Document:

exv10w1

 

Exhibit 10.1

CITIZENS BANK OF CONNECTICUT

63 Eugene O’Neill Drive

New London, Connecticut 06103

May 1, 2002

David C. Benoit

Vice President-Finance and Treasurer

Connecticut Water Service, Inc.

93 West Main Street

Clinton, CT 06413

Re:       Modification of Revolving Credit Facility

Dear Mr. Benoit:

         We are pleased to confirm the willingness of Citizens Bank of Connecticut
(the “Bank”) to amend and restate the terms and conditions of the existing
demand revolving credit facility (the “Facility”) provided to Connecticut Water
Service, Inc. (the “Company”). The Facility will be available to the Company
for general corporate and working capital purposes and will be made pursuant
and subject to the following terms, conditions and limitations (collectively,
the “Letter Agreement”):

	1.	 	Amount.
	 
	 	 	The aggregate principal amount of loans and advances (“Advances”)
outstanding under the Facility shall not exceed (a) $9,000,000 at any
time during the period commencing on the effective date of this Letter
Agreement and terminating on May 31, 2003 and (b) $6,000,000 at any time
thereafter.
	 
	2.	 	Term.
	 
	 	 	This Facility shall terminate and shall be repayable upon DEMAND by the
Bank at any time and for any reason in the Bank’s sole and absolute
discretion, even if the Company is in compliance with the terms,
covenants, conditions, representations and warranties contained herein,
and in any event, shall expire and terminate on May 31, 2004 (the
“Maturity Date”), unless renewed by the Bank.
	 
	3.	 	Promissory Note.
	 
	 	 	The Facility shall be evidenced by a promissory note in the
original principal amount of $9,000,000 made by the Company to the order
of the Bank and payable on demand (the

 

 

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Exhibit 10.1

	 	 	“Note”), in substitution for, but not a novation of, a certain $6,000,000
Demand Promissory Note executed by the Company to the order of the Bank
dated January 3, 2001. The Note shall be in substantially the form of
Exhibit A attached hereto. The Bank shall record the date and amount of
each advance in a loan account maintained by the Bank for the Facility
and the Bank’s records with respect to such loan account shall, absent
manifest error, be conclusive and binding.
	 
	4.	 	Utilization.
	 
	 	 	The Company may utilize the Facility in whole or in part in the form of:
a) advances bearing interest at the Prime Rate (as hereinafter defined)
payable on demand; b) advances bearing interest at the Fixed Rate (as
hereinafter defined) with mutually agreed upon maturities up to ninety
(90) days, repayable, unless demand is sooner made, at maturity; or b)
short term advances bearing interest at a rate determined by reference to
the Libor Rate (as hereinafter defined) with mutually agreed upon
maturities up to ninety (90) days, repayable, unless demand is sooner
made, at maturity. Advances of whatever type may be used to support the
Company’s working capital needs, dividend reinvestment purchases and
interim capital expenditure funding. Advances under the Facility shall
be available in the sole and absolute discretion of the Bank and shall be
in amounts, which are at least $100,000. The Company may request a
quotation from the Bank for a Libor Rate advance on any business day by
the submission of any such request no later than 12:00 noon (Hartford,
Connecticut time) on the day which is two (2) Business Days (as defined
in Section 9) prior to the date of the requested Advance. Advances
(including Libor Rate advance quotations which the Company desires to
accept) shall be requested on any Business Day no later than 1:30 p.m.
(Hartford, Connecticut time) (requests being received after such time
shall, at the option of the Bank, be deemed to be received on the next
business day) and confirmed immediately thereafter by the delivery by the
Company to the Bank of a written confirmation in the form of Exhibit B
attached hereto.
	 
	5.	 	Interest.
	 
	 	 	Advances shall bear interest, at the option of the Bank, at either:

	 	a)	 	a fluctuating rate equal to the Bank’s Prime Rate
in effect from time to time (“Prime Rate Advances”); or
	 
	 	b)	 	a rate equal to the Fixed Rate for maturities of
up to 90 days (“Fixed Rate Advances”); or
	 
	 	c)	 	a rate equal to the Libor Rate for maturities of 30, 60 or 90 days plus
375 basis points (“Libor Advances”).

 

 

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	 	 	Definitions:

	 	a)	 	“Prime Rate” shall mean the annual rate of interest announced
from time to time by the Bank at its head office as its “prime
rate”.
	 
	 	b)	 	“Fixed Rate” shall mean, as of any date as of which the amount thereof
shall be determined and with respect to each Interest Period, a fixed per
annum rate of interest equal to the U.S. Treasury Bill or Note rate as of
such date for a period equal to the Interest Period.
	 
	 	c)	 	“Libor Rate” shall mean, with respect to each Interest
Period, the rate per annum (rounded upwards, if necessary, to the
next higher 1/8 of 1%) determined pursuant to the following formula:

	 	 	 	 	 
	Libor Rate	 	
=
	 	Libor Base
	
	
	
	

	 	 	 	 	

	
	
	
	

	 	 	 	 	(1.0- Libor Reserve Percentage)

	 	d)	 	“Libor Base” shall mean the rate per annum (rounded upwards,
if necessary, to the next higher 1/8 of 1%) that is the offered
rate for U.S. dollar deposits that are approximately equal in
principal amount to the amount of the requested Libor Advance which
the British Bankers Association fixes as its LIBOR rate and which
appears on the Telerate Page 3750 as of 11:00 a.m. London time on
the day which is two (2) London Banking Days prior to the beginning
of such Interest Period.
	 
	 	e)	 	“London Banking Day” means a day on which dealings in U.S.
dollar deposits are transacted in the London interbank market.
	 
	 	f)	 	“Libor Reserve Percentage” means, relative to any day of any
Interest Period for a Libor Advance, the maximum aggregate (without
duplication) of the rates (expressed as a decimal fraction) of
reserve requirements (including all basic, emergency, supplemental,
marginal and other reserves and taking into account any
transitional adjustments or other scheduled changes in reserve
requirements) under any regulations of the Board of Governors of
the Federal Reserve System (the “Board”) or other governmental
authority having jurisdiction with respect thereto as issued from
time to time and then applicable to assets or liabilities
consisting of “Eurocurrency Liabilities”, as currently defined in
Regulation D of the Board, having a term approximately equal or
comparable to such Interest Period.
	 
	 	g)	 	“Interest Period” shall mean (a) with respect to Libor
Advances (A) initially, the period commencing on the date of the
making of such Libor Advance and, unless demand is sooner made,
ending on (but excluding) the day which numerically corresponds to
such date 30,
60 or 90 days thereafter, (if such month has no numerically
corresponding day, on the last Business Day of such month), in each
case as the Company may select in its irrevocable notice to the
Bank and (B) 

 

 

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	 	 	 	thereafter, each period commencing on the last day of
the next preceding Interest Period applicable to such Libor Advance
and, unless demand is sooner made, ending 30, 60 or 90 days
thereafter, as selected by the Company by irrevocable notice to the
Bank not less than two (2) Business Days prior to the last day of
the then current Interest Period with respect thereto; (b) with
respect to each Prime Rate Advance, the period commencing on the
date of the making of such Prime Rate Advance and, unless demand is
sooner made, ending on the Maturity Date; and (c) with respect to
each Fixed Rate Advance, the period commencing on the date of
making of such Fixed Rate Advance and, unless demand is sooner
made, ending ninety (90) days thereafter;
	 
	 	 	 	provided, however, that:
	 
	 	 	 	(i) any Interest Period (other than an Interest Period determined
pursuant to clause (iii) below) that would otherwise end on a day
that is not a Business Day shall be extended to the next succeeding
Business Day unless, in the case of Libor Advances, such Business
Day falls in the next calendar month, in which case such Interest
Period shall end on the immediately preceding Business Day;
	 
	 	 	 	(ii) any Interest Period applicable to a Libor Advance that begins
on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall, subject to clause (iii)
below, end on the last Business Day of a calendar month;
	 
	 	 	 	(iii) notwithstanding clause (ii) above, no Interest Period
applicable to a Libor Advance shall have a duration of less than
thirty (30) days and if any Interest Period applicable to such
Libor Advance would be for a shorter Interest Period, such Interest
Period shall not be available hereunder;
	 
	 	 	 	(iv) any Interest Period that would otherwise end after the
Maturity Date shall end on the Maturity Date;
	 
	 	 	 	(v) Interest Periods commencing on the same day for the Libor
Advances, which comprise part of the same advance under this Letter
Agreement shall be of the same duration;
	 
	 	 	 	(vi) Interest Periods for Libor Advances in connection with which
the Company has or may incur Hedging Obligations with the Bank
shall be of the same duration as the relevant periods pursuant to
the applicable Hedging Contracts; and
	 
	 	 	 	(vii) notwithstanding any provision of this Letter Agreement to the
contrary, the Company shall not be permitted to select Interest
Periods to be in effect at any one time, which have expiration
dates occurring on more than three (3) different dates applicable
to Libor Advances outstanding at any one time.

 

 

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	 	h)	 	“Business Day” shall mean any day that is neither a Saturday
nor Sunday nor a legal holiday on which commercial banks are
authorized or required to be closed in Hartford, Connecticut, and,
in the case of any Libor Advance,
	 
	 	 	 	(i)       when such term is used to describe a day on which a borrowing,
payment, prepaying or repaying is to be made in respect of any
Libor Advance, any day which is: (i) neither a Saturday or Sunday
nor legal holiday on which commercial banks are authorized or
required to be closed in New York, New York and (ii) a London
Banking Day; and
	 
	 	 	 	(ii)       when such term is used to describe a day on which an interest
rate determination is to be made in respect of any Libor Loan, any
day which is a London Banking Day.
	 
	 	i)	 	Hedging Obligations shall mean, with respect to the Company,
all liabilities of the Company to Bank under Hedging Contracts.
	 
	 	j)	 	Hedging Contracts shall mean, interest rate swap agreements,
interest rate cap agreements and interest rate collar agreements,
or any other agreements or arrangements entered into between the
Company and the Bank and designed to protect the Company against
fluctuations in interest rates or currency exchange rates.

	6.	 	Payments.
	 
	 	 	The principal amount of each Advance shall be due and payable upon the
earlier of DEMAND by the Bank, the Maturity Date (or any renewal thereof)
or, in the case of Libor Advances or Fixed Rate Advances, on the maturity
date thereof. Prime Rate Advances may be prepaid in whole or in part at
any time without premium or penalty. Libor Advances and Fixed Rate
Advances may not be prepaid in whole or in part without the prior written
consent of the Bank and the payment of any amounts required under Section
11 hereof. Furthermore, for Libor Advances in connection with which the
Company has or may incur Hedging Obligations, additional obligations may
be
associated with prepayment in accordance with the terms and conditions of
the applicable Hedging Contracts.
	 
	 	 	Upon the maturity thereof, Libor Advances may be continued as Libor
Advances or converted to Prime Rate Advances at the option of Company.
Any Libor Advance with respect to which the Company fails to elect an
interest rate option upon the maturity thereof shall be converted to a
Prime Rate Advance. In the event that (i) on any date on which the Libor
Rate would otherwise be set, Bank shall have determined in good faith
(which determination, upon notice thereof to the Company, shall be final,
conclusive and binding on the Company) that adequate and fair means do
not exist for ascertaining the Libor Base, or (ii) at any time Bank shall
have determined in good faith (which determination shall be final and
conclusive) that (A) the introduction of or any change in or in the
interpretation of any law, rule, regulation or guideline, (whether or not
having 

 

 

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	 	 	the force of law) makes it unlawful, or any central bank or other
governmental authority asserts that it is unlawful, for Bank to make,
continue or maintain any Libor Advance as, or to convert any loan into, a
Libor Advance of a certain duration; (B) U.S. dollar deposits in the
relevant amount and for the relevant Interest Period are not available to
Bank in the London interbank market; (C) by reason of circumstances
affecting Bank in the London interbank market, adequate means do not
exist for ascertaining the Libor Base applicable hereunder to Libor
Advances of any duration; or (D) Libor Base no longer adequately
reflects Bank’s cost of funding loans; and (iii) at any time the Company
defaults in the fulfillment of its obligations under this Letter
Agreement; then, and in any such event, Bank shall forthwith so notify
the Company thereof and Bank’s obligation, if any, to make or continue
Libor Advances shall be suspended, and such Advance shall be made or
continued as a Prime Rate Advance.
	 
	 	 	In the absence of demand, interest on Prime Rate Advances shall be
payable monthly in arrears on the first day of each month and when any
such advance is due (whether by reason of demand, prepayment or
otherwise). Interest on Libor Advances and Fixed Rate Advances shall be
payable in arrears on the last day of the interest period applicable
thereto and when any such Advance is due (whether by reason of demand,
prepayment or otherwise). Interest shall be calculated on the basis of a
360 day year. If the Company for any reason fails to borrow any Libor
Advance requested under Section 5, the Company will be required to pay
any costs, losses or liabilities (including lost profits) incurred by the
Bank as a result thereof, including any losses incurred in obtaining,
liquidating or employing deposits with reference to which the rate of
interest for such loan was determined, upon presentation by the Bank of a
statement in the amount and setting forth the Bank’s calculation thereof,
which statement shall be deemed true and correct absent manifest error.
All payments to be made hereunder shall be made without
set-off or counterclaim and free from, clear of and without deduction of
any taxes or any other charges.
	 
	7.	 	Collateral.
	 
	 	 	The Facility shall be unsecured.
	 
	8.	 	Facility Fee.
	 
	 	 	In consideration of the Bank’s agreement to make the Facility available to
the Company,
the Company shall pay a per annum facility fee in an amount equal to .25%
of the full
amount of the Facility (the “Facility Fee”). The Facility Fee shall be
payable quarterly in
arrears.

 

 

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	9.	 	Conditions Precedent.
	 
	 	 	Conditions to be fulfilled to the Bank’s satisfaction prior to the
utilization of the Facility include delivery of the following:

	 	a)	 	a counterpart of this letter is duly executed by the Company
and delivered to the Bank;
	 
	 	b)	 	the Note in form and substance satisfactory to the Bank is
duly executed by the Company and delivered to the Bank;
	 
	 	c)	 	certified copies of the resolutions of the Company’s Board of
Directors authorizing the acceptance of this Facility on the terms
and conditions of this letter and designating those persons
authorized to sign on behalf of the Company are delivered to the
Bank, if any of the foregoing shall have been amended and modified
since January 3, 2001;
	 
	 	d)	 	certified copies of the Company’s Certificate of
Incorporation and Bylaws (or equivalent) are delivered to the Bank,
if any of the foregoing shall have been amended or modified since
January 3, 2001; and
	 
	 	e)	 	a certificate of the corporate secretary of the Company
designating those persons authorized to act on behalf of the Company
with respect to the Facility together with specimens of their
signatures are delivered to the Bank, if any of the foregoing shall
have been amended or modified since January 3, 2001.

	 	 	In addition, the Company shall maintain a depository account with the
Bank for purposes of administering the Facility.
	 
	10.	 	Financial Reporting.
	 
	 	 	As soon as available, but in no event later than March 31 in each year,
the Company shall
provide the Bank with copies of the Company’s audited financial
statements for the Company’s most recently ended fiscal year. In
addition, the Company agrees to provide the Bank with copies of any and
all reports issued by the Company to its shareholders, including Form
10-Q and Form 10-K, and such additional information as the Bank may from
time to time request.
	 
	11.	 	Costs.
	 
	 	 	a)       The Company shall pay or reimburse the Bank, on demand, for all
expenses (including, without limitation, reasonable independent counsel
fees and expenses as well as internally
allocated costs and expenses of the Bank’s in-house counsel) incurred or
paid by Bank in connection with: (i) the enforcement by the Bank of the
Bank’s rights as against the Company in respect of the Facility,
including, but not limited to, any action to 

 

 

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	 	 	enforce the Note, and (ii)
in the defense of any action against the Bank with respect to the Bank’s
rights or liabilities in respect to the Company’s obligations.
	 
	 	 	b)       The Company shall indemnify the Bank on demand for any loss or damage
incurred or to be incurred by the Bank as a consequence or payment of any
amount otherwise than on the due date thereof or as a result of the
payment of any amount in respect of a Libor Advance otherwise than on the
maturity date for that advance, including any losses incurred in
obtaining, liquidating or employing deposits with reference to which the
rate of interest for such loan was determined, upon presentation by the
Bank of a statement in the amount and setting forth the Bank’s
calculation thereof, which statement shall be deemed true and correct
absent manifest error.
	 
	 	 	c)       The Company acknowledges that prepayment or acceleration of a Libor
Advance during an Interest Period shall result in Bank incurring
additional costs, expenses and/or liabilities and that it is extremely
difficult and impractical to ascertain the extent of such costs, expenses
and/or liabilities. Therefore, all full or partial prepayments of Libor
Advances shall be accompanied by, and the Company hereby promises to pay,
on each date a Libor Advance is prepaid or the date all sums payable
hereunder become due and payable, by acceleration or otherwise, in
addition to all other sums then owing, an amount (“Libor Advance
Prepayment Fee”) determined by Bank pursuant to the following formula:

	 	(i)	 	the then current rate for United States Treasury
securities (bills on a discounted basis shall be converted to
a bond equivalent) with a maturity date closest to the end of
the Interest Period as to which prepayment is made,
	 
	 	 	 	subtracted from
	 
	 	(ii)	 	the Libor Rate applicable to the Libor Advance
being prepaid.
	 
	 	 	 	If the result of this calculation is zero or a negative
number, then there shall be no Libor Advance Prepayment Fee.
If the result of this calculation is a positive number, then
the resulting percentage shall be multiplied by:
	 
	 	(iii)	 	the amount of the Libor Loan being prepaid.
	 
	 	 	 	The resulting amount shall be divided by:
	 
	 	(iv)	 	360
	 
	 	 	 	and multiplied by:
	 
	 	(v)	 	the number of days remaining in the Interest
Period as to which the prepayment is being made.

 

 

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	 	 	 	Said amount shall be reduced to present value calculated by
using the referenced United States Treasury securities rate
and the number of days remaining on the Interest Period for
the Libor Loan being prepaid.

	 	d)	 	If the Company for any reason makes any payment of principal
with respect to any Fixed Rate Advance on any day other than the
last day of an Interest Period applicable to such Advance, or if any
Fixed Rate Advance is accelerated pursuant to the terms hereof, the
Company shall pay a prepayment penalty calculated according to the
following formula:

	 	 	 	The latest published rate preceding the date of
prepayment for United States Treasury Notes or
Bills (Bills on a discounted basis shall be
converted to a bond equivalent) as published weekly
in the Federal Reserve Statistical Release with a
maturity date closest to the last date of the then
applicable Interest Period as to which the
prepayment is made shall be subtracted from the
interest rate in effect at the time of prepayment
with respect to the indebtedness being paid. If
the result is zero or a negative number, there
shall be no prepayment premium. If the result is a
positive number, then the resulting percentage
shall be multiplied by the amount of the principal
balance being prepaid. The resulting amount will
be divided by 360 and multiplied by the number of
days remaining in the then applicable Interest
Period. Said amount shall be reduced to present
value calculated by using the above-referenced
United States Treasury Note or Bill rate as of the
date of prepayment as the discount rate. The
resulting amount shall be the prepayment premium
due to Bank upon prepayment.

	12.	 	Law.
	 
	 	 	The respective rights and obligations of the Company and the Bank
hereunder shall be governed by the construed in
accordance with the laws of the State of Connecticut. The Company hereby
consents to the jurisdiction of any court sitting in the State of
Connecticut for the purposes of resolution of any dispute which may arise
hereunder or under the Note and for enforcement of the Bank’s rights and
remedies hereunder or under the Note, and further waives to the fullest
extent permitted by law any right to assert that said courts do not
constitute a convenient forum for such resolution or enforcement.
	 
	13.	 	Representations, Warranties and Covenants.
	 
	 	 	The Company hereby represents and warrants to the Bank that (i) the
execution and delivery by the Company of this letter and the Note and the
performance of its agreements and obligations hereunder and thereunder
are within the Company’s power 

 

 

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	 	 	and authority and have been authorized by
all necessary corporate proceedings and will not violate any provision of
the Company’s certificate of incorporation or bylaws or any material
agreement or contractual obligations binding upon the Company; (ii) the
Facility, this letter, and the Note, when executed and delivered, are the
valid, legal and binding obligations of the Company and do not require
the consent or approval of any governmental authority or agency; and
(iii) there is no litigation, proceeding or investigation pending, or to
the knowledge of the Company, threatened, against the Company except as
previously disclosed to the Bank.
	 
	 	 	The Company shall substantially comply with all Environmental Laws (as
hereinafter defined) and establish and maintain policies and procedures
to ensure and monitor continued compliance with all Environmental Laws.
The Company shall promptly take any and all necessary remedial action in
connection with the presence, storage, use, disposal, transportation or
release of any hazardous materials on, under or about its business
premises. If the Company undertakes any remedial action with respect to
any hazardous materials on, under or about its business premises, the
Company shall conduct and complete such remedial action in compliance
with the policies, orders and directives of any governmental authority
except when and only to the extent that the Company’s liability for such
presence, storage, use, disposal, transportation or discharge of any
hazardous material is being contested in good faith by the Company.
“Environmental Laws” means any and all laws, statutes, ordinances, rules,
regulations, orders, or determinations of any Federal, state or local
governmental body, instrumentality or agency pertaining to the
environment, including without limitation, the Clean Water Act, the Clean
Air Act, as amended, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended by the Superfund
Amendments and
Reauthorization Act of 1986 (“SARA”), and as may be further amended (all
together herein called “CERCLA”), the Federal Water Pollution Control
Amendments, the Resource Conservation and Recovery Act of 1976, as
amended (“RCRA”), the Hazardous Materials Transportation Act of 1975, as
amended, the Safe Drinking Water Act, as amended, the Toxic Substances
Control Act, as amended, and any comparable or similar environmental laws
of the State of Connecticut and any other state in which the Company
maintains business premises. Likewise, the terms “hazardous substance,”
“release,” and “threatened release” herein referenced in connection with
Environmental Laws shall have the meanings specified in CERCLA and the
terms “solid waste” and “dispose” (or “disposed”) shall have the meanings
specified in RCRA; provided, however, in the event either CERCLA or RCRA
is amended so as to broaden the meaning of any term defined therein, such
broader meaning shall apply subsequent to the effective date of such
amendment, and provided further that, to the extent the laws of any state
which establish a meaning for “hazardous substance,” “release,” “solid
waste” or “disposal” which is broader than that specified in either
CERCLA or RCRA, such broader meaning shall apply.
	 
	14.	 	Counterparts. This letter may be executed in any number of counterparts,
each of which shall be an original and all of which, when taken together,
shall constitute one agreement.

 

 

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	15.	 	Entire Agreement. This letter supersedes and replaces in its entirety
all prior agreements or understandings, whether oral or written, between
the Bank and the Company relating to the Facility.

         Please confirm the Company’s acceptance of the terms and conditions of the
Facility by signing and returning to us the enclosed copy of this letter, the
Note, and the other items required to be delivered by the Company under Section
9 hereof.

	 	 	 	 	 
	 	 	CITIZENS BANK OF CONNECTICUT
	
	
	
	

	 	 	 	 	 
	
	
	
	

	 	 	
By:	 	 
	
	
	
	

	 	 	 	 	

	
	
	
	

	 	 	 	 	Name:
	
	
	
	

	 	 	 	 	Title:

[Intentionally Left Blank – Company Signature Page Follows]

 

 

Exhibit 10.1

[Company Signature Page to Letter Agreement Regarding Modification of Revolving Credit Facility]

         The Company hereby agrees to and accepts the terms and conditions
contained in the foregoing letter and confirms that the Bank, shall be entitled
but shall not be obliged, to rely upon and act in accordance with any
communication (whether a request for an Advance under this Facility or any
other notice, request, instruction or other communication whatsoever) which may
be or purport to be given by telephone or telex or telefax transmission on the
Company’s behalf by any person notified to the Bank by the Company as being
authorized to give such communication without inquiry by the Bank to make such
communication. The Company hereby indemnifies the Bank and agrees to hold it
harmless against all losses, claims, actions, proceedings, damages, costs and
expenses incurred or sustained by the Bank as a result thereof or in connection
therewith.

         The persons authorized to give communication on the Company’s behalf are
the persons named on the certificate of incumbency delivered to the Bank
pursuant to Section 9(e).

	 	 	 	 	 
	 	 	CONNECTICUT WATER SERVICE, INC.
	
	
	
	

	 	 	 	 	 
	
	
	
	

	 	 	
By:
	 	/s/ David C. Benoit
	
	
	
	

	 	 	 	 	

	
	
	
	

	 	 	 	 	Name: David C. Benoit
	
	
	
	

	 	 	 	 	Title: CFO

 

 

Exhibit 10.1

DEMAND PROMISSORY NOTE

	 	 	 
	 	 	
May 1, 2002
	
	
	
	

	$9,000,000.00	 	
                           , Connecticut

         ON DEMAND, FOR VALUE RECEIVED, the undersigned CONNECTICUT WATER
SERVICE, INC. (“Maker”) hereby unconditionally promises to pay to
CITIZENS BANK OF CONNECTICUT, a Connecticut stock savings bank (the
“Payee” or “Bank”), or any subsequent assignee or holder (Payee and any
subsequent assignee or holder being sometimes referred to as “Holder”)
at the head office of the Bank located at 63 Eugene O’Neill Drive, New
London, Connecticut 06320, the principal amount of NINE MILLION AND
NO/100 DOLLARS ($9,000,000.00) or such lesser amount as may have been
loaned, advanced or readvanced to Maker by Bank under the terms of that
certain letter agreement of even date herewith, by and between Maker and
the Bank (as amended and in effect from time to time, the “Letter
Agreement”), together with interest thereon as provided herein and all
other sums due from Maker to Bank under the Letter Agreement and this
Note.

         The unpaid principal amount of this Note shall be paid at the times
and in the manner set forth in Section 6 of the Letter Agreement, but if
not sooner paid or demanded, the entire unpaid principal amount of this
Note, together with accrued and unpaid interest thereon, shall be due
and payable on May 31, 2004, unless such date shall be extended pursuant
to Section 2 of the Letter Agreement.

         Interest on the unpaid principal amount of this Note shall be
payable at the rates set forth in Section 5 of the Letter Agreement and
at the times and in the manner specified in Section 6 of the Letter
Agreement.

         This Note is the promissory note referred to in Section 3 of the
Letter Agreement, the terms and conditions of which are hereby
incorporated by this reference, and is in substitution for, but not a
novation of, and continues to evidence amounts outstanding under, that
certain $6,000,000 demand promissory note dated January 3, 2001.
Capitalized terms used herein without definition shall have the meanings
set forth in the Letter Agreement.

         Overdue payments of principal (whether at stated maturity, by
acceleration or otherwise), and, to the extent permitted by law, overdue
interest, shall bear interest at the
Prime Rate plus four percentage points (4.0%).

 

 

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         If a payment of principal or interest is not made within ten (10)
days of its due date, the undersigned will also pay on demand a late
payment charge equal to, the greater of $35.00 or five percent (5%) of
the amount of such payment.

         No reference to the Letter Agreement nor any provision thereof
shall affect or impair the absolute and unconditional obligation of the
Maker of this Note to pay the principal of and interest on this Note as
herein provided.

         All sums paid under this Note shall be applied first to all fees,
costs and expenses incurred by Bank under the Letter Agreement and this
Note, then to any late charges payable by Maker, then to any accrued and
unpaid interest, with the balance, if any, to be applied to unpaid
principal.

         Until notified in writing of the transfer of this Note, Maker shall
be entitled to deem Payee or such person who has been so identified by
the transferor in writing to Maker as the holder of this Note, as the
owner and holder of this Note. Holder agrees that before disposing of
this Note, or any part hereof, it will make a notation on Schedule A
attached hereto and incorporated herein by reference evidencing (i) the
date and amount of each advance to be evidenced by this Note and (ii)
the date and amount of each principal payment made with respect thereto;
provided, however, that the failure to make a notation of any payment
made on this Note shall not limit or otherwise affect the obligations of
Maker under this Note.

         The Letter Agreement and this Note shall be governed by, and shall
be construed and enforced in accordance with, the laws of the State of
Connecticut.

         Maker and each endorser, guarantor and surety of this Note, and
each other person liable or who shall become liable for all or any part
of the indebtedness evidenced by this Note:

                  (a) waive demand, presentment, protest, notice of protest, notice
of dishonor, diligence in collection, notice of nonpayment and all
notices of a like nature; and

                  (b) consent to (i) the release, surrender, exchange or substitution
of all or any part of the security for the indebtedness evidenced by
this Note, or the taking of any additional security; (ii) the release of
any or all other persons from liability, whether primary or contingent,
for the indebtedness evidenced by this Note or for any related
obligations; and (iii) the granting of any other indulgences
to any such person.

                  (c) consent to (i) all renewals, extensions or modifications of
this Note or the Agreement (including any affecting the time of
payment), and (ii) all advances under this Note or the Letter Agreement.

 

 

3

Any such renewal, extension, modification, advance, release, surrender,
exchange, substitution, taking or indulgence may take place without
notice to any such person, and, whether or not any such notice is given,
shall not impair the liability of any such person.

         Maker and each endorser, guarantor and surety of this Note, and
each other person liable or who shall become liable for all or any part
of the indebtedness evidenced by this Note, hereby give Holder a lien
and right of setoff for all of their respective liabilities in respect
of such indebtedness upon and against all of their respective deposits,
credits and property, now or hereafter in the possession or control of
Holder or in transit to Holder.

         If this Note is now, or hereafter shall be, signed by more than one
Person, it shall be the joint and several obligation of all such persons
(including, without limitation, all makers, endorsers, guarantors and
sureties, if any) and shall be binding on all such Persons and their
respective heirs, executors, administrators, legal representatives,
successors and assigns. This Note and all covenants, agreements and
provisions set forth in this Note shall inure to the benefit of Holder
and its successors and assigns, including any lender(s) with which
Holder may participate in the making of any loans or advances evidenced
by this Note.

         As used in this Note, words of any gender shall be deemed to apply
equally to any other gender, the plural shall include the singular and
the singular shall include the plural (as the context shall require),
and the word “person” shall refer to individuals, entities, authorities
and other natural and juridical persons of every type.

         MAKER AND EACH AND EVERY ENDORSER, GUARANTOR AND SURETY OF THIS
NOTE, AND EACH OTHER PERSON WHO IS OR WHO SHALL BECOME LIABLE FOR ALL OR
ANY PART OF THIS NOTE, HEREBY ACKNOWLEDGE THAT THE TRANSACTION OF WHICH
THIS NOTE IS A PART IS A COMMERCIAL TRANSACTION AND WAIVE THEIR RIGHTS
TO NOTICE AND HEARING UNDER CHAPTER 903a OF THE CONNECTICUT GENERAL
STATUTES OR BY OTHER APPLICABLE LAW WITH RESPECT TO ANY PREJUDGMENT
REMEDY WHICH HOLDER MAY DESIRE TO USE.

         MAKER AND EACH AND EVERY ENDORSER, GUARANTOR AND SURETY OF THIS
NOTE, AND EACH OTHER PERSON WHO IS OR WHO SHALL
BECOME LIABLE FOR ALL OR ANY PART OF THIS NOTE, HEREBY WAIVES TRIAL BY
JURY IN ANY COURT IN ANY SUIT, ACTION, OR PROCEEDING OR ANY MATTER
ARISING IN CONNECTION WITH OR IN ANY WAY RELATED TO THE TRANSACTION OF
WHICH THIS NOTE IS A PART AND/OR IN THE ENFORCEMENT BY BANK OF ANY OF
ITS RIGHTS AND REMEDIES HEREUNDER OR UNDER APPLICABLE LAW. MAKER
ACKNOWLEDGES THAT IT MAKES THIS WAIVER KNOWINGLY, VOLUNTARILY AND ONLY
AFTER CONSIDERATION OF THE RAMIFICATIONS OF THIS WAIVER BY ITS ATTORNEY.

 

 

4

         MAKER AND EACH AND EVERY ENDORSER, GUARANTOR AND SURETY OF THIS
NOTE, AND EACH OTHER PERSON WHO IS OR WHO SHALL BECOME LIABLE FOR ALL OR
ANY PART OF THIS NOTE HEREBY ACKNOWLEDGE THAT THIS NOTE IS A DEMAND
INSTRUMENT AND THAT THE INDEBTEDNESS EVIDENCED HEREBY IS DUE AND PAYABLE
UPON DEMAND BY THE HOLDER AT ANY TIME AND FOR ANY REASON IN THE HOLDER’S
SOLE AND ABSOLUTE DISCRETION.

         IN WITNESS WHEREOF, Maker has executed this Note as of the date
first set forth above.

	 	 	 	 	 
	 	 	 	 	CONNECTICUT WATER SERVICE, INC.
	
	
	
	

	 	 	 	 	 
	
	
	
	

	 	 	
By:
	 	/s/ David C. Benoit
	
	
	
	

	 	 	 	 	

	
	
	
	

	 	 	 	 	David C. Benoit, CFO

 

 

SCHEDULE A

TO REVOLVING CREDIT NOTE

	 	 	 	 	 	 	 	 	 	 	 	 	 
	DATE	 	
AMOUNT
	 	FIXED

RATE
	 	PRIME

RATE
	 	LIBOR

RATE
	 	DATE

PAID
	 	NOTATION

MADE

BY

 

 

EXHIBIT B

FORM OF CONFIRMATION OF ADVANCE

Citizens Bank of Connecticut

63 Eugene O’Neill Drive

New London, CT 06320

         Re: $9,000,000 Revolving Credit Facility

Ladies and Gentlemen:

         Pursuant to Section 5 of that certain Letter Agreement dated May
       , 2002 by and between Citizens Bank of Connecticut and Connecticut
Water Service, Inc., the undersigned hereby confirms its request made on                
             , 20      for an advance in the amount of
                   AND      /100
DOLLARS ($                ) on             
               , 20     .

         The advance shall be a Prime Rate Advance [Fixed Rate Advance; a
Libor Advance].

         The maturity date of the advance, in the case of Libor Advance or
Fixed Rate Advance, shall be                   
      , 20     .

	 	 	 	 	 
	 	 	CONNECTICUT WATER SERVICE, INC.
	
	
	
	

	 	 	 	 	 
	
	
	
	

	 	 	
By:	 	 
	
	
	
	

	 	 	 	 	

	
	
	
	

	 	 	 	 	Name:
	
	
	
	

	 	 	 	 	Title:
	
	
	
	

	 	 	 	 	 
	
	
	
	

	
	 	 	 	 
	
	
	
	

	DateEXHIBIT 10.47

                                 PROMISSORY NOTE

                                CareCentric, Inc.
                                SC Holding, Inc.
                            CareCentric National, LLC

                                                           Dated: July 1, 2002

1.        Amount  and  Rate.   CareCentric,   Inc.,   a  Delaware   corporation;
          CareCentric National, LLC, a Georgia limited liability company; and SC
          Holding,  Inc., a Georgia corporation;  each of whose principal office
          is at 2625  Cumberland  Parkway,  Suite 310,  Atlanta,  Georgia 30339,
          (collectively,   "Borrower"),  for  value  received,  hereby  promise,
          jointly and severally, to pay to the order of Mestek, Inc. ("Lender"),
          the  principal  amount  of  Four  Million  and  00/100  Dollars  (U.S.
          $4,000,000.00),  or such  greater or lesser  amount as shall equal the
          aggregate unpaid amount of the Obligations of Borrower to Lender under
          the Loan Agreement (as  hereinafter  defined),  in lawful money of the
          United States of America in immediately available funds, in accordance
          with the  terms  of the Loan  Agreement,  and to pay  interest  on the
          unpaid principal  amount of the Loans, in the manner,  at the rate and
          at the times specified in the Loan Agreement.

2.       Loan Agreement. This Promissory Note is the Promissory Note referred to
         in the Secured Convertible Credit Facility and Security Agreement dated
         as of July 1, 2002 between  Lender and Borrower,  as amended,  modified
         and  supplemented  from time to time  (the  "Loan  Agreement"),  and it
         evidences Loans made by Lender to Borrower thereunder.  This Promissory
         Note is subject  to all of the terms and  conditions  contained  in the
         Loan Agreement, which are incorporated herein by reference. Capitalized
         terms used in this  Promissory  Note  shall,  unless  otherwise  stated
         herein,  have  the  respective  meanings  assigned  to them in the Loan
         Agreement. The Loans evidenced by this Promissory Note may be converted
         into  Common  Stock  of  CareCentric,   Inc.,  at  Lender's  option  in
         accordance with the terms and conditions of the Loan Agreement.

3.        Event of Default.  Upon the occurrence and continuation of an Event of
          Default,  the  principal  hereof and  accrued  interest  hereon may be
          declared  to be,  or may  become,  forthwith  due and  payable  in the
          manner,  upon the conditions and with the effect  provided in the Loan
          Agreement.

4.       No Registration. THIS PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE
         SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE SECURITIES LAWS,
         AND THEREFORE  CANNOT BE SOLD,  TRANSFERRED,  PLEDGED,  HYPOTHECATED OR
         ASSIGNED  UNLESS IT IS REGISTERED  UNDER THE SECURITIES ACT OF 1933, AS
         AMENDED,  AND UNDER ALL APPLICABLE  STATE SECURITIES LAWS, OR UNLESS AN

<PAGE>

         EXEMPTION THEREFROM IS AVAILABLE.

5.       Transfer.  Except with respect to a transfer to an affiliate of Lender,
         notice of any transfer of this Promissory Note by Lender shall be given
         to Borrower within a reasonable  time period after such transfer.  Upon
         surrender of this  Promissory  Note at the office of the Borrower,  the
         Borrower shall execute and deliver one or more  replacement  Promissory
         Notes in the name of the transferee(s).

6.        Presentment. The Borrower hereby waives presentment,  dishonor, notice
          of dishonor,  demand and  protest.  The  Borrower  hereby  irrevocably
          authorizes,  and empowers the prothonotary or clerk or any attorney of
          any court of record to appear for and confess judgment therein against
          the Borrower for the amount which may be due hereon as evidenced by an
          affidavit  signed by an officer of the Lender setting forth the amount
          then due including accrued interest,  plus reasonable attorney's fees,
          with costs of suit, release of errors, and without right of appeal. If
          a copy hereof, verified by an affidavit, shall have been filed in said
          proceeding,  it  shall  not be  necessary  to file the  original  as a
          warrant  of  attorney.  The  Borrower  waives the right to any stay of
          execution  and the benefit of all  exemption  laws now or hereafter in
          effect.  No single  exercise  of the  foregoing  warrant  and power to
          confess judgment shall be deemed to exhaust the power,  whether or not
          any such exercise shall be held by any court to be invalid,  voidable,
          or  void,  but  the  power  shall  continue  undiminished  and  may be
          exercised from time to time as often as the Lender shall elect,  until
          all sums payable or that may become payable  hereunder by the Borrower
          have been paid in full.

7.        Waivers.  Any  failure of the Lender to exercise  any right  hereunder
          shall not be  construed  as a waiver of the right to exercise the same
          or any other right at any other time.

8.        Assignment.  This  Promissory  Note  shall  not be  assignable  by the
          Borrower without the prior written consent of the Lender.

9.        Controlling  Law. This Promissory Note shall be construed and enforced
          in accordance  with, and governed by the laws of the State of Delaware
          (without regard to the principles of conflict of laws).

10.       Severability  of  Provisions.  In case any term or  provision  of this
          Promissory  Note  shall be  invalid,  illegal or  unenforceable,  such
          provision  shall be severable  from the  remainder,  and the validity,
          legality and  enforceability of the remaining  provisions shall not in
          any way be affected or impaired thereby.

11.       Headings.  The  headings of this  Promissory  Note are for purposes of
          reference  only and shall not limit or  otherwise  affect the  meaning
          hereof.
<PAGE>

12.       Sealed  Instrument.  The Borrower intends this Promissory Note to be a
          sealed instrument and to be legally bound hereby.

         IN WITNESS  WHEREOF,  the Borrower has executed  this  Promissory  Note
effective as of the date first written above.

                                            CARECENTRIC, INC.

                                            By:   /s/ John R. Festa
                                                 ------------------------------
                                            Its:  President

                                            CARECENTRIC NATIONAL, LLC

                                            By:   /s/ John R. Festa
                                                 ------------------------------
                                            Its:  President

                                            SC HOLDING, INC.

                                            By:   /s/ John R. Festa
                                                 ------------------------------
                                            Its:  President

1490033

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