REVOLVING CREDIT AGREEMENT BETWEEN ARTESIAN WATER COMPANY, INC. AND COBANK, ACB DATED AS OF JANUARY 19, 2010
BETWEEN
ARTESIAN
WATER COMPANY, INC.
AND
COBANK,
ACB
DATED
AS OF JANUARY 19, 2010
THIS REVOLVING CREDIT AGREEMENT (this "Agreement") is
entered into as of January 19, 2010, between ARTESIAN WATER COMPANY, INC.,
a Delaware corporation (the "Company"), and CoBANK, ACB, a federally
chartered instrumentality of the United States (the “Lender” or “CoBank”).
In
consideration of the agreements herein and in the other "Credit Documents" (as
hereinafter defined) and in reliance upon the representations and warranties set
forth herein and therein, the parties agree as follows:
ARTICLE
1
DEFINITIONS
AND ACCOUNTING TERMS
SECTION
1.01. Definitions. Except as
otherwise expressly provided in this Agreement, capitalized terms used in this
Agreement and defined in Exhibit A hereto
shall have the meanings set forth in such Exhibit.
SECTION
1.02. Rules of Interpretation.
Except as otherwise expressly provided in this Agreement, the rules of
interpretation set forth in Exhibit A hereto
shall apply to this Agreement.
ARTICLE
2
AMOUNT
AND TERMS OF LOANS
SECTION
2.01. The Commitment. On the terms
and conditions set forth in this Agreement, the Lender agrees to make loans
(each a “Loan”
and collectively the “Loans”) to
the Company from time to time during the period commencing on the
date hereof and ending on January 18, 2011 (the “Maturity Date”), in an
aggregate principal amount not to exceed, at any one time outstanding,
$20,000,000 (the "Commitment"). Within
the limits and during the term of the Commitment, the Company may
borrow, prepay pursuant to Section 2.07
hereof, and reborrow.
SECTION
2.02. Purpose. The purpose of the
Loans is to finance the operations of the Company and to provide up to
$10,000,000 for the purpose of making loans to Artesian Water Maryland, Inc. The
Company agrees to use the proceeds of the Loans for those purposes and no
other.
SECTION
2.03. Availability. Loans will be
made available on any Business Day upon the telephonic or written request of an
authorized employee of the Company; provided, however, that any request made
telephonically shall be promptly confirmed in writing by the Company if required
by CoBank. Requests for Loans must be received not later than 12:00 Noon,
Eastern time on the date the Loan is to be made. Loans will be made
available by wire transfer of immediately available funds. Wire transfers shall
be made to such account or accounts as may be authorized by the Company on forms
supplied or approved by CoBank.
SECTION
2.04. Interest.
(A) Interest Rate Options. The
Company agrees to pay interest on the unpaid principal balance of the Loans in
accordance with one or more of the following interest rate options, as selected
by the Company in accordance with the terms hereof:
(1) Weekly Variable Rate Option.
At a rate per annum equal to the rate of interest established by CoBank
on the first Business Day of each week (the “Variable Rate Option”). The rate
established by CoBank shall be effective until the first Business Day of the
next week. Each change in the rate shall be applicable to all balances subject
to this option and information about the then current rate shall be made
available upon telephonic request.
(2) Quoted Fixed Rate
Option. At a fixed rate per annum to be quoted by the
Lender in its sole discretion in each instance (the “Quoted Fixed
Rate
Option”). Under this option, rates may be fixed on such balances and for
such periods (each a "Quoted Fixed Rate Period),
as may be agreeable to CoBank in its sole discretion in each instance, provided
that: (1) rates may not be fixed for Quoted Fixed Rate Periods of
less than 30 days or extending beyond the Maturity Date; (2) rates may only be
fixed on balances of $100,000.00 or in multiples thereof; and (3) the maximum
number of balances that may be subject to this option at any one time shall be
five (5).
(3) LIBOR Option. At a
fixed rate per annum equal to the LIBOR plus 1.50% (the “LIBOR Option”). Under this
option rates may be fixed: (A) for Interest Periods of 1, 2, 3, 6, and 9 months,
as selected by the Company; provided, however, that in no event may
rates be fixed for Interest Periods expiring after the Maturity Date; (B) on
balances of $100,000 or in multiples thereof; (C) on a Banking Day on 3 Banking
Days’ prior notice; and (D) on not more than five (5) separate balances at any
one time.
(B) Elections. Subject to the
limitations set forth above, the Company: (1) shall select the
applicable rate option(s) each time it requests a Loan; (2) may, on any Business
Day, elect to convert balances bearing interest at the Variable Rate Option to
the Quoted Fixed Rate Option; (3) may, on the last day of any Quoted Fixed Rate
Period, elect to refix the rate under the Quoted Fixed Rate Option or convert
the balance to the Variable Rate Option; (4) may, on the last day of any
Interest Period, elect to convert the balances bearing interest at the LIBOR
Option to the Variable Rate Option or Quoted Fixed Rate Option; and (5) may, on
three (3) Banking Days' prior notice, elect to convert balances bearing interest
at the Variable Rate Option or the Quoted Fixed Rate Option to the LIBOR Option
or refix a rate under the LIBOR Option; provided, however, that balances bearing
interest at the Quoted Fixed Rate Option or the LIBOR Option may not be
converted or continued until the last date of the Quoted Fixed Rate Period or
Interest Period applicable thereto. In the absence of an election
provided for herein, the Company shall be deemed to have elected the Variable
Rate Option. All elections provided for herein may be made
telephonically, in writing, or, if agreed to in a separate agreement,
electronically, and must be received by 12:00 Noon Company's local time on the
applicable day. Any election made telephonically, shall be promptly
confirmed in writing if so requested by CoBank.
(C) Calculation and
Payment. Interest shall be calculated on the actual number of
days each Loan is outstanding on
the basis of a year consisting of 360 days. In calculating interest,
the date each Loan is made shall be included and the date each Loan is repaid
shall, if received before 3:00 P.M. Mountain time, be excluded. Interest
shall be: (1) calculated monthly in arrears as of the last day of each month and
on the Maturity Date; and (2) due and payable on the 20th day
of the following month and on the Maturity Date. Notwithstanding
the foregoing, at CoBank's option, interest on balances bearing interest at the
LIBOR Option shall be payable on the last day of the Interest Period or, in case
of Interest Periods of longer than three months, at three month
intervals.
(D) Additional Provisions Regarding LIBOR
Option. Notwithstanding any other provision hereof, CoBank
shall have the right to temporarily suspend or permanently terminate
the Company’s ability to fix rates under the LIBOR Option or for one
or more Interest Periods if, for any reason whatsoever (including a change in
Applicable Law): (1) LIBOR is no longer being quoted in the London interbank
market or is no longer being quoted for an Interest Period; (2) CoBank is
prohibited from offering rates based on LIBOR; or (3) CoBank’s cost to fund
balances bearing interest at the LIBOR Option (as determined by CoBank in its
sole discretion) increases beyond any corresponding increase in LIBOR or
decreases less than any corresponding decrease in LIBOR. In addition, if as a
result of a change in Applicable Law or otherwise, CoBank is required to
allocate additional capital to, or otherwise bear increased costs as a result of
maintaining balances under, the LIBOR Option, the Company agrees to
indemnify CoBank upon demand against all such costs.
SECTION
2.05. Commitment Fees. In
consideration of the Commitment, the Company agrees to pay to the
Lender a commitment fee on the average daily unused portion of the
Commitment from the date hereof until the Commitment expires or is terminated at
the rate of 1/4th of
1% (0.25%) per annum (calculated on an actual/360 day basis). Such fees shall
be: (a) calculated quarterly in arrears as of the last day of each calendar
quarter and
on the date the Commitment expires or is terminated; and (b) due and payable on
the 20th
day of each January, April, July and October and on the date the Commitment
expires or is terminated. Such fee shall be payable for each quarter
or portion thereof during the original or any extended term of the Commitment;
provided, however, that nothing contained herein shall obligate CoBank to extend
the term of the Commitment.
SECTION
2.06. Repayment. The
Loans shall mature and be due and payable on the Maturity Date.
SECTION
2.07. Prepayment.
(A) Voluntary.
The Company shall have the right upon one, or, in the case of
Fixed Rate Balances, three Business Days prior notice (which notice shall be
irrevocable), to prepay the Loans in whole or part. In the event the Company
prepays any Fixed Rate Balance, then at the time thereof, the Company shall pay
to CoBank a prepayment surcharge calculated in accordance with Section 2.11
hereof.
(B) Mandatory. The Company shall
prepay the Loans if required pursuant to Section 7.02 hereof.
SECTION
2.08. Note. The Company’s
obligation to repay the Loans shall be evidenced by a promissory note in
substantially the form of Exhibit B hereto, duly completed, dated the date
hereof, and in the amount of the Commitment (the "Note").
SECTION
2.09. Security. The Company’s
obligations under the Credit Documents shall be secured by a statutory first
priority Lien on all equity which the Company may now own or hereafter acquire
or be allocated in the
Lender and all proceeds thereof. The Company agrees to take such steps
(including the execution and recording of such instruments and documents) as
the
Lender may from time to time require in order to confirm or enable
the Lender to realize upon its Lien.
SECTION
2.10. Payments.
(A) Manner of Making Payments.
The Company shall make all payments to the
Lender under this Agreement and the other Credit Documents by wire
transfer of immediately available funds in accordance with the following wire
transfer instructions (or in accordance with such other wire transfer
instructions as
the Lender may direct by notice):
Name of
Bank: COBANK
Location: Greenwood
Village, CO
ABA
No. 307088754
Reference: Artesian
Water Company, Inc.
(B) Business Days. In the event
any day on which any payment required to be made hereunder or under the Note is
not a Business Day, then such payment shall be due and payable on the next
Business Day and, in the case of principal, interest shall continue to accrue
thereon.
(C) Records. The
Lender shall keep a record of the unpaid principal balance of the Loans,
the interest rate elections made with respect thereto, the interest accrued on
the Loans, and all payments made with respect to the Loans, and such record
shall, absent proof of error, be conclusive evidence of the outstanding
principal and interest on the Loans.
SECTION
2.11. Broken Funding
Surcharge. In the event the Company: (i) repays any
Fixed Rate Balance prior to the last day of the Interest Period or Quoted Fixed
Period applicable thereto, whether such payment is made voluntary, by reason of
acceleration, or otherwise; or (ii) fails for any reason to borrow, convert to,
or renew any Fixed Rate Balance on the date fixed therefor, then
the Company shall pay to the
Lender a surcharge calculated in accordance with the next sentence
hereof. Such surcharge shall be in an amount equal to the greater of:
(i) the present value of the sum of: (a) any funding losses imputed by the
Lender to have been incurred as a result of such payment, conversion or
failure; and (b) a per annum yield of ½ of 1% on the amount prepaid, converted
or not borrowed for the period such amount was scheduled to have been
outstanding at such fixed rate; or (ii) $300. Such surcharge shall be
determined and calculated in accordance with methodology established by the
Lender, a copy of which will be made available upon request.
ARTICLE
3
CONDITIONS
PRECEDENT
SECTION
3.01. Conditions Precedent to Initial
Loan. The obligation of the
Lender to make the initial Loan to the Company is subject to the
conditions precedent that the
Lender shall have received, on or before the day of such initial Loan,
each of the following (which, in the case of instruments or documents, must be
originals and in form and content satisfactory to
the Lender):
(A) This Agreement. This
Agreement, duly executed by each of the parties hereto in sufficient
counterparts for each party hereto.
(B) The Note. The Note duly
executed by the Company.
(C) Secretary’s Certificate. A
certificate of the Secretary of the Company in form and content prescribed by
CoBank, attaching and certifying as to each of the following (each of which must
be in form and content reasonably acceptable to CoBank): (1) resolutions of
the Company’s board of directors authorizing the transactions
contemplated herein and in the other Credit Documents; (2) a certificate of
incumbency showing the names and true ink signatures of the officers of
the Company that are authorized to enter into this Agreement and the
other Credit Documents; (3) a duly completed and executed copy of a CoBank
Delegation and Wire and Electronic Transfer Authorization Form; (4) the certificate of
incorporation of the Company, as amended to the date hereof; (5) the
bylaws of the Company, as amended to the date hereof; and (6) a
certificate of the Secretary of State of Delaware attesting to the due
incorporation and good standing of the Company in the State of
Delaware.
(D) [Intentionally
Omitted].
(E) Fees and Expenses. Payment by
the Company of all fees and expenses owed by it to the
Lender.
(F) Insurance. Such
evidence as the
Lender shall require that the Company is in compliance with
Section 6.14 hereof.
(G) Officer's
Certificate. A certificate of a Financial Officer of the
Company as of the Closing Date in form and content prescribed by
CoBank.
SECTION
3.02. Conditions to Each
Loan. The obligation of the
Lender to make any Loan to the Company, including the initial
Loan, is subject to the conditions precedent that: (A) each of the
representations and warranties set forth herein and in such other Credit
Documents be true and correct on
the date of such Loan, except to the extent such representations and warranties
expressly related to an earlier date (in which case such representations and
warranties shall have been true and correct in all material respects as of such
earlier date); (B) no Default or Event of Default shall have occurred and be
continuing; and (C) at the time of such Loan, there shall not exist any event
which could reasonably be expected to have a Material Adverse
Effect.
ARTICLE
4
REPRESENTATIONS
AND WARRANTIES
The Company
hereby represents and warrants to the Lender that:
SECTION
4.01. Organizations and Good
Standing. The Company is a corporation duly organized, validly
existing and in good standing under the Laws of the State of Delaware with
corporate power and authority to own and operate its properties and to carry on
its business as now conducted, which consists of the gathering, purification,
transportation, storage and distribution of water solely in the State of
Delaware. The Company is a wholly owned subsidiary of Artesian Resources
Corporation, a corporation duly incorporated and validly existing in good
standing under the laws of the State of Delaware (the "Corporation").
SECTION
4.02. Subsidiaries. The Company has
no Subsidiaries.
SECTION
4.03. Financial Statements. (A) The
balance sheets of the Company for the year ended December 31 in each of the
years 2006, 2007, and 2008 and the related statements of income, retained
earnings and cash flows for the years ended on said dates, copies of all of
which have been furnished to the Lender, accompanied by a report thereon
containing an opinion unqualified as to scope limitations imposed by the Company
and otherwise without qualification except as therein noted, by BDO ▇▇▇▇▇▇▇,
LLP, have been prepared in accordance with generally accepted accounting
principles consistently applied and the applicable provisions of the regulatory
authorities having jurisdiction in the premises except as therein noted, are
correct and complete, and present fully and fairly the financial position of the
Company as of such dates and the results of its operations and changes in its
financial position for such periods.
(B) Since
December 31, 2008, there has been no change in the condition, financial or
otherwise, of the Company as shown on the balance sheet as of such date except
increases, if any, in its current indebtedness to banks incurred for working
capital and except changes in the ordinary course of business, none of which
individually or in the aggregate has had a Material Adverse Effect.
(C) All
budgets, projections, feasibility studies, and other similar documentation
submitted by the Company to the Lender in connection with the transactions
contemplated by this Agreement were based upon assumptions that were reasonable
and, as of the date hereof, no fact has come to light, and no event has
occurred, that would cause any such assumption not to be
reasonable.
SECTION
4.04. Litigation. Except as set forth in Schedule 4.04
hereof, there are no actions, suits or proceedings pending or, to the best of
the knowledge of the Company, threatened against or affecting the Company at law
or in equity or before or by any Governmental Authority, that would reasonably
be expected to involve the possibility of any material judgment or liability
against the Company or otherwise have a Material Adverse Effect. The
Company is not in default with respect to any order of any court or Governmental
Authority.
SECTION 4.05. Taxes. The Company has filed
prior to delinquency all required tax returns and paid all applicable federal,
state and local taxes, other than taxes not yet due or that may hereafter be
paid without penalty, and the Company has no knowledge of any material
deficiency or additional assessment in connection therewith not provided for on
the books of the Company.
SECTION
4.06. Liens. There are no Liens on
any property of the Company other than the Lien of the Indenture and Permitted
Encumbrances.
SECTION
4.07. Title to Properties. The
Company has good title to all its property and assets reflected on the balance
sheet of the Company as of December 31, 2008 (other than property or assets
subsequently disposed of in the normal and ordinary course of
business).
SECTION
4.08. [Reserved].
SECTION
4.09. Calamities, Strikes, etc.
Since December 31, 2008, the business, properties and assets of the Company have
not been adversely affected in any substantial way as the result of any fire,
explosion, accident, windstorm, strike, labor disturbance, lockout, combination
of workmen, requisition or taking of property by the United States or any agency
thereof or by the State of Delaware or any municipality or other agency thereof,
flood, drought, embargo, riot, war or act of God or the public
enemy.
SECTION
4.10. Restrictions on the Company.
The Company is not a party to or bound by any contract, indenture, agreement or
instrument, or any law, rule or regulation, any judgment or order of any court
or Governmental Authority that restricts or limits the right or ability of the
Company to enter into and perform the Credit Documents; and no approval,
authorization, consent or withholding of objection on the part of any
Governmental Authority is necessary in connection with the execution or
performance of the Credit Documents. No action on the part of any shareholder of
the Company is necessary in connection with the execution and delivery by the
Company of and the performance by the Company of its obligations under the
Credit Documents.
SECTION
4.11. No Conflicts. The execution
and delivery of the Credit Documents and the consummation of the transactions
therein contemplated, and the compliance with the Credit Documents by the
Company, will not conflict with or result in a breach of any of the terms,
conditions or provisions of, or constitute a default under, or result in the
creation or imposition of any Lien upon any of the property or assets of the
Company pursuant to the terms of, the charter or by-laws of the Company, or any
indenture, mortgage, deed of trust or other agreement or instrument to which the
Company or the Corporation is a party, or by which the property or assets of
either may be bound or affected.
SECTION
4.12. No Defaults. The Company is
operating its business in compliance with the terms of the Credit Documents, and
no Default or Event of Default exists.
SECTION
4.13. Compliance with
Laws.
(A) The Company is not (i) in default
with respect to any order, writ, injunction or decree of any court or (ii) in
default in any material respect under any law, ordinance, order, regulation,
license or demand (including ERISA, the Occupational Safety and Health Act of
1970 and laws and regulations establishing quality criteria and standards for
air, water, land and toxic waste) of any Governmental Authority, default under
which would have consequences that could reasonably be expected to have a
Material Adverse Effect.
(B) The
Company is not in violation of any applicable Federal, state or
local
laws,
statutes, rules, regulations, ordinances, permit, licenses or authorizations
relating to public health, safety or the environment, including, without
limitation, relating to releases, discharges, emissions or disposals to air,
water, land or ground water, to the withdrawal or use of ground water, to the
use, handling or disposal of polychlorinated biphenyls (PCBs), asbestos or urea
formaldehyde, to the treatment, storage, disposal or management of hazardous
substances (including, without limitation, petroleum, crude oil or any fraction
thereof or other hydrocarbons), pollutants or contaminants, to exposure to
toxic, hazardous or other controlled, prohibited or regulated substances which
violation could reasonably be expected to have a Material Adverse Effect. The
Company does not know of any liability or class of liability of the Company
under the Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended (42 U.S.C. Section 9601 et seq.), or the Resource
Conservation and Recovery Act of 1976, as amended (42 U.S.C. Section 6901 et
seq.).
SECTION
4.14. Validity. Enforceable Obligations. This
Agreement and the other Credit Documents have been duly executed and delivered
and constitute legal, valid and binding obligations of the Company
enforceable against the Company in accordance with their respective
terms, except as may be limited by bankruptcy or insolvency laws or similar laws
affecting creditors' rights generally or by general equitable
principles.
SECTION
4.15. Full Disclosure. The financial
statements referred to in Section 4.03 of this Agreement do not, nor does any
other written statement furnished to the Lender by the Company in connection
herewith, contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements contained therein or herein not
misleading. There is no fact peculiar to the Company that the Company has not
disclosed to the Lender in writing that materially affects adversely nor, so far
as the Company now can reasonably foresee, will materially affect adversely the
properties, business, prospects, profits or condition (financial or otherwise)
of the Company.
SECTION
4.16. Use of Proceeds. None of the
transactions contemplated in the Agreement (including, without limitation, the
use of proceeds from the Loans) will violate or result in a violation of Section
7 of the Securities Exchange Act of 1934, as amended, or any regulation issued
pursuant thereto, including, without limitation, Regulations G, T and X of the
Board of Governors of the Federal Reserve System, 12 C.F.R., Chapter II. The
Company does not intend to purchase, with the proceeds from the sale of the
Loans, any "margin stock" within the meaning of said Regulation G. None of the
proceeds from the Loans will be used to purchase, or refinance any borrowing the
proceeds of which were used to purchase, any "security" within the meaning of
the Securities Exchange Act of 1934, as amended.
SECTION
4.17. ERISA. The
consummation of the transactions provided for in the Agreement and compliance by
the Company with the provisions thereof will not involve any prohibited
transaction within the meaning of ERISA or Section 4975 of the Code . Each
"Plan" (as hereinafter defined) complies in all material respects with all
applicable statutes and governmental rules and regulations, and (i) no
"Reportable Event" (as hereinafter defined) has occurred and is continuing with
respect to any Plan, (ii) the Company has not withdrawn from any Plan or
instituted steps to do so, and (iii) no steps have been instituted to terminate
any Plan. No condition exists or event or transaction has occurred in connection
with any Plan that could result in the incurrence by the Company of any material
liability, fine or penalty. No Plan maintained by the Company, nor any trust
created thereunder, have incurred any "accumulated funding deficiency" as
defined in Section 302 of ERISA nor does the present value of all benefits
vested under all Plans exceed, as of the last annual valuation date, the value
of the assets of the Plans allocable to such vested benefits. The Company does
not have any contingent liability with respect to any post-retirement "welfare
benefit plans" (as such term is defined in ERISA) except as has been disclosed
to the Lender. As used herein, the following terms shall have the meanings set
forth: "Plan" shall mean a "pension plan," as such term is defined in ERISA,
established or maintained by the Company or as to which the Company contributed
or is a member or otherwise may have any liability; and "Reportable Event" shall
have the meaning given to such term in ERISA.
SECTION
4.18. Principal Place of Business;
Records. The principal place of business and chief executive office of
the Company and the place where the records of the Company are kept is at the
address of the Company shown in Schedule 8.01 of this Agreement.
SECTION
4.19. Rate Matters. The Company's
current rates for the provision of water services have been approved by all
necessary Governmental Authorities, including, without limitation, the Delaware
Public Service Commission. There are no pending, nor to the Company's knowledge,
any threatened, proceedings before any Governmental Authority the objective or
result of which is or could be to materially reduce or otherwise materially
change adversely any of the Company's rates for the provision of water services
or otherwise have a Material
Adverse Effect.
SECTION
4.20. System Condition; Water
Rights. The Company's utility facilities reasonably meet present demand
in all material respects, are constructed in a good and workmanlike manner, are
in good working order and condition, and comply in all material respects with
all applicable laws, rules, regulations, orders, codes, and the like. The
Company has water rights with such quantities, priorities and qualities as are
necessary adequately to service the present and reasonably anticipated needs of
its customers. The Company controls, owns, or has access to all such water
rights free and clear of the interest of any third party which would
individually or in the aggregate materially adversely affect the Company's
intended use thereof and has not suffered or permitted any transfer or
encumbrance of such water rights, has not abandoned such water rights, or any of
them, and has not done any act or thing which would materially impair or cause a
material loss of any such water rights.
SECTION
4.21. [Intentionally
Omitted
SECTION
4.22. Investment Company Act The
Company is not an "investment company" as that term is defined in, or otherwise
subject to regulation under, the Investment Company Act of 1940, as
amended.
SECTION
4.23. No Default Under Other
Agreements. The Company is not in default in any respect under
any contract, lease, loan agreement, indenture, mortgage, security agreement or
other agreement or obligation to which it is a party or by which any of its
properties is bound which default has
had
or would be reasonably expected to have a Material Adverse
Effect.
SECTION
4.24. Indebtedness. As of the
Closing Date, the Company has no secured Indebtedness or Off Balance
Sheet Indebtedness other than, in each case, as set forth in the Company’s most
recent annual report filed on Form 10-K and quarterly report filed on Form 10-Q,
in each case as filed with the Securities and Exchange
Commission.
SECTION
4.25. Solvency. The Company is and,
after the consummation of the transactions contemplated by this Agreement and
the other Credit Documents, will be Solvent.
SECTION
4.26. Insurance. The Company
maintains insurance for the benefit of the Company with responsible
and reputable insurance companies or associations in such amounts and covering
such risks as is usually carried by companies engaged in similar business and
owning similar properties in the same general areas in which
the Company operates.
SECTION
4.27. Franchise, Licenses, Etc. The
Company possesses all material franchises, certificates, licenses, permits and
other authorizations necessary for the operation of its businesses.
ARTICLE
5
FURNISHING
FINANCIAL AND OTHER INFORMATION
The Company
hereby covenants and agrees that so long as this Agreement is in effect and
until the Loans, together with interest, fees and other monetary obligations
hereunder have been paid in full and the Commitment expires or is
terminated:
SECTION
5.01. Annual Financial Statements of
Company. The Company will furnish, or cause to be furnished, to the
Lender as soon as available, and in any event within 120 days after the close of
each fiscal year of the Company:
(i) a balance sheet of the Company as
of the close of such fiscal year, and
(ii) statements of income, retained
earnings and cash flow of the Company for such fiscal year,
in each
case setting forth in comparative form the figures for the preceding fiscal
year, all in reasonable detail and accompanied by an opinion thereon of a firm
of independent public accountants of recognized national standing selected by
the Company to the effect that the financial statements have been prepared in
conformity with generally accepted accounting principles consistently applied
and present fairly the financial condition of the Company as of the end of such
fiscal year and the results of its operations for the fiscal year then ended and
a written statement from such accountants that their examination in connection
with such financial statements has been made in accordance with generally
accepted auditing standards and auditing procedures as were considered necessary
in the circumstances, and, to the extent applicable, disclosing all defaults by
the Company in the performance of any obligation or under its certificate of
incorporation of which they have obtained knowledge in making the examination
necessary to their opinion.
SECTION
5.02. Financial Statements of the
Corporation.
(i) Quarterly Statements. As soon
as available and in any event within forty five (45) days after the end of each
quarterly fiscal period (except the last) of each fiscal year of the
Corporation, the Company will deliver to the Lender copies of:
(A) consolidated balance sheets of the
Corporation and its subsidiaries as of the close of such quarterly period,
and
(B) consolidated statements of income,
retained earnings and cash flows of the Corporation and its subsidiaries, for
such quarterly period and for the portion of the fiscal year ending with such
period,
in each
case setting forth in comparative form the figures for the corresponding period
of the preceding fiscal year, all in reasonable detail and certified as
presenting fairly the financial condition of the Corporation and its
subsidiaries as of the end of such period and the results of their operations
for such period, subject to changes resulting from year-end adjustments, by the
chief financial officer of the Corporation.
(ii) Annual Statements. As soon as
available and in any event within one hundred twenty (120) days after the close
of each fiscal year of the Corporation, the Company will deliver to the
Purchaser (and any such institutional or other holder), copies in duplicate
of:
(A) consolidated balance sheets of the
Corporation and its subsidiaries as of the close of such fiscal year,
and
(B) consolidated statements of income,
retained earnings and cash flow of the Corporation and its subsidiaries for such
fiscal year,
in each case setting forth in
comparative form the consolidated figures for the preceding fiscal year, all in
reasonable detail and accompanied by an opinion thereon of a firm of independent
public accountants of recognized national standing selected by the Corporation
to the effect that the consolidated financial statements have been prepared in
conformity with generally accepted accounting principles consistently
applied and present fairly the financial condition of the Corporation and its
subsidiaries as of the end of such fiscal year and the results of their
operations for the fiscal year then ended and a written statement from such
accountants that their examination in connection with such financial statements
has been made in accordance with generally accepted auditing standards and
auditing procedures as were considered necessary in the circumstances, and, to
the extent applicable, disclosing all defaults by the Corporation in the
performance of any obligation or under its certificate of incorporation of which
they have obtained knowledge in making the examination necessary to their
opinion
SECTION
5.03. SEC and Other Related
Reports. The
Company will deliver to the Lender (and any such institutional holder), promptly
upon their becoming available, copies of all registration and proxy statements
and reports that the Company or the Corporation shall file with the Securities
and Exchange Commission or any successor and corresponding Governmental
Authority, and copies of such financial statements, reports, proxy statements
and returns as it, or the Corporation, shall send to its or their stockholders
or to the Trustee or file with any securities exchange.
SECTION
5.04. Requested Information. The
Company with reasonable promptness shall furnish the Lender such other data and
information as may reasonably be requested.
SECTION
5.05. Officer's Annual Certificate.
Concurrently with delivery of the financial statements referred to in Section
5.01 hereof, the Company will deliver to the Lender a certificate of its
President or its Treasurer or Controller in the form attached hereto as Exhibit
C.
SECTION
5.06. Inspection. The Company will
permit the Lender, or such person or persons as the Lender may designate in
writing, to visit and inspect any of the properties of the Company and to
examine its books of account and discuss its affairs, finances and accounts with
its officers and independent public accountants (and by this provision the
Company authorizes said accountants to discuss with the Lender the finances and
affairs of the Company), all at such reasonable times and as often as the Lender
may desire; provided that, unless a Default or Event of Default exists, the
Lender shall bear the cost of any such inspection.
SECTION
5.07. Notice of Default. Promptly
after becoming aware thereof, the Company will deliver to the Lender notice
of the occurrence of any Default or Event of Default provided,
however, that the failure to give such notice shall not affect the Lender’s
rights and power to exercise any and all of the remedies specified
herein.
SECTION
5.08. Notice of Non-Environmental
Litigation. Promptly after the commencement thereof, the Company will
deliver to the Lender notice of the commencement of all actions, suits, or
proceedings before any court, arbitrator, or Governmental Authority affecting it
that, if adversely determined, could have a Material Adverse
Effect.
SECTION
5.09. Notice of Environmental
Matters. Without limiting the provision of Section 5.08 hereof, promptly
after receipt thereof, the Company will deliver to the Lender notice of its
receipt of all pleadings, orders, complaints, indictments, or other written
communications alleging a condition that would reasonably be expected to require
the Company to undertake or to contribute to a cleanup or other response under
any Environmental Law, or that seeks material penalties, damages, injunctive
relief, or criminal sanctions related to alleged violations of any Environmental
Law, or that makes any material claim for personal injury or property damage as
a result of environmental factors or conditions or that, if adversely
determined, could otherwise have a Material Adverse
Effect.
SECTION
5.10. ERISA Reportable Events. Within 10 days after
the Company becomes aware of the occurrence of any Reportable Event (as defined
in Section 4043 of ERISA) with respect to the Company, a statement describing
such Reportable Event and the actions proposed to be taken in response to such
Reportable Event.
ARTICLE
6
COVENANTS
The Company
hereby covenants and agrees that so long as this Agreement is in effect and
until the Loans, together with interest, fees and other monetary obligations
hereunder have been paid in full and the Commitment expires or is
terminated:
SECTION
6.01. Compliance With Laws and
Agreements. The Company will comply with (i) all Applicable
Laws of all Governmental Authorities and of any court, arbitrator or
grand jury, in respect of the conduct of its business and the ownership of its
properties (including, without limitation, applicable statutes, rules,
regulations, orders and restrictions relating to equal employment opportunities
or Environmental Laws), the violation of which could reasonably be expected to
have a Material Adverse
Effect; and (ii) all agreements, indentures, mortgages and other
instruments to which it is a party or by which it or any of its property is
bound, the violation of which could reasonably be expected to have a Material Adverse
Effect.
SECTION
6.02. Capitalization. The Company
agrees to purchase such equity in the Lender as the Lender may from time to time
require in accordance with its Bylaws and Capital Plan (as each may be amended
from time to time), except that the maximum amount of equity that the Company
may be required to purchase in the Lender in connection with the Loans may not
exceed the maximum amount permitted by the Lender’s Bylaws at the time this
Agreement is entered into. The rights and obligations of the parties with
respect to such equity and any distributions made on account thereof or on
account of Borrower's patronage with CoBank shall be governed by the Lender’s
Bylaws and Capital Plan (as each may be amended from time to time). All such
investments and all other equities that the Company may now own or hereafter
acquire or be allocated in the Lender shall be subject to a statutory first Lien
in favor of the Lender. The Lender shall not be obligated to set off or
otherwise apply such equities to the Company's obligations to the
Lender.
SECTION
6.03. Licenses, Etc. The Company
will duly and lawfully obtain and maintain in full force and effect all
licenses, certificates, permits, authorizations, approvals and the like that are
material to the conduct of its business or that otherwise may be required by
laws, to the extent the failure to do so could have a Material Adverse
Effect.
SECTION
6.04. Water Rights. The Company will
maintain and procure water rights with such quantities, priorities and qualities
as are necessary adequately to serve the present and reasonably anticipated
needs of its customers. The Company will continue to control, own or have access
to all such water rights free and clear of the interest of any third party, will
not suffer or permit any transfer or encumbrance of such water rights, will not
abandon such water rights, or any of them, and will not do any act or thing
which would impair or cause the loss of such water rights.
SECTION
6.05. Loans and Investments. The
Company will not, after the date hereof, make any loan or advance to, invest in,
purchase or make any commitment to purchase any commercial paper, stock, bonds,
notes, or other securities of any person or entity (each, whether made directly
or indirectly, (an "Investment"), other
than:
(A) commercial
paper maturing not in excess of one year from the date of acquisition and rated
"P1" by ▇▇▇▇▇'▇ or "A1" by S&P on the date of acquisition;
(B) certificates
of deposit in North American commercial banks rated "C" or better by ▇▇▇▇▇,
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc., or "3" or better by ▇▇▇▇▇ Consulting Analysts,
maturing not in excess of one year from the date of acquisition;
(C) securities
or deposits issued, guaranteed, or fully insured as to payment by the United
States government or any agency thereof, and equity or investments in the
Lender;
(D) repurchase
agreements of any bank or trust company incorporated under the laws of the
United States of America or any state thereof and fully secured by a pledge of
obligations issued or fully and unconditionally guaranteed by the United States
government;
(E) stocks
and other voting securities that are not included within the scope of clauses
(A) through (D) above and are issued by corporations or other entities not
engaged in any business other than the water or wastewater utility business and
that are incorporated or organized under the laws of the United State of America
or any state thereof; provided that prior to or as a result of such investment
the Company holds not less than seventy five percent (75%) of the voting
securities of such corporation or entity;
(F) commercial
paper, bonds, stocks or other securities that are not included within the scope
of clauses (A) through (E) above and are issued by corporations or other
entities incorporated or organized under the laws of the United State of America
or any state thereof (collectively, "Other Investments");
provided that the aggregate amount (calculated based on cost) of all such Other
Investments shall not at any time exceed One Million Dollars ($1,000,000);
and
(G) Loans
to Artesian Water Maryland, Inc. in an aggregate principal amount not to exceed,
at any one time outstanding, $10,000,000.
SECTION
6.06. Guarantees. The Company will
not guarantee, assume or otherwise become obligated or liable with respect to
the indebtedness or other obligations of any person or entity, other than in the
ordinary course of its business.
SECTION
6.07. Mergers; Acquisitions: Etc.
The Company will not: (A) merge or consolidate with any other entity unless the
Company shall be the continuing and surviving corporation and, after such merger
or consolidation, there shall exist no Default or Event of Default; or (B)
commence operations under any other name, organization or entity, including any
joint venture.
SECTION
6.08. Transfer of Assets. The
Company will not sell, transfer, lease, enter into any contract for the sale,
transfer or lease of, or otherwise dispose of, any of its assets, except in the
ordinary course of its business.
SECTION
6.09. Change in Business. The
Company will not engage in any business activity or operation different from or
unrelated to its current business activities or operations.
SECTION 6.10. Distributions. The Company
will not make, declare or pay, directly or indirectly, any dividend or other
distribution of assets to shareholders of the Company, or retire, redeem,
purchase or otherwise acquire for value any shares of stock of the Company, if
such dividend, distribution, retirement, redemption, purchase or acquisition
would cause the Company's consolidated capital to be less than Seventy Five
Million Dollars ($75,000,000).
SECTION 6.11. Preservation of Existence, Franchise
and Assets. The Company will do all things necessary to
preserve and keep in full force and effect its existence, rights, franchises and
authority. The Company shall generally maintain its properties, real
and personal, in good condition, and the Company shall not waste or
otherwise permit such properties to deteriorate, reasonable wear and tear
excepted.
SECTION
6.12. Books and Records. The Company
will keep complete and accurate books and records of its transactions in
accordance with good accounting practices on the basis of GAAP (including the
establishment and maintenance of appropriate reserves).
SECTION
6.13. Payment of Taxes and Other
Indebtedness. The Company will pay, settle or discharge (a)
all taxes, assessments and governmental charges or levies imposed upon it, or
upon its income or profits, or upon any of its properties, before they shall
become delinquent, (b) all lawful claims (including claims for labor, materials
and supplies) which, if unpaid, might give rise to a Lien upon any of its
properties, and (c) all of its other Indebtedness as it shall become due (to the
extent such repayment is not otherwise prohibited by this Agreement); provided,
however, that the Company shall not be required to pay any such tax,
assessment, charge, levy, claim or Indebtedness which is being contested in good
faith by appropriate proceedings and as to which adequate reserves therefore
have been established in accordance with GAAP, unless the failure to make any
such payment (i) would give rise to an immediate right to foreclose or collect
on a Lien securing such amounts or (ii) would have or would reasonably be
expected to have a Material Adverse Effect.
SECTION
6.14. Insurance. The Company will at
all times maintain in full force and effect insurance (including worker's
compensation insurance, liability insurance, casualty insurance and business
interruption insurance) with responsible and reputable insurance companies in
such amounts, covering such risks and liabilities and with such deductibles or
self-insurance retentions as is usually carried by companies engaged in similar
businesses and owning similar properties in the same general areas in which
the Company operates.
SECTION
6.15. Performance of Obligation.
The Company will perform in all material respects all of its
obligations under the terms of all material agreements, indentures, mortgages,
security agreements or other debt instruments to which it is a party or by which
it is bound.
SECTION
6.16. Audits/Inspections. Upon
reasonable prior notice and during normal business hours, the Company
will permit representatives appointed by the Lender, including, without
limitation, employees of the Lender, independent accountants, agents, attorneys,
and appraisers, to visit and inspect the Company's property,
including its books and records, its accounts receivable and inventory,
the Company's facilities and its other business assets, and to make
photocopies or photographs thereof and to write down and record any information
such representative obtains and shall permit the Lender or its representatives
to investigate and verify the accuracy of information provided to the Lender and
to discuss all such matters with the officers, employees and representatives of
the Company.
SECTION
6.17 . Nature of Business. The
Company will not alter the character of its business from that of a water or
wastewater utility company.
SECTION
6.18. Arm's-Length Transactions. The
Company will not enter into any transaction or series of transactions, whether
or not in the ordinary course of business, with any officer, director or
Affiliate other than on terms and conditions substantially as favorable to the
Company as would be obtainable in a comparable arm's-length transaction with a
Person other than an officer, director or Affiliate.
SECTION
6.19. Fiscal Year; Organization
Documents. The Company will not (a) change its fiscal year or
(b) change its form of organization from a corporation organized under the laws
of the State of Delaware.
SECTION
6.20. Liens. The Company
will not contract, create, incur, assume or permit to exist any Lien with
respect to any of its property or assets of any kind (whether real or personal,
tangible or intangible), whether now owned or after acquired, except for the
Lien of the Indenture and Liens permitted by the Indenture.
SECTION
6.21. Indebtedness. The Company will
not, nor will it permit any of its Subsidiaries to incur, assume, guarantee or
in any other manner become liable, with respect to:
(A) Short-Term
Debt (including Company Obligations) in excess of, at any one time outstanding,
$40,000,000.
(B) Funded
Indebtedness in excess of, at any one time outstanding, 66.67% of Total
Permanent Capital of the Company and its consolidated subsidiaries.
SECTION
6.22. EBITDA to Total Interest Expense
Ratio. The Company and its consolidated subsidiaries, if any, will have
at the end of each fiscal year, an " EBITDA to Total Interest Expense" of not
greater than 2.50 to 1.
ARTICLE
7
EVENTS
OF DEFAULT
SECTION
7.01. Events of Default. An Event of
Default shall exist upon the occurrence of any of the following specified events
(each an "Event of Default"):
(A) Payment. The Company
shall default in the payment when due of any principal of any of the Loans or in
the payment when due of any interest on the Loans or of any fees or other
amounts owing hereunder or under any of the other Credit Documents.
(B) Representations. Any
representation, warranty or statement made or deemed to be made by the Company
herein, in any of the other Credit Documents, or in any statement or certificate
delivered or required to be delivered pursuant hereto or thereto shall prove
untrue in any material respect on the date as of which it was deemed to have
been made.
(C) Certain Covenants. The failure
by the Company to perform or comply with any covenant or agreement set forth in
this Agreement (excluding Sections 2.02, 5.07, 5.08, 5.09, 6.21, and
6.22) , and such failure continues for thirty (30) days after written notice
thereof shall have been delivered by the Lender to the Company;
(D) Other Covenants. The failure
by the Company to perform or comply with Sections 2.02, 5.07, 5.08, 5.09, 6.21
or 6.22 of this Agreement.
(E) Cross-Default. The occurrence
of any event of default under, or lapse of or failure on the part of the Company
to observe, keep, or perform any covenant or agreement contained in any other
Credit Document or any other agreement between the Company and the Lender,
including, without limitation, any guaranty, loan agreement, security agreement,
pledge agreement, indenture, mortgage or other agreement.
(F) Other
Indebtedness. The Company should fail to pay when due any
indebtedness to any other person or entity for borrowed money or any long-term
obligation for the deferred purchase price of property (including any
capitalized lease), or any other event occurs which, under any agreement or
instrument relating to such indebtedness or obligation, has the effect of
accelerating or permitting the acceleration of such indebtedness or obligation,
whether or not such indebtedness or obligation is actually accelerated or the
right to accelerate is conditioned on the giving of notice, the passage of time,
or otherwise.
(G) Judgment. The rendering
against the Company of a judgment for the payment of moneys in excess of Five
Hundred Thousand Dollars ($500,000) and the continuance of such judgment
unsatisfied and without stay of execution thereon for a period of forty-five
(45) days after the entry of such judgment, or the continuance of such judgment
unsatisfied for a period of forty-five (45) days after the termination of any
stay of execution thereon entered within such first mentioned forty-five (45)
days.
(H) Bankruptcy, etc. The
occurrence of any of the following with respect to the Company (i) a
court or governmental agency having jurisdiction in the premises shall enter a
decree or order for relief in respect of the Company in an involuntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or appoint a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official of the Company or for any
part of its property or order the winding up or liquidation of its affairs; or
(ii) an involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect is commenced against the and such
petition remains un stayed and in effect for a period of 60 consecutive days; or
(iii) the Company shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or consent to the entry of an order for relief in an involuntary case
under any such law, or consent to the appointment or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official of the Company or any substantial part of its property or
make any general assignment for the benefit of creditors; or (iv) the Company
shall become insolvent or shall admit in writing its inability to pay its debts
generally as they become due or any action shall be taken by the
Company in furtherance of any of the aforesaid purposes.
(I) ERISA. The
occurrence of any of the following events or conditions if the same,
individually or in the aggregate, would be reasonably expected to result in a
liability of an amount greater than or equal to $500,000: (A) any "accumulated
funding deficiency," as such term is defined in Section 302 of ERISA and Section
412 of the Code, whether or not waived, shall exist with respect to any Plan, or
any Lien shall arise on the assets of the Company or any ERISA
Affiliate in favor of the PBGC or a Plan; (B) a Termination Event shall occur
with respect to a Single Employer Plan, which is, in the reasonable opinion of
the Lender, likely to result in the termination of such Plan for purposes of
Title IV of ERISA; (C) a Termination Event shall occur with respect to a
Multiemployer Plan or Multiple Employer Plan, which is, in the reasonable
opinion of the Lender, likely to result in (i) the termination of such Plan for
purposes of Title IV of ERISA, or (ii) the Company or any ERISA
Affiliate incurring any liability in connection with a withdrawal from,
reorganization of (within the meaning of Section 4241 of ERISA), or insolvency
(within the meaning of Section 4245 of ERISA) of such Plan; or (D) any
prohibited transaction (within the meaning of Section 406 of ERISA or Section
4975 of the Code) or breach of fiduciary responsibility shall occur which would
be reasonably expected to subject the Company or any ERISA Affiliate
to any liability under Sections 406, 409, 502(i), or 502(1) of ERISA or Section
4975 of the Code, or under any agreement or other instrument pursuant to which
the Company or any ERISA Affiliate has agreed or is required to
indemnify any person against any such liability.
(J) Indenture. An
"Event of Default" (as defined in the Indenture) shall exist.
SECTION
7.02. Acceleration; Remedies. Upon
the occurrence and during the continuance of a Default or an Event of Default,
the Lender shall have no obligation to make any Loan to the Company and may
discontinue doing so at any time without prior notice. In addition, upon the
occurrence of an Event of Default and at any time thereafter unless and until
such Event of Default has been waived by the Lender, the Lender may, by written
notice to the Company take any of the following actions without prejudice to the
rights of the Lender to enforce its claims against the Company,
except as otherwise specifically provided for herein.
(A) Termination of
Commitments. Declare the Commitment terminated whereupon the
Commitment shall be immediately terminated.
(B) Acceleration of
Loans. Declare the unpaid amount of all Company
Obligations to be due whereupon the same shall be immediately due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Company.
(C) Enforcement of
Rights. Enforce any and all rights and interests created and
existing under the Credit Documents, including, without limitation, all rights
of set-off.
(D) Other Rights. Exercise all
other rights provided in this Agreement, any other Credit Document, or under
law.
In
addition to the foregoing, upon the occurrence and during the continuance of an
Event of Default the unpaid principal balance of the Loans, together with any
overdue payments of interest, fees or other charges hereunder, shall
automatically accrue interest at the Default Rate.
SECTION
7.03. Application of Payments After Event
of Default. Notwithstanding any other provisions of this
Agreement, after the exercise of any remedies by the Lender pursuant to Section 7.02 (or
after the Commitments shall automatically terminate and the Loans (with accrued
interest thereon) and all other amounts under the Credit Documents shall
automatically become due and payable in accordance with the terms of such
Section), all amounts collected or received by the Lender on account of amounts
outstanding under any of the Credit Documents shall be applied as
follows:
FIRST, to
the payment of all reasonable out-of-pocket costs and expenses (including
without limitation reasonable Attorney Costs) of the Lender in connection with
enforcing the rights of the Lender under the Credit Documents;
SECOND,
to payment of any fees or surcharges owed to the Lender;
THIRD, to
the payment of all accrued interest payable to the Lender
hereunder;
FOURTH,
to the payment of the outstanding principal amount of the Loans;
FIFTH, to
all other obligations which shall have become due and payable under the Credit
Documents and not repaid pursuant to clauses "FIRST" through "FOURTH" above;
and
SIXTH, to
the payment of the surplus, if any, to whoever may be lawfully entitled to
receive such surplus.
In
carrying out the foregoing, amounts received shall be applied in the numerical
order provided until exhausted prior to application to the next succeeding
category.
ARTICLE
8
MISCELLANEOUS
SECTION
8.01. Notices
and Other Communications; Facsimile Copies.
(A) General. Unless
otherwise expressly provided herein, all notices and other communications
provided for hereunder shall be in writing (including by facsimile
transmission). All written notices and all other communications expressly
permitted hereunder to be given by telephone shall be made to the applicable
address, facsimile number, electronic mail address or telephone number specified
for such Person on Schedule 8.01 or to such other address, facsimile number,
electronic mail address or telephone number as shall be designated by such party
in a notice to the other parties. All such notices and other communications
shall be deemed to be given or made upon the earlier to occur of (i) actual
receipt by the relevant party hereto and (ii) (A) if delivered by hand or by
courier, when signed for by or on behalf of the relevant party hereto;
(B) if delivered by facsimile, when sent and receipt has been
confirmed by telephone; and (C) if delivered by electronic mail (which form of
delivery is subject to the provisions of subsection (C) below), when
delivered.
(B) Effectiveness of Facsimile Documents
and Signatures. Credit Documents may be transmitted and/or
signed by facsimile. The effectiveness of any such documents and signatures
shall, subject to applicable law, have the same force and effect as
manually-signed originals and shall be binding on the Company and the
Lender. The Lender may also require that any such documents and signatures be
confirmed by a manually-signed original thereof; provided, however, that the
failure to request or deliver the same shall not limit the effectiveness of any
facsimile document or signature.
(C) Limited Use of Electronic
Mail. Electronic mail and internet and intranet websites may
be used only to distribute routine communications, such as financial statements
and other information as provided in Sections 5.01 through 5.04, and to
distribute Credit Documents for execution by the parties thereto, and may not be
used for any other purpose.
(D) Reliance by
Lender. The Lender shall be entitled to rely and act upon any
notices (including telephonic notices of borrowing and interest elections)
purportedly given by or on behalf of the Company even if (i) such
notices were not made in a manner specified herein, were incomplete or were not
preceded or followed by any other form of notice specified herein, or (ii) the
terms thereof, as understood by the recipient, varied from any confirmation
thereof. The Company shall indemnify the Lender from all losses,
costs, expenses and liabilities resulting from the reliance by such Person on
each notice purportedly given by or on behalf of the Company. All
telephonic notices to and other communications with the Lender may be recorded
by the Lender, and the Company hereby consents to such
recording.
SECTION
8.02. Rights of Set-Off. In addition
to any rights now or hereafter granted under applicable law or otherwise, and
not by way of limitation of any such rights, upon the occurrence of an Event of
Default and the commencement of remedies described in Section 7.02, the Lender
is authorized at any time and from time to time, without presentment, demand,
protest or other notice of any kind (all of which rights being hereby expressly
waived), to hold, set-off and appropriate and apply any and all proceeds of any
equity in the
Lender, any deposits (general or special), and any other indebtedness at
any time held or owing by the Lender (whether or not due) to or for the credit
or the account of the Company against the Company Obligations
irrespective of whether the Lender shall have made any demand hereunder and
although such Company Obligations, or any of them, may be contingent
or unmatured, and any such set-off shall be deemed to have been made immediately
upon the occurrence of an Event of Default even though such charge is made or
entered on the books of the Lender subsequent thereto; provided, however, that
the Lender shall not be obligated to effect any such setoff.
The Company hereby agrees that any Person purchasing a participation
in the Loans and Commitments hereunder pursuant to Section 8.03 may
exercise all rights of set-off with respect to its participation interest as
fully as if such Person were a Lender hereunder.
SECTION
8.03. Successors
and Assigns
(A) Generally. The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted hereby,
except that the Company may not assign or otherwise transfer any of
its rights or obligations hereunder without the prior written consent of the
Lender. Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby, Participation Purchasers to the extent
provided in subsection (B) of this Section and, to the extent expressly
contemplated hereby, the indemnities) any legal or equitable right, remedy or
claim under or by reason of this Agreement.
(B) Participations. Without
limiting the foregoing, the Lender may at any time, without the consent of, or
notice to, the Company, sell participations to any Participation Purchaser in
all or a portion of the Lender's rights and/or obligations under this Agreement
(including all or a portion of the
Commitment and/or the Loans); provided that (i) if
such sale is other than to a Farm Credit System
Institution,
such sale shall be subject to the Company's consent, which shall not
be unreasonably withheld or delayed, (ii) the Lender's obligations under
this Agreement shall remain unchanged, (iii)
the Lender shall remain solely responsible to the Company for the
performance of such obligations and (iv)
the Company and the Lender shall continue to deal solely and directly with the
Lender in connection with the Lender's rights and obligations under this
Agreement. Any agreement or instrument pursuant to which the Lender
sells such a participation shall provide that the Lender shall retain the sole
right to enforce this Agreement and to approve any amendment, modification or
waiver of any provision of this Agreement; provided that such agreement or
instrument may provide that the Lender will not, without the consent of the
Participation Purchaser, agree to any amendment, waiver or other modification
described in Section 8.06 that directly affects such Participation
Purchaser. To the extent permitted by law, each Participation Purchaser also
shall be entitled to the benefits of Section 8.02 as though it were a Lender,
provided such Participation Purchaser agrees to share any amount received in
excess of its pro rata share with the Lender and all other Participation
Purchasers.
(C) Nonrestricted
Assignments. The Lender may at any time pledge or assign a
security interest in all or any portion of its rights under the Credit Documents
(including under the Note) to secure obligations of such Lender, including any
pledge or assignment to secure obligations arising in connection with the
issuance of notes by the Federal Farm Credit Banks Funding Corporation; provided that no such
pledge or assignment shall release such Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.
(D) Information. The
Lender may furnish any information concerning the Company in the
possession of such Lender from time to time to Participation Purchasers
(including prospective Participation Purchasers).
SECTION
8.04. No Waiver; Remedies
Cumulative. No failure or delay on the part of the Lender in exercising
any right, power or privilege hereunder or under any other Credit Document and
no course of dealing between the Company and the Lender shall operate
as a waiver thereof, nor shall any single or partial exercise of any right,
power or privilege hereunder or under any other Credit Document preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege hereunder or thereunder. The rights and remedies provided herein are
cumulative and not exclusive of any rights or remedies which the Lender would
otherwise have. No notice to or demand on the Company in any case
shall entitle the Company to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the rights of the
Lender to any other or further action in any circumstances without notice or
demand.
SECTION
8.05. Payment of Expenses,
Etc.
(A) The Company agrees (i) to
pay or reimburse the Lender for all costs and expenses incurred in connection
with the preparation, negotiation and execution of this Agreement and the other Credit
Documents and any amendment, waiver, consent or other modification of the
provisions hereof and thereof (whether or not the transactions contemplated
hereby or thereby are consummated), and the consummation and administration of
the transactions contemplated hereby and thereby, including all Attorney Costs
(including, without limitation, the reasonable fees and expenses of ▇▇▇▇▇▇▇
& ▇▇▇▇▇▇ L.L.C., special counsel to the Lender), and (ii) to pay or
reimburse the Lender for all costs and expenses incurred in connection with the
enforcement, attempted enforcement, or preservation of any rights or remedies
under this Agreement or
the other Credit Documents (including all such costs and expenses incurred
during any "workout" or restructuring in respect of the Company Obligations and
during any legal proceeding, including any bankruptcy or insolvency proceeding
of the Company), including all Attorney Costs. The foregoing costs
and expenses shall include all search, filing, recording, title insurance and
appraisal charges and fees and taxes related thereto, and other out-of-pocket
expenses incurred by the Lender and the cost of independent public accountants
and other outside experts retained by the Lender. All amounts due under this
Section 8.05(A) shall be payable within ten Business Days after written notice
is provided to the Company demanding payment therefor. In addition, the Company
will pay all taxes (including interest and penalties) that may be payable in
respect of the execution and delivery of this Agreement or any other Credit
Documents or of any amendment of, or waiver or consent under or with
respect to, this Agreement, the or the Note and will hold the Lender harmless
against any loss or liability resulting from nonpayment or delay in payment of
any such tax. The obligations of the Company under this Section 8.05 shall
survive the payment of the Loans.
(B) Whether
or not the transactions contemplated hereby are consummated,
the Company shall indemnify and hold harmless the Indemnities from
and against any and all liabilities, obligations, losses, damages, penalties,
claims, demands, actions, judgments, suits, costs, expenses and disbursements
(including Attorney Costs) of any kind or nature whatsoever which may at any
time be imposed on, incurred by or asserted against any such Indemnitee in any
way relating to or arising out of or in connection with (a) the execution,
delivery, enforcement, performance or administration of any Credit Document or
any other agreement, letter or instrument delivered in connection with the
transactions contemplated thereby or the consummation of the transactions
contemplated thereby, (b) the Commitment or any Loan, (c) any actual or alleged
presence or release of hazardous materials on or from any property currently or
formerly owned or operated by the Company, any Subsidiary of
the Company, or any liability resulting from any actual or alleged
violation of Environmental Laws related in any way to the Company,
any Subsidiary of the Company or (d) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory (including any investigation
of, preparation for, or defense of any pending or threatened claim,
investigation, litigation or proceeding) and regardless of whether any
Indemnitee is a party thereto (all the foregoing, collectively, the "Indemnified
Liabilities"), in all cases, whether or not caused by or arising, in whole or in
part, out of the negligence of the Indemnitee; provided that such indemnity
shall not, as to any Indemnitee, be available to the extent that such
liabilities, obligations, losses, damages, penalties, claims, demands, actions,
judgments, suits, costs, expenses or disbursements are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence or willful misconduct of such Indemnitee. No Indemnitee
shall be liable for any indirect or consequential damages relating to this
Agreement or any other Credit Document or arising out of its activities in
connection herewith or therewith (whether before or after the Closing Date). All
amounts due under this Section 8.05(B) shall
be payable within ten Business Days after written notice is provided to the
Company demanding payment therefor. The agreements in this Section
shall survive the termination of the Commitment and the repayment,
satisfaction or discharge of all the other Company
Obligations.
SECTION
8.06. Amendments, Waivers and
Consents. Neither
this Agreement, nor any other Credit Document nor any of the terms hereof or
thereof may be amended, changed, waived, discharged or terminated unless such
amendment, change, waiver, discharge or termination is in writing and signed by
the Lender and the Company; provided that no such amendment, change, waiver,
discharge or termination shall without the consent of each Participation
Purchaser affected thereby:
(A) extend
the Maturity Date, or postpone or extend the time for any payment or prepayment
of principal;
(B) reduce
the rate or extend the time of payment of interest (other than as a result of
waiving the applicability of any post-default increase in interest rates)
thereon or fees or other amounts payable hereunder;
(C) reduce
or waive the principal amount of any Loan;
(D) increase
or extend the Commitment (it being understood and agreed that a waiver of any
Default or Event of Default shall not constitute a change in the terms of the
Commitment);
(E) release
the Company from its obligations under the Credit
Documents;
(F) amend,
modify or waive any provision of this Section 8.06, or Sections 7.01(A), 8.02,
8.03 or 8.05; or
(G) consent
to the assignment or transfer by the Company of any of its rights and
obligations under (or in respect of) the Credit Documents.
SECTION
8.07. Counterparts. This Agreement
may be executed in any number of counterparts, each of which where so executed
and delivered shall be an original, but all of which shall constitute one and
the same instrument.
SECTION
8.08. Headings. The headings of the
sections and subsections hereof are provided for convenience only and shall not
in any way affect the meaning or construction of any provision of this
Agreement.
SECTION 8.09.
Survival of Indemnification and
Representations and Warranties. All indemnities set forth herein and all
representations and warranties made herein shall survive the execution and
delivery of this Agreement, the making of the Loans, and the repayment of the
Loans and other Company Obligations and the termination of the
Commitment hereunder.
SECTION
8.10. Governing Law. THIS AGREEMENT AND THE OTHER CREDIT
DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER
SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF DELAWARE. The Company irrevocably consents to
the service of process out of any competent court in any action or proceeding
with respect to this Agreement by the mailing of copies thereof by registered or
certified mail, postage prepaid, to it at the address for notices pursuant to
Section 8.01,
such service to become effective 30 days after such mailing. Nothing herein
shall affect the right of the Lender to serve process in any other manner
permitted by law.
SECTION
8.11. Waiver
of Jury Trial. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OF THE OTHER
CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY AND
THEREBY.
SECTION
8.12. Severability. If any provision
of any of the Credit Documents is determined to be illegal, invalid or
unenforceable, such provision shall be fully severable and the remaining
provisions shall remain in full force and effect and shall be construed without
giving effect to the illegal, invalid or unenforceable provisions.
SECTION
8.13. Further Assurances.
The Company agrees, upon the request of the Lender, to promptly take
such actions, as reasonably requested, as are necessary to carry out the intent
of this Agreement and the other Credit Documents.
SECTION
8.14. Entirety. This Agreement
together with the other Credit Documents represent the entire agreement of the
parties hereto and thereto, and supersede all prior agreements and
understandings, oral or written, if any, including any commitment letters or
correspondence relating to the Credit Documents or the transactions contemplated
herein and therein.
SECTION
8.15. Binding
Effect; Continuing Agreement.
(A) This
Agreement shall become effective at such time as all of the conditions set forth
in Section 3.01
have been satisfied or waived by the Lender and it shall have been executed by
the Company and the Lender, and thereafter this Agreement shall be
binding upon and inure to the benefit of the Company and the Lender
and their respective successors and assigns.
(B) This
Agreement shall be a continuing agreement and shall remain in full force and
effect until all Loans, interest, fees and other Company Obligations have been
paid in full and the Commitment expires or has been terminated. Upon
termination, the Company shall have no further obligations (other
than the indemnification provisions that survive) under the Credit Documents;
provided that should any payment, in whole or in part, of the Company
Obligations be rescinded or otherwise required to be restored or returned by the
Lender, whether as a result of any proceedings in bankruptcy or reorganization
or otherwise, then the Credit Documents shall automatically be reinstated and
all amounts required to be restored or returned and all costs and expenses
incurred by the Lender in connection therewith shall be deemed included as part
of the Company Obligations.
SECTION
8.16. Confidentiality. The Lender
agrees to maintain the confidentiality of the Information (as defined below),
except that Information may be disclosed (a) to its and its Affiliates'
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential); (b) to the extent requested
by any regulatory authority; (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process (provided, in the event
of any disclosure pursuant to this clause (c), the Lender shall promptly notify
the Company of its disclosure of such Information); (d) to any other
party to this Agreement; (e) in connection with the exercise of any remedies
hereunder or any suit, action or proceeding relating to this Agreement or the
enforcement of rights hereunder; (f) subject to an agreement containing
provisions substantially the same as those of this Section 8.16, to (i)
any Participation Purchaser in, or any prospective Participation
Purchaser in, any of its rights or obligations under this Agreement or (ii) any
direct or indirect contractual counterparty or prospective counterparty (or such
contractual counterparty's or prospective counterparty's professional advisor)
to any credit derivative transaction relating to obligations of
the Company; (g) with the consent of the Company; (h) to
the extent such Information (i) becomes publicly available other than as a
result of a breach of this Section 8.16 or (ii)
has been available or becomes available to the Lender on a nonconfidential basis
from a source other than the Company; or (i) to the National
Association of Insurance Commissioners or any other similar organization or any
nationally recognized rating agency that requires access to information about a
Lender's or its Affiliates' portfolio in connection with ratings issued with
respect to such Lender or its Affiliates. For the purposes of this Section 8.16,
"Information" means all information received from the Company
relating to the Company or its Subsidiaries or business. Any Person
required to maintain the confidentiality of Information as provided in this
Section 8.16
shall be considered to have complied with its obligation to do so if such Person
has exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.
Notwithstanding anything herein to the contrary, "Information" shall not
include, and the Lender and the Company may disclose to any and all
Persons, without limitation of any kind, any information with respect to the
"tax treatment" and "tax structure" (in each case, within the meaning of
Treasury Regulation Section 1.6011-4) of the transactions contemplated hereby
and all materials of any kind (including opinions or other tax analyses) that
are provided to the Lender or the Company relating to such tax
treatment and tax structure; provided that with respect to any document or
similar item that in either case contains information concerning the tax
treatment or tax structure of the transaction as well as other information, this
sentence shall only apply to such portions of the document or similar item that
relate to the tax treatment or tax structure of the Loans and transactions
contemplated hereby.
SECTION
8.17. USA PATRIOT ACT. CoBank hereby
notifies the Company that pursuant to the requirements of the USA Patriot Act
(Title III of Publ. 107 56 (signed into law October 26, 2001)) (the “Act”), it is required
to obtain, verify and record information that identifies the Company, which
information includes the name and address of the Company and other information
that will allow CoBank to identify the Company in accordance with the
Act.
[Remainder
of Page Intentionally Left Blank]
Each of
the parties hereto has caused a counterpart of this Revolving Credit Agreement
to be duly executed and delivered as of the date first above
written.
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BORROWER:
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ARTESIAN
WATER COMPANY, INC.
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By:
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Name:
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Title:
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LENDER:
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CoBANK,
ACB
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By:
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Name:
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Title:
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EXHIBIT
A
DEFINITIONS
AND RULES OF INTERPRETATION
SECTION 1.01 Definitions. As
used in the Agreement, any amendment thereto, or in any other Credit Document,
the following terms shall have the following meanings:
"Affiliate" means,
with respect to any Person, any other Person directly or indirectly controlling
(including but not limited to all directors and officers of such Person),
controlled by or under direct or indirect common control with such Person. A
Person shall be deemed to control a corporation if such Person possesses,
directly or indirectly, the power (a) to vote 10% or more of the securities
having ordinary voting power for the election of directors of such corporation
or (b) to direct or cause direction of the management and policies of such
corporation, whether through the ownership of voting securities, by contract or
otherwise. “Agreement” shall have
the meaning set forth in the introductory paragraph hereof.
“Applicable Law” means
all laws, rules, regulations, codes, and ordinances applicable to the Person,
conduct, transaction, covenant or contract in question.
"Attorney Costs" means
all reasonable fees and disbursements of any law firm or other external
counsel.
“Banking Day” shall
mean a day that is both a Business Day and a day on which dealings between banks
are carried on in U.S. dollar deposits in the London interbank
market.
"Business Day" means
any day other than a Saturday, a Sunday, a legal holiday or a day on which the
Lender is closed for business.
"Capital Stock" means
(a) in the case of a corporation, all classes of capital stock of such
corporation, (b) in the case of a partnership, partnership interests (whether
general or limited), (c) in the case of a limited liability company, membership
interests and (d) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
"Closing Date" means
the date hereof.
“CoBank
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 as a reference
rate and not its lowest rate. The CoBank Base Rate will change on the effective
date of each change in the rate.
"Code" means the
Internal Revenue Code of 1986, as amended from time to time, and the rules and
regulations promulgated thereunder.
"Commitment" shall
have the meaning set forth in Section
2.01.
"Company" means
Artesian Water Company, Inc.
"Company Obligations"
means, without duplication, all of the obligations of the Company to the Lender,
whenever arising, under this Agreement, the Note or any of the other Credit
Documents, including, without limitation, the obligation to pay principal,
interest, fees, surcharges, premiums, expense, and other amounts owing
hereunder.
“Corporation” shall
have the meaning set forth in Section 4.01 hereof.
"Credit Documents"
means this Agreement, the Note, and all other related agreements and documents
issued or delivered hereunder or thereunder or pursuant hereto or
thereto.
"Default" means any
event, act or condition which with notice or lapse of time, or both, would
constitute an Event of Default.
“Default Rate” shall
mean the CoBank Base Rate plus 2%
per annum.
"Dollars" and "$" means dollars in
lawful currency of the United States of America.
"Environmental Laws"
means any current or future legal requirement of any Governmental Authority
pertaining to (a) the protection of health, safety, and the indoor or outdoor
environment, (b) the conservation, management, or use of natural resources and
wildlife, (c) the protection or use of surface water and groundwater or (d) the
management, manufacture, possession, presence, use, generation, transportation,
treatment, storage, disposal, release, threatened release, abatement, removal,
remediation or handling of, or exposure to, any hazardous or toxic substance or
material or (e) pollution (including any release to land surface water and
groundwater) and includes, without limitation, the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act of 1986, 42 USC 9601 et seq., Solid Waste
Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976
and Hazardous and Solid Waste Amendment of 1984, 42 USC 6901 et seq., Federal
Water Pollution Control Act, as amended by the Clean Water Act of 1977,33 USC
1251 et seq., Clean Air Act of 1966, as amended, 42 USC 7401 et seq., Toxic
Substances Control Act of 1976, 15 USC 2601 et seq., Hazardous Materials
Transportation Act, 49 USC App. 1801 et seq., Occupational Safety and Health Act
of 1970, as amended, 29 USC 651 et seq., Oil Pollution Act of 1990, 33 USC 2701
et seq., Emergency Planning and Community Right-to-Know Act of 1986, 42 USC
11001 et seq., National Environmental Policy Act of 1969, 42 USC 4321 et seq.,
Safe Drinking Water Act of 1974, as amended, 42 USC 300(f) et seq., any
analogous implementing or successor law, and any amendment, rule, regulation,
order, or directive issued thereunder.
"ERISA" means the
Employee Retirement Income Security Act of 1974, as amended, and any successor
statute thereto, as interpreted by the rules and regulations thereunder, all as
the same may be in effect from time to time. References to sections of ERISA
shall be construed also to refer to any successor sections.
"ERISA Affiliate"
means an entity, whether or not incorporated, which is under common control with
the Company or any of its Subsidiaries within the meaning of Section
4001(a)(14) of ERISA, or is a member of a group which includes
the Company or any of its Subsidiaries and which is treated as a
single employer under Sections 414(b), (c), (m), or (0) of the
Code.
“Eurocurrency
Liabilities” shall have meaning as set forth in Regulation
D.
"Event of Default" has
the meaning specified in Section 7.01.
"Financial Officer"
means any one of the chief financial officer, the chief accounting officer, the
Vice President, Finance or the Senior Vice President, Finance and Planning of
the Company.
“Fixed Rate Balances”
shall mean balances bearing interest at either the Quoted Fixed Rate
Option or the LIBOR Option.
"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 be calculated on a
consolidated basis, excluding all intercompany items, in accordance with GAAP
consistently applied and 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, provided that for purposes
of computations under this Agreement, capitalized lease obligations shall be
excluded from Funded Indebtedness.
"GAAP" means generally
accepted accounting principles in the United States applied on a consistent
basis.
"Governmental
Authority" means any Federal, state, local or foreign court or
governmental agency, authority, instrumentality or regulatory body.
"Guaranty Obligations"
means, with respect to any Person, without duplication, any obligations (other
than endorsements in the ordinary course of business of negotiable instruments
for deposit or collection) guaranteeing any Indebtedness of any other Person in
any manner, whether direct or indirect, and including without limitation any
obligation, whether or not contingent, (a) to purchase any such Indebtedness or
other obligation or any property constituting security therefore, (b) to advance
or provide funds or other support for the payment or purchase of such
Indebtedness or obligation or to maintain working capital, solvency or other
balance sheet condition of such other Person (including, without limitation,
maintenance agreements, comfort letters, take or pay arrangements, put
agreements or similar agreements or arrangements) for the benefit of the holder
of Indebtedness of such other Person, (c) to lease or purchase property,
securities or services primarily for the purpose of assuring the owner of such
Indebtedness or (d) to otherwise assure or hold harmless the owner of such
Indebtedness or obligation against loss in respect thereof. The amount of any
Guaranty Obligation hereunder shall (subject to any limitations set forth
therein) be deemed to be an amount equal to the outstanding principal amount (or
maximum principal amount, if larger) of the Indebtedness in respect of which
such Guaranty Obligation is made.
"Indebtedness" of any
Person means, without duplication, (a) all obligations of such Person for
borrowed money, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, or upon which interest payments are
customarily made, (c) all obligations of such Person under conditional sale or
other title retention agreements relating to property purchased by such Person
to the extent of the value of such property (other than customary reservations
or retentions of title under agreements with suppliers entered into in the
ordinary course of business), (d) all obligations, other than intercompany items
and trade payables incurred in the ordinary course of business, of such Person
issued or assumed as the deferred purchase price of property or services
purchased by such Person which would appear as liabilities on a balance sheet of
such Person, (e) all Indebtedness of others secured by (or for which the holder
of such Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien on, or payable out of the proceeds of production from,
property owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed, (f) all Guaranty Obligations of such Person,
(g) the principal portion of all obligations of such Person under (i) capital
lease obligations and (ii) Off Balance Sheet Indebtedness, (h) all obligations
of such Person to repurchase any securities which repurchase obligation is
related to the issuance thereof, including, without limitation, obligations
commonly known as residual equity appreciation potential shares, (i) all net
principal obligations of such Person in respect of interest rate protection
agreements, foreign currency exchange agreements, commodity purchase or option
agreements or other interest or exchange rate or commodity price hedging
agreements, (j) the maximum amount of all performance and standby letters of
credit issued or bankers' acceptances facilities created for the account of such
Person and, without duplication, all drafts drawn thereunder (to the extent
unreimbursed), and (k) the aggregate amount of uncollected accounts receivable
of such Person subject at such time to a sale of receivables (or similar
transaction) regardless of whether such transaction is effected without recourse
to such Person or in a manner that would not be reflected on the balance sheet
of such Person in accordance with GAAP .
"Indemnified
Liabilities" has the meaning set forth in Section
8.05(B).
"Indemnities" means,
collectively, the Lender and its respective Affiliates, directors, officers,
employees, counsel, agents and attorneys- in-fact.
"Indenture" means that
certain Indenture of Mortgage dated as of July 1, 1961 between the Company
(successor to the Corporation) and Wilmington Trust Company, as Trustee as the
same may from time to time be supplemented, modified, amended, renewed, extended
or consolidated.
"Interest Period"
means a period commencing on the date the LIBOR Option is to take
effect (including continuations and conversions) and ending on the numerically
corresponding day in the next calendar month or the month that is 2, 3, 6, or 9
months thereafter, as the case may be; provided, however, that: (i) in the event
such ending day is not a Banking Day, such period shall be extended to the next
Banking Day unless such next Banking Day falls in the next calendar month, in
which case it shall end on the preceding Banking Day; and (ii) if there is no
numerically corresponding day in the ending month, then such period shall end on
the last Banking Day in the relevant month.
“Investment” shall
have the meaning set forth in Section 6.05 hereof.
"Lender" means CoBank,
ACB, together with its
successors and assigns.
“LIBOR Option” shall
have the meaning set forth in Section
2.04(A)(3).
“LIBOR” shall mean the
rate (rounded upward to the nearest sixteenth and adjusted for reserves required
on Eurocurrency Liabilities for banks subject to Regulation D or required by any
other federal law or regulation) quoted by the British Bankers Association (the
“BBA”) at 11:00 a.m. London time 2 Banking Days before the commencement of the
Interest Period for the offering of U.S. dollar deposits in the London interbank
market for the Interest Period designated by the Company, as published by
Bloomberg or another major information vendor listed on BBA’s official
website.
"Lien" means any
mortgage, pledge, hypothecation, assignment, deposit arrangement, security
interest, encumbrance, lien (statutory or otherwise), preference, priority or
charge of any kind (including any agreement to give any of the foregoing, any
conditional sale or other title retention agreement, any financing or similar
statement or notice filed under the Uniform Commercial Code as adopted and in
effect in the relevant jurisdiction or other similar recording or notice
statute, and any lease in the nature thereof).
"Loans" shall
have the meaning set forth in Section 2.01 hereof.
"Material Adverse
Effect" means a material adverse effect on (a) the operations, business,
assets, or condition (financial or otherwise) of the Company and its
Subsidiaries, taken as a whole, (b) the ability of the Company to perform its
obligations under this Agreement or (c) the validity or enforceability of this
Agreement, any of the other Credit Documents, or the rights and remedies of the
Lender hereunder or thereunder.
"Maturity Date" shall
have the meaning set forth in Section 2.01.
"Moody's" means
▇▇▇▇▇'▇ Investors Service, Inc., or any successor or assignee of the business of
such company in the business of rating securities.
"Multiemployer Plan"
means a Plan covered by Title IV of ERISA which is a multiemployer plan as
defined in Section 3(37) or 4001(a)(3) of ERISA.
"Multiple Employer
Plan" means a Plan covered by Title IV of ERISA, other than a
Multiemployer Plan, which the Company or any ERISA Affiliate and at
least one employer other than the Company or any ERISA Affiliate are
contributing sponsors.
“Note” shall have the
meaning set forth in Section 2.08 hereof, as amended, modified, supplemented or
replaced from time to time.
"Off Balance Sheet
Indebtedness" means any obligation of a Person that would be considered
indebtedness for tax purposes but is not set forth on the balance sheet of such
Person, including, but not limited to, (a) any synthetic lease, tax retention
operating lease, off balance sheet loan or similar off-balance sheet financing
product of such Person, (b) the aggregate amount of uncollected accounts
receivables of such Person subject at such time to a sale of receivables (or
similar transaction) and (c) obligations of any partnership or joint venture
that is recourse to such Person.
“Other Investments”
shall have the meaning set forth in Section 6.05(F) hereof.
"Participation
Purchaser" means any Person (other than a natural person or
the Company or any of the Company's Affiliates or
Subsidiaries) to whom a Lender sells a participation as specified in Section
8.03(B).
"PBGC" means the
Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title
IV of ERISA and any successor thereto.
“Permitted
Encumbrances” shall have the meaning set forth in the
Indenture.
"Person" means any
individual, partnership, joint venture, firm, corporation, association, trust,
limited liability company or other enterprise (whether or not incorporated), or
any government or political subdivision or any agency, department or
instrumentality thereof
"Plan" means any
employee benefit plan (as defined in Section 3(3) of ERISA) which is covered by
ERISA and with respect to which the Company or any ERISA Affiliate is
( or, if such plan were terminated at such time, would under Section 4069 of
ERISA be deemed to be) an "employer" within the meaning of Section 3(5) of
ERISA.
“Quoted Fixed Rate
Option” shall have the meaning
set forth in Section 2.04(A)(2).
“Quoted Fixed Rate
Period”
shall have the meaning set forth in Section 2.04(A)(2).
"Regulation D, O, T, U or
X" means Regulation D, O, T, U or X, respectively, of the Board of
Governors of the Federal Reserve System as from time to time in effect, any
amendment thereto and any successor to all or a portion thereof
"Reportable Event"
means a "reportable event" as defined in Section 4043 of ERISA with respect
to which the notice requirements to the PBGC have not been waived.
"S&P" means
Standard & Poor's Ratings Services, a division of McGraw Hill, Inc., or any
successor or assignee of the business of such division in the business of rating
securities.
"Short-Term
Debt" means
debt of the Company that matures within one year of the date
created.
"Single Employer Plan"
means any Plan which is covered by Title IV of ERISA, but which is not a
Multiemployer Plan or a Multiple Employer Plan.
"Solvent" means, with
respect to the Company as of a particular date, that on such date (a)
the Company is able to pay its debts and other liabilities,
contingent obligations and other commitments as they mature in the normal course
of business, (b) the Company does not intend to, and does not believe
that it will, incur debts or liabilities beyond the Company's ability
to pay as such debts and liabilities mature in their ordinary course, (c)
the Company is not engaged in a business or a transaction, and is not
about to engage in a business or a transaction, for which
the Company's assets would constitute unreasonably small capital
after giving due consideration to the prevailing practice in the industry in
which the Company is engaged or is to engage and (d) the fair value
of the assets of the Company, taken as a whole on a going concern basis, is
greater than the total amount of liabilities, including, without limitation,
contingent liabilities, of the Company. In computing the amount of
contingent liabilities at any time, it is intended that such liabilities will be
computed as the amount which, in light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
"Subsidiary" means, as
to any Person, (a) any corporation more than 50% of whose stock of any class or
classes having by the terms thereof ordinary voting power to elect a majority of
the directors of such corporation (irrespective of whether or not, at the time,
any class or classes of such corporation shall have or might have voting power
by reason of the happening of any contingency) is at the time owned by such
Person directly or indirectly through Subsidiaries and (b) any partnership,
association, joint venture, limited liability company or other entity in which
such Person directly or indirectly through Subsidiaries has more than 50% equity
interest at any time.
"Termination Event"
means (a) with respect to any Single Employer Plan, the occurrence of a
Reportable Event or the substantial cessation of operations (within the meaning
of Section 4062(e) of ERISA), (b) the withdrawal of the Company or
any ERISA Affiliate from a Multiple Employer Plan during a plan year in which it
was a substantial employer (as such term is defined in Section 4001(a)(2) of
ERISA), or the termination of a Multiple Employer Plan, (c) the distribution of
a notice of intent to terminate or the actual termination of a Plan pursuant to
Section 4041 (a)(2) or 4041A of ERISA, (d) the institution of proceedings to
terminate or the actual termination of a Plan by the PBGC under Section 4042 of
ERISA, (e) any event or condition which constitutes grounds under Section 4042
of ERISA for the termination of, or the appointment of a trustee to administer,
any Plan, or (f) the complete or partial withdrawal of the Company or
any ERISA Affiliate from a Multiemployer Plan.
"Total Assets" means
all assets of the Company and its consolidated Subsidiaries as shown on its most
recent annual audited consolidated balance sheet, as determined in accordance
with GAAP .
"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, 2008; (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. Total
Permanent Capital shall be calculated on a consolidated basis, excluding all
intercompany items, and in accordance with GAAP consistently
applied.
“Variable Rate Option”
shall have the meaning set forth in Section 2.04(A)(1).
RULES
OF INTERPRETATION
SECTION 2.01 Rules of
Interpretation. The following rules of interpretation shall
apply to the Agreement, the other Credit Documents and all amendments to either
of the foregoing:
Accounting Terms. Except as
otherwise expressly provided herein, all accounting terms used herein shall be
interpreted, and all financial statements and certificates and reports as to
financial matters required to be delivered to the Lender hereunder shall be
prepared, in accordance with GAAP applied on a consistent basis.
Number. All terms
stated in the singular shall include the plural, and all terms stated in the
plural shall include the singular.
Including. The term
"including" shall be construed as meaning "including, but not limited
to".
Default. The expression "while
any Default or Event of Default shall have occurred and be continuing" (or like
expression) shall be deemed to include the period following any acceleration of
the Company Obligations (unless such acceleration is
rescinded).
References in this Agreement
to "Articles", "Sections", "Schedules" or "Exhibits" shall be to Articles,
Sections, Schedules or Exhibits of or to this Agreement unless otherwise
specifically provided.
Renewal of Commitment.
References in the Agreement to the renewal of the Commitment shall not be
construed as obligating the
Lender to renew the Commitment, and no obligation to renew the Commitment
shall arise unless contained in a writing signed by the
Lender.