EXHIBIT 4.1
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EXECUTION COPY
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BIRMINGHAM UTILITIES, INC.
(f/k/a The Ansonia Derby Water Company)
BOND PURCHASE AGREEMENT
Dated as of April 15, 2004
$9,000,000 Series F
First Mortgage Bonds
Due April 15, 2011
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TABLE OF CONTENTS
SECTION HEADING PAGE
SECTION 1. AUTHORIZATION OF BONDS.....................................1
SECTION 2. SALE AND PURCHASE OF BONDS.................................2
SECTION 3. CLOSING....................................................2
SECTION 4. WARRANTIES AND REPRESENTATIONS.............................2
Section 4.1. Organization and Ownership of Shares of
Subsidiaries; Affiliates.................................2
Section 4.2. Corporate Organization and Authority.......................3
Section 4.3. Business and Property......................................3
Section 4.4. Existing Indebtedness......................................4
Section 4.5. Financial Statements.......................................4
Section 4.6. Full Disclosure............................................4
Section 4.7. Pending Litigation.........................................4
Section 4.8. Title to Properties........................................5
Section 4.9. Sale Legal and Authorized..................................5
Section 4.10. Compliance with Laws, Other Instruments, etc...............5
Section 4.11. No Defaults................................................6
Section 4.12. Governmental Consent.......................................6
Section 4.13. Taxes......................................................6
Section 4.14. Use of Proceeds............................................6
Section 4.15. Private Offering...........................................7
Section 4.16. Earnings Coverage..........................................7
Section 4.17. Franchises, Etc............................................7
Section 4.18. Environmental Matters......................................7
Section 4.19. Restrictions on the Company................................8
Section 4.20. Compliance with ERISA......................................8
Section 4.21. Utility Status.............................................9
Section 4.22. Indenture..................................................9
Section 4.23. Status Under Certain Statutes..............................9
Section 4.24. Perfection of Security Interest............................9
Section 4.25. Filing and Recordation.....................................9
Section 4.26. Foreign Assets Control Regulations, Etc....................9
SECTION 5. CLOSING CONDITIONS........................................10
Section 5.1. Warranties and Representations True as of Closing Date....10
Section 5.2. Compliance with this Agreement and Indenture; No Default..10
Section 5.3. Compliance Certificates...................................10
Section 5.4. Regulatory Approvals......................................10
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Section 5.5. Opinions of Counsel.......................................10
Section 5.6. Proceedings Satisfactory..................................10
Section 5.7. Payment of Special Counsel Fees...........................11
Section 5.8. Private Placement Number..................................11
Section 5.9. Execution of Eighth Supplemental Indenture................11
Section 5.10. Purchase Permitted by Applicable Law, etc.................11
SECTION 6. REPRESENTATIONS OF THE PURCHASER..........................11
SECTION 7. COVENANTS.................................................13
Section 7.1. Punctual Payment..........................................13
Section 7.2. Delivery Expenses.........................................13
Section 7.3. Issue Taxes...............................................13
Section 7.4. Rule 144 or Rule 144A Transfer............................13
Section 7.5. ERISA Compliance..........................................13
Section 7.6. Acquisition of Bonds......................................14
Section 7.7. Transactions with Affiliates..............................14
Section 7.8. Waiver of Transfer Fees...................................14
SECTION 8. POST-CLOSING MATTERS......................................14
Section 8.1. Notice of Order...........................................14
Section 8.2. Pledge of Stock of Acquired Subsidiaries..................14
SECTION 9. INFORMATION AS TO COMPANY.................................15
Section 9.1. Financial and Business Information........................15
Section 9.2. Officers' Certificates....................................17
Section 9.3. Accountants' Certificate..................................18
Section 9.4. Delivery of Certified Financial Statements................18
Section 9.5. Inspection................................................18
SECTION 10. HOME OFFICE PAYMENT.......................................19
SECTION 11. INTERPRETATION OF THIS AGREEMENT..........................19
Section 11.1. Terms Defined.............................................19
Section 11.2. Accounting Principles.....................................24
Section 11.3. Directly or Indirectly....................................24
Section 11.4. Governing Law.............................................25
SECTION 12. EXPENSES..................................................25
SECTION 13. MISCELLANEOUS.............................................26
Section 13.1. Notices...................................................26
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Section 13.2. Reproduction of Documents.................................26
Section 13.3. Survival..................................................26
Section 13.4. Successors and Assigns....................................26
Section 13.5. Amendment and Waiver......................................26
Section 13.6. Duplicate Originals.......................................27
SCHEDULE 1 -- Purchaser Information
SCHEDULE 4.1 -- Subsidiaries
SCHEDULE 4.4 -- Existing Indebtedness
SCHEDULE 4.5 -- Financial Statements
SCHEDULE 4.7 -- Litigation
SCHEDULE 4.24 -- Perfection of Security Interest
SCHEDULE 5.5(a) -- Form of Company Counsel's Closing Opinion
SCHEDULE 5.5(b) -- Form of Special Counsel's Closing Opinion
EXHIBIT A -- Form of Eighth Supplemental Indenture
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BIRMINGHAM UTILITIES, INC.
230 Beaver Street
Ansonia, Connecticut 06401
BOND PURCHASE AGREEMENT
$9,000,000 Series F
First Mortgage Bonds
Due April 15, 2011
Dated as of April 15, 2004
General Electric Capital Assurance Company
c/o GE Asset Management Incorporated
601 Union Street, Suite 2200
Seattle, Washington 98101
Ladies and Gentlemen:
Birmingham Utilities, Inc. (the "COMPANY"), a Connecticut
corporation, hereby agrees with you as follows:
SECTION 1. AUTHORIZATION OF BONDS.
The Company will authorize and issue $9,000,000 in aggregate
principal amount of its 5.21% Series F First Mortgage Bonds due April 15, 2011
(the "BONDS") under and secured by the Trust Indenture, dated as of July 15,
1954 (hereinafter called the "ORIGINAL INDENTURE"), between the Company (as
successor corporation to The Ansonia Derby Water Company, a Connecticut
corporation) and The First National Bank and Trust Company of New Haven, as
trustee, which has been succeeded by U.S. Bank National Association as the
currently acting trustee (the "TRUSTEE"), as supplemented and amended by
indentures supplemental thereto and amendatory thereof, dated as of October 1,
1974, June 1, 1981, June 3, 1982, March 8, 1985, July 1, 1988, August 9, 1991
and September 1, 2000, respectively, and as further supplemented and amended by
the Eighth Supplemental Indenture dated as of April 15, 2004 (the "EIGHTH
SUPPLEMENTAL INDENTURE") entered into by the Company and the Trustee, which will
be substantially in the form attached hereto as Exhibit A. The Original
Indenture as supplemented and amended as described in the preceding sentence is
referred to herein as the "INDENTURE." The Indenture constitutes a direct
mortgage lien upon the franchises of the Company and upon the properties therein
described as intended to be mortgaged, subject only to the exceptions and
encumbrances set forth in the granting clauses of the Indenture and Permitted
Encumbrances (as defined in the Eighth Supplemental Mortgage Indenture). The
Bonds will be substantially in the form attached as Exhibit A to the Eighth
Supplemental Indenture.
SECTION 2. SALE AND PURCHASE OF BONDS.
The Company hereby agrees to sell to you and you hereby agree to
purchase from the Company, in accordance with the provisions of this Agreement,
the entire $9,000,000 aggregate principal amount of the Bonds at 100% of the
principal amount thereof.
SECTION 3. CLOSING.
The sale and purchase of the Bonds to be purchased by you shall
occur at the offices of
Chapman and Cutler LLP, 111 West Monroe Street, Chicago, Illinois 60603, at
11:00 a.m., Chicago time, at a closing (the "CLOSING") on April 30, 2004 or on
such other Business Day thereafter on or prior to March 31, 2004 as may be
agreed upon by the Company and you (the "CLOSING DATE"). At the Closing the
Company will deliver to you the Bonds to be purchased by you in the form of a
single Bond (or such greater number of Bonds in denominations of at least
$100,000 as you may request) dated the Closing Date and registered as provided
in Schedule 1, unless you otherwise request at least five Business Days prior to
the Closing Date, against delivery by you to the Company or its order of
immediately available funds in the amount of the purchase price therefor by wire
transfer of immediately available funds for the account of the Company to
account number 2202515253 at Citizens Bank, 1 Citizens Drive, Riverside, Rhode
Island 02915, ABA number 011500120, Reference: Birmingham Utilities, Inc., 230
Beaver Street, Ansonia, Connecticut 06401. If at the Closing the Company shall
fail to tender such Bonds to you as provided above in this Section 3, or any of
the conditions specified in Section 5 shall not have been fulfilled to your
satisfaction, you shall, at your election, be relieved of all further
obligations under this Agreement, without thereby waiving any rights you may
have by reason of such failure or such nonfulfillment.
The Bonds shall be printed or typewritten and shall be delivered to
you in fully registered form without coupons. Any provision of the Indenture
notwithstanding, if, at any time or times subsequent to the Closing Date, you
shall decide to exchange all or any part of the Bonds purchased by you for fully
registered Bonds of other authorized denominations of the same series, maturity
and interest rate, the Company will, as soon as practicable after receiving your
written request therefor, without expense to you, deliver to you, in exchange
for said Bonds or any part thereof, Bonds printed or typewritten in such
authorized denominations of $100,000 or integral multiples thereof in fully
registered form as you shall have requested.
SECTION 4. WARRANTIES AND REPRESENTATIONS.
The Company warrants and represents to you that:
SECTION 4.1. ORGANIZATION AND OWNERSHIP OF SHARES OF SUBSIDIARIES;
AFFILIATES. (a) Schedule 4.1 contains (except as noted therein) a complete and
correct list (i) of the Company's Subsidiaries, showing, as to each Subsidiary,
the correct name thereof, the jurisdiction of its organization, and the
percentage of shares of each class of its capital stock or similar equity
interests outstanding owned by the Company and each other Subsidiary, (ii) of
the Company's Affiliates, other than Subsidiaries, and (iii) of the Company's
directors and senior officers.
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(b) All of the outstanding shares of capital stock or similar equity
interests of each Subsidiary shown in Schedule 4.1 as being owned by the Company
and its Subsidiaries have been validly issued, are fully paid and nonassessable
and are owned by the Company or another Subsidiary free and clear of any Lien
(except as otherwise disclosed in Schedule 4.1).
(c) Each Subsidiary identified in Schedule 4.1 is a corporation or
other legal entity duly organized and validly existing under the laws of its
jurisdiction of organization, and is duly qualified as a foreign corporation or
other legal entity and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. Each such
Subsidiary has the corporate or other power and authority to own or hold under
lease the properties it purports to own or hold under lease and to transact the
business it transacts and proposes to transact.
(d) No Subsidiary is a party to, or otherwise subject to, any legal
restriction or any agreement (other than this Agreement, the agreements listed
on Schedule 4.1 and customary limitations imposed by corporate law statutes)
restricting the ability of such Subsidiary to pay dividends out of profits or
make any other similar distributions of profits to the Company or any of its
Subsidiaries that owns outstanding shares of capital stock or similar equity
interests of such Subsidiary.
SECTION 4.2. CORPORATE ORGANIZATION AND AUTHORITY. (a) The Company:
(i) is a corporation duly organized and validly
existing under the laws of its jurisdiction of incorporation,
(ii) has all requisite power and authority and all
necessary franchises, licenses, rights and permits to own and
operate its Properties and to carry on its business as now conducted
and as presently proposed to be conducted, and
(iii) has duly qualified and is authorized to do
business and is in good standing as a foreign corporation in each
jurisdiction where the character of its Properties or the nature of
its activities makes such qualification necessary.
(b) The Company is legally authorized and has valid and sufficient
franchises to transmit, sell and distribute water, and to carry on its business
in the place or places where it is now engaged in such activities (namely
Ansonia, Derby and a portion of Seymour, Connecticut), which authorizations and
franchises are unlimited as to time and free from burdensome restrictions and
from competition in such areas from other water companies.
SECTION 4.3. BUSINESS AND PROPERTY. The Annual Report on Form 10-K
of the Company for the year ended December 31, 2003 filed with the Securities
and Exchange Commission (the "FORM 10-K") correctly describe the general nature
of the business and principal Properties of the Company.
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SECTION 4.4. EXISTING INDEBTEDNESS. Except as described therein,
Schedule 4.4 sets forth a complete and correct list of all outstanding
Indebtedness of the Company and its Subsidiaries as of March 31, 2004, since
which date there has been no Material change in the amounts, interest rates,
sinking funds, installment payments or maturities of the Indebtedness of the
Company or its Subsidiaries. Neither the Company nor any Subsidiary is in
default and no waiver of default is currently in effect, in the payment of any
principal or interest on any Indebtedness of the Company or such Subsidiary and
no event or condition exists with respect to any Indebtedness of the Company or
any Subsidiary that would permit (or that with notice or the lapse of time, or
both, would permit) one or more Persons to cause such Indebtedness to become due
and payable before its stated maturity or before its regularly scheduled dates
of payment.
SECTION 4.5. FINANCIAL STATEMENTS. (a) The Company has delivered to
you copies of the financial statements of the Company and its Subsidiaries
listed on Schedule 4.5. All of said financial statements (including in each case
the related schedules and notes) fairly present in all material respects the
consolidated financial position of the Company and its Subsidiaries as of the
respective dates specified in such financial statements and the consolidated
results of their operations and cash flows for the respective periods so
specified and have been prepared in accordance with GAAP consistently applied
throughout the periods involved except as set forth in the notes thereto
(subject, in the case of any interim financial statements, to normal year-end
adjustments) and in accordance with the applicable uniform systems of accounts
prescribed for Class A water utilities by the Connecticut Department of Public
Utility Control (the "DPUC") throughout the periods involved.
(b) Except as specifically disclosed in the Form 10-K, since
December 31, 2003, there has been no change in the business, prospects, profits,
Properties or condition (financial or otherwise) of the Company except changes
in the ordinary course of business, none of which individually or in the
aggregate would reasonably be expected to have a Material Adverse Effect.
SECTION 4.6. FULL DISCLOSURE. Neither the Form 10-K, the financial
statements referred to in Section 4.5, nor does this Agreement or any written
statement furnished by the Company to you in connection with the negotiation of
the sale of the Bonds, contain any untrue statement of a material fact or omit a
material fact necessary to make the statements contained therein or herein not
misleading. Except as disclosed in the Form 10-K, since December 31, 2003, there
has been no change in the financial conditions, operations, business or
properties of the Company or any Subsidiary except changes that individually or
in the aggregate could not reasonably be expected to have a Material Adverse
Effect. There is no fact which the Company has not disclosed to you in writing
which materially affects adversely or, so far as the Company can now foresee,
will materially affect adversely the Properties, business, prospects, profits or
condition (financial or otherwise) of the Company, the rates to be charged by
the Company, the valuation of its Properties for rate-making purposes or the
ability of the Company to perform its obligations under this Agreement or the
Indenture.
SECTION 4.7. PENDING LITIGATION. Except as specifically provided in
the Form 10-K or in Schedule 4.7, there are no proceedings or investigations
pending, or to the knowledge of the Company threatened in writing, against or
affecting the Company in any court or before any governmental authority or
arbitration board or tribunal which involve the possibility of
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materially and adversely affecting the Properties, business, franchises, profits
or condition (financial or otherwise) of the Company, the rates to be charged by
the Company, the valuation of its Properties for rate-making purposes, or the
ability of the Company to perform this Agreement or the Indenture; and, except
as set forth in the Form 10-K or in Schedule 4.7, there is no litigation of any
character pending, or to the knowledge of the Company threatened, to which it is
or may be a party other than tort actions, if any, against the Company with
respect to each of which the Company is covered by insurance for judgments up to
$6,000,000 and with respect to each of which tort actions the aggregate amount
of adverse judgments is not reasonably expected to exceed the insurance policy
limits. The Company is not in default with respect to any order of any court,
governmental authority or arbitration board or tribunal.
SECTION 4.8. TITLE TO PROPERTIES. (a) The Company has good and
marketable title in fee simple (or its equivalent under applicable law) to all
the real property, and has good title to all the other Property it purports to
own, including that reflected in the most recent balance sheet referred to in
Section 4.5 (except as sold or otherwise disposed of in the ordinary course of
business), free from Liens other than Permitted Encumbrances. Exhibit B to the
Eighth Supplemental Indenture describes all the real property that the Company
owns or holds title to in fee simple.
(b) The Indenture presently constitutes a direct mortgage lien upon
the franchises of the Company and upon the properties therein described as
intended to be mortgaged (including without limitation all contract rights for
the purchase of water), subject only to Permitted Encumbrances.
SECTION 4.9. SALE LEGAL AND AUTHORIZED. The execution and delivery
of this Agreement, the Indenture and the issue, authentication and sale of the
Bonds, have each been duly authorized by all necessary corporate action and this
Agreement, the Eighth Supplemental Indenture and the Bonds, when issued
hereunder for value, will each constitute a legal, valid and binding obligation
of the Company enforceable in accordance with its terms, subject to general
equitable principles and to applicable bankruptcy, reorganization, insolvency,
moratorium and similar laws affecting the enforcement of creditor's rights
generally. The sale of the Bonds by the Company and compliance by the Company
with all of the provisions of this Agreement, the Indenture and of the Bonds are
within the corporate powers of the Company.
SECTION 4.10. COMPLIANCE WITH LAWS, OTHER INSTRUMENTS, ETC. The
execution and delivery of this Agreement and the Eighth Supplemental Indenture,
the offer, issue, sale and delivery of the Bonds and compliance by the Company
with the terms and provisions of this Agreement, the Indenture, the Eighth
Supplemental Indenture and the Bonds will not conflict with, result in any
breach of any of the provisions of, constitute a default under, or result in the
creation of any Lien (other than the Lien of the Indenture) upon any Property of
the Company under the provisions of, any agreement, charter instrument, by-law
or other instrument to which the Company is a party or by which it may be bound
or to which any of its Property is subject or any order, judgment, decree,
statute, law or regulation to which the Company or any of its Property is
subject. There are no limitations in any indenture, mortgage, deed of trust or
other agreement or instrument to which the Company is now a party or by which
the Company may be bound (including the Indenture) with respect to the payment
of principal or premium or interest on any Indebtedness of the Company,
including the Bonds.
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SECTION 4.11. NO DEFAULTS. No event has occurred and no condition
exists which, immediately before the issuance of the Bonds or after giving
effect thereto, would constitute a Default or an Event of Default under the
Indenture. The Company is not in default under any term of any written agreement
or instrument to which it is a party or by which it is bound (other than the
Indenture), or any order, judgment, decree or ruling of any court, arbitrator or
Governmental Authority or is in violation of any applicable law, ordinance, rule
or regulation (including without limitation Environmental Laws) of any
Governmental Authority, which default or violation, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
SECTION 4.12. GOVERNMENTAL CONSENT. Neither the nature of the
Company nor of any of its businesses or Properties, nor any relationship between
the Company and any other Person, nor any circumstance in connection with the
offer, issue, sale or delivery of the Bonds is such as to require a consent,
approval or authorization of, or filing, registration or qualification with, any
governmental authority on the part of the Company as a condition to the
execution and delivery of this Agreement, the Indenture, or the offer, issue,
sale or delivery of the Bonds, except the approval by the DPUC of the issuance
of the Bonds.
SECTION 4.13. TAXES. The Company and its Subsidiaries have filed all
tax returns (or extensions) that are required to have been filed in any
jurisdiction, and have paid all taxes shown to be due and payable on such
returns and all other taxes and assessments levied upon them or their
properties, assets, income or franchises, to the extent such taxes and
assessments have become due and payable and before they have become delinquent,
except for any taxes and assessments (a) the amount of which is not individually
or in the aggregate Material or (b) the amount, applicability or validity of
which is currently being contested in good faith by appropriate proceedings and
with respect to which the Company or a Subsidiary, as the case may be, has
established adequate reserves in accordance with GAAP. The Company knows of no
basis for any other tax or assessment that could reasonably be expected to have
a Material Adverse Effect. The charges, accruals and reserves on the books of
the Company and its Subsidiaries in respect of Federal, state or other taxes for
all fiscal periods are adequate. The Company has not waived any statute of
limitations in respect of taxes or agreed to any extension of time with respect
to a tax assessment or deficiency.
SECTION 4.14. USE OF PROCEEDS. The Company will apply the net
proceeds from the sale of the Bonds to repay the Company's existing first
mortgage debt and to fund acquisition costs and capital improvements. None of
the transactions contemplated in this Agreement (including, without limitation
thereof, the use of the proceeds from the sale of the Bonds) will violate or
result in a violation of Section 7 of the Securities Exchange Act of 1934, as
amended, or any regulations issued pursuant thereto, including, without
limitation, Regulations U, T and X of the Board of Governors of the Federal
Reserve System, 12 C.F.R., Chapter II. The Company does not own or intend to
carry or purchase any "margin stock" within the meaning of said Regulation U,
including margin securities originally issued by it. None of the proceeds from
the sale of the Bonds will be used to purchase or carry (or refinance any
borrowing the proceeds of which were used to purchase or carry) any "margin
security" within the meaning of Regulation U.
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SECTION 4.15. PRIVATE OFFERING. Neither the Company nor anyone
acting on its behalf has offered any of the Bonds or any similar Security of the
Company for sale to, or solicited offers to buy any thereof from, or otherwise
approached or negotiated with respect thereto with, any prospective purchaser,
other than you and two (2) other Institutional Investors, each of whom was
offered all or a portion of the Bonds or any similar Security at private sale
for investment. The Company agrees that neither the Company nor anyone acting on
its behalf will offer the Bonds or any part thereof or any similar Securities
for issue or sale to, or solicit any offer to acquire any of the same from,
anyone so as to bring the issuance and sale of the Bonds within the provisions
of Section 5 of the Act.
SECTION 4.16. EARNINGS COVERAGE. The "net earnings" of the Company
for a period of twelve (12) consecutive calendar months within the last fifteen
(15) calendar months immediately preceding the first day of the month in which
the Bonds are issued is at least one and three-quarters times the aggregate
annual interest charges on all Bonds outstanding under the Indenture applicable
to such period, after giving effect to the issue of the Bonds and the retirement
of other outstanding First Mortgage Bonds. A Certificate of Required Net
Earnings in the form prescribed by Section 3.17 of the Indenture shall be
delivered at the Closing and shall evidence compliance with the foregoing. As
used in this Section 4.16, the term "net earnings" shall have the meaning set
forth in Section 3.17 of the Indenture.
SECTION 4.17. FRANCHISES, ETC. The Company has all franchises,
certificates of convenience and necessity, operating rights, licenses, permits,
consents, approvals, authorizations and orders of governmental bodies, political
subdivisions and regulatory authorities, free from unduly burdensome
restrictions, as are reasonably necessary for the ownership of the Properties
now owned and operated by it, the maintenance and operation of the Properties
now operated by it and the conduct of the business now conducted by it.
SECTION 4.18. ENVIRONMENTAL MATTERS. Except as disclosed in the Form
10-K, the Company is not in violation in any material respect of any applicable
zoning ordinances or any applicable state and federal environmental, health or
safety statutes or regulations, including, without limitation, the Occupational
Safety and Health Act of 1970, the Federal Safe Drinking Water Act of 1974, laws
and regulations establishing quality criteria and standards for air, water, land
and toxic wastes, regulations promulgated under the Resource Conservation and
Recovery Act of 1976, 42 U.S.C. ss.ss.6901 ET SEQ. and the Connecticut Public
Health Code and, to its knowledge, has not acquired, incurred or assumed,
directly or indirectly, any material contingent liability in connection with the
release of any toxic or hazardous waste or substance into the environment, which
violation might materially and adversely affect the business, prospects,
profits, Properties or condition (financial or otherwise) of the Company, the
rates to be charged by the Company or the valuation of its Properties for
rate-making purposes. The Company is not aware of any evaluation of it or any of
its Properties under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986, 42 U.S.C. ss.ss.9601 ET SEQ.
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SECTION 4.19. RESTRICTIONS ON THE COMPANY. The Company is not a
party to any contract or agreement, or subject to any charter or other corporate
restriction, which could reasonably be expected to result in a Material Adverse
Effect. The Company is not a party to any contract or agreement which restricts
its right or ability to issue Bonds or Indebtedness of any kind, other than this
Agreement, the Indenture and the Commercial Loan Agreement dated as of November
20, 2002 between the Company and Citizens Bank of Connecticut, as amended and
modified to date. The Company has not agreed or consented to cause or permit in
the future (upon the happening of a contingency or otherwise) any of its
Property, whether now owned or hereafter acquired, to be subject to a Lien other
than the Lien of the Indenture and Permitted Encumbrances.
SECTION 4.20. COMPLIANCE WITH ERISA. (a) The Company and each ERISA
Affiliate have operated and administered each Plan in compliance with all
applicable laws except for such instances of noncompliance as have not resulted
in and could not reasonably be expected to result in a Material Adverse Effect.
Neither the Company nor any ERISA Affiliate has incurred any liability pursuant
to Title I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans (as defined in Section 3 of ERISA), and no
event, transaction or condition has occurred or exists that could reasonably be
expected to result in the incurrence of any such liability by the Company or any
ERISA Affiliate, or in the imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA Affiliate, in either case
pursuant to Title I or IV of ERISA or to such penalty or excise tax provisions
or to Section 401(a)(29) or 412 of the Code, other than such liabilities or
Liens as would not be individually or in the aggregate Material.
(b) The present value of the aggregate benefit liabilities under
each of the Plans (other than Multiemployer Plans), determined as of the end of
such Plans' most recently ended plan year on the basis of the actuarial
assumptions specified for funding purposes in such Plans' most recent actuarial
valuation report, did not exceed the aggregate current value of the assets of
such Plans allocable to such benefit liabilities by more than $80,000 in the
aggregate for all Plans. The terms "benefit liabilities" has the meaning
specified in Section 4001 of ERISA and the terms "current value" and "present
value" have the meaning specified in Section 3 of ERISA.
(c) The Company and its ERISA Affiliates have not incurred
withdrawal liabilities (and are not subject to contingent withdrawal
liabilities) under Section 4201 or 4204 of ERISA in respect of Multiemployer
Plans that individually or in the aggregate are Material.
(d) The expected post-retirement benefit obligation (determined as
of the last day of the Company's most recently ended fiscal year in accordance
with Financial Accounting Standards Board Statement No. 106, without regard to
liabilities attributable to continuation coverage mandated by Section 4980B of
the Code) of the Company and its Subsidiaries is not Material.
(e) The execution and delivery of this Agreement, the Eighth
Supplemental Indenture and the issuance and sale of the Bonds will not involve
any transaction that is subject to the prohibitions of Section 406 of ERISA or
in connection with which a tax could be imposed pursuant to Section
4975(c)(1)(A)-(D) of the Code. The representation by the Company in the first
sentence of this Section 4.20(e) is made in reliance upon and subject to the
accuracy of your representation in Section 6 as to the sources of the funds used
to pay the purchase price of the Bonds to be purchased by you.
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SECTION 4.21. UTILITY STATUS. The Company is a water company subject
to regulation by the DPUC. The Company is exempt from the requirements of the
Public Utility Holding Company Act of 1935. The Company is subject to regulation
with regard to water quality, environmental, safety and zoning matters by
various Federal, state and local authorities. Except as set forth above or in
the Form 10-K, the Company is not subject to the regulatory jurisdiction of any
other authority, other than those authorities to which all businesses in the
State of Connecticut are subject to generally.
SECTION 4.22. INDENTURE. The Company has heretofore furnished to you
a true, correct and complete copy of the Indenture as in effect on the date
hereof.
SECTION 4.23. STATUS UNDER CERTAIN STATUTES. Neither the Company nor
any Subsidiary is subject to regulation under the Investment Company Act of
1940, as amended, the Interstate Commerce Act, as amended, or the Federal Power
Act, as amended.
SECTION 4.24. PERFECTION OF SECURITY INTEREST. The Indenture creates
in favor of the Trustee, on your behalf, a security interest in certificates
representing all of the issued and outstanding shares of stock of each
Subsidiary listed on Schedule 4.24, and the Trustee's continued possession of
such certificates maintains a perfected first security interest in such shares
of stock.
SECTION 4.25. FILING AND RECORDATION. The Indenture and all
financing statements (including any financing statements required to be filed
under the provisions of the Connecticut Uniform Commercial Code) have been duly
recorded and filed in such manner and in such place as is required by law to
establish, preserve and protect the security interest thereby created on all
collateral specifically or generally described in such documents as subject to
such security interests and under the laws enforced, and it will not be
necessary to rerecord any such documents.
SECTION 4.26. FOREIGN ASSETS CONTROL REGULATIONS, ETC. Neither the
sale of the Bonds by the Company hereunder nor its use of the proceeds thereof
will violate the Trading with the Enemy Act, as amended, or any of the foreign
assets control regulations of the United States Treasury Department (31 CFR,
Subtitle B, Chapter V, as amended) or any enabling legislation or executive
order relating thereto. Without limiting the foregoing, neither the Company nor
any of its Subsidiaries (a) is a person whose property or interests in property
are blocked pursuant to Section 1 of Executive Order 13224 of September 23, 2001
Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten
to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)) or (b) engages in
any Material dealings or transactions, or is otherwise associated, with any such
person.
The Company and its Subsidiaries are in compliance in all material
respects with the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism (USA Patriot Act of 2001). No
part of the proceeds from the sale of the
9
Bonds hereunder will be used, directly or indirectly, for any payment to any
governmental official or employee, political party, official of a political
party, candidate for political office or anyone else acting in an official
capacity, in order to obtain, retain or direct business, in violation of the
United States Foreign Corrupt Practices Act of 1977, as amended.
SECTION 5. CLOSING CONDITIONS.
Your obligation to purchase and pay for the Bonds to be delivered to
you at the Closing shall be subject to the following conditions precedent:
SECTION 5.1. WARRANTIES AND REPRESENTATIONS TRUE AS OF CLOSING DATE.
The warranties and representations contained in Section 4 shall (except as
affected by transactions contemplated by this Agreement) be correct when made
and at the time of Closing.
SECTION 5.2. COMPLIANCE WITH THIS AGREEMENT AND INDENTURE; NO
DEFAULT. The Company shall have performed and complied with all agreements and
conditions contained herein and in the Indenture which are required to be
performed or complied with by the Company before or at the Closing, and after
giving effect to the issue and sale of the Bonds on the Closing Date no
condition or event shall exist which constitutes or which, after notice or lapse
of time or both, would constitute an Event of Default.
SECTION 5.3. COMPLIANCE CERTIFICATES. (a) You shall have received a
certificate dated the Closing Date and signed by the Chairman or the President
and the Treasurer or an Assistant Treasurer of the Company, certifying that each
of the conditions specified in Sections 5.1 and 5.2 has been fulfilled.
(b) You shall have received a certificate from the Secretary of the
Company, certifying as to the resolutions attached thereto and other corporate
proceedings relating to the authorization, execution and delivery of the Bonds,
this Agreement and the Eighth Supplemental Indenture.
SECTION 5.4. REGULATORY APPROVALS. The issue and sale of the Bonds
shall have been duly authorized by order of the DPUC and such order shall be in
full force and effect on the Closing Date and all appeal periods applicable to
such order shall have expired.
SECTION 5.5. OPINIONS OF COUNSEL. You shall have received opinions
in form and substance satisfactory to you, dated the Closing Date (a) from
Wiggin and Dana LLP, counsel for the Company, covering the matters set forth in
Exhibit 5.5(a) and covering such other matters incident to the transactions
contemplated hereby as you or your counsel may reasonably request (and the
Company hereby instructs its counsel to deliver such opinion to you) and (b)
from Chapman and Cutler LLP, your special counsel in connection with such
transactions, substantially in the form set forth in Exhibit 5.5(b) and covering
such other matters incident to such transactions as you may reasonably request.
SECTION 5.6. PROCEEDINGS SATISFACTORY. All proceedings taken in
connection with the sale of the Bonds and all documents and papers relating
thereto shall be satisfactory to you and your special counsel. You and your
10
special counsel shall have received copies of such documents and papers as you
or they may reasonably request in connection therewith or as a basis for your
special counsel's closing opinion, all in form and substance satisfactory to you
and your special counsel.
SECTION 5.7. PAYMENT OF SPECIAL COUNSEL FEES. Without limiting the
provisions of Section 12 hereof, the Company shall have paid on or before the
Closing the fees, charges and disbursements of your special counsel referred to
in Section 5.5(b) to the extent reflected in a statement of such counsel
rendered to the Company at least one Business Day prior to the Closing Date.
SECTION 5.8. PRIVATE PLACEMENT NUMBER. A Private Placement number
issued by Standard & Poor's CUSIP Service Bureau (in cooperation with the
Securities Valuation Office of the National Association of Insurance
Commissioners) shall have been obtained for the Bonds.
SECTION 5.9. EXECUTION OF EIGHTH SUPPLEMENTAL INDENTURE. The
Original Indenture as heretofore supplemented and amended shall be further
supplemented and amended by the execution and delivery of the Eighth
Supplemental Indenture between the Company and the Trustee. The Eighth
Supplemental Indenture shall have been filed and recorded (and financing
statements in respect thereof shall have been filed, if necessary, and all
Pledged Shares shall have been deposited and pledged with the Trustee) in such
manner and in such places as is required by law to establish, preserve and
protect the direct mortgage Lien thereof on all Property and franchises of the
Company referred to in the Indenture as subject to the direct mortgage Lien
thereof.
SECTION 5.10. PURCHASE PERMITTED BY APPLICABLE LAW, ETC. On the date
of the Closing your purchase of Bonds shall (i) be permitted by the laws and
regulations of each jurisdiction to which you are subject, without recourse to
provisions (such as Section 1405(a)(8) of the New York Insurance Law) permitting
limited investments by insurance companies without restriction as to the
character of the particular investment, (ii) not violate any applicable law or
regulation (including, without limitation, Regulation T, U or X of the Board of
Governors of the Federal Reserve System) and (iii) not subject you to any tax,
penalty or liability under or pursuant to any applicable law or regulation,
which law or regulation was not in effect on the date hereof. If requested by
you, you shall have received an Officer's Certificate certifying as to such
matters of fact as you may reasonably specify to enable you to determine whether
such purchase is so permitted.
SECTION 6. REPRESENTATIONS OF THE PURCHASER.
(a) You represent that you are purchasing the Bonds for your own
account or for one or more separate accounts maintained by you or for the
account of one or more pension or trust funds and not with a view to the
distribution thereof, PROVIDED that the disposition of your or their property
shall at all times be within your or their control. You understand that the
Bonds have not been registered under the Securities Act and may be resold only
if registered pursuant to the provisions of the Securities Act or if an
exemption from registration is available, except under circumstances where
neither such registration nor such an exemption is required by law, and that the
Company is not required to register the Bonds.
11
(b) You represent that at least one of the following statements is
an accurate representation as to each source of funds (a "SOURCE") to be used by
you to pay the purchase price of the Bonds to be purchased by you hereunder:
(i) the Source is an "insurance company general
account" and there is no employee benefit plan with respect to which
the amount, if any, of such general account's reserves and
liabilities for all contracts held by or on behalf of such plan and
all other plans maintained by the same employer or its affiliates or
by the same employee organization exceeds 10% of the total of all
reserves and liabilities of such general account at the date of
purchase (all as determined under Prohibited Transaction Class
Exemption ("PTE") 95-60 (issued July 12, 1995)); or
(ii) the Source is either (i) an insurance company
pooled separate account, within the meaning of Prohibited
Transaction Exemption ("PTE") 90-1 (issued January 29, 1990), or
(ii) a bank collective investment fund, within the meaning of the
PTE 91-38 (issued July 12, 1991) and, except as you have disclosed
to the Company in writing pursuant to this paragraph (b), no
employee benefit plan or group of plans maintained by the same
employer or employee organization beneficially owns more than 10% of
all assets allocated to such pooled separate account or collective
investment fund; or
(iii) the Source constitutes assets of an "investment
fund" (within the meaning of Part V of the QPAM Exemption) managed
by a "qualified professional asset manager" or "QPAM" (within the
meaning of Part V of the QPAM Exemption), no employee benefit plan's
assets that are included in such investment fund, when combined with
the assets of all other employee benefit plans established or
maintained by the same employer or by an affiliate (within the
meaning of Section V(c)(1) of the QPAM Exemption) of such employer
or by the same employee organization and managed by such QPAM,
exceed 20% of the total client assets managed by such QPAM, the
conditions of Part l(c) and (g) of the QPAM Exemption are satisfied,
neither the QPAM nor a person controlling or controlled by the QPAM
(applying the definition of "control" in Section V(e) of the QPAM
Exemption) owns a 5% or more interest in the Company and (i) the
identity of such QPAM and (ii) the names of all employee benefit
plans whose assets are included in such investment fund have been
disclosed to the Company in writing pursuant to this paragraph (c);
or
(iv) the Source is a governmental plan; or
(v) the Source is one or more employee benefit plans,
or a separate account or trust fund comprised of one or more
employee benefit plans, each of which has been identified to the
Company in writing pursuant to this paragraph (e); or
12
(vi) the Source does not include assets of any
employee benefit plan, other than a plan exempt from the coverage of
ERISA.
As used in this Section 6, the terms "employee benefit plan",
"governmental plan", "party in interest" and "separate account" shall have the
respective meanings assigned to such terms in Section 3 of ERISA.
SECTION 7. COVENANTS.
SECTION 7.1. PUNCTUAL PAYMENT. The Company will duly and punctually
pay the principal, premium, if any, and interest on the Bonds in accordance with
the terms of this Agreement, the Indenture and the Bonds.
SECTION 7.2. DELIVERY EXPENSES. If you surrender any Bond to the
Company or the Trustee pursuant to this Agreement or the Indenture, the Company
will pay the cost of delivering to or from your home office from or to the
Company or the Trustee, insured to your satisfaction, the surrendered Bond and
any Bond issued in substitution or replacement for the surrendered Bond.
SECTION 7.3. ISSUE TAXES. The Company will pay all taxes in
connection with the issuance, sale or exchange of the Bonds and in connection
with any amendment or modification of the Bonds or of the Indenture and will
hold you harmless without limitation as to time against any and all liabilities
with respect to all such taxes, including any interest and penalties assessed or
asserted in connection therewith. The obligations of the Company under this
Section 7.3 shall survive the transfer, payment or redemption of the Bonds and
the termination of this Agreement and the Indenture.
SECTION 7.4. RULE 144 OR RULE 144A TRANSFER. The Company will, so
long as you or your nominee shall hold any of the Bonds, give you such
information as you may reasonably require for the purpose of completing any
proposed sale by you of any of the Bonds either pursuant to Rule 144 or Rule
144A.
SECTION 7.5. ERISA COMPLIANCE. (a) All assumptions and methods used
to determine the present value of vested employee benefits under Plans and the
value of assets of Plans shall be reasonable in the good faith judgment of the
Company's actuary (who shall be an "enrolled actuary" as that term is defined in
Section 3 of ERISA) and shall comply with all requirements of law.
(b) Neither the Company nor any ERISA Affiliate will at any time
permit any Pension Plan maintained by it to:
(i) engage in any "prohibited transaction," as such
term is defined in Section 4975 of the Internal Revenue Code of
1986, as amended, or described in Section 406 of ERISA;
13
(ii) incur any "accumulated funding deficiency," as
such term is defined in Section 302 of ERISA, whether or not waived;
or
(iii) terminate under circumstances which could result
in the imposition of a Lien on the Property of the Company pursuant
to Section 4068 of ERISA.
SECTION 7.6. ACQUISITION OF BONDS. The Company will not and will not
permit any Affiliate to purchase, redeem, prepay or otherwise acquire, directly
or indirectly, any of the outstanding Bonds except upon the redemption or
prepayment of the Bonds in accordance with the terms of the Indenture.
SECTION 7.7. TRANSACTIONS WITH AFFILIATES. The Company will not and
will not permit any Subsidiary to enter into any Material transaction,
including, without limitation, the purchase, sale or exchange of Property or the
rendering of any service, with any Affiliate (other than the Company or another
Subsidiary) except in the ordinary course of and pursuant to the reasonable
requirements of the Company's or such Subsidiary's business and upon fair and
reasonable terms no less favorable to the Company or such Subsidiary than would
obtain in a comparable arm's length transaction with a Person not an Affiliate,
or on such terms as may be specifically required, either directly or indirectly,
by the DPUC.
SECTION 7.8. WAIVER OF TRANSFER FEES. Notwithstanding anything to
the contrary in this Agreement, the Indenture or the Bonds, the Company
covenants that, upon any transfer or exchange of the Bonds, it will not require
the payment of any charges otherwise permitted to be made in respect of such
transfer or exchange by the provisions of the last paragraph of Section 1.07 of
the Indenture, nor require the payment of any sums intended to cover any tax or
taxes or other governmental charges required to be paid in connection with such
exchange and the Company shall in each such case pay all such charges or sums
due and owing.
SECTION 8. POST-CLOSING MATTERS.
SECTION 8.1. NOTICE OF ORDER. When the Company obtains approval
from, or an order of, the New York Public Service Commission (such approval or
order, as the case may be, being referred to herein as the "PSC APPROVAL") for
its proposed acquisition of certain of the New York subsidiaries of Philadelphia
Suburban Corporation's AquaSource properties (the "ACQUISITION"), the Company
shall (i) provide to you prompt notice of the PSC Approval; and (ii) deliver a
copy of the PSC Approval to you within ten (10) days of its receipt of such PSC
Approval.
SECTION 8.2. PLEDGE OF STOCK OF ACQUIRED SUBSIDIARIES. The Company
shall deliver within thirty (30) days after the expiration of any appeal period
applicable to the PSC Approval (i) all of the outstanding certificates of stock
(the "PLEDGED STOCK") of any acquired New York subsidiaries (individually, an
"ACQUIRED SUBSIDIARY" and collectively, the "ACQUIRED SUBSIDIARIES") to the
Trustee together with appropriate instruments of assignment to be held by the
Trustee under Article 17 of the Indenture as additional mortgaged property; (ii)
a certificate, addressed to the Trustee and you and signed by an officer of the
Company, setting forth the name of each Acquired Subsidiary and a description of
all issued and outstanding Pledged Stock of
14
each Acquired Subsidiary, transmitting the Pledged Stock to the Trustee and
setting forth the Trustee's receipt and acknowledgment thereof; and (iii) an
opinion of counsel in form and substance satisfactory to you regarding the
Acquisition and the Pledged Stock of the Acquired Subsidiaries and such other
matters incidental thereto as you or your special counsel may request. The
Company agrees to pay the reasonable fees, charges and disbursements of your
special counsel in connection with the foregoing post-closing matters.
SECTION 9. INFORMATION AS TO COMPANY.
SECTION 9.1. FINANCIAL AND BUSINESS INFORMATION. The Company will
deliver to you, if at the time you or your nominee holds any Bonds (or if you
are obligated to purchase any Bonds), and to each other Institutional Investor
of the then outstanding Bonds (and, upon the request of any holder of the Bonds,
to any prospective transferee of any Bonds):
(a) QUARTERLY STATEMENTS--as soon as practicable
after the end of each of the first three quarterly fiscal periods in
each fiscal year of the Company, and in any event within 45 days
thereafter, duplicate copies of:
(i) a consolidated balance sheet of the
Company and its Subsidiaries, if any, as at the end of
such quarter, and
(ii) consolidated statements of income of
the Company and its Subsidiaries, if any, and the
statements of stockholders' equity and cash flows of the
Company and its Subsidiaries, each for such quarter, and
(in the case of the second and third quarters) for the
portion of the fiscal year ending with such quarter,
setting forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year, all in reasonable
detail and certified as complete and correct, subject to changes
resulting from year-end adjustments by a principal financial officer
of the Company;
(b) ANNUAL STATEMENTS--as soon as practicable after
the end of each fiscal year of the Company, and in any event within
90 days thereafter, duplicate copies of:
(i) a consolidated balance sheet of the
Company and its Subsidiaries, if any, at the end of such
year, and
(ii) consolidated statements of income,
stockholders' equity and cash flows of the Company and
its Subsidiaries, if any, for such year,
setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail and accompanied by an
opinion thereon of an independent public accountants of recognized
national standing selected by the Company, which opinion shall state
that such financial statements fairly present the financial
condition of the companies being reported upon, have been prepared
15
in accordance with GAAP consistently applied (except for changes in
application in which such accountants concur) and in accordance with
the applicable uniform systems of accounts prescribed for Class A
water utilities by the DPUC and that the examination of such
accountants in connection with such financial statements has been
made in accordance with generally accepted auditing standards, and
accordingly included such tests of the accounting records and such
other auditing procedures as were considered necessary in the
circumstances;
(c) AUDIT REPORTS--promptly upon receipt thereof, one
copy of each other report submitted to the Company or any Subsidiary
by independent accountants in connection with any annual, interim or
special audit made by them of the books of the Company or any
Subsidiary;
(d) SEC AND OTHER REPORTS--promptly upon their
becoming available, duplicate copies of (i) each financial
statement, report, notice or proxy statement sent by the Company to
stockholders generally, and of each regular or periodic report and
any registration statement, prospectus or written communication
(other than transmittal letters) in respect thereof filed by the
Company with or received by such Person in connection therewith
from, any securities exchange or the Securities and Exchange
Commission or any successor agency; and (ii) any report filed by the
Company with the DPUC which is Material;
(e) ERISA MATTERS -- promptly, and in any event
within five days after a Responsible Officer becoming aware of any
of the following, a written notice setting forth the nature thereof
and the action, if any, that the Company or an ERISA Affiliate
proposes to take with respect thereto:
(i) with respect to any Plan, any
reportable event, as defined in Section 4043(c) of ERISA
and the regulations thereunder, for which notice thereof
has not been waived pursuant to such regulations as in
effect on the date hereof; or
(ii) the taking by the PBGC of steps to
institute, or the threatening by the PBGC of the
institution of, proceedings under Section 4042 of ERISA
for the termination of, or the appointment of a trustee
to administer, any Plan, or the receipt by the Company
or any ERISA Affiliate of a notice from a Multiemployer
Plan that such action has been taken by the PBGC with
respect to such Multiemployer Plan; or
(iii) any event, transaction or condition
that could result in the incurrence of any liability by
the Company or any ERISA Affiliate pursuant to Title I
or IV of ERISA or the penalty or excise tax provisions
of the Code relating to employee benefit plans, or in
the imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA
16
Affiliate pursuant to Title I or IV of ERISA or such
penalty or excise tax provisions, if such liability or
Lien, taken together with any other such liabilities or
Liens then existing, could reasonably be expected to
have a Material Adverse Effect;
(f) NOTICE OF DEFAULT OR EVENT OF
DEFAULT--immediately upon a Responsible Officer becoming aware of
the existence of any condition or event which constitutes a Default
or an Event of Default under the Indenture, a written notice
specifying the nature and period of existence thereof and what
action the Company is taking or proposes to take with respect
thereto;
(g) NOTICE OF CLAIMED DEFAULT--immediately upon a
Responsible Officer becoming aware that the holder of any Bond or of
any evidence of Indebtedness or other Security of the Company or any
Subsidiary has given notice or taken any other action with respect
to a claimed Default or Event of Default, a written notice
specifying the notice given or action taken by such holder and the
nature of the claimed Default or Event of Default and what action
the Company is taking or proposes to take with respect thereto;
(h) LITIGATION NOTICE--prompt written notice of any
action, suit or administrative proceeding to which the Company or
any Subsidiary is a party which, if adversely determined, could
result in a Material Adverse Effect;
(i) NOTICE OF REGULATORY ACTION--promptly upon
receipt thereof, copies of any notices received from Federal or
state regulatory agencies relating to an order, ruling, statute,
other law or information which in the reasonable opinion of the
Company is likely to result in a Material Adverse Effect;
(j) CHANGE IN CONTROL--promptly upon becoming aware
thereof, notice of the happening of any event which might reasonably
be expected to involve the occurrence of any Person, or group of
related Persons, (i) having beneficial ownership of a majority in
interest of the outstanding Voting Stock of the Company or (ii)
acquiring all or substantially all of the assets of the Company; and
(k) REQUESTED INFORMATION--with reasonable
promptness, such other data and information as from time to time may
be reasonably and in good faith requested, and any information
required by Rule 144A(d)(4) under the Act to be provided to a holder
or prospective purchaser of any Bonds.
SECTION 9.2. OFFICERS' CERTIFICATES. Each set of financial
statements delivered to you or any other Institutional Investor of the Bonds
pursuant to Section 9.1(a) or 9.1(b) hereof will be accompanied by a certificate
of the Chairman or the President or a Vice President and the Treasurer or an
Assistant Treasurer of the Company stating that the signers have reviewed the
relevant terms of the Indenture and this Agreement and have made, or caused to
be made, under their supervision, a review of the transactions and condition of
the Company and the Subsidiaries, if any, from the beginning of the period
covered by the statement of earnings then being furnished and setting forth the
information (including detailed calculations) required in order to establish
whether, at any time during the period covered by the statement of earnings
17
then being furnished, any Default or Event of Default under the Indenture
existed including, without limitation, calculations showing compliance with
Section 3.15, 3.16 and 3.17 of the Indenture, or the Company failed to keep,
perform, observe or fulfill any of its covenants or agreements set forth in this
Agreement, PROVIDED that in the event that any such Default, Event of Default or
failure shall have occurred, such certificate shall so specify and shall state
whether such Default, Event of Default or failure has been cured or is
continuing.
If at any time the Company violates or fails to keep, perform or
fulfill any of its covenants or agreements in any material respect set forth in
this Agreement, or the Company becomes aware of any such violation or failure,
the Company will promptly deliver to you and each other Institutional Investor
of any of the Bonds, a certificate of the Chairman or the President or a Vice
President and the Treasurer or an Assistant Treasurer of the Company indicating
the nature of such violation or failure, the time when and manner in which it
occurred and was discovered, the expected duration and the method by which the
Company intends to cure the violation or failure.
SECTION 9.3. ACCOUNTANTS' CERTIFICATE. Each set of annual financial
statements delivered pursuant to Section 9.1(b) hereof will be accompanied by a
certificate of the accountants who certify such financial statements, stating
that they have reviewed this Agreement and the Indenture and stating further,
whether, in making their audit, such accountants have become aware of any
Default or Event of Default under the Indenture (whether or not such Default or
Event of Default is continuing) or of any failure by the Company to keep,
perform, observe or fulfill any of its covenants or agreements set forth in this
Agreement and, if any such Default, Event of Default or failure then exists,
specifying the nature and period of existence thereof.
SECTION 9.4. DELIVERY OF CERTIFIED FINANCIAL STATEMENTS.
Concurrently with the delivery to you and to each other Institutional Investor
of the Bonds of the certified annual financial statements pursuant to Section
9.1(b) hereof, the Company will mail one copy of each such statement to:
Securities Valuation Office
National Association of Insurance Commissioners
1411 Broadway, 9th floor
New York, New York 10018
SECTION 9.5. INSPECTION. The Company shall permit the
representatives of each holder of Bonds that is an Institutional Investor:
(a) NO DEFAULT -- if no Default or Event of Default
then exists, at the expense of such holder and upon reasonable prior
notice to the Company, to visit the principal executive office of
the Company, to discuss the affairs, finances and accounts of the
Company and its Subsidiaries with the Company's officers, and (with
the consent of the Company, which consent will not be unreasonably
withheld) its independent public accountants, and (with the consent
of the Company, which consent will not be unreasonably withheld) to
visit the other offices and properties of the Company and each
Subsidiary, all at such reasonable times and as often as may be
reasonably requested in writing; and
18
(b) DEFAULT -- if a Default or Event of Default then
exists, at the expense of the Company to visit and inspect any of
the offices or properties of the Company or any Subsidiary, to
examine all their respective books of account, records, reports and
other papers, to make copies and extracts therefrom, and to discuss
their respective affairs, finances and accounts with their
respective officers and independent public accountants (and by this
provision the Company authorizes said accountants to discuss the
affairs, finances and accounts of the Company and its Subsidiaries),
all at such times and as often as may be requested.
SECTION 10. HOME OFFICE PAYMENT.
Notwithstanding anything to the contrary in this Agreement, the
Indenture or the Bonds, the Company will pay, or cause the Trustee to pay, all
amounts payable with respect to any Bonds held by each holder of Bonds which has
given written notice to the Company (such as the written direction given in
Schedule 1 to this Agreement) requesting that the provisions of this Section 10
shall apply (without any presentment of such Bonds and without any notation of
such payment being made thereon) by initiating federal funds bank wire transfers
no later than 11:00 a.m., New York time, for the account of such holder in any
bank in the United States as may be designated in writing by such holder
(accompanied by sufficient information to identify the source and application of
such funds), or in such other manner or to such other address in the United
States as may be designated in writing by such holder. The holder of any of the
Bonds to which this Section 10 applies agrees that in the event it shall sell or
transfer any of the Bonds, prior to the delivery of such Bonds to the purchaser
or transferee (a) it will (i) make a proper notation thereon of the portion of
the Bond which has been redeemed, or (ii) surrender the Bond in exchange for a
new Bond or Bonds representing the then outstanding principal amount of the
Bonds being sold or disposed of and the principal amount of the Bonds held by
such holder after such sale or disposition, and (b) it will promptly notify the
Company and the Trustee of the name and address of the transferee of the Bonds
being sold or disposed of. Any person to whom this Section 10 applies agrees
that Bonds which are redeemed in full or paid on maturity will be surrendered to
the Trustee against such payment in accordance with the terms of the Indenture.
The Company will file with the Trustee, in accordance with the provisions of the
Indenture, a certificate stating that the agreement set forth in this Section 10
has been entered into. The Company and the Trustee shall be entitled to rely
upon any such agreement and shall incur no liability with respect to any holder
of the Bonds in so relying and acting pursuant to such Agreement.
SECTION 11. INTERPRETATION OF THIS AGREEMENT.
SECTION 11.1. TERMS DEFINED. As used in this Agreement, the
following terms have the respective meanings set forth below or set forth in the
Section following such term:
"ACT" - shall mean the Securities Act of 1933, as amended.
19
"AFFILIATE" - means, at any time, and with respect to any Person,
(a) any other Person that at such time directly or indirectly through one or
more intermediaries Controls, or is Controlled by, or is under common Control
with, such first Person, and (b) any Person beneficially owning or holding,
directly or indirectly, 5% or more of any class of voting or equity interests of
the Company or any Subsidiary or any corporation of which the Company and its
Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly,
5% or more of any class of voting or equity interests. As used in this
definition, "CONTROL" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
Unless the context otherwise clearly requires, any reference to an "AFFILIATE"
is a reference to an Affiliate of the Company.
"BONDS" - Section 1.
"BUSINESS DAY" - means any day other than a Saturday, a Sunday or a
day on which commercial banks in New York, New York are required or authorized
to be closed.
"CAPITAL LEASE" - means, at any time, a lease with respect to which
the lessee is required concurrently to recognize the acquisition of an asset and
the incurrence of a liability in accordance with GAAP.
"CLOSING DATE" - Section 3.
"CODE" - means the Internal Revenue Code of 1986, as amended from
time to time, and the rules and regulations promulgated thereunder from time to
time.
"COMPANY" - Section 1.
"DEFAULT" - an event or condition the occurrence of which would,
with the lapse of time or the giving of notice or both, become an Event of
Default.
"DPUC" - Section 4.5.
"EIGHTH SUPPLEMENTAL INDENTURE" - Section 1.
"ENVIRONMENTAL LAWS" - means any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes, air emissions
and discharges to waste or public systems.
"ERISA" - means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the rules and regulations promulgated
thereunder from time to time in effect.
20
"ERISA AFFILIATE" - means any trade or business (whether or not
incorporated) that is treated as a single employer together with the Company
under Section 414 of the Code.
"EVENT OF DEFAULT" - means an "Event of Default" as that term is
defined in the Indenture.
"FIRST MORTGAGE BONDS" - the First Mortgage Bonds of the Company
now or hereafter issued under and pursuant to the Indenture, which are
outstanding at the time of reference.
"FORM 10-K" - Section 4.3.
"GAAP" - means generally accepted accounting principles as in effect
from time to time in the United States of America.
"GOVERNMENTAL AUTHORITY" means -
(a) the government of
(i) the United States of America or any
State or other political subdivision thereof, or
(ii) any jurisdiction in which the Company
or any Subsidiary conducts all or any part of its
business, or which asserts jurisdiction over any
properties of the Company or any Subsidiary, or
(b) any entity exercising executive, legislative,
judicial, regulatory or administrative functions of, or pertaining
to, any such government.
"GUARANTY" - means, with respect to any Person, any obligation
(except the endorsement in the ordinary course of business of negotiable
instruments for deposit or collection) of such Person guaranteeing or in effect
guaranteeing any indebtedness, dividend or other obligation of any other Person
in any manner, whether directly or indirectly, including (without limitation)
obligations incurred through an agreement, contingent or otherwise, by such
Person:
(a) to purchase such indebtedness or obligation or
any property constituting security therefor;
(b) to advance or supply funds (i) for the purchase
or payment of such indebtedness or obligation, or (ii) to maintain
any working capital or other balance sheet condition or any income
statement condition of any other Person or otherwise to advance or
make available funds for the purchase or payment of such
indebtedness or obligation;
(c) to lease properties or to purchase properties or
services primarily for the purpose of assuring the owner of such
indebtedness or obligation of the ability of any other Person to
make payment of the indebtedness or obligation; or
21
(d) otherwise to assure the owner of such
indebtedness or obligation against loss in respect thereof.
In any computation of the indebtedness or other liabilities of the obligor under
any Guaranty, the indebtedness or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor.
"HAZARDOUS MATERIAL" - means any and all pollutants, toxic or
hazardous wastes or any other substances that might pose a hazard to health or
safety, the removal of which may be required or the generation, manufacture,
refining, production, processing, treatment, storage, handling, transportation,
transfer, use, disposal, release, discharge, spillage, seepage, or filtration of
which is or shall be restricted, prohibited or penalized by any applicable law
(including, without limitation, asbestos, urea formaldehyde foam insulation and
polychlorinated biphenyls).
"INDEBTEDNESS" - with respect to any Person means, at any time,
without duplication,
(a) its liabilities for borrowed money and its
redemption obligations in respect of mandatorily redeemable
Preferred Stock;
(b) its liabilities for the deferred purchase price
of property acquired by such Person (excluding accounts payable
arising in the ordinary course of business but including all
liabilities created or arising under any conditional sale or other
title retention agreement with respect to any such property);
(c) all liabilities appearing on its balance sheet in
accordance with GAAP in respect of Capital Leases;
(d) all liabilities for borrowed money secured by any
Lien with respect to any property owned by such Person (whether or
not it has assumed or otherwise become liable for such liabilities);
(e) all its liabilities in respect of letters of
credit or instruments serving a similar function issued or accepted
for its account by banks and other financial institutions (whether
or not representing obligations for borrowed money); and
(f) any Guaranty of such Person with respect to
liabilities of a type described in any of clauses (a) through (f)
hereof.
Indebtedness of any Person shall include all obligations of such Person of the
character described in clauses (a) through (g) to the extent such Person remains
legally liable in respect thereof notwithstanding that any such obligation is
deemed to be extinguished under GAAP.
"INDENTURE" - Section 1.
"INSTITUTIONAL INVESTOR" - means (a) any original purchaser of a
Bond, (b) any holder of a Bond holding more than 5% of the aggregate principal
amount of the Bonds then outstanding,
22
and (c) any bank, trust company, savings and loan association or other financial
institution, any pension plan, any investment company, any insurance company,
any broker or dealer, or any other similar financial institution or entity,
regardless of legal form.
"LIEN" - any interest in Property securing an obligation owed to, or
a claim by, a Person other than the owner of the Property, whether such interest
is based on the common law, statute or contract, and including but not limited
to the security interest lien arising from a mortgage, encumbrance, pledge,
conditional sale or trust receipt or a lease, consignment or bailment for
security purposes. The term "Lien" shall include reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions, restrictions,
leases and other title exceptions and encumbrances affecting Property. For the
purposes of this Agreement, the Company shall be deemed to be the owner of any
Property which it has acquired or holds subject to a conditional sale agreement,
financing lease or other arrangement pursuant to which title to the Property has
been retained by or vested in some other Person for security purposes, and such
retention or vesting shall be deemed to create a Lien on such Property.
"MATERIAL" - means material in relation to the business, operations,
affairs, financial condition, assets, properties, or prospects of the Company
and its Subsidiaries taken as a whole.
"MATERIAL ADVERSE EFFECT" - means a material adverse effect on (a)
the business, operations, affairs, financial condition, assets or properties of
the Company and its Subsidiaries taken as a whole, or (b) the ability of the
Company to perform its obligations under this Agreement, the Indenture and the
Bonds, or (c) the validity or enforceability of this Agreement, the Indenture or
the Bonds.
"MULTIEMPLOYER PLAN" means any Plan that is a "multiemployer plan"
(as such term is defined in Section 4001(a)(3) of ERISA).
"ORIGINAL INDENTURE" - Section 1.
"PBGC" - means the Pension Benefit Guaranty Corporation referred to
and defined in ERISA or any successor thereto.
"PERMITTED ENCUMBRANCES" - shall have the meaning set forth in the
Indenture.
"PERSON" - an individual, partnership, corporation, trust or
unincorporated organization, and a government or agency or political subdivision
thereof.
"PLAN" - means an "employee benefit plan" (as defined in Section
3(3) of ERISA) that is or, within the preceding five years, has been established
or maintained, or to which contributions are or, within the preceding five
years, have been made or required to be made, by the Company or any ERISA
Affiliate or with respect to which the Company or any ERISA Affiliate may have
any liability.
"PLEDGED SHARES" - shall have the meaning set forth in Section 17.01
of the Indenture.
23
"PREFERRED STOCK" - means any class of capital stock of a
corporation that is preferred over any other class of capital stock of such
corporation as to the payment of dividends or the payment of any amount upon
liquidation or dissolution of such corporation.
"PROPERTY" or "PROPERTIES" - shall mean any interest in any kind of
property or asset, whether real, personal or mixed, or tangible or intangible.
"QPAM EXEMPTION" - means Prohibited Transaction Class Exemption
84-14 issued by the United States Department of Labor.
"REQUIRED HOLDERS" means, at any time, the holders of at least
66-2/3% in principal amount of the Bonds at the time outstanding (exclusive of
Bonds then owned by the Company or any of its Affiliates).
"RESPONSIBLE OFFICER" - means any Senior Financial Officer and any
other officer of the Company with responsibility for the administration of the
relevant portion of this Agreement.
"SECURITY" - shall have the same meaning as in Section 2(1) of the
Act.
"SENIOR FINANCIAL OFFICER" - means the chief financial officer,
principal accounting officer, treasurer or comptroller of the Company.
"SUBSIDIARY" - means, as to any Person, any corporation, association
or other business entity in which such Person or one or more of its Subsidiaries
or such Person and one or more of its Subsidiaries owns sufficient equity or
voting interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if more
than a 50% interest in the profits or capital thereof is owned by such Person or
one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries (unless such partnership can and does ordinarily take major
business actions without the prior approval of such Person or one or more of its
Subsidiaries). Unless the context otherwise clearly requires, any reference to a
"Subsidiary" is a reference to a Subsidiary of the Company.
"TRUSTEE" - Section 1.
SECTION 11.2. ACCOUNTING PRINCIPLES. Where the character or amount
of any asset or liability or item of income or expense is required to be
determined or any consolidation or other accounting computation is required to
be made for the purposes of this Agreement, this shall, where applicable, be
done in accordance with the uniform systems of accounts for Class A water
utilities prescribed by DPUC and otherwise shall be done in accordance with GAAP
to the extent applicable, except where such principles are inconsistent with the
requirements of this Agreement.
SECTION 11.3. DIRECTLY OR INDIRECTLY. Where any provision in this
Agreement refers to action to be taken by any Person, or which such Person is
prohibited from taking, such provision shall be applicable whether such action
is taken directly or indirectly by such Person including
24
actions taken by or on behalf of any partnership in which such Person is a
general partner and all liabilities of such partnerships shall be considered
liabilities of such Person for purposes of this Agreement.
SECTION 11.4. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Connecticut, without
regard to the conflicts of laws principles thereof.
SECTION 12. EXPENSES.
Whether or not the Bonds are sold, the Company will pay all expenses
relating to this Agreement, including but not limited to:
(a) the cost of reproducing this Agreement, the
Eighth Supplemental Indenture and the Bonds;
(b) the fees and disbursements of your special
counsel;
(c) the cost of any fees of agents, brokers or
dealers or otherwise incurred in connection with the sale of the
Bonds, together with any filing fees and the costs associated with
the acquisition of a private placement number;
(d) your reasonable out-of-pocket expenses;
(e) the cost of delivering to your home office,
insured to your reasonable satisfaction, the Bonds purchased by you
at the closing; and
(f) all expenses, costs, outlays and reasonable
attorneys' fees (including the reasonable allocated costs and
expenses of your in-house counsel) of any kind and character
relating to (i) the exchange of Bonds or amendments, waivers or
consents pursuant to, or the enforcement and protection of your
rights under, the provisions of this Agreement, the Indenture or the
Bonds, or (ii) the enforcement of any provisions of, or the
collection of amounts due you under, the Bonds, the Indenture or
this Agreement, or (iii) the preparation for, negotiations
regarding, consultations concerning or the defense of legal
proceedings involving any claim or claims made or threatened against
you arising out of this Agreement, the Indenture or the Bonds;
PROVIDED, HOWEVER, that the Company shall not be required to
reimburse you for any such expenses, costs, outlays or fees incurred
in connection with any action or proceeding to enforce any of the
provisions of this Agreement, the Indenture or the Bonds which a
court of competent jurisdiction determines has not been undertaken
by you in good faith.
The obligations of the Company under this Section 12 shall survive the transfer,
payment or redemption of the Bonds and the termination of this Agreement.
25
SECTION 13. MISCELLANEOUS.
SECTION 13.1. NOTICES. All notices and communications provided for
hereunder shall be in writing and shall be sent (a) by telecopy if the sender on
the same day sends a confirming copy of such notice by a recognized delivery
service (charges prepaid), or (b) by registered or certified mail with return
receipt requested (postage prepaid) or (c) by a recognized overnight delivery
service (with charges prepaid). Any such notice must be sent:
(i) if to you, at your address shown in Schedule 1
hereto, marked for attention as there indicated, or at such other
address as you may have furnished the Company in writing, or
(ii) if to the Company, at its address shown at the
beginning of this Agreement, Attention Treasurer, or at such other
address as the Company may have furnished in writing to you and all
other holders of the Bonds at the time outstanding.
SECTION 13.2. REPRODUCTION OF DOCUMENTS. This Agreement and all
documents relating thereto, including, without limitation, (a) consents, waivers
and modifications which may hereafter be executed, (b) documents received by you
at closing of your purchase of the Bonds (except the Bonds themselves), and (c)
financial statements, certificates and other information previously or hereafter
furnished to you, may be reproduced by you at your sole cost and expense by any
photographic, photostatic, microfilm, micro-card, miniature photographic or
other similar process and you may destroy any original document so reproduced.
The Company agrees and stipulates that any such reproduction shall be admissible
in evidence as the original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not such
reproduction was made by you in the regular course of business) and that any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.
SECTION 13.3. SURVIVAL. All warranties, representations, and
covenants made by the Company herein or on any certificate or other instrument
delivered by it or on its behalf under this Agreement or under the Indenture
shall be considered to have been relied upon by you and shall survive the
delivery to you of the Bonds regardless of any investigation made by you or on
your behalf. All statements in any such certificate or other instrument shall
constitute warranties and representations by the Company hereunder.
SECTION 13.4. SUCCESSORS AND ASSIGNS. This Agreement shall inure to
the benefit of and be binding upon the successors and assigns of each of the
parties. The provisions of this agreement are intended to be for the benefit of
all holders, from time to time, of the Bonds, and shall be enforceable by any
such holder, whether or not an express assignment to such holder of rights under
this Agreement has been made by you or your successor or assign.
SECTION 13.5. AMENDMENT AND WAIVER.
(a) REQUIREMENTS. This Agreement may be amended, and the observance
of any term of this Agreement may be waived, with (and only with) the written
consent of the Company and
26
the Required Holders (including the Purchaser if it continues to own Bonds);
PROVIDED that no such amendment or waiver shall, without the written consent of
the holders of all the Bonds at the time outstanding, amend this Section 13.5.
(b) SOLICITATION OF BONDHOLDERS. The Company will not directly or
indirectly solicit, request or negotiate for or with respect to any proposed
waiver or amendment of any of the provisions of this Agreement, the Indenture,
the Eighth Supplemental Indenture or the Bonds unless each holder of the Bonds
(irrespective of the amount of Bonds then owned by it) shall be informed thereof
by the Company and shall be afforded the opportunity of considering the same and
shall be supplied by the Company with sufficient information to enable it to
make an informed decision with respect thereto. Executed or true and correct
copies of any waiver or consent effected pursuant to the provisions of this
Section 13.5 or of the provisions of the Indenture shall be delivered by the
Company to each holder of outstanding Bonds forthwith following the date on
which the same shall have been executed and delivered by the holder or holders
of the requisite percentage of outstanding Bonds or First Mortgage Bonds. The
Company will not, directly or indirectly, pay or cause to be paid any
remuneration, whether by way of supplemental or additional interest, fee or
otherwise, to any holder of the Bonds or any holder of any First Mortgage Bonds
of the Company issued under the Indenture as consideration for or as an
inducement to the entering into by any such holder of any waiver or amendment of
any of the terms and provisions of this Agreement, the Indenture or the Eighth
Supplemental Indenture unless such remuneration is (i) concurrently paid, on the
same terms, ratably to the holders of all of the Bonds then outstanding; or (ii)
paid solely to the holders of a particular series of First Mortgage Bonds as
consideration for or as an inducement to the entering into by any such holder of
any such waiver or amendment which relates solely to the terms and provisions of
that particular series of First Mortgage Bonds and does not affect the Bonds or
First Mortgage Bonds generally.
(c) BINDING EFFECT. Any such amendment or waiver shall apply
equally to all the holders of the Bonds and shall be binding upon them and upon
each future holder of any Bonds and upon the Company whether or not such Bonds
shall have been marked to indicate such amendment or waiver. No such amendment
or waiver shall extend to or affect any obligation not expressly amended or
waived or impair any right which follows therefrom.
SECTION 13.6. DUPLICATE ORIGINALS. Two or more duplicate originals
of this Agreement may be signed by the parties, each of which shall be an
original but all of which together shall constitute one and the same instrument.
[Signature Pages to Follow]
27
If this Agreement is satisfactory to you, please so indicate by
signing the acceptance at the foot of a counterpart of this Agreement and return
such counterpart to the Company, whereupon this Agreement will become binding
between us in accordance with its terms.
Very truly yours,
BIRMINGHAM UTILITIES, INC.
By: /s/
----------------------------
Name: John S. Tomac
Title: President and Treasurer
28
The foregoing is hereby accepted as of
the date first above written.
GENERAL ELECTRIC CAPITAL ASSURANCE COMPANY
By: GE Asset Management Incorporated,
its investment adviser
By: /s/_________________________________
Name: ______________________________
Title: _____________________________
29
PURCHASER INFORMATION
PRINCIPAL AMOUNT OF
NAME AND ADDRESS OF PURCHASER SERIES F BONDS TO BE
PURCHASED
GENERAL ELECTRIC CAPITAL ASSURANCE COMPANY $9,000,000
c/o GE Asset Management Incorporation
601 Union Street, Suite 2200
Seattle, Washington 98101
Attention: Private Placements
Telephone No: (206) 516-4515
Fax No: (206) 516-4578
geam.privateplacements@corporate.ge.com
Payments
All payments on or in respect of the Bonds to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Birmingham Utilities, Inc., 5.21% Series F Bonds, due April 15, 2011, PPN
091270 A* 9, principal or interest") to:
The Bank of New York
ABA #021000018
Account Number/Beneficiary: GLA111566
SWIFT Code: IRVTBEBB
Attention: PP P & I Department
Reference: General Electric Capital Assurance Company, Account #127939, PPN &
Security Description, and Identify Principal & Interest Amounts
Notices
All notices of payment on or in respect of the Bonds and written confirmation of
each such payment, including interest payments, redemptions, premiums,
make-wholes, and fees should be addressed as provided above with a copy to:
State Street Bank
Account: General Electric Capital Assurance Company
801 Pennsylvania
Kansas City, Missouri 64105
Attention: Klaus Diem
Telephone No.: (816) 691-8646
Fax No.: (816) 691-5593
geam@statestreetkc.com (preferred delivery method)
SCHEDULE 1
(to Bond Purchase Agreement)
and to:
HARE & CO.
Bank of New York
Income Collection Department
P.O. Box 11203 New York, New York 10286 Attention: PP P&I Department
Reference: General Electric Capital Assurance Company,
Account #127939, PPN and Security Description
Name of Nominee in which Bonds are to be issued: HARE & CO.
Taxpayer I.D. Number: 91-6027719
2
SUBSIDIARIES
Subsidiary: Eastern Connecticut Regional Water Company, Inc.
- ----------
A Connecticut corporation
200 shares issued and outstanding to the Company (certificate
no. 17)
5,000 authorized shares
Affiliates: BIW Limited
- ---------- A Connecticut corporation
Birmingham H20 Services Inc.
A Connecticut corporation
Directors of Birmingham Utilities, Inc.
- ---------------------------------------
Betsy Henley-Cohn James E. Cohen John S. Tomac
Michael J. Adanti Themis Klasides Alvaroda Silva
Mary Jane Burt B. Lance Saverteig
Kenneth E. Schable
Officers of Birmingham Utilities, Inc.
- --------------------------------------
Chairwoman and CEO: Betsy Henley-Cohn
President and Treasurer: John S. Tomac
V.P. Operations: John Keefe
Secretary: Henrietta Vitale
Assistant Treasurer: Diane DeBiase
SCHEDULE 4.1
(to Bond Purchase Agreement)
EXISTING INDEBTEDNESS
9.64% Series E First Mortgage Bonds, which will be redeemed with the
proceeds from the sale of the Series F Bonds.
Commercial Loan Agreement dated as of November 20, 2002 between the
Company and Citizens Bank of Connecticut, as amended and modified to date.
SCHEDULE 4.4
(to Bond Purchase Agreement)
FINANCIAL STATEMENTS
The Annual Report on Form 10-K of the Company for the year ended
December 31, 2003 filed with the Securities and Exchange Commission.
SCHEDULE 4.5
(to Bond Purchase Agreement)
LITIGATION
None.
SCHEDULE 4.7
(to Bond Purchase Agreement)
PERFECTION OF SECURITY INTEREST
Eastern Connecticut Regional Water Company, Inc., a Connecticut
corporation (200 shares issued and outstanding).
SCHEDULE 4.24
(to Bond Purchase Agreement)
[OPINION OF WIGGIN AND DANA LLP]
SCHEDULE 5.5(a)
(to Bond Purchase Agreement)
FORM OF CLOSING OPINION OF SPECIAL COUNSEL
TO THE PURCHASER
The closing opinion of Chapman and Cutler LLP, special counsel to
the Purchaser, shall be dated the Closing Date and addressed to the Purchaser,
shall be satisfactory in form and substance to the Purchaser and shall be to the
effect that:
(i) The Company is a corporation validly existing and in good
standing under the laws of the state of Connecticut, has the corporate power and
the corporate authority to carry on the business in which it is engaged and to
issue and sell the Series F Bonds.
(ii) Each of the Eighth Supplemental Indenture and the Bond Purchase
Agreement has been duly authorized by all necessary corporate action on the part
of the Company, has been duly executed and delivered by the Company and it
constitutes the legal, valid and binding contract of the Company enforceable in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
conveyance or similar laws affecting creditors' rights generally, and general
principles of equity (regardless of whether the application of such principles
is considered in a proceeding in equity or at law).
(iii) The Series F Bonds have been duly authorized by all necessary
corporate action on the part of the Company, have been duly executed by the
Company and authenticated by the Trustee and delivered and constitute the legal,
valid and binding obligations of the Company, enforceable in accordance with
their terms, and are secured by and entitled to the benefits of the Indenture
equally and ratably with all other bonds issued and to be issued thereunder,
subject to bankruptcy, insolvency, fraudulent conveyance or similar laws
affecting creditors' rights generally, and general principles of equity
(regardless of whether the application of such principles is considered in a
proceeding in equity or at law).
(iv) The offering, sale and delivery of the Series F Bonds, under
the circumstances contemplated by the Bond Purchase Agreement, constitutes an
exempt transaction under the Securities Act of 1933, as amended, and under the
Trust Indenture Act of 1939, as amended, and does not require registration of
the Series F Bonds or qualification of the Indenture, respectively, thereunder.
The opinion of Chapman and Cutler LLP shall also state that the
opinion of Wiggin and Dana LLP is satisfactory in scope and form to Chapman and
Cutler LLP and that, in their opinion, the Purchaser is justified in relying
thereon. In rendering the opinion set forth in paragraph 1 above, Chapman and
Cutler LLP may rely solely upon an examination of the Articles of Incorporation
certified by the Secretary of the Company, and a Certificate of Good Standing of
the Company from, the Secretary of State of Connecticut and the By-Laws of the
Company.
In giving the foregoing opinions, Chapman and Cutler LLP may rely on
the opinion of Wiggin and Dana LLP as to (i) the due authorization, execution
and delivery of the Indenture (other than the Eighth Supplemental Indenture),
(ii) the enforceability of the Indenture and (iii)
SCHEDULE 5.5(b)
(to Bond Purchase Agreement)
as to all other matters governed by Connecticut law. With respect to matters of
fact upon which such opinion is based, Chapman and Cutler LLP may rely upon
appropriate certificates of public officials and officers of the Company.
5.5(b)-2