ARTESIAN RESOURCES CORPORATION (NASDAQ:ARTNA) Files An 8-K Entry into a Material Definitive Agreement

On December 17, 2019, Artesian Water Company, Inc. (the “Company”), the principal subsidiary of Artesian Resources Corporation, and CoBank, ACB (“CoBank”), entered into a Bond Purchase Agreement (the “Agreement”) relating to the issue and sale by the Company to CoBank of a $30 million principal amount First Mortgage Bond, Series V (the “Bond”), due October 31, 2049 (the “Maturity Date”). The Bond was issued to the Company’s Indenture of Mortgage dated as of July 1, 1961, as amended and supplemented by supplemental indentures, including the Twenty-Fourth Supplemental Indenture dated as of December 17, 2019 (the “Supplemental Indenture”), from the Company to Wilmington Trust Company, as Trustee (the “Indenture”). The Indenture is a first mortgage lien against substantially all of the Company’s utility plant. The proceeds from the sale of the Bond shall be used to pay down outstanding lines of credit of the Company and a loan payable to Artesian Resources Corporation, and any additional proceeds shall be used to fund future capital investment by the Company. The Delaware Public Service Commission approved the issuance of the Bond on November 14, 2019.

The Bond carries an annual interest rate of 4.42% through but excluding the Maturity Date. Interest is payable on January 30^th, April 30^th, July 30^th and October 30^th in each year and on the Maturity Date, beginning January 30, 2020, until the Company’s obligation with respect to the payment of principal, premium (if any) and interest shall be discharged. Overdue payments shall bear interest as provided in the Supplemental Indenture. The term of the Bond also includes certain limitations on the Company’s indebtedness.

The Agreement contains customary default provisions where the Bond will become due and payable no less than 30 days from notice received by CoBank, referred to as “Events of Redemption.” Such Events of Redemption include, among others, breach of covenants or warranties; defaults under or failure to pay certain other indebtedness; failure to pay certain final judgments; certain events of bankruptcy, insolvency, reorganization, administration or similar proceedings; and certain ERISA events. In the event that any Event of Redemption below should occur and be continuing, CoBank shall have the right to require the Company, and the Company shall be obligated, to redeem all bonds then held by CoBank. The bonds shall be redeemed at a price equal to the sum of (i) the aggregate principal amount to be redeemed, (ii) the interest accrued thereon through the date of redemption and (iii) a make-whole amount as described in the Supplemental Indenture.

The Bond was issued in a private placement in reliance on exemptions from registration under the Securities Act of 1933, to the terms of the Bond Purchase Agreement.

The foregoing summary is qualified in its entirety by reference to the text of the Supplemental Indenture and Bond Purchase Agreement, copies of which are filed as Exhibits 4.1 and 4.2, respectively, hereto and are incorporated by reference.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant.

The disclosure required by this item is included in Item 1.01 of this Current Report on Form 8-K and is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

4.1 Twenty-Fourth Supplemental Indenture dated as of December 17, 2019, between Artesian Water Company, Inc. and Wilmington Trust Company, as trustee.

4.2 Bond Purchase Agreement, dated December 17, 2019, by and between Artesian Water Company, Inc., and CoBank, ACB.

ARTESIAN RESOURCES CORP Exhibit
EX-4.1 2 exhibit4-1.htm EXHIBIT 4.1 – TWENTY-SECOND SUPPLEMENTAL INDENTURE ARTESIAN WATER COMPANY,…
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About ARTESIAN RESOURCES CORPORATION (NASDAQ:ARTNA)

Artesian Resources Corporation is a holding company. The Company, through its subsidiaries, offers water, wastewater and other services on the Delmarva Peninsula. It distributes and sells water, including water for public and private fire protection, to residential, commercial, industrial, municipal and utility customers in Delaware, Maryland and Pennsylvania. It also provides contract water and wastewater operations, and water and sewer Service Line Protection Plans. Its subsidiaries include Artesian Water Company, Inc. (Artesian Water), Artesian Water Pennsylvania, Inc., Artesian Water Maryland, Inc., Artesian Wastewater Management, Inc., Artesian Wastewater Maryland, Inc., Artesian Utility Development, Inc., Artesian Development Corporation and Artesian Consulting Engineers, Inc. Artesian Water distributes and sells water to residential, commercial, industrial, Governmental, municipal and utility customers throughout the State of Delaware.