such difference (such that the minimum result shall at all times be ½ of
1%).
(C) For
each
annual period (from each January 1) or part thereof during which the Series
S
Bonds being redeemed were scheduled to be outstanding, multiply the amount
determined in (B) above by the principal amount of the Series S 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 S 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.
The
principal of the Series S 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 Twentieth Supplemental
Indenture (i) upon the occurrence of an Event of Default as provided in the
Original Indenture, (ii) as provided in the Bond Purchase Agreement or (iii)
as
described in Section 2.5 of this Twentieth Supplemental
Indenture. Upon the principal of the Series S 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 or Section 2.5 of this Twentieth Supplemental
Indenture, any unpaid principal, premium (if any) and interest payment shall
automatically accrue interest at 4% per annum in excess of the Base Rate.
The
Series S 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 S Bonds shall not be issued as coupon Bonds.
Section
1.3 Form
of
Bond.
The
text of the registered Series S Bonds and of the authentication certificate
of
the Trustee upon said Bonds shall be, respectively, substantially as
follows:
FORM
OF
REGISTERED SERIES S 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 DECEMBER 1, 2008, A COPY OF WHICH IS
ON
FILE AT THE PRINCIPAL OFFICE OF THE COMPANY.
No.
SR-__
$__________
ARTESIAN
WATER COMPANY, INC.
FIRST
MORTGAGE BONDS, SERIES S
Due
December 31, 2033
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 the first
business day of January, April, July and October in each year, beginning with
the first Business Day of January, 2009, the sum of One Hundred Fifty Thousand
Dollars, and on December 31, 2033 (the “Maturity Date”), all then
outstanding principal, in each case 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 6.73% per
annum, through and including, March 1, 2016, and thereafter at such rate(s)
and
for such period(s) as provided in the Twentieth Supplemental Indenture
hereinafter mentioned, such interest payable on the first Business Day of
January, April, July and October of each year, beginning with the first Business
Day of January, 2009, 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 discharged. Overdue payments of principal, premium (if any)
and interest shall bear interest as provided in the Twentieth Supplemental
Indenture hereinafter mentioned. Unless otherwise agreed to in
writing by the Company and the holders of the Series S 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 eighteen 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 a Twentieth Supplemental Indenture dated
as
of December 1, 2008 (hereinafter called the “Twentieth 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, 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
Twentieth Supplemental Indenture and designated therein as “First Mortgage
Bonds, Series S” (hereinafter called the “Series S
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.
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 S Bonds shall be redeemable as provided in the Original Indenture and
the
Twentieth Supplemental Indenture.
The
principal of the Series S 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 Twentieth 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 S Bonds, in an authorized denomination or denominations, of
a
like aggregate principal amount; and the registered owner of any registered
Series S 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 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.
IN
WITNESS WHEREOF, ARTESIAN WATER COMPANY, INC., has caused this Bond to be signed
in its name by its Chief Financial Officer 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 December 1, 2008.
ARTESIAN
WATER COMPANY, INC.
By:____________________________
Attest:
___________________________
FORM
OF
TRUSTEE’S AUTHENTICATION CERTIFICATE
FOR
SERIES S 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
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 S Bonds then outstanding, so long as any of
the
Series S Bonds are outstanding:
Section
2.1 Series
S
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
$75,000,000. 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, 2007 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.
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, 2007; (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
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.
Section
2.5 Mandatory
Sinking Fund Redemption.
The
Series S Bonds are subject to mandatory sinking fund redemption prior to
maturity on the first Business Day of January, April, July and October in each
year, in a principal amount of $150,000 on each such date, at a redemption
price
equal to such principal amount plus accrued interest thereon to the redemption
date (to the extent such interest is not otherwise paid pursuant to Section
1.2
of this Twentieth Supplemental Indenture). Each sinking fund
redemption provided for herein shall be effected in accordance with the
provisions set forth in Article V of the Original Indenture and the provisions
of Section 1.2 of this Twentieth Supplemental Indenture.
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 Twentieth 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 Twentieth
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, the Eighteenth Supplemental Indenture and
as
further supplemented by this Twentieth 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.
Section
4.2 Counterparts.
This
Twentieth 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.
IN
WITNESS WHEREOF, ARTESIAN WATER COMPANY, INC. has caused these presents to
be
signed in its corporate name by its Chief Financial Officer 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:_______________________________
Xxxxx
X. Xxxxxx
Chief
Financial Officer and Treasurer
[SEAL]
Attest: ___________________
(Signatures
continue on next page.)
(Signatures
continued from previous page.)
|
|
WILMINGTON
TRUST COMPANY,
|
As
Trustee,
By:_________________________________
[SEAL]
Attest:
__________________________
STATE
OF
DELAWARE
)
) SS.:
COUNTY
OF
NEW
CASTLE
)
On
this,
the _____ day of ________________, 2008, before me, the undersigned, notary
public, personally appeared Xxxxx X. Xxxxxx, who acknowledged himself to be
the
Chief Financial Officer and Treasurer 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 Twentieth
Supplemental Indenture for the purposes therein contained by signing the name
of
Artesian Water Company, Inc. by himself as Chief Financial Officer and
Treasurer.
IN
WITNESS WHEREOF, I hereunto set my hand and official seal.
___________________________
Notary Public
Wilmington,
New Castle County
My
Commission Expires
___________________________
[Seal]
STATE
OF
DELAWARE
)
)
SS.:
COUNTY
OF
NEW
CASTLE )
On
this,
the ______ day of _______________, 2008, before me, the undersigned, notary
public, personally appeared __________________________, 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 Twentieth
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.
___________________________,
Notary Public
Wilmington,
New Castle County
My
Commission Expires
___________________________
[Seal]
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 ________________, 2008.
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 ________________, 2008.
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 ________________, 2008.
