CONNECTICUT DEVELOPMENT
AUTHORITY,
THE CONNECTICUT WATER
COMPANY
A.G. EDWARDS & SONS,
INC.
$10,000,000
Connecticut Development Authority
Water Facilities Revenue Bonds
(The Connecticut Water Company Project – 2005A
Series)
AGREEMENT,
dated October 28, 2005, among the Connecticut Development
Authority (the “Authority”), The Connecticut Water
Company (the “Company”) and A.G. Edwards & Sons,
Inc. (the “Underwriter”), with respect to the sale and
purchase of the Authority’s $10,000,000 Water Facilities
Revenue Bonds (The Connecticut Water Company Project – 2005A
Series) (the “Bonds”) on the terms and subject to the
conditions herein set forth:
1.
The Borrower has previously filed with the Authority its
application for the issuance of the Bonds by the Authority, and the
Authority has authorized the Bonds by a resolution duly adopted
August 17, 2005 (the “Resolution”). The Bonds will
be special obligations of the Authority payable solely out of the
revenues or other receipts, funds or moneys pledged therefore, and
from any amounts otherwise available to the Trustee for the payment
thereof under the indenture referred to below. The proceeds of the
sale of the Bonds will be loaned to the Company for use in the
acquisition, construction and installation of certain additions to
the water system of the Company (the “Project”) located
in certain municipalities within the State of Connecticut (the
“State”). All such projects are to be used for water
facilities purposes, all as more particularly described in the Loan
Agreement (the “Agreement”), dated as of
October 1, 2005 by and between the Authority and the Company.
Pursuant to the Agreement, the Company will execute and deliver to
the Authority the Company’s note (the “Note”) to
evidence its indebtedness thereunder. Payments on the Note shall be
applied to the amounts due on the Bonds.
The
Bonds shall be in all respects as described in, and shall be issued
under and pursuant to, an Indenture of Trust (the
“Indenture”), dated as of October 1, 2005, between
the Authority and U.S. Bank National Association, as trustee (the
“Trustee”). In connection with the execution and
delivery of the Indenture, the Authority and the Trustee will
execute and deliver a Letter of Representation (the “Letter
of Representation”) to The Depository Trust Company
(“DTC”). In order to assure the exclusion of interest
on the Bonds from gross income for purposes of federal income
taxation, the Company, the Authority and the Trustee will enter
into a Tax Regulatory Agreement relating to the Bonds, dated as of
the date of issuance of the Bonds (the “Tax Regulatory
Agreement”).
In
this Bond Purchase Agreement, the term “Financing
Documents” (1) when used with respect to the Company,
means the Agreement, the Note, the Tax Regulatory Agreement, the
Insurance Agreement to be dated as of the hereinafter-defined
Closing Date between the Company and Financial Guaranty Insurance
Company (the “Bond Insurer”), the Continuing Disclosure
Agreement dated as of October 1, 2005 between the Company and
the Trustee, as dissemination agent (the “Disclosure
Agreement”), and the general certificate of the Company
delivered in connection with the issuance of the Bonds and
(2) when used with respect to the Authority, means any of the
foregoing documents and agreements referred to in (1) above to
which the Authority is a direct party. The Financing Documents when
such term is used with respect to the Company, do not include any
documents or agreements to which the Company is not a direct party,
including the Bonds, the Indenture or the Letter of
Representation.
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2.
Subject to the terms and conditions and upon the basis of the
representations hereinafter set forth, the Authority hereby agrees
to sell the Bonds to the Underwriter and the Underwriter hereby
agrees to purchase the Bonds from the Authority at the purchase
price of $10,000,000.00. The Bonds shall be dated their date of
delivery, shall mature on October 1, 2040 and shall bear
interest at a rate of 5% per annum, payable on April 1 and October
1 in each year, commencing April 1, 2006. It will be a condition to
the Authority’s obligation to sell the Bonds to the
Underwriter and the obligation of the Underwriter to purchase the
Bonds that all Bonds be sold and delivered by the Authority and
paid for by the Underwriter on the Closing Date, as hereinafter
defined.
3.
The date of delivery and payment for the Bonds (the “Closing
Date”) will be November 30, 2005 unless not later than
the fifth day preceding such date the Authority, the Company and
the Underwriter agree that the Closing Date will be a specified
date not later than the thirtieth day subsequent to such date, in
which event the Closing Date will be the date so specified. The
Bonds shall be available for inspection and packaging at least
twenty-four hours before the Closing Date.
The
Authority will authorize the Trustee to authenticate and deliver
the Bonds to the Underwriter through the facilities of DTC, 55
Water Street, New York, New York, utilizing the FAST System
pursuant to which the Trustee will take custody of the Bonds as
agent for DTC, at approximately 11:00 A.M., New York City time
on the Closing Date, in typewritten form, bearing CUSIP numbers,
duly executed and authenticated, registered in the name of Cede
& Co., as nominee for DTC, against payment therefor by wire
transfer or other manner payable in immediately available funds to
the Trustee for the account of the Authority. The payment for the
Bonds to the Authority and the delivery thereof to the Underwriter
shall be made at the offices of Murtha Cullina LLP, City Place I,
185 Asylum Street, Hartford, Connecticut. The Bonds will be
delivered in the form and denominations and shall be otherwise as
described in the Indenture.
4.
The Authority represents and warrants that:
(a) It
is a body corporate and politic constituting a public
instrumentality and political subdivision of the State of
Connecticut duly organized and existing under the laws of the State
of Connecticut, particularly the State Commerce Act, constituting
Connecticut General Statutes, Sections 32-la through 32-23zz,
as amended (the “Act”). The Authority is authorized to
issue the Bonds in accordance with the Act and to lend the proceeds
thereof to the Company to finance the improvements described in the
Indenture.
(b) The
Authority has complied with the provisions of the Act and has full
power and authority pursuant to the Act to consummate all
transactions contemplated by this Bond Purchase Agreement, the
Bonds, the Resolution, the Indenture and the Financing Documents,
and to issue, sell and deliver the Bonds to the Underwriter as
provided herein.
(c) The
Resolution has been duly adopted by the Authority and is still in
full force and effect. The Resolution has authorized the execution,
delivery and due performance of this Bond Purchase Agreement, the
Bonds, the Indenture and the Financing Documents, and
the
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taking
of any and all action as may be required on the part of the
Authority to carry out, give effect to and consummate the
transactions contemplated by this Bond Purchase Agreement, and all
approvals necessary in connection with the foregoing have been
received, except the State Treasurer’s approval.
(d) When
delivered to and paid for by the Underwriter in accordance with the
terms of this Bond Purchase Agreement, the Bonds will have been
duly authorized, executed, authenticated, issued and delivered and
will constitute valid and binding special obligations of the
Authority payable solely from revenues or other receipts, funds or
moneys pledged therefor under the Indenture and from any amounts
otherwise available therefor under the Indenture, and will be
entitled to the benefit of the Indenture. Neither the State nor any
municipality thereof will be obligated to pay the Bonds or the
interest thereon. Neither the faith and credit nor the taxing power
of the State nor any municipality thereof is pledged for the
payment of the principal, and premium, if any, of and interest on
the Bonds.
(e) The
execution and delivery of this Bond Purchase Agreement, the Bonds,
the Indenture and the Financing Documents, and compliance with the
provisions thereof, will not conflict with or constitute on the
part of the Authority a violation of, breach of or default under
its by-laws or any statute, indenture, mortgage, deed of trust,
note agreement or other agreement or instrument to which the
Authority is a party or by which the Authority is bound, or, to the
knowledge of the Authority, any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the
Authority or any of its activities or properties, and all consents,
approvals, authorizations and orders of governmental or regulatory
authorities which are required for the consummation by the
Authority of the transactions contemplated thereby have been
obtained, except the State Treasurer’s approval.
(f) Subject
to the provisions of the Agreement and the Indenture, the Authority
will apply the proceeds from the sale of the Bonds to the purposes
specified in the Indenture and the Financing Documents.
(g) To
the best knowledge of the Authority, there is no action, suit,
proceeding or investigation at law or in equity before or by any
court, public board or body pending or threatened against or
affecting the Authority, or to the best knowledge of the Authority,
any basis therefor, wherein an unfavorable decision, ruling or
finding would adversely affect the transactions contemplated hereby
and by the Indenture, or which, in any way, would adversely affect
the validity of the Bonds, the Resolution, the Indenture, the
Financing Documents, this Bond Purchase Agreement, or any agreement
or instrument to which the Authority is a party and which is used
or contemplated for use in consummation of the transactions
contemplated hereby and by the Indenture or the exemption from
taxation as set forth therein.
(h) The
representations and warranties of the Authority contained in
Section 2.1 of the Loan Agreement are true and correct as of
the date hereof.
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(i) Any
certificate signed by any Authorized Representative of the
Authority under the Resolution or this Bond Purchase Agreement and
delivered to the Underwriter or to the Trustee shall be deemed a
representation and warranty by the Authority to the Underwriter and
the Company as to the statements made therein.
(j) The
information with respect to the Authority in the Official Statement
of the Authority, dated the date hereof, is correct and complete,
except that none of the representations and warranties herein apply
to statements in or omissions from the Official Statement made in
reliance on or in conformity with information furnished, to the
Authority by the Company, or to information under the headings
“THE PROJECT”, “THE BONDS—Book-Entry Only
System”, “BOND INSURANCE”, “TAX
MATTERS”, “LEGAL MATTERS” and “INDEPENDENT
ACCOUNTANTS”, or to anything contained or incorporated by
reference in the appendices to the Official Statement or otherwise
with respect to the Company. The Authority has authorized the use
of the Official Statement in both its preliminary and final forms
and delivered duly executed copies thereof in final form to the
Underwriter.
It
is specifically understood and agreed that the Authority makes no
representation as to the financial position or business condition
of the Company or any other person and does not, with respect to
the Official Statement or otherwise, except to the extent the
Authority deems the Preliminary Official Statement to be final as
provided in Section 9 hereof, represent or warrant as to any
of the statements, materials (financial or otherwise),
representations or certifications furnished or to be made and
furnished by the Company or any other person in connection with the
sale of the Bonds, or as to the correctness, completeness or
accuracy of any of such statements, materials, representations or
certificates.
5.
The Company represents and warrants that:
(a) The
Company has been duly organized and validly exists as a corporation
under the laws of the State of Connecticut, having all requisite
corporate power to carry on its business as now
constituted.
(b) The
execution and delivery by the Company of the Financing Documents
and this Bond Purchase Agreement, and all other agreements herein
contemplated to be performed by the Company, and the performance of
the conditions herein contained and those in each of such
instruments to be performed are not in contravention of law and
will not conflict with or result in any breach of any of the terms,
conditions or provisions of, or constitute a default under any
indenture, mortgage deed of trust or other agreement or instrument
to which the Company is a party, or the Certificate of
Incorporation and any special acts incorporated by reference
therein or Bylaws of the Company, or any order, rule or regulation
applicable to the Company of any court or of any federal or State
regulatory body or administrative agency or other governmental body
having jurisdiction over the Company or over any of its properties,
or any statute, rule or regulation of any jurisdiction applicable
to the Company, or result in the creation or imposition of any
lien, charge or encumbrance upon any of the properties or assets of
the Company pursuant to the terms of any indenture, agreement or
undertaking binding upon it; and, to the extent
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required by
law, the Connecticut Department of Public Utility Control (the
“DPUC”) has approved or waived approval of all matters
relating to the Company’s participation in the transactions
contemplated in the Financing Documents which require such approval
or waiver of approval; such approval or waiver of approval remains
in full force and effect in the form issued; and, assuming that the
Bonds are securities described in Section 3(a)(2) of the
Securities Act of 1933, as amended (the “Securities
Act”) and Section 3(a)(12) and (29) of the
Securities Exchange Act of 1934, as amended (the “Exchange
Act”), no other consent, approval, authorization or other
order of any regulatory body or administrative agency or other
governmental body is legally required for the Company’s
participation in connection therewith, except as have been
obtained.
(c) Except
as disclosed or incorporated by reference in the Official
Statement, there is no action, suit, proceeding, inquiry or
investigation, at law or in equity, or before or by any court,
public board or body, pending, or to the knowledge of the Company
threatened, wherein an unfavorable decision, ruling or finding
would (i) in the opinion of the Company, involve the
possibility of any judgment or liability to the extent not covered
by insurance which would result in any material adverse change in
the business, properties or operations of the Company, (ii)
materially adversely affect the transactions contemplated by this
Bond Purchase Agreement or (iii) materially adversely affect the
validity or enforceability of the Financing Documents or this Bond
Purchase Agreement.
(d) The
Company will not take or omit to take any action which action or
omission will in any way cause the proceeds from the sale of the
Bonds to be applied in a manner contrary to that provided in the
Financing Documents.
(e) Except
as disclosed or incorporated by reference in the Official
Statement, the Company is not a party to or bound by any contract,
agreement or other instrument, or subject to any judgment, order,
writ, injunction, decree, rule or regulation which, in the
Company’s opinion, materially adversely affects, or in the
future may, so far as the Company can now reasonably foresee,
materially adversely affect the business, operations, properties,
assets or condition, financial or otherwise, of the
Company.
(f) Neither
this Bond Purchase Agreement, other than Section 4 hereof as
to which no representation is made, nor any other document,
certificate or written statement furnished to the Underwriter or
the Authority by or on behalf of the Company, when read together
with the information disclosed or incorporated by reference in the
Official Statement, contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make
the statements contained herein and therein, in light of the
circumstances under which they were made, not misleading or
incomplete.
(g) The
Company has not taken and will not take any action and knows of no
action that any person, firm or corporation has taken or intends to
take, which would cause interest on the Bonds to be includable in
the gross income of the recipients thereof for federal income tax
purposes.
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(h) The
Company will deliver or cause to be delivered all opinions,
certificates, letters and other instruments and documents required
to be delivered by the Company pursuant to this Bond Purchase
Agreement.
(i) The
Financing Documents and this Bond Purchase Agreement, when executed
and delivered, will be legal, valid, binding and enforceable
obligations of the Company, except to the extent that such
enforceability may be limited by bankruptcy or insolvency or other
laws affecting creditors’ rights generally or by general
principles of equity.
(j) The
Company has authorized and consents to the use of the Official
Statement by the Underwriter. The information with respect to the
Company included or incorporated by reference in Appendix A to
the Preliminary Official Statement and the descriptions contained
therein of the Indenture and the Financing Documents and the
Company’s participation in the transactions contemplated
thereby, with such additions or amendments as heretofore have been
agreed upon between the Authority, the Company and the Underwriter
and which are reflected in the Official Statement, are correct and
do not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein in light of circumstances under which
they were made not misleading except that the Company makes no
representation as to (A) the information contained in
Appendices D and F of each of the Preliminary Official Statement
and the Official Statement or the information contained in each of
the Preliminary Official Statement and the Official Statement under
the captions “INTRODUCTION — The Authority”,
“THE AUTHORITY”, “THE BONDS — Book Entry
Only System”, “TAX MATTERS”, “BOND
INSURANCE” and “UNDERWRITING” or (B) the
information with respect to DTC and its book-entry system. The
financial statements included in Appendix B to each of the
Preliminary Official Statement and the Official Statement have been
prepared in accordance with generally accepted accounting
principles as applied in the case of rate-regulated public
utilities, comply with the Uniform System of Accounts and
ratemaking practices prescribed by the DPUC (except as otherwise
disclosed in the notes to such financial statements) and fairly
present the financial position, results of operations, retained
earnings and statements of cash flows of the Company at the
respective dates and for the respective periods
indicated.
(k) There
has been no material adverse change in the business, properties,
operations or financial condition of the Company, taking into
account seasonal revenue fluctuations, from that shown or
incorporated by reference in the Official Statement.
(l) The
Company will use its best efforts to cause the delivery of the
Policy (as hereinafter defined).
(m) The
representations and warranties of the Company contained in
Section 2.2 of the Loan Agreement are true and correct as of
the date hereof.
(n) The
Company has obtained all approvals required in connection with the
execution and delivery of, and performance by the Company of its
obligations under, this Bond Purchase Agreement and the Financing
Documents.
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(o) Any
certificate signed by an officer of the Company and delivered to
the Underwriter at the time of the purchase and sale of the Bonds
shall be deemed a representation and warranty by the Company to the
Underwriter as to the statements made therein.
(p) The
Company deems the Preliminary Official Statement to be final as of
its date for purposes of Rule 15c2-12 of the SEC.
(q) No
material event of default or event which, with notice or lapse of
time or both, would constitute a material event of default or
default under any material agreement or material instrument to
which the Company is a party or by which the Company is bound or to
which any of the property or assets of the Company is subject has
occurred and is continuing.
(r) The
Company will undertake, pursuant to the Disclosure Agreement, to
provide certain annual financial information and notices of the
occurrence of certain events, if material. A description of this
undertaking is set forth in the Preliminary Official Statement and
will be set forth in the Official Statement.
6.
The Company agrees to indemnify and hold harmless the Authority,
the Underwriter, any member, officer, official, employee or agent
of the Authority or the State or the Underwriter, and each person,
if any, who controls the Underwriter within the meaning of
Section 15 of the Securities Act, as amended (for purposes of
this paragraph, collectively the “Indemnified
Parties”), to the extent permitted under the applicable law,
against any and all losses, claims, damages, liabilities or
expenses whatsoever, joint or several, caused by (1) any
breach of any representation or warranty made by the Company in
this Bond Purchase Agreement or the Financing Documents or
(2) any untrue statement or misleading statement or allegedly
misleading statement of a material fact contained in the Official
Statement or caused by any omission or alleged omission from the
Official Statement of any material fact necessary in order to make
the statements made therein, in light of the circumstances under
which they were made, not misleading, except insofar as such
losses, claims, damages, liabili
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