Exhibit 10-1.

ASSET PURCHASE AGREEMENT
FOR THE WATER ASSETS
OF THE CITY OF DELAWARE CITY
THIS ASSET PURCHASE AGREEMENT (“Agreement”) is entered into as of this ___ day
of ____________________, 2020 by and between Artesian Water Company, Inc., a
Delaware corporation (“Buyer”), and the City of Delaware City, a Delaware
municipality (“Seller”).
WHEREAS, Seller is a municipality that provides public water service and fire
protection service (the “Municipal Water Utility”) within its corporate limits
and to certain customers outside its corporate limits (the “Service Area”); and
WHEREAS, in January 2019 Seller publicly issued Request for Proposal No. 18-01,
titled Provision of Drinking Water Service Delaware City Service Area (Multi
Option Proposal), concerning a potential sale of Seller’s Municipal Water
Utility assets, which is incorporated herein by reference; and
WHEREAS, Buyer desires to purchase from Seller, and Seller desires to sell,
assign, transfer, convey and deliver to Buyer, substantially all of the
operating assets of Seller’s water system, including the right to provide water
service to Seller’s existing customers, under the terms and conditions set forth
herein, free and clear of all Indebtedness and Liens (as hereinafter defined);
and
WHEREAS, in connection with sale of the water system assets, Seller and Buyer
shall jointly file an application with the Delaware Public Service Commission
(“PSC”) seeking regulatory approval to consummate the Agreement and the
transactions contemplated in connection herewith;
NOW, THEREFORE, in consideration of the representations, warranties, covenants
and agreements of the parties hereinafter set forth, as well as other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, Buyer and Seller, intending to be legally bound, do hereby agree
as follows:
ARTICLE I 
DEFINITIONS
Section 1.1 The following capitalized terms shall have the following meanings
when used in this Agreement:
(a)  “Indebtedness” means all (i) indebtedness of Seller for borrowed money,
including, without limitation, purchase money indebtedness, bonds, debentures,
capital or financing leases, equipment operating leases, non-trade payables and
credit facilities, or obligations for or in respect of the deferred purchase
price of goods or services, (ii) obligations of Seller under any guaranty,
letter of credit, performance credit or other contract having the effect of
assuring a creditor against loss, (iii) obligations of Seller under any interest
rate, currency or other hedging contract, and (iv) any prepayment penalties,
premiums or fees under any of the foregoing items described under causes (i),
(ii) or (iii).
(b) “Liability” or “Liabilities” means any and all direct or indirect
Indebtedness, liability, assessment, claim, loss, damage, deficiency,
environmental liability, obligation or responsibility, expense (including,
without limitation, reasonable attorneys’ fees, court costs, accountants’ fees,
environmental consultants’ fees, laboratory costs and other professional fees),
Order (as hereinafter defined), settlement payments, taxes, fines and penalties,
fixed or unfixed, choate or inchoate, liquidated or unliquidated, secured or
unsecured, accrued, absolute, actual or potential, contingent or otherwise
(including any liability under any guaranties or letters of credit, or with
respect to insurance loss accruals).
(c) “Lien” or “Liens” means, with respect to any Purchased Asset (as hereinafter
defined), any lien (including mechanic’s, warehouseman’s, laborer’s and
landlord’s liens), charge, restriction, claim, hypothecation, pledge, security
interest, mortgage, preemptive right, right of first refusal, option, judgment,
title defect, right of way, easement, conditional sale or other title retention
agreement, or other restriction or encumbrance of any kind in respect of or
affecting such asset.
(d) “Order” means any order, judgment, preliminary or permanent injunction,
temporary restraining order, award, citation, decree, consent decree or writ.
ARTICLE II
SALE AND DELIVERY OF PURCHASED ASSETS
Section 2.1 Sale and Delivery of Purchased Assets.
At Closing (as hereinafter defined), and subject to the terms and conditions of
this Agreement, Seller shall sell, assign, transfer, convey and deliver to
Buyer, free and clear of all Liens and Indebtedness, all of Seller’s right,
title and interest in and to all of the following assets, rights, claims,
properties and interests that Seller owns or in which Seller has any right,
title or interest, other than the Excluded Property as hereinafter defined (each
a “Purchased Asset” and collectively the “Purchased Assets”), as follows:
(a) Municipal Water Utility.  Subject to the accounts receivable terms of
Section 3.2 below, all of Seller’s right, title and interest in and to the
Municipal Water Utility, including, without limitation, all of Seller’s right to
serve the customers now or hereafter provided water service in the Service Area
and all of Seller’s right to be served by or otherwise interact with all vendors
and suppliers with respect to the conduct of the Municipal Water Utility; and
(b) Water Plant, Property and Equipment.  Except as specified herein as excluded
property (the “Excluded Property”), all of Seller’s wells, supply facilities,
water treatment facilities, water service related equipment, water transmission
and distribution mains, lines and conduits, hydrants, services, meters and
related appurtenances from the mains to the meter pit at each service location
(collectively, the “Water Plant”) on an “as is” basis.  The Excluded Property
shall consist of, and the Purchased Assets shall not include:  (a) Tax Parcel
No. 22-008.00-089 (the “Excluded Parcel”), it being understood that Buyer is
acquiring in connection herewith all Water Plant at the Excluded Parcel that is
used in connection with or relates to the Municipal Water Utility; and (b) the
meter pit or any on-site water facilities after the meter at any service
location on the date of Closing; and
(c) Real Property.  Tax Parcel No. 22-008.00-055 (the “Well 4 Parcel”), together
with access or use of any other real property in the Service Area (including via
easements granted by deeds or other instruments) that relates to the Water Plant
(collectively, the “Real Property”).  A map reflecting the location of the
principal Purchased Assets and the parameters of the Service Area is attached
hereto and incorporated herein as Exhibit A; and
(d) Assumed Contracts.  All instruments, documents, contracts, agreements,
arrangements, commitments, bids, licenses and any other contract rights (whether
written or oral) (collectively, “Assumed Contracts”) of Seller existing on the
date of Closing and relating to the Municipal Water Utility and/or Water Plant. 
The Licensed Operator Agreement between Buyer and Seller relating to operation
of the Water Plant shall terminate on the date of Closing.  The Metering and
Billing Agreement shall terminate as provided in Section 3.2 below; and
(e) Easements.  To the extent assignable, all of Seller’s rights to access or
use any real property or fixtures (including by license or easement) directly or
indirectly used in connection with the Municipal Water Utility and/or the Water
Plant; and
(f) Permits.  All approvals, consents, licenses, permits, waivers, certificates
of public convenience and necessity, or other authorizations issued, granted,
given, or applied for at the time of Closing or otherwise made available by or
under the authority of any governmental authority (collectively, “Permits”) for
the ownership or operation of the Municipal Water Utility and/or Water Plant, to
the extent such Permits are assignable.
Section 2.2 Liabilities.
(a) Liabilities Assumed by Buyer.  At Closing, Buyer shall assume Liability for
and agree to pay, perform and discharge all of the following (collectively, the
“Assumed Liabilities”):
(i)
All obligations and responsibilities to provide water service to the Service
Area; and

(ii)
All accounts payable and trade payables first accruing from and after Closing
with respect to the provision of water service to the Service Area; and

(iii)
The Assumed Contracts with respect to all periods from and after Closing, but
shall not assume any Liability arising from Seller’s performance or
non-performance under any Assumed Contracts at any time prior to Closing,
whether asserted before or after Closing; and

(iv)
All Liabilities with respect to taxes first accruing immediately after Closing
and which are incurred in connection with Buyer’s ownership or operation of the
Purchased Assets; and

(v)
All Liabilities arising out of ownership and/or operation of the Purchased
Assets subsequent to Closing; and

(vi)
All sales and use, transfer-related taxes, stamp, real property recordation fees
or taxes and all other fees and/or costs associated with the transfer of title
of the Purchased Assets from Seller to Buyer.

(b) Liabilities Retained by Seller.  Except for the Assumed Liabilities, Buyer
shall not assume, and shall not be deemed to have assumed through anything
contained in this Agreement or otherwise, any Indebtedness, Liabilities or Liens
of Seller whatsoever (the “Excluded Liabilities”).  Without limiting the
generality of the foregoing, Buyer shall not assume, and shall not be deemed by
anything contained in this Agreement or otherwise to have assumed the following
Excluded Liabilities:
(i)
Liabilities and obligations of Seller set forth in this Agreement; and

(ii)
Liabilities arising out of ownership or operation of the Municipal Water Utility
or the Purchased Assets prior to Closing; and

(iii)
Liabilities or demands for any unclaimed property relating to the Municipal
Water Utility or the Purchased Assets that is in Seller’s possession, custody or
control; and

(iv)
Liabilities or demands arising out of any litigation (whether civil or
criminal), arbitration, mediation, administrative proceeding, audit or
investigation, or threatened litigation or proceedings, relating to any period
ending at or prior to Closing; and

(v)
Liabilities or demands arising out of any work or contract of Seller that were
to be performed by Seller at or prior to Closing, including, without limitation,
any warranty claims relating thereto; and

(vi)
Liabilities or demands, including, without limitation, for any interest,
penalties, late charges, prepayment charges or termination fees relating to any
Indebtedness outstanding as of Closing, or resulting from cancellation of such
Indebtedness; and

(vii)
any other Liens, Liabilities or Indebtedness of Seller that are not specifically
enumerated above.

Section 2.3 Purchase Price.
(a) Purchase Price for the Purchased Assets.  In consideration of the sale,
assignment, transfer, conveyance and delivery of the Purchased Assets by Seller
to Buyer and in reliance on the representations, warranties, covenants and
agreements made by Seller in this Agreement, at the Closing Buyer shall pay
Seller as set forth in Section 3.3(b) below the following amounts (collectively,
the “Cash Purchase Price”):
(i)
the sum of Two Million and 00/100 Dollars ($2,000,000.00), plus

(ii)
the sum of Fifty-One Thousand Nine Hundred Ninety-Two and 00/100 Dollars
($51,992.00), being the aggregate amount substantiated by documentation that
Seller has provided to Buyer relating to work performed during calendar year
2019 on Well No. 5, plus

(iii)
the sum of Thirty Thousand and 00/100 Dollars required by the Parcel Easement
(as defined in Section 3.3(a)(iii) below).

(b) Payment of the Purchase Price for the Purchased Assets.  No later than five
(5) business days prior to Closing, Seller shall deliver to Buyer:  (i) a
statement from WSFS Bank (“WSFS”) on WSFS letterhead setting forth the payoff
amount as of the Closing date of the loan relating to the Well 4 Parcel,
together with wire payment instructions from WSFS for making the payoff payment;
(ii) a statement from the Trustee for that certain General Obligation Bond Water
System Improvement Project Series 1997 (the “1997 Bond”) setting forth the
payoff amount of the 1997 Bond as of the Closing date, together with wire
payment instructions from such Trustee for making the payoff payment or the name
and address to which payment by check may be hand delivered on the Closing date;
(iii) a statement from the Trustee for that certain General Obligation Bond
(Well Treatment Plant Improvement Project) Series 2006 – 21st Century Fund (the
“2006 Bond”) setting forth the payoff amount of the 2006 Bond as of the Closing
date, together with wire payment instructions from such registered owner for
making the payoff payment or the name and address to which payment by check may
be hand delivered on the Closing date; and (iv) wire payment instructions for
payment to Seller of the remainder of the Cash Purchase Price.
(c) Proration.  The parties shall make customary proration with respect to any
personal or real property taxes, and power or other utility charges as of the
Closing date.
(d) Allocation of Purchase Price.  Buyer and Seller agree to allocate the Cash
Purchase Price (and all other capitalizable costs) among the Purchased Assets
for all purposes (including financial, accounting and tax purposes) in
accordance with an allocation schedule to be agreed upon by Buyer and Seller,
and, in the absence of an agreement then in such manner as determined by Buyer
in its reasonable discretion.  Buyer and Seller shall file all tax returns,
reports and other documents, including an asset acquisition statement on Form
8594, required by any competent taxing authority in a timely manner consistent
with the allocation set forth on such agreed schedule.
ARTICLE III 
CLOSING
Section 3.1 Closing.
The closing of the transactions contemplated by this Agreement (“Closing”) is
contingent upon obtaining regulatory approval from the PSC.  Closing on the
purchase of the Purchased Assets shall take place at Seller’s offices located at
407 Clinton Street, Delaware City, Delaware 19706 on the later of (x) the first
day of the month next following the receipt of all necessary approvals from the
PSC, and (y) the first day of the month next following the date thirty (30) days
after Seller delivers notices of redemption to the registered owners of the 1997
Bond and the 2006 Bond in accordance with the terms thereof.
Section 3.2 Municipal Water Utility Accounts Receivable at Closing.
On the date of Closing Seller shall, with the assistance of Buyer, read the
meters of all Municipal Water Utility customers.  Municipal Water Utility
service charges that Seller has billed in advance shall be prorated between
Buyer and Seller as of the date of Closing.  Once Buyer has posted the final
bills relating to the period of Seller’s ownership of the Municipal Water
Utility, the Metering and Billing Agreement between Seller and Buyer shall
terminate.  Seller shall retain all rights to accounts receivable relating to
the Municipal Water Utility as of the date of Closing and be responsible for the
collection thereof.  To the extent Buyer receives payments relating to the
Municipal Water Utility on Seller’s behalf, Buyer may, with Seller’s consent,
net remittances to Seller to account for the portion of prepaid service charges
due to Buyer.
Section 3.3 Closing Deliveries.
(a) At Closing, Seller shall deliver or cause to be delivered to Buyer each of
the following:
(i)
the Purchased Assets; and

(ii)
a permanent easement in substantially the same form attached hereto as Exhibit
B, which is incorporated herein by reference, duly executed in triplicate,
granting Buyer rights in connection with its provision of water service relating
to rights-of-way owned by Seller (the “Rights-of-Way Easement”); and

(iii)
a permanent easement in substantially the same form attached hereto as Exhibit
C, which is incorporated herein by reference, duly executed in triplicate,
granting Buyer rights to use the Excluded Parcel in connection with Buyer’s
ownership and operation of Purchased Assets and providing public water utility
service (the “Parcel Easement”, and collectively with the Rights-of-Way
Easement, the “Easements”); and

(iv)
duly executed duplicate originals of a Bill of Sale and General Assignment in
substantially the same form attached hereto and incorporated herein as Exhibit D
(the “Bill of Sale”); and

(v)
executed copies of a deed and related transfer documents for the Well 4 Parcel;
and

(vi)
to the extent Seller has not delivered them to Buyer prior to Closing, such
records relating to the Municipal Water Utility and/or the Purchased Assets,
such as Permits, certificates of title duly endorsed for transfer, maintenance
records, equipment warranties, and customer account information, if any, as are
necessary or proper to facilitate the transactions contemplated hereby, Buyer’s
ownership of the Purchased Assets, or Buyer’s subsequent provision of public
water utility service to the Service Area; and

(vii)
a correct and complete list of Seller’s Municipal Water Utility customers who
qualify for the Senior Citizen Discount pursuant to City ordinance; and

(viii)
a correct and complete list of Seller’s Municipal Water Utility customers as of
Closing.

(b) At Closing, Buyer shall deliver or cause to be delivered to Seller each of
the following:
(i)
duly executed triplicate originals of the Easements; and

(ii)
duly executed duplicate originals of the Bill of Sale.

(c) During Closing, Buyer shall payoff the WSFS loan, the 1997 Bond and the 2006
Bond, in the amounts identified in the pre-Closing deliverables contemplated in
Section 2.3(b) and using the wire payment or check payment instructions provided
in such pre-Closing deliverables, and then Buyer shall pay the remainder of the
Cash Purchase Price to Seller using the wire payment instructions provided by
Seller.
ARTICLE IV 
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer that each of the following
representations and warranties are, as of the date hereof, and as of the Closing
date will be, true and correct:
Section 4.1 Authority and Validity.
Seller’s execution and delivery of this Agreement, performance by Seller
hereunder, and the consummation by Seller of the transactions contemplated
hereby have been duly and validly authorized by all required action by or on
behalf of Seller.  This Agreement has been duly and validly executed and
delivered by Seller, and constitutes valid and legally binding obligations of
Seller that are enforceable against Seller in accordance with its terms, except
as the same may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws now or hereafter in effect relating to the
enforcement of creditors’ rights generally or by principles governing the
availability of equitable remedies.
Section 4.2 No Conflict.
Neither the execution and delivery of this Agreement nor the carrying out of any
of the transactions contemplated hereby will result in any:  (a) violation,
termination or modification of, or be in conflict with, Seller's powers or
authority under applicable laws; (b) material breach of, or constitute a default
(or with notice, lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation, or
result in the creation of any Lien upon any of its properties or assets pursuant
to any Permit or any contract to which Seller is a party or by which it or any
of the Purchased Assets are bound or affected, or (c) violation of, or be in
conflict with, any law or Permit applicable to Seller or by which the Purchased
Assets are bound or affected.
Section 4.3 Title to Assets.
(a) The Purchased Assets constitute all of Seller’s assets, properties and
rights (in each case whether real or personal, tangible or intangible), other
than the Excluded Property, necessary for Buyer to conduct the Municipal Water
Utility after Closing in the same manner as conducted immediately prior to
Closing.  Title to the Water Plant and all the Purchased Assets shall be
conveyed to Buyer at Closing free and clear of all Indebtedness, Liens and
Liabilities.  Except as otherwise stated herein, Seller has good and marketable
title to, or a valid license to use, all of the Purchased Assets (in each case
whether real or personal, tangible or intangible) used by Seller in the
Municipal Water Utility or located on any property owned or used by Seller, free
and clear of all Liens and defects of title.  Seller specifically warrants and
represents that, except as otherwise identified herein and set for repayment as
part of Closing in accordance with the terms hereof, no Liens or Indebtedness
exist relating to the Purchased Assets other than current, ordinary monthly
accruals such as the current month’s electric bill.
(b) Except as previously disclosed in Seller’s publicly-issued Request for
Proposals regarding the sale of the Municipal Water Utility, all of the Water
Plant is in good condition and repair, ordinary wear and tear excepted, and has
been maintained and repaired in a good and workmanlike manner in accordance with
industry standards.
Section 4.4 Litigation.
There are no outstanding Orders of any governmental authority involving the
Purchased Assets or the Municipal Water Utility.  There is no litigation (civil
or criminal) and there are no other actions, suits, arbitrations, mediations,
administrative proceedings, audits or investigations, whether or not the defense
thereof or Liabilities in respect thereof are covered by insurance
(collectively, “Claims”), pending or, to Seller’s knowledge, threatened against,
or involving the Purchased Assets or the Municipal Water Utility.
Section 4.5 Environmental.
(a) None of the real property relating to the Purchased Assets or the Easement
is or has been listed on the National Priorities List, the Comprehensive
Environmental Response, Compensation, Liability Information System (“CERCLIS”)
or any similar state list, or is or has been the subject of any “Superfund”
evaluation or investigation, or any other investigation or proceeding of any
governmental authority or unaffiliated third party or of Seller evaluating
whether any remedial action is necessary to respond to any release of any
hazardous substance, pollutant or contaminant in connection with such real
property.
(b) Seller has received no notice, written or otherwise, which remains
outstanding or unresolved, to the effect that the Water Plant is not being
operated in compliance in all material respects with all applicable laws
concerning the protection of public health, public safety or the environment
(“Environmental Laws”).  Seller has received no notice, written or otherwise,
which remains outstanding or unresolved, (i) (A) alleging that Seller or any of
its agents is liable under any Environmental Law, or (B) ordering Seller or any
of its agents to remedy or recommending that Seller or any of agents remediate,
any environmental damage to any real property or modify or upgrade its Water
Plant to comply with Environmental Laws, and (ii) to Seller’s knowledge, no such
claims or notices are threatened or pending.
(c)  There has been no violation of Environmental Laws that remain unremedied or
unresolved respecting the release or threatened release of any hazardous
substance, pollutant or contaminant to any soil, groundwater, surface water,
building component, wastewater, air or other media on or from any real property
relating to the Purchased Assets or the Easement during the ownership,
occupation or use of such real property by Seller or any of its agents.
(d) There are no and have not been any underground storage tanks, underground
piping (except for water or sewer), or polychlorinated biphenyls used, stored,
treated or disposed of at any real property relating to the Purchased Assets or
the Easement.
Section 4.6 Unclaimed Property.
Seller has no unpaid unclaimed property Liability relating to the Municipal
Water Utility with respect to any taxable period ending on or before the Closing
date for which Buyer would be liable or to which the Purchased Assets would be
subject.
Section 4.7    Compliance with Laws.
The ownership and operation of the Purchased Assets and the operation of the
Municipal Water Utility as it is currently conducted do not violate or infringe
any law in any material respect.  Seller has not received written notice (or, to
the Seller’s knowledge, oral notice) of any violation by Seller of any law
applicable to the operation of the Municipal Water Utility as currently
conducted or the Purchased Assets as currently operated.  Seller has timely paid
all applicable fees, including registration fees and maintenance fees, required
by any governmental authority, to maintain Permits in good standing.
Section 4.8 No Brokers.
Neither Seller, nor any representative or other person acting on behalf of
Seller, has agreed to pay a commission, finder’s or investment banking fee, or
similar payment in connection with this Agreement or any matter related hereto
to any person, nor has any such person taken any action on which a claim for
such a payment could be based, other than payments for which Buyer will have no
Liability or obligation.
Section 4.9 Disclosure.
All agreements, schedules, exhibits, certificates and reports furnished or to be
furnished to Buyer by or on behalf of Seller in connection with this Agreement
or the transactions contemplated hereby are true, complete and accurate in all
material respects.  Except for the representations and warranties expressly set
forth in this Agreement, Seller has not made and does not hereby make any
express or implied representations or warranties, statutory or otherwise, of any
nature, including, without limitation, with respect to any express or implied
representation or warranty as to the merchantability, quality, quantity,
suitability or fitness for any particular purpose of the assets, each of which
are hereby disclaimed.
ARTICLE V 
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller that the following
representations and warranties are, as of the date hereof, and as of the Closing
date will be, true and correct:
Section 5.1 Organization and Good Standing.
Buyer is a corporation duly organized, validly existing and in good standing
under the applicable laws of the State of Delaware.  Buyer has full corporate
power and authority to own its properties and carry on its business as it is now
being conducted.
Section 5.2 Authority and Validity.
Buyer’s execution and delivery of this Agreement, performance by Buyer
hereunder, and the consummation by Buyer of the transactions contemplated hereby
have been duly and validly authorized by all required corporate action by or on
behalf of Buyer.  This Agreement has been duly and validly executed and
delivered by Buyer, and constitutes valid and binding obligations of Buyer that
are enforceable against Buyer in accordance with its terms, except as the same
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws now or hereafter in effect relating to the enforcement of
creditors’ rights generally or by principles governing the availability of
equitable remedies.
Section 5.3 No Violation.
There is no legal action, proceeding or investigation pending or, to the
knowledge of Buyer, threatened against Buyer, nor is there any judgment
outstanding against Buyer or to which Buyer is subject or bound, that materially
adversely affects the ability of Buyer to consummate any of the transactions
contemplated hereby.
Section 5.4 No Brokers.
Neither Buyer nor any person acting on behalf of Buyer has agreed to pay a
commission, finder’s fee, investment banking fee or similar payment in
connection with this Agreement or any matter relating hereto, nor has Buyer
taken any action on which a claim for such a payment could be based.
Section 5.5 Disclosure.
None of the representations and warranties set forth in this Agreement furnished
by Buyer to Seller pursuant hereto, taken as a whole, contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements contained herein or therein not misleading.
ARTICLE VI 
PRE-CLOSING COVENANTS
During the period from the date of this Agreement through and including the
Closing date:
Section 6.1 Seller’s Conduct of the Municipal Water Utility Pending Closing.
Except as may be first consented to by Buyer in writing (such consent not to be
unreasonably withheld, conditioned or delayed), during the period from the date
of this Agreement through and including the Closing date: (i) Seller shall
conduct the Municipal Water Utility and operate the Purchased Assets according
to its ordinary and usual course of business, preserve intact its Municipal
Water Utility and the Purchased Assets, and keep available the services of its
employees and independent contractors; (ii) Seller will not sell, lease,
transfer, assign, convey, hypothecate, encumber or make any dividend or
distribution of any Purchased Assets, will not amend any unclaimed property
filing relating to the Municipal Water Utility, and will otherwise use
reasonable efforts to maintain satisfactory relationships with respect to the
Municipal Water Utility with all relevant governmental authorities, suppliers,
agents, customers, and others having relevant business relationships with
Seller; and Seller shall promptly notify Buyer in writing of any notice or other
communication that it receives (written or oral) respecting any litigation,
regulatory proceeding, or audit involving or affecting Seller.  Without limiting
the foregoing, Seller, except as may be first consented to by Buyer in writing
(such consent not to be unreasonably withheld, conditioned or delayed), shall
not:
(a) enter into any contract relating to the Municipal Water Utility other than
with customers or suppliers in the ordinary course of business substantially as
conducted heretofore;
(b) cause any material adverse change in the Municipal Water Utility, including
performing or not performing any action, the performance or non-performance of
which would reasonably be expected to result in a material adverse change;
(c) make any loan or advance relating to the Municipal Water Utility other than
for services provided to customers on credit in the ordinary course of business
consistent with past practice;
(d) (i) incur any Indebtedness relating to the Purchased Assets or Municipal
Water Utility, except expenses and current Liabilities incurred in connection
with or for services rendered or goods supplied in the ordinary course of
business, or obligations or Liabilities incurred by virtue of the execution of
this Agreement, or (ii) create any Lien on any Purchased Assets; or
(e) change the accounting principles, methods or practices (including without
limitation any change in depreciation or amortization policies or rates)
utilized by Seller involving or affecting the Purchased Assets or the ownership
or operation thereof; or
(f) make any capital expenditure or commitment therefor.
Section 6.2 2019 Consumer Confidence Report.
Seller and its agents shall prepare the Consumer Confidence Report (“CCR”) for
the Municipal Water Utility for calendar year 2019 and provide it to all
necessary governmental authorities and customers.
Section 6.3 Access; Cooperation.
Upon reasonable prior notice, during the period from the date of this Agreement
through and including the Closing date: (i) Seller shall give Buyer and its
representatives such access to the Purchased Assets, Municipal Water Utility
records, customers and suppliers during regular business hours as may be
reasonably requested by Buyer, including with respect to having surveys
performed and a Phase I environmental assessment undertaken for the Well 4
Parcel; (ii) Seller and its representatives shall also cooperate with Buyer and
its representatives, including Buyer’s auditors and counsel, in the preparation
of any documents or other materials required in connection with the transactions
contemplated by this Agreement, including with respect to obtaining all
necessary regulatory approvals from the PSC; (iii) in addition, Seller and Buyer
shall use their respective reasonable good faith efforts to satisfy all
conditions to Closing and all other matters relating to the consummation of the
transactions contemplated by this Agreement; and (iv) Seller and Buyer shall
cooperate with each other in connection with any filings with any governmental
entity with authority over the parties or the transactions contemplated by this
Agreement.
ARTICLE VII 
POST-CLOSING COVENANTS
Section 7.1 Remittance of Unclaimed Property.
  From and after Closing through and including the date that is the seventh
(7th) anniversary of the Closing, Seller and Buyer shall cooperate fully with
each other and make available or cause to be made available to each other in a
timely fashion such data relating to taxes, prior tax returns, filings with the
Internal Revenue Service or other governmental authorities, unclaimed property
filings, and other information as may be reasonably requested for the
preparation by Buyer or Seller of any tax returns or other filings with the
Internal Revenue Service or other governmental authorities.
Section 7.2 2019 CCR.
If Seller has not completed and provided to all necessary governmental
authorities and customers the CCR for 2019 prior to Closing, Seller and its
agents shall do so after Closing.
Section 7.3 Access to Books and Records.
From and after Closing, Seller shall give Buyer and its agents such access to
Seller’s books and records relating to the Purchased Assets and the Municipal
Water Utility that pertain to the period prior to and ending at Closing as Buyer
shall reasonably request, as necessary or appropriate for Buyer to prepare any
tax filings or defend or prosecute any litigation or other proceeding.  Seller
shall maintain its books and records relating to the period during which it
owned the Purchased Assets and operated the Municipal Water Utility for at least
seven (7) years after Closing, or such other period as mandated by applicable
law.
Section 7.4 Rate Structure.
After Closing and until such time as Buyer interconnects the Purchased Assets to
Buyer’s regional water utility system in Fort DuPont via a directional drill,
Buyer shall continue to assess water charges in the Service Area based upon
Seller’s Municipal Water Utility rates as of the date of Closing, provided,
however, Buyer shall have the option of converting billing for the Service Area
to monthly invoicing, rather than Seller’s current system of quarterly billing
for the Municipal Water Utility.  Buyer shall take all necessary and appropriate
steps and seek all necessary regulatory approvals to make annual adjustments in
the water and fire protection rates in the Service Area over a five (5) year
period commencing on the date that Buyer interconnects the Service Area to Fort
DuPont, transitioning them to the rates that generally apply in the State of
Delaware per Buyer’s PSC-approved tariff as of the date of Closing (the “Rate
Transition Period”), it being understood that:
(a) Buyer shall take reasonable steps to make the annual adjustments in Service
Area rates during the Rate Transition Period similar in amount; and
(b) Buyer shall normalize assessing water charges to the Senior Center located
at 250 5th Street, Delaware City, Delaware, 19706, which presently is not
assessed charges by the Municipal Water Utility, on the following schedule:  (i)
no water charges until the first annual anniversary of Closing; (ii) one-half of
the water charges generally assessed in the Service Area until the second annual
anniversary of Closing; and (iii) water charges at the same rate generally
assessed in the Service Area thereafter; and
(c) as of the date of this Agreement, to qualify for the Senior Citizen Discount
in Seller’s Municipal Water Utility Rates pursuant to Seller’s ordinances:  (i)
the customer must be sixty-five (65) years of age or older; (ii) the customer
must own the property that receives water service; (iii) the property that
receives water service must have a tax value of Forty Thousand Dollars ($40,000)
or less; and (iv) the customer must have an annual income of Twenty Thousand
Dollars ($20,000) or less (collectively, the “Discount Standard”).  The Senior
Citizen Discount is a forty percent (40%) reduction of the water bill based on
the rates that would otherwise apply as amended from time to time.   Prior to
the expiration of the Rate Transition Period, Seller shall from time to time
inform Buyer both the identity of persons who newly meet the Discount Standard
and the identity of those who no longer meet the Discount Standard, beginning
with the list required by Section 3.3(a)(vii) above.  Buyer shall also remove
any customer from the list that Buyer knows no longer receives water service or
no longer resides in the City.  Buyer shall give a forty percent (40%) discount,
based on the rates that would otherwise apply as amended from time to time, on
the water bill for those customers on the Discount Standard list.  At the end of
the Rate Transition Period, those customers on the list of persons qualifying
for the Senior Citizen Discount shall continue to receive the discount until
such time as the customer is no longer a resident of the City, but no additional
customers shall be added to the Senior Citizen Discount list; and
(d) after the Rate Transition Period, rates in the Service Area shall be the
same as apply generally in the State of Delaware pursuant to Buyer’s
PSC-approved tariff as amended from time to time.
Section 7.5 Buyer’s Mandatory Investment in the Service Area.
After Closing, Buyer shall make the following investments in Service Area
infrastructure, making good faith efforts to complete each item within the
specified time, it being understood that Buyer shall not be deemed in breach of
this Agreement if, despite its good faith efforts, it is unable to do so for
reasons beyond its control:
(a) Replacement of water meters throughout the Service Area within six (6)
months of the date of Closing; and
(b) Relocating a service main and installing new services at 900 5th Street and
906 5th Street within one (1) month of the date of Closing; and
(c) Undertaking a directional drill under the Delaware City Branch Canal to
interconnect the Service Area to Buyer’s regional water system in Fort DuPont,
starting the permit application process no later than one (1) week after the
date of Closing and completing the interconnection within eighteen (18) months
of the date of Closing; and
(d) Making such pump upgrades as are necessary to increase water pressure in the
Service Area to approximately 65-75 PSI within eighteen (18) months of the date
of Closing; and
(e) Installing raw water and potable main extensions to connect the Purchased
Asset well facilities at the Excluded Parcel to the Well 4 Parcel, completed no
later than December 31, 2022; and
(f) Replacing the water treatment plant filters in use as of the date of Closing
no later than December 31, 2024; and
(g) Painting or replacing the elevated water storage tank at the Excluded Parcel
(the “Elevated Storage Tank”) no later than December 31, 2025.  If Buyer
decommissions the Elevated Storage Tank, Buyer shall (i) use alternative water
storage within the Service Area in addition to Buyer’s elevated storage tank in
Fort DuPont, and (ii) provide space for Seller’s antenna tenants that were using
the Elevated Storage Tank, if any, on Buyer’s Fort DuPont elevated storage tank
without charge to Seller; and
(h) Buyer shall continue to operate multiple sources of groundwater supply
within the Service Area.
Section 7.6 Sampling and Monitoring by Buyer.
Buyer shall perform compliance monitoring consistent with its practices
throughout the State of Delaware, which includes routine monthly bacteria
sampling, annual disinfection by-product monitoring, and triannual lead and
copper sampling.  Buyer will sample from the distribution entry point at each
treatment plant and conduct a comprehensive analysis of water quality. 
Notwithstanding anything to the contrary herein, Buyer’s sampling and monitoring
shall conform to applicable state and federal statutes and regulations,
including the Safe Drinking Water Act, as such statutes and regulations are
amended from time to time.
Section 7.7 Project Communications.
Absent an emergency, Buyer shall notify Seller at least three (3) months prior
to the commencement of construction about any project that will impact
rights-of-way within the Service Area.  Absent an emergency, Seller shall notify
Buyer at least three (3) months prior to the commencement of construction about
any road improvement project where Buyer owns or operates water utility
facilities.
Section 7.8 Continued Cooperation.
At any time and from time to time after Closing, without further consideration
(but at Buyer’s cost of preparation and filing) Seller shall promptly execute
and deliver such confirmatory instruments of sale, transfer, conveyance,
assignment and delivery, and take such other reasonable actions, as Buyer may
reasonably request to transfer, convey and assign to Buyer, and to confirm
Buyer’s right, title and interest in and to, each and all of the Purchased
Assets, to put Buyer in actual possession and operating control thereof, to
assist Buyer in exercising all rights with respect thereto, and to carry out the
purposes and intent of this Agreement.
ARTICLE VIII 
INDEMNIFICATION
Section 8.1 Indemnification.
The representations and warranties made by the parties in this Agreement shall
survive the Closing, and shall remain in full force and effect until the date
that is twelve (12) months from the Closing Date; provided, however, that the
representations and warranties in Section 4.3(a) (the “Fundamental
Representations”) shall survive until the date on which the statute of
limitations otherwise applicable to such claims expires.  All covenants and
agreements of the parties contained herein shall survive the Closing
indefinitely or for the period explicitly specified therein. The parties each
agree to indemnify, defend and hold harmless the other party, including the
other party’s affiliates, directors, officers, agents, employees, contractors,
subcontractors, successors and assigns, from and against any and all claims,
counterclaims, actions, proceedings, suits, losses, debts, demands, judgments,
liens, costs and liabilities, including reasonable attorneys’ fees and expert
witness fees, arising out of or in any way relating to any breach of the
indemnifying party’s representations and warranties.  Without limiting the
foregoing, (i) Seller indemnifies Buyer and shall hold Buyer harmless for all
Liens, encumbrances, Liabilities, Indebtedness, security interests and claims of
any nature relating to the Purchased Assets existing as of Closing, or that
arise after Closing and relate to the period prior to the transfer of title to
Buyer, and Seller shall bear all costs and expenses, including attorneys’ fees,
necessary to remove any such Liens, encumbrances, Liabilities, Indebtedness
security interests and/or claims, provided, however, that with specific respect
to defects in title, Seller’s obligation shall be to provide Buyer reasonable
cooperation in curing such defects, rather than an obligation of
indemnification, and (ii) Buyer indemnifies Seller and shall hold Seller
harmless for all Liens, encumbrances, Liabilities, Indebtedness, security
interests and claims of any nature relating to the Purchased Assets that arise
after Closing and do not relate to the period prior to the transfer of title to
Buyer, and Buyer shall bear all costs and expenses, including attorneys’ fees,
necessary to remove any such Liens, encumbrances, Liabilities, Indebtedness
security interests and/or claims.
The indemnification provided for in this Section 8.1 shall be subject to the
following limitations:
(a) Seller shall not be liable to Buyer for indemnification under this Section
8.1 until the aggregate amount of all losses exceeds $25,000 (the “Basket”), in
which event Seller shall be required to pay or be liable for all such losses
from the first dollar.  The aggregate amount of all losses for which the Seller
shall be liable pursuant to Section 8.1 shall not exceed $200,000 (the “Cap”).
(b) Buyer shall not be liable to Seller for indemnification under Section 8.1
until the aggregate amount of all losses exceeds the Basket, in which event
Buyer shall be required to pay or be liable for all such losses from the first
dollar. The aggregate amount of all losses for which Buyer shall be liable
pursuant to Section 8.1 shall not exceed the Cap.
(c) Notwithstanding the foregoing, the limitations set forth in Section 8.1(a)
and (b) above shall not apply to (i) losses based upon, arising out of, with
respect to or by reason of any inaccuracy in or breach of any Fundamental
Representation, and (ii) losses related to fraud.
(d) The indemnified party shall use reasonable efforts to mitigate loss.
ARTICLE IX
GENERAL PROVISIONS
Section 9.1 PSC Approval; Termination.
Notwithstanding anything to the contrary in this Agreement, the receipt from the
PSC of regulatory approval relating to this Agreement or the transactions
contemplated in connection herewith shall be a condition precedent to both
parties’ obligation to consummate the transactions contemplated in this
Agreement.
Notwithstanding anything in this Agreement to the contrary, this Agreement and
the transactions contemplated by this Agreement may not be terminated, except
prior to Closing as follows:
(a) by mutual consent in writing of Seller and Buyer; or
(b) by Seller or Buyer at any time after December 31, 2020 (the “Outside Date”)
if regulatory approval from the PSC has not been received by such date or the
Closing has otherwise failed to occur by such date; provided, that the right to
terminate this Agreement under this Section 9.1(b) shall not be available to any
party whose failure to fulfill any obligation under this Agreement has been the
cause of, or resulted in, the failure of the Closing to occur by such date.
In the event that this Agreement shall be terminated pursuant to this Section
9.1, all further obligations of the parties under this Agreement shall terminate
without further liability of any party to another.
Section 9.2 Expenses.
The parties shall bear their respective expenses incurred in connection with the
preparation, execution and performance of this Agreement and the consummation of
the transactions contemplated hereby, including, without limitation, all fees
and expenses of their respective representatives and all fees, expenses and
costs for obtaining any required consents.
Section 9.3 Successors and Assigns; Third Party Beneficiaries.
This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective legal representatives, successors, heirs,
executors and assigns; provided, however, that this Agreement and all rights and
obligations hereunder may not be assigned or transferred without the prior
written consent of the other party hereto, except Buyer may assign its rights
hereunder to a directly or indirectly wholly-owned subsidiary or affiliate of
Buyer or any successor-in-interest.  There are no intended third party
beneficiaries in connection with this Agreement.
Section 9.4 Choice of Law; Venue.
This Agreement and the rights of the parties shall be governed by and construed
in accordance with the laws of the State of Delaware without consideration of
the choice of law or conflict of law principles.  Each of the parties hereto
irrevocably consents to the service of any process, pleading, notices or other
papers by the mailing of copies thereof by certified mail with return receipt
requested, to such party at such party’s address set forth herein, or by any
other method provided or permitted under the laws of the State of Delaware. 
Each party hereby irrevocably submits to the jurisdiction of any federal or
state court located in the State of Delaware (and any appellate court therefrom)
with respect to any action or proceeding arising out of or relating to this
Agreement.  Each party hereby irrevocably and unconditionally waives and agrees
not to plead, to the fullest extent provided by law, any objection it may have
to venue and the defense of an inconvenient forum to the maintenance of such
action or proceeding in Delaware courts.
Section 9.5 Waiver of Jury Trial.
EACH PARTY HERETO HEREBY KNOWINGLY AND VOLUNTARILY IRREVOCABLY WAIVES, AFTER
CONSULTATION WITH COUNSEL, ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING (WHETHER
BASED IN CONTRACT, TORT, EQUITY OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY TRANSACTION OR AGREEMENT CONTEMPLATED HEREBY, OR THE ACTIONS OF
ANY PARTY HERETO IN THE NEGOTIATION, PERFORMANCE OR ENFORCEMENT HEREOF.
Section 9.6   Notices.
Unless otherwise provided in this Agreement, any notice required or permitted
under this Agreement shall be given in writing and addressed to the party to be
notified as indicated below, or at such other addresses as the parties may
designate from time to time by written notice to the other party:
If to Buyer:
Artesian Water Company, Inc.
Attention:  Karl G. Randall, General Counsel
664 Churchmans Road
Newark, Delaware 19702

If to Seller:
The City of Delaware City
Attention: Paul H. Johnson, Sr., Mayor
407 Clinton Street
Delaware City, Delaware 19706

With a copy to:

Connolly Gallagher LLP
Attention: N. Christopher Griffiths, Esq.
267 East Main Street
Newark, Delaware 19711
Section 9.7 Severability.
If any portion of this Agreement shall be held invalid, illegal or unenforceable
by a court of competent jurisdiction, that portion shall, to the extent
possible, be modified in such manner as to be valid, legal and enforceable,
provided any such modification shall as nearly as possible retain the intent of
the parties, and if such modification is not possible, such portion shall be
severed from this Agreement.  In either case, the remainder of this Agreement
shall be interpreted as if such provision were so modified or excluded, as the
case may be, and shall be enforceable in accordance with its terms.
Section 9.8 Entire Agreement.
This Agreement constitutes the entire agreement among the parties with respect
to the subject matter hereof and supersedes all prior understandings and
agreements, whether written or oral.
Section 9.9 Construction.
 The parties have participated jointly in the negotiation and drafting of this
Agreement.  In the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the parties,
and no presumption or burden of proof shall arise favoring or disfavoring either
party by virtue of authorship of any particular portion hereof.  The titles and
section headings used in this Agreement are for convenience only and are not to
be considered in construing or interpreting this Agreement.  The Recitals in
this Agreement form a part of this Agreement.
Section 9.10 Counterparts.
This Agreement may be executed in counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
Section 9.11 Time Is of the Essence.
The parties hereto agree that time is of the essence with respect to the
performance of each party’s respective obligations and commitments under this
Agreement.

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IN WITNESS WHEREOF, the parties have executed this Asset Purchase Agreement as
of the date first written above.

BUYER:
ATTEST:                  ARTESIAN WATER COMPANY, INC.,
a Delaware corporation

____________________________                                               By: 
Name:  Joseph A.
DiNunzio                                                            Name:  Dian
C. Taylor
Title:  Secretary Title: President and Chief Executive Officer

                          SELLER:
WITNESS/ATTEST: THE CITY OF DELAWARE CITY,
                          a Delaware municipality

By: __________________________                                          By: 
______________________________
Name:                               Name: Paul H. Johnson, Sr.
Title:     Title: Mayor