file8k_oct7-2008.htm
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): October 7, 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 ofincorporation)
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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
October 7, 2008, Artesian Water Maryland, Inc. (“Artesian Maryland”), a
subsidiary of Artesian Resources Corporation (“Artesian Resources”), signed an
agreement (the “Water Asset Purchase Agreement”) to purchase from Cecil County,
Maryland (“the County”) all of the County’s right, title and interest in and to
specific water facilities and the associated parcels of real property, easement
rights and water transmission and distribution systems. The water
facilities include Meadowview, Pine Hills, Harbourview and the Route 7
Facility. Pursuant to the Water Asset Purchase Agreement, Artesian
Maryland will pay to the County a price equal to the net asset value
of the purchased assets and assume certain liabilities at
closing. This sum may be paid by Artesian Maryland to the County in
cash at closing or, upon mutual agreement, by a note payable to the
County. Any cash portion of the purchase price financed by the County
would be repaid upon such terms, and at such rate of interest, as the County
and
Artesian Maryland shall agree. In such case, Artesian Maryland would
then provide a promissory note to the County at closing. The net
asset value of the purchased assets under the Water Asset Purchase agreement
is
approximately $2.2 million.
On
October 7, 2008, Artesian Wastewater Maryland, Inc. (“Artesian Wastewater
Maryland”), a subsidiary of Artesian Resources, signed an agreement (the
“Meadowview Wastewater Asset Purchase Agreement”) to purchase from the County
the wastewater facilities known as the Meadowview Wastewater Facility and the
Highlands Wastewater Facility and the associated parcels of real property,
easement rights and wastewater collection systems with respect to each
facility. Pursuant to the Meadowview Wastewater Asset Purchase
Agreement, Artesian Wastewater Maryland will pay to the County a price equal
to
the net asset value of the purchased assets and assume certain liabilities
at
closing. The purchase price shall be paid by Artesian Wastewater
Maryland’s assumption of the principal amount due by the County with respect to
a tax-exempt Cecil County Sanitary District Bond, Series 2004B (the “Bond”), as
payable under the loan agreement dated October 12, 2004 by and between Maryland
Water Quality Financing Administration and the County (the “Bond
Indebtedness”). Artesian Wastewater Maryland will pay down the Bond
at such times and in such amounts as the County is required to pay the same
in
accordance with the terms of the Bond. In the event that the net
asset value of the purchased assets as of the closing exceeds the Bond
Indebtedness to be paid by Artesian Wastewater Maryland, then the positive
difference (if any) shall be paid by Artesian Wastewater Maryland to the County
in cash at closing or, upon mutual agreement, by a note payable to the
County. Any cash portion of the purchase price financed by the County
would be repaid upon such terms, and at such rate of interest, as the County
and
Artesian Wastewater Maryland shall agree, and in such case, Artesian Wastewater
Maryland would then provide a promissory note to the County at
closing. The net asset value of purchased assets under the Meadowview
Wastewater Asset Purchase Agreement is approximately $7.8
million. The debt associated with the Bond is approximately $7.2
million.
On
October 7, 2008, Artesian Wastewater Maryland signed an agreement (the “Cherry
Hill Wastewater Asset Purchase Agreement”) to purchase from the County the
wastewater facilities known as the Cherry Hill Wastewater Facility and the
Harbourview Wastewater Facility and the associated parcels of real property,
easement rights and wastewater collection systems with respect to each
facility. Pursuant to the Cherry Hill Wastewater Asset Purchase
Agreement, Artesian Wastewater Maryland will pay to the County a sum equal
to
the net asset value of the purchased assets and assume certain liabilities
at
closing, and the County shall immediately upon receipt of such payment, pay
to
its creditors an amount sufficient to pay all indebtedness of the County in
respect of the Cherry Hill and Harbourview Wastewater facilities (the
“Indebtedness”). If the amount of the purchase price under the Cherry
Hill Wastewater Asset Purchase Agreement shall be less than the Indebtedness,
the County shall pay out of its own funds any amount sufficient to pay and
discharge in full the Indebtedness in excess of the purchase price;
alternatively, if the purchase price exceeds the amount necessary for the County
to pay the Indebtedness, such excess may not be required to be paid by Artesian
Wastewater Maryland at the closing, but may be financed by the
County. Any such portion of the purchase price financed by the County
would be repaid upon such terms, and at such rate of interest, as the County
and
Artesian Wastewater Maryland shall agree, and in such case Artesian Wastewater
Maryland would then provide a promissory note to the County at
closing. The net asset value of the purchased assets under the Cherry
Hill Wastewater Asset Purchase Agreement is approximately $3.8
million.
Closing
on the transactions is expected to occur on or before June 30, 2009, subject
to
the satisfaction of customary closing conditions, including, among other
matters, the completion of Artesian Resources’ due diligence and the approval of
the Maryland Public Service Commission. Under each of the Asset
Purchase Agreements, either party may terminate such agreement, subject to
certain exceptions, in the event of uncured breach by the other party, or if
the
closing has not occurred by December 31, 2009. The existing water and
wastewater systems subject to the Asset Purchase Agreements serve approximately
3,400 customers.
Copies
of
the above Asset Purchase Agreements are attached as Exhibits 10.1, 10.2 and
10.3
and are incorporated herein by reference. The foregoing descriptions
of the Asset Purchase Agreements are qualified in their entirety by reference
to
the full text of the Asset Purchase Agreements.
Item
9.01 Financial Statements and Exhibits
(d)
Exhibits.
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Asset
Purchase Agreement, dated October 7, 2008 by and among Artesian
Water
Maryland, Inc., a Delaware corporation,
and Cecil County, Maryland, a body corporate and politic under
the laws of
the State of Maryland, as represented by the Board of County Commissioners
of Cecil County.
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Asset
Purchase Agreement, dated October 7, 2008 by and among Artesian
Wastewater
Maryland, Inc., a Delaware corporation,
and Cecil County, Maryland, a body corporate and politic under
the laws of
the State of Maryland, as represented by the Board of County Commissioners
of Cecil County.
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Asset
Purchase Agreement, dated October 7, 2008 by and among Artesian
Wastewater
Maryland, Inc., a Delaware corporation,
and Cecil County, Maryland, a body corporate and politic under
the laws of
the State of Maryland, as represented by the Board of County Commissioners
of Cecil County.
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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: October
10, 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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