Document:

Promissory Note and Single Advance Term Loan Supplement (Loan 4)

 Exhibit 10.5 
 Loan No. RI1087T04 
 PROMISSORY NOTE AND 

SINGLE ADVANCE TERM LOAN SUPPLEMENT 
 THIS PROMISSORY NOTE AND SUPPLEMENT (this “Promissory Note and Supplement”) to the Master Loan Agreement dated as of October 29, 2012 (the “MLA”) is entered into as of
October 29, 2012 between THE CONNECTICUT WATER COMPANY, Clinton, Connecticut, a Connecticut corporation (the “Company”) and CoBANK, ACB, a federally chartered instrumentality of the United States
(“CoBank”). 
 SECTION 1.    The Term Loan.  On the terms and
conditions set forth in the MLA and this Promissory Note and Supplement, CoBank agrees to make a loan to the Company in an amount not to exceed $14,805,000.00 (the “Commitment”). The Commitment shall expire at 12:00 noon (Company’s
local time) on November 1, 2012, or on such later date as CoBank may, in its sole discretion, authorize in writing. 
 SECTION 2.    Purpose.  The purpose of the Commitment is to refinance existing bond debt of the Company issued through the Connecticut Development Authority
(“CDA”) and identified on Exhibit A hereto (individually or collectively, the “Existing Debt”). 
 SECTION 3.    Availability.  Notwithstanding Section 2 of the MLA and provided that each of the conditions precedent set forth herein and in the MLA have been
satisfied, the loan will be made available to the Company on a date to be agreed upon by the parties (the “Closing Date”). The loan will be made available in a single advance by CoBank wire transferring the proceeds of the loan
to CDA. 
 SECTION 4.    Interest.  The Company agrees to pay interest
on the unpaid balance of the loan(s) in accordance with one or more of the following interest rate options, as selected by the Company: 
 (A)    Weekly Quoted Variable Rate.  At a rate per annum equal at all times to the rate of interest established by CoBank on the first Business Day of each week. The
rate established by CoBank shall be effective until the first Business Day of the next week. Each change in the rate shall be applicable to all balances subject to this option and information about the then current rate shall be made available upon
telephonic request. 
 (B)    Quoted Rate Option.  At a fixed rate per
annum to be quoted by CoBank in its sole discretion in each instance. Under this option, rates may be fixed on such balances and for such periods, as may be agreeable to CoBank in its sole discretion in each instance, provided that: (1) the
minimum fixed period shall be 180 days; (2) amounts may be fixed in increments of $100,000.00 or multiples thereof; and (3) the maximum number of fixes in place at any one time shall be five. 

The Company shall select the applicable rate option at the time it requests a loan hereunder and may, subject to the limitations set
forth above, elect to convert balances bearing interest at the variable rate option to one of the fixed rate options. Upon the expiration of any fixed rate period, interest shall automatically accrue at the variable rate option unless the amount
fixed is repaid or fixed for an 

			
	 Promissory Note and Single Advance
 Term Loan Supplement RI1087T04
 THE CONNECTICUT WATER COMPANY

Clinton, Connecticut
	 	-2-

  

 
additional period in accordance with the terms hereof. Notwithstanding the foregoing, rates may not be fixed for periods expiring after the maturity date of the loans and rates may not be fixed
in such a manner as to cause the Company to have to break any fixed rate balance in order to pay any installment of principal. All elections provided for herein shall be made telephonically or in writing and must be received by 12:00 Noon
Company’s local time. Interest shall be calculated on the actual number of days each loan is outstanding on the basis of a year consisting of 360 days and shall be payable quarterly in arrears by the 20th day of each March, June,
September, and December or on such other day in such month as CoBank shall require in a written notice to the Company. 
 SECTION 5.    Fees. INTENTIONALLY OMITTED. 
 SECTION 6.    Promissory Note.  The Company promises to repay the unpaid principal balance and any unpaid accrued interest of the loan on August 1, 2032, or such
later date as CoBank may, in its sole discretion, authorize in writing. If any installment due date is not a Business Day, then such installment shall be due and payable on the next Business Day. In addition to the above, the Company promises to pay
interest on the unpaid principal balance of the loan at the times and in accordance with the provisions set forth above. 
 SECTION 7.    Prepayment.  Subject to the broken funding surcharge provision of the MLA (Section 12 (A)), the Company may prepay all or any portion of the loan(s).
Unless otherwise agreed, all prepayments will be applied to principal installments in the inverse order of their maturity and to such balances, fixed or variable, as CoBank shall specify. 

SECTION 8.    Security.  Notwithstanding the provisions of the MLA, including,
without limitation, Section 4(A) of the MLA, the Company’s obligations hereunder shall be unsecured, except that this Promissory Note and Supplement shall be guaranteed in accordance with Section 4(B) of the MLA and any related
guaranty agreement. 
 SECTION 9.    Additional Conditions Precedent.  In
addition to the conditions precedent set forth in the MLA, CoBank’s obligation to make the loan is subject to the conditions precedent that CoBank shall have received each of the following (which, in the case of instruments and documents, must
be in form and content acceptable to CoBank): (A) a copy of a payoff letter or spreadsheet from CDA setting forth, as of the Closing Date, the unpaid principal balance of the Existing Debt, the interest accrued thereon, and any prepayment
premiums, surcharges and other amounts owning to CDA for or on account of the Existing Debt; and (B) immediately available funds in an amount sufficient to pay all interest accrued on the Existing Debt through the Closing Date, together with
all prepayment premiums, surcharges, and other amounts necessary to discharge all of the Company’s obligations to CDA for or on account of the Existing Debt. 

SECTION 10.    Additional Affirmative Covenants.  In addition to the affirmative
covenants set forth in the MLA, the Company agrees that: (A) if for any reason the funds remitted to CDA are insufficient to discharge all of the Company’s obligations to CDA for or on account of the Existing Debt, the Company will
promptly make such additional payments to CDA as may be required to discharge such 

			
	 Promissory Note and Single Advance
 Term Loan Supplement RI1087T04
 THE CONNECTICUT WATER COMPANY

Clinton, Connecticut
	 	-3-

  

 
obligations in full; and (B) while this Promissory Note and Supplement is in effect and unless CoBank otherwise consents in writing, the Company will immediately, secure the Company’s
obligations hereunder and, to the extent related hereto, the MLA as specifically provided in the Security, Guarantee(s) and Title Insurance Section (Section 4) of the MLA, in the event that the Company secures any of its obligations with another
lender, bond holder or bond issuer, excluding liens granted in connection with purchase money indebtedness. 

IN WITNESS WHEREOF, the parties have caused this Promissory Note and Supplement to the MLA to be executed by their
duly authorized officers as of the date shown above. 
  

							
	CoBANK, ACB	 	THE CONNECTICUT WATER COMPANY
				
	By:	 	 /s/ Alex Georgievski
	 	By:	 	 /s/ David C. Benoit

				
	Title:	 	 Assistant Corporate Secretary
	 	Title:	 	 Vice President and Chief Financial Officer

			
	 Promissory Note and Single Advance
 Term Loan Supplement RI1087T04
 THE CONNECTICUT WATER COMPANY

Clinton, Connecticut
	 	-4-

  

 EXHIBIT A 
 To Supplement No. RI1087T04 
 DESCRIPTION OF EXISTING DEBT TO BE
REFINANCED 
  
  

					
	HOLDER/ISSUER	  	BOND DESIGNATION	  	PRINCIPAL
OUTSTANDING
	 CDA
	  	2005A Series 5.00%	  	$4,925,000.00
	 CDA
	  	2005A Series 5.00%	  	$9,870,000.00Guarantee of Payment (Limited) by Connecticut Water Service, Inc.

 Exhibit 10.6 
 GUARANTEE OF PAYMENT 
 (LIMITED) 

THIS GUARANTEE OF PAYMENT (this “Guarantee”) is executed as of October 29, 2012, by CONNECTICUT
WATER SERVICE, INC., a Connecticut corporation (hereinafter referred to as the “Guarantor”), in favor of CoBANK, ACB, a federally chartered instrumentality of the United States (hereinafter referred to as “CoBank”).

 BACKGROUND 
 THE CONNECTICUT WATER COMPANY, Clinton, Connecticut, a Connecticut corporation (the “Company”) has applied to CoBank for a loan or loans or other financial accommodations in an aggregate
principal amount not to exceed $54,645,000.00. Subject to and on the terms and conditions set forth in that certain Master Loan Agreement No. RI1087 dated as of October 29, 2012 (the “Master Loan Agreement”), as supplemented by that
certain Promissory Note and Single Advance Term Loan Supplement No. RI1087T01 in a principal amount not to exceed $8,000,000.00 and dated as of even date with the Master Loan Agreement, and by that certain Promissory Note and Single Advance Term
Loan Supplement No. RI1087T02 in a principal amount not to exceed $14,795,000.00 and dated as of even date with the Master Loan Agreement, and by that certain Promissory Note and Single Advance Term Loan Supplement No. RI1087T03 in a principal
amount not to exceed $17,045,000.00 and dated as of even date with the Master Loan Agreement, and by that certain Promissory Note and Single Advance Term Loan Supplement No. RI1087T04 in a principal amount not to exceed $14,805,000.00 and dated as
of even date with the Master Loan Agreement (the Master Loan Agreement, as supplemented, is hereinafter referred to as the “Loan Agreement”), CoBank is willing to extend that credit to the Company. One of the conditions of the Loan
Agreement is that the Company obtain the guarantee of the Guarantor in the form hereof. In satisfaction of that condition and intending to benefit by the extension of credit contemplated by the Loan Agreement, the Guarantor is entering into this
Guarantee. 
 NOW, THEREFORE, in order to induce CoBank to extend credit to the Company and for good and
valuable other consideration, the receipt and sufficiency of which are hereby acknowledged, the Guarantor hereby agrees as follows: 
 SECTION 1.        Guarantee.   The Guarantor hereby unconditionally and irrevocably guarantees to CoBank the punctual payment when due
(whether at stated maturity, as accelerated, or as renewed, refinanced or extended from time to time), of all indebtedness, obligations and liabilities of the Company to CoBank arising under the Loan Agreement, all instruments and documents executed
or furnished in connection therewith, and all amendments, supplements, restatements or replacements thereto or thereof (hereinafter collectively referred to as the “Loan Documents”). Such indebtedness, obligations and liabilities shall
include all principal, interest, fees, surcharges, reimbursement obligations, expenses, stock subscription charges and all other obligations of the Company arising under the Loan Documents. Notwithstanding the foregoing or anything else contained in
this Guarantee or the Loan Agreement to the contrary, the Guarantor’s obligations hereunder shall be limited to the lesser of: (i) $1,000,000.00 of the amount outstanding under the Loan Agreement; or (ii) the actual amount outstanding
under the Loan Agreement, as that amount may vary from time to time. The foregoing shall hereinafter collectively be referred to as the “Guaranteed Obligations”. 

SECTION 2.        Guarantee of Payment; Waiver of Defenses,
Etc.    This Guarantee is a guarantee of payment and not of collection. The Guarantor acknowledges and agrees that this Guarantee is an absolute and independent obligation of the Guarantor and therefore waives any right to
require that any action be brought against the Company, another guarantor or any other person or entity which is liable for all or any part of the Guaranteed Obligations, or to require that resort be had at any time to any security for the
Guaranteed Obligations or to any right of setoff or similar right. The Guarantor’s obligations hereunder shall be payable on demand and shall be absolute and unconditional irrespective of (and the Guarantor hereby expressly waives any defense
or claim of discharge based on): (i) the alteration or modification from time to time (whether material or otherwise) of the Guaranteed Obligations, including the date, time, and place of payment, an increase or decrease in the rate or rates of
interest accruing on the Guaranteed Obligations, the period during which the Guaranteed Obligations may be made, the amount of the 

			
	Limited Guarantee of Payment	 	-2-

  

 
Guaranteed Obligations or otherwise; (ii) the waiver by CoBank of the Company’s compliance with any of the terms and conditions of the Loan Documents; (iii) the forbearance by
CoBank from exercising any right or remedy it may have under the Loan Documents or under law; (iv) any inability, failure, neglect or omission to obtain, perfect, maintain, enforce, or realize upon any collateral for the Guaranteed Obligations,
or to pursue or obtain any deficiency judgment against the Company following any foreclosure of any security interest, mortgage or deed of trust; (v) the loss or impairment of any collateral, the subordination or release of CoBank’s lien
thereon, or the sale, pledge, surrender, exchange or substitution of any collateral; (vi) CoBank releasing, waiving, discharging, or modifying the obligations of one or more other guarantors (whether a party hereto or to a separate agreement
with CoBank); (vii) the acceptance by CoBank of any partial payment on the Guaranteed Obligations or any collateral therefor, or CoBank settling, subordinating, compromising, discharging, or releasing the Guaranteed Obligations or any
collateral therefor; (viii) the enforceability of the Loan Documents; (ix) any defenses or counterclaims assertable by the Company, including any defense or counterclaim based on failure of consideration, fraud, statute of frauds,
bankruptcy, statute of limitations, lender liability, and accord and satisfaction; (x) any setoff, counterclaim, recoupment or similar right assertable by the Company, the Guarantor, or other guarantor (whether a party hereto or to a separate
guarantee); or (xi) any other circumstance which constitutes a legal or equitable discharge of a guarantor or surety. This Guarantee shall continue in full force and effect until five business days after written notice of termination shall have
been received by CoBank. Notwithstanding the foregoing, such notice of termination shall not be effective as to any Guaranteed Obligations: (1) existing prior to the effective date of termination; (2) arising thereafter pursuant to any
commitment to extend credit entered into prior to the effective date of such notice (regardless of whether CoBank has or from time to time acquires a right to suspend or terminate such commitment owing to the occurrence of a default or otherwise);
(3) any extensions, renewals, or refinancings of any Guaranteed Obligations referred to in (1) or (2) above made before or after the effective date of termination; and (4) interest, fees, expenses, and other Guaranteed
Obligations relating to any of the foregoing. In addition, no such notice of termination shall in any manner impair or alter CoBank’s rights or obligations hereunder with respect to such Guaranteed Obligations (including under Sections 2
and 5 hereof) or affect or impair the obligations of any other guarantor (whether a party hereto or to a separate guarantee). 
 SECTION 3.        Intentionally Deleted. 
 SECTION 4.        Recovery of Payment.  If any payment received by CoBank and applied to the Guaranteed Obligations is subsequently set aside,
recovered, rescinded, or required to be returned for any reason (including, without limitation, the bankruptcy, insolvency or reorganization of the Company), the Guaranteed Obligations to which such payment was applied shall for the purposes of this
Guarantee and all instruments or documents executed in connection herewith or securing the Guarantor’s obligations hereunder, be deemed to have continued in existence, and this Guarantee shall be enforceable as to such Guaranteed Obligations as
fully as if such applications had never been made. 
 SECTION
5.        Information Regarding Company; Waiver of Notices, Etc.  The Guarantor assumes responsibility for keeping fully informed of the financial condition of the Company, its liability
hereunder and all other circumstances affecting the Company’s ability to pay and perform the Guaranteed Obligations. The Guarantor agrees that CoBank shall have no duty to report to or notify the Guarantor of: (i) any information which
CoBank shall receive about the financial condition of the Company (including adverse matters); (ii) the Company’s performance under the Loan Documents (including nonpayment or the occurrence of any other default); (iii) any
circumstances bearing on the Company’s ability to perform the Guaranteed Obligations; (iv) any increases in the amount of the Guaranteed Obligations or any renewals, extensions or refinancing(s) of any Guaranteed Obligation; (v) any
actions taken by CoBank or the Company under any Loan Document; (vi) any matters relating to another guarantor; (vii) any matter set forth in Section 2 hereof; or (viii) any other matter relating to the Guaranteed Obligations;
and the Guarantor hereby expressly and unconditionally waives any defense or claim of discharge based on the failure of CoBank to report to or notify the Guarantor of any such information. In addition, the Guarantor hereby acknowledges that it has
entered into this Guarantee based upon its own independent knowledge of or investigation into the affairs of the Company and any other guarantor (whether a party hereto or to a separate guarantee) and has not relied in any respect on CoBank or any
officers, employees, or agents thereof. 

			
	Limited Guarantee of Payment	 	-3-

  

 SECTION
6.        Representations and Warranties.    The Guarantor hereby represents and warrants as follows: 

(A)         The execution, delivery and performance by the Guarantor
of this Guarantee and all instruments and documents executed in connection herewith have been duly authorized by all requisite corporate or other action and do not and will not: (i) conflict with, or constitute (with or without the giving of
notice and/or the passage of time and/or the occurrence of any other condition) a default under, any other agreement to which the Guarantor is a party or by which it or any of its property may be bound or affected, or with any provision of its
articles of incorporation, bylaws or other organizational documents; (ii) require the consent, permission, authorization, order or license of any governmental authority or of any party to any agreement to which the Guarantor is a party or by
which it or any of its property may be bound or affected, except as has been obtained and are in full force and effect; (iii) violate any provision of any law, rule, regulation, order, writ, judgment, injunction, decree, determination or award
presently in effect applicable to it; or (iv) result in, or require, the creation or imposition of any lien, security interest or other charge or encumbrance upon or with respect to any of its properties now owned or hereafter acquired.

 (B)         The Guarantee and each instrument and
document executed in connection herewith, or when executed and delivered will be, is the legal, valid and binding obligation of the Guarantor, enforceable in accordance with its terms, subject only to limitations on enforceability imposed by
applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting creditors’ rights generally. 
 SECTION 7.       Covenants.    While this Guarantee is in effect, the Guarantor agrees to comply with all covenants set forth in all loan and
other credit agreements between the Guarantor and CoBank, whether now existing or hereafter entered into, and all amendments, supplements, restatements and replacements to or of any such agreements, which covenants are hereby, and shall hereafter
continuously be, incorporated by reference. 
 SECTION 8.       Notices,
Etc.  All notices provided for herein shall be in writing (including facsimile) and shall be mailed or delivered to the following addresses or facsimile numbers or to such other address or facsimile number as either party may specify
by notice to the other: (a) If to CoBank, to P.O. Box 5110, Denver, Colorado 80217-5110 (for general correspondence purposes), or to 5500 South Quebec Street, Greenwood Village, Colorado 80111-1914 (for direct delivery purposes, when desired),
Attention: Credit Information Services, Fax No.: (303) 224-6101; and (b) if to the Guarantor, to Connecticut Water Service, Inc., 93 West Main Street, Clinton, CT 06418, Attention: Mr. David Benoit, Fax No. (860) 669-8630.

 SECTION 9.      Expenses.  In the event CoBank employs counsel
to protect or enforce its rights hereunder against the Guarantor, all reasonable attorneys’ fees arising from such services and all expenses, costs, and charges in any way or respect arising in connection therewith or relating thereto shall be
paid by such Guarantor to the extent allowed by law. 
 SECTION 10.    Amendments,
Etc.  This writing is intended by the parties as the final expression of their agreement and is also intended as a complete and exclusive statement of the terms of that agreement. No amendment or waiver of any provision of this
Guarantee nor consent to any departure by the Guarantor herefrom shall be effective unless the same shall be in writing and signed by CoBank, and then such waiver or consent shall be effective only in the specific instance and for the specific
purpose for which given. 
 SECTION 11.    No Waiver;
Remedies.    No failure on the part of CoBank to exercise, and no delay in exercising, any right hereunder shall operate as waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or
further exercise thereof or the exercise of any other right. 
 SECTION 12.    Governing
Law.  Except to the extent governed by applicable Federal law, this Guarantee shall be governed by and construed in accordance with the laws of the State of Colorado, without reference to choice of law doctrine. 

SECTION 13.    Notice of Acceptance.  The Guarantor hereby waives notice of
acceptance hereof. 
 SECTION 14.    Joint and Several.    If
more than one person or entity executes this Guarantee, the obligations of such person or entities shall be joint and several. 
 SECTION 15.    Security.  This Guaranty is unsecured. 

			
	Limited Guarantee of Payment	 	-4-

  

 IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to
be executed as of the date shown above by its duly authorized officers. 
 CONNECTICUT WATER SERVICE, INC. 

 

			
	By:	 	/s/ David C. Benoit
		
	Title:	 	Vice President and Chief Financial Officer

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