On April 28, 2020, Artesian Water Company, Inc. (“Artesian Water”), a wholly owned subsidiary of Artesian Resources Corporation, entered into three financing agreements (the “Financing Agreements”) with the Delaware Drinking Water State Revolving Fund, acting by and through the Delaware Department of Health & Social Services, Division of Public Health, a public agency of the state of Delaware (the “Department”). The Department makes loans to, and acquires obligations of, eligible persons in Delaware to finance the costs of drinking water facilities in accordance with the Federal Safe Drinking Water Act using funds from the Delaware Drinking Water State Revolving Fund (the “Fund”).

Under the Financing Agreements, the Department has agreed to advance to Artesian Water up to approximately $1.7 million, $1.0 million and $1.3 million (collectively, the “Loans”) from the Fund to finance all or a portion of the costs to replace specific water transmission mains in service areas located in New Castle County, Delaware (collectively, the “Projects”). In accordance with the Financing Agreements, Artesian Water will from time to time request funds under the Loans as it incurs costs in connection with the Projects. to three General Obligation Notes, Series 2020A-SRF, 2020B-SRF and 2020C-SRF, dated as of April 28, 2020, entered into in connection with the Financing Agreements (the “Notes”), borrowings under the Financing Agreements bear interest at a rate of 0.6% per annum and are further subject to an administrative fee at a rate of 0.6% per annum. Interest and the administrative fee accrue starting on April 28, 2020 and are payable semiannually in arrears on each November 1 and May 1, commencing on November 1, 2020 (each, a “Payment Date”). Artesian Water is obligated to pay only interest and the administrative fee during the period commencing on April 28, 2020 and ending on the earlier of (i) the Payment Date next succeeding the date on which the Projects are actually completed and (ii) June 30, 2021. After the end of such period, in addition to payment of interest and the administrative fee, Artesian Water will begin making principal payments semiannually on each Payment Date on the outstanding principal amounts of the Loans in accordance with the terms of the Notes. The final maturity date of the Notes on which all unpaid principal, interest and administrative fee are due and payable is November 1, 2041.

The Financing Agreements contain certain covenants that are binding on Artesian Water (which are in some cases subject to certain exceptions), including, but not limited to, affirmative obligations to maintain its legal existence, to maintain proper books of record and account, to deliver certain officer’s certificates to the Department as to the nonexistence of an event of default under the Financing Agreements, and to consult with the Department in the event that Artesian Water is required to borrow additional funds in order to complete the Projects.

The Financing Agreements contain customary events of default (which are in some cases subject to certain exceptions and cure periods), including, but not limited to, with respect to nonpayment of principal, interest or any administrative fee, failure to perform or observe covenants, breaches of representations and warranties and certain bankruptcy-related events or other relief proceedings. If an event of default shall have occurred and be continuing, the Department may, in addition to any other remedies provided in the Financing Agreements or by law, discontinue advances under the Financing Agreements and declare immediately due and payable all amounts due or to become due under the Financing Agreements and the Notes.

The foregoing description of the Financing Agreements and the Notes is qualified in its entirety by reference to the Financing Agreements and the Notes, which are attached hereto as Exhibits 10.1 through Exhibit 10.6 and are incorporated by reference into this Current Report on Form 8-K.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant

The information set forth under Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

ARTESIAN RESOURCES CORP Exhibit
EX-10 2 ex10-1.htm 2020A SRF LOAN FA FINANCING AGREEMENT BETWEEN ARTESIAN WATER COMPANY,…
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About ARTESIAN RESOURCES CORPORATION (NASDAQ:ARTNA)

Artesian Resources Corporation is a holding company. The Company, through its subsidiaries, offers water, wastewater and other services on the Delmarva Peninsula. It distributes and sells water, including water for public and private fire protection, to residential, commercial, industrial, municipal and utility customers in Delaware, Maryland and Pennsylvania. It also provides contract water and wastewater operations, and water and sewer Service Line Protection Plans. Its subsidiaries include Artesian Water Company, Inc. (Artesian Water), Artesian Water Pennsylvania, Inc., Artesian Water Maryland, Inc., Artesian Wastewater Management, Inc., Artesian Wastewater Maryland, Inc., Artesian Utility Development, Inc., Artesian Development Corporation and Artesian Consulting Engineers, Inc. Artesian Water distributes and sells water to residential, commercial, industrial, Governmental, municipal and utility customers throughout the State of Delaware.