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Item
1.01 Entry Into a Material Definitive Agreement
On
June30, 2008, Artesian Utility Development, Inc. (“Artesian Utility”), a subsidiary
of Artesian Resources Corporation (the “Company”), signed an agreement (the
“Wastewater Services Agreement”) with Northern Sussex Regional Water Recycling
Complex, LLC (“NSRWRC”) for the design, construction and operation of the
Northern Sussex Regional Water Recycling Complex, a wastewater treatment
facility to be located in Sussex County, Delaware (the
“Facility”). Pursuant to the Wastewater Services Agreement, NSRWRC
will purchase the 75 acre parcel upon which the Facility will be constructed
(the “Facility Site”) and construct phase 1 of the Facility and Artesian Utility
will operate the Facility.
Artesian
Utility has agreed to reimburse NSRWRC for the construction of phase 1 of
the
Facility through customer connection fees. Such connection fees will
be split 40% to Artesian Utility and 60% to NSRWRC until NSRWRC’s investment in
the design, treatment, storage and disposal facilities are
reimbursed. For reimbursement of NSRWRC’s cost to acquire the
Facility Site, Artesian Utility has agreed to provide NSRWRC with ten annual
$300,000 payments. In addition to the annual payments, Artesian
Utility will provide certain monthly payments to NSRWRC consisting of a portion
of fees received from new customers once the Facility is successfully
constructed and operating. Once the cost of the construction
and the cost of the Facility Site have been fully reimbursed, NSRWRC will
transfer its ownership of the Facility and the Facility Site to Artesian
Utility
or one of its affiliates. Until such time, NSRWRC has agreed to lease
the Facility to Artesian Wastewater Management, Inc.
At
such
time as NSRWRC enters into agreements with third party lenders to acquire
the
funds to purchase the Facility Site and to construct the Facility, the
Company has also agreed to enter into a guaranty with such third party
lender(s) to guaranty all debts and obligations that are incurred by
NSRWRC. Any payments made by the Company pursuant to this guaranty
will be credited against Artesian Utility’s obligations to reimburse NSRWRC for
construction costs and the cost of Facility Site, as described
above.
The
Company will file the Wastewater
Services Agreement as an exhibit to its Quarterly Report on Form 10-Q for
the
quarterly period ending June 30, 2008.
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.
