UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date
of
Report (Date of earliest event reported): December 1, 2008
ARTESIAN
RESOURCES
CORPORATION
(Exact
name of registrant as specified in its charter)
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Delaware
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000-18516
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51-0002090
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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664
Churchmans Road, Newark, Delaware
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19702
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant's
telephone number, including area code:
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302-453-6900
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Not
Applicable
¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾¾
(Former
name or former address, if changed since last report.)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
o
Written communications
pursuant to Rule 425 under the Securities Act
o
Soliciting material
pursuant to Rule 14a-12 under the Exchange Act
o
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
o
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
Item
1.01 Entry Into a Material Definitive Agreement
On
December 1, 2008, 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 $15 million principal amount First
Mortgage Bond (the “Bond”), Series S, due December 31, 2033 (the “Maturity
Date”). The Bond was issued pursuant to the Company’s Indenture of
Mortgage dated as of July 1, 1961, as amended and supplemented by supplemental
indentures, including the Twentieth Supplemental Indenture, dated as of December
1, 2008 (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. Proceeds of the sale of the Bond will be used to repay
short-term indebtedness which was used to finance the expansion of the Company’s
headquarters building in New Castle County, Delaware. The issuance of
the Bond was approved by the Delaware Public Service Commission on November
21,
2008.
The
Bond carries an annual interest rate
of 6.73% through March 1, 2016 (the “Initial Period”). After March
16, 2016, the Company can request that the annual interest rate be fixed
by
CoBank in its sole and absolute discretion for a period through the Maturity
Date or for such shorter periods as mutually agreed by the Company and
CoBank. If the Company does not request that CoBank fix the interest
rate for any period subsequent to the Initial Period or if CoBank fails to
fix
the interest rate in the required time period after the receipt of the request
by the Company, the Bond shall bear interest at a variable rate equal to
the
higher of the Prime Rate (as defined in the Supplemental Indenture) or the
sum
of the Federal Funds Rate (as defined in the Supplemental Indenture) plus
0.50%. Interest is payable on the first business day of
January, April, July and October in each year, beginning with the first business
day of January, 2009, until the Company’s obligation with respect to the payment
of such principal and interest shall be discharged. In addition, the Bond is subject
to
redemption in a principal amount equal to $150,000 per calendar quarter,
payable
on the first business day of January, April, July and October in each year,
beginning with the first business day of January, 2009, with all remaining
principal due and payable on December 31, 2033. Overdue
payments of such principal and interest shall bear interest as provided in
the
Supplemental Indenture.
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.” 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.
Events
of
Redemption are listed below:
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(a)
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Any
representation or warranty made by the Company in the Agreement
proves to
be false or misleading in any material respect;
or
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(b)
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Failure
to comply with furnishing financial information, covenants, use
of
proceeds, payment of taxes and indemnification;
or
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(c)
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Failure
to perform or comply with providing notice of default, non-environmental
litigation or environmental matters;
or
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(d)
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The
occurrence of any event of default under, or lapse of or failure
on the
part of the Company to observe, keep, or perform any covenant or
agreement
contained in any other agreement between the Company and CoBank,
including, without limitation, any guaranty, loan agreement, security
agreement, pledge agreement, indenture, mortgage or other agreement;
or
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(e)
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Default
under any bond, debenture, note or other evidence of indebtedness
for any
money borrowed by the Company in excess of $500,000 or under any
mortgage,
indenture or instrument under which there may be issued or by which
there
may be secured or evidenced any indebtedness of the Company in
excess of
$500,000, whether such indebtedness exists or shall hereafter be
created,
which default has not been waived and shall constitute a failure
to pay
any portion of the interest accruing on or the principal of such
indebtedness when due and payable after the expiration of any applicable
grace period with respect thereto or shall have resulted in such
indebtedness becoming or being declared due and payable prior to
the date
on which it would otherwise have become due and payable, without
such
indebtedness having been discharged, or such acceleration having
been
rescinded or annulled; or
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(f)
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The
rendering against the Company of a judgment for the payment of
moneys in
excess of $500,000 and the continuance of such judgment unsatisfied
and
without stay of execution thereon for a period of 45 days after
the entry
of such judgment, or the continuance of such judgment unsatisfied
for a
period of 45 days after the termination of any stay of execution
thereon
entered within such first mentioned 45
days.
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The
Bond was
issued in a private placement in reliance on exemptions from registration
under
the Securities Act of 1933, pursuant 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.
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4.1
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Twentieth
Supplemental Indenture dated as of December 1, 2008 between Artesian
Water
Company, Inc. and Wilmington Trust Company, as trustee.
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4.2
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Bond
Purchase Agreement, dated December 1, 2008 by and between Artesian
Water
Company, Inc., and CoBank, ACB.
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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ARTESIAN
RESOURCES CORPORATION
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Date: December
4, 2008
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By: /s/
David B. Spacht
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David
B. Spacht
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Chief
Financial Officer
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