CONNECTICUT DEVELOPMENT
AUTHORITY,
THE CRYSTAL WATER COMPANY OF
DANIELSON,
CONNECTICUT WATER SERVICE,
INC.
A.G. EDWARDS & SONS,
INC.
$5,000,000
Connecticut Development Authority
Water Facilities Revenue Bonds
(The Crystal Water Company of Danielson Project – 2005A
Series)
AGREEMENT, dated
November 16, 2005, among the Connecticut Development Authority
(the “Authority”), The Crystal Water Company of
Danielson (the “Company”), Connecticut Water Service,
Inc. (the “Guarantor”) and A.G. Edwards & Sons,
Inc. (the “Underwriter”), with respect to the sale and
purchase of the Authority’s $5,000,000 Water Facilities
Revenue Bonds (The Crystal Water Company of Danielson 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”).
The Bonds shall be
additionally secured by a Guaranty, dated as of October 1,
2005, from the Guarantor to the Trustee (the
“Guaranty”).
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
among the Company, the Guarantor 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 “Company Disclosure
Agreement”), and the general certificate of the Company
delivered in connection with the issuance of the Bonds,
(2) when used with respect to the Guarantor, means the
Guaranty, the Continuing Disclosure Agreement dated
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as of
October 1, 2005 between the Guarantor and the Trustee, as
dissemination agent (the “Guarantor Disclosure
Agreement”), and the general certificate of the Guarantor
delivered in connection with the issuance of the Bonds and
(3) 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 or the Guarantor, do
not include any documents or agreements to which the Company or the
Guarantor, as the case may be, is not a direct party, including the
Bonds, the Indenture or the Letter of Representation.
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
$5,000,000.00. 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.
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(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 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
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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.
(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 10 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
4
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 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 Sections 4 or 6
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.
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(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.
(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-1
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 B (including the financial statements incorporated
therein by reference), 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 summarized in Appendix A 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 combined financial position, results of operations,
retained earnings and statements of cash flows of the Company and
of The Gallup Water Service, Inc. (“Gallup Water”) 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).
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(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. ¼!
(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 Company 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
Guarantor represents and warrants that:
(a) The
Guarantor 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 Guarantor of the Financing Documents
and this Bond Purchase Agreement, and all other agreements herein
contemplated to be performed by the Guarantor, 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 Guarantor is a party, or the Certificate of
Incorporation or Bylaws of the Guarantor, or any order, rule or
regulation applicable to the Guarantor of any court or of any
federal or State regulatory body or administrative agency or other
governmental body having jurisdiction over the Guarantor or over
any of its properties, or any statute, rule or regulation of any
jurisdiction applicable to the Guarantor, or result in the creation
or imposition of any lien, charge or encumbrance upon any of the
properties or assets of the Guarantor pursuant to the terms of any
indenture, agreement or undertaking binding upon it; 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
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consent,
approval, authorization or other order of any regulatory body or
administrative agency or other governmental body is legally
required for the Guarantor’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 Guarantor threatened, wherein
an unfavorable decision, ruling or finding would (i) in the
opinion of the Guarantor, 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 Guarantor, (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) Except as
disclosed or incorporated by reference in the Official Statement,
the Guarantor 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
Guarantor’s opinion, materially adversely affects, or in the
future may, so far as the Guarantor can now reasonably foresee,
materially adversely affect the business, operations, properties,
assets or condition, financial or otherwise, of the
Guarantor.
(e) Neither
this Bond Purchase Agreement, other than Sections 4 or 5
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 Guarantor, 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.
(f) The
Guarantor will deliver or cause to be delivered all opinions,
certificates, letters and other instruments and documents required
to be delivered by the Guarantor pursuant to this Bond Purchase
Agreement.
(g) The
Financing Documents and this Bond Purchase Agreement, when executed
and delivered, will be legal, valid, binding and enforceable
obligations of the Guarantor, 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.
(h) The
Guarantor has authorized and consents to the use of the Official
Statement by the Underwriter. The information with respect to the
Guarantor included or incorporated by reference in Appendix B
to the Preliminary Official Statement and the descriptions
contained therein of the Indenture and the Financing Documents and
the Guarantor’s participation in the transactions
contemplated thereby, with such additions or amendments as
heretofore have been agreed upon between the Authority, the
Guarantor 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
8
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 Guarantor makes no
representation as to (A) the informat
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