exhibit10-2.htm


    


     

    ASSET
      PURCHASE AGREEMENT

     

    THIS
      ASSET PURCHASE AGREEMENT
      (this “Agreement”) is
      entered into as of this 7TH
      day of
      October, 2008 by and among ARTESIAN WASTEWATER MARYLAND,
      INC., a Delaware corporation (the “Buyer”), 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 (the “County”).

     

    WHEREAS,
      the County and the Buyer entered into that certain Franchise for Wastewater
      Services and Wastewater Service Agreement dated August 19, 2008 (as may be
      subsequently amended, modified or restated from time to time, the “Franchise
      Agreement”);

     

    WHEREAS,
      the County and the Buyer entered into a Letter of Intent, attached as Exhibit
      D
      to the Franchise Agreement (the “Letter of Intent”), providing
      for the lease and subsequent sale to the Buyer from the County of the wastewater
      facility known as the Meadowview Wastewater Facility (the “Meadowview Facility”) and the
      Highlands Wastewater Facility (the “Highlands Facility” and
      together with the Meadowview Facility, the “Facilities” and each, a “Facility”)
      and the associated
      parcels of real property, easement rights and wastewater collection system
      with
      respect to each Facility;

     

    WHEREAS,
      the Buyer and the County no longer desire to lease the Facilities with an option
      for the Buyer to purchase, but rather the Buyer desires to purchase from the
      County, and the County desires to sell, assign, transfer and convey to the
      Buyer, the Facilities and the associated parcels of real property, easement
      rights and wastewater collection system with respect to each such Facility
      on
      the terms and conditions herein set forth, free and clear of all Liens (as
      hereinafter defined);

     

    WHEREAS,
      in connection with the Facilities that are being sold to the Buyer, the County
      is realizing substantial economic and other benefits in addition to the purchase
      price to be paid by the Buyer from such sale as a result of the Buyer’s
      assumption of various County obligations and liabilities set forth in Section 2.3(a)
      of this Agreement, including but not limited to, all wastewater service
      obligations, all repairs and maintenance of the Facilities in conformance with
      all Applicable Laws (as defined in the Franchise Agreement) and other applicable
      standards of Governmental Authorities (as defined on Exhibit
      A hereto), and all future environmental liabilities arising after the
      Closing Date (as hereinafter defined);

     

    WHEREAS,
      the County and the Buyer desire to reconfigure the handling and treatment of
      wastewater in the County in order to make available nutrient credits for use
      by
      the County and the Buyer in their respective wastewater operations;

     

    WHEREAS,
      in connection with such reconfiguration, the County and the Buyer desire to
      coordinate their efforts in order that nutrient credits are made available
      at
      such times as are necessary and convenient for the best and most efficient
      handling of wastewater by the County and the Buyer in their respective
      wastewater operations; and

     

    WHEREAS,
      this Agreement constitutes the definitive agreement for the purchase of the
      Facilities and their respective associated parcels of real property, easement
      rights and wastewater collection systems by or to the Buyer from the County
      contemplated by the Letter of Intent.

     

    NOW,
      THEREFORE, in consideration of the representations, warranties, covenants and
      agreements of the parties hereinafter set forth, as well as for other good
      and
      valuable consideration, the receipt and adequacy is hereby acknowledged, the
      Buyer and the County, intending to be legally bound hereby, do hereby agree
      as
      follows:

     

                                                               
      

       
ARTICLE
      I     

    DEFINITIONS

     

    
      	
              Section
                1.1  

            	
              Definitions.

            


    

     

    Except
      as
      otherwise expressly provided in this Agreement, the capitalized terms used
      in
      this Agreement shall have the meanings specified in Exhibit
      A hereto and
      shall be equally applicable to both the singular and plural
      forms.  Capitalized terms used, but not otherwise defined in this
      Agreement or on Exhibit
      A to this Agreement, shall have the meanings given to such terms in the
      Franchise Agreement.

     

                                                                   
      

    ARTICLE
      II 

    SALE
      AND DELIVERY OF PURCHASED ASSETS

     

    
      	
              Section
                2.1  

            	
              Sale
                and Delivery of
                Purchased Assets.

            


    

     

    Subject
      to the terms and conditions of this Agreement, at the Closing, the County shall
      sell, assign, transfer, convey and deliver to the Buyer, free and clear of
      all
      Liens, all of the County’s right, title and interest in and to the following
      assets, rights, claims, properties and interests that the County owns or in
      which the County has any right, title or interest, other than the Excluded
      Assets, (collectively, the “Purchased
      Assets”):

     

    
      	
              (a)  

            	
              Plant
                and
                Equipment.  All of the plant and equipment and other
                tangible personal property, whether owned, leased or otherwise possessed
                by the County and located at any Facility or otherwise used in the
                operation of any Facility (the “Plant and Equipment”),
                including, without limitation, the plant, equipment and other tangible
                personal property specified on Schedule
                2.1(a).

            


    

     

    
      	
              (b)  

            	
              Real
                Property.  All of the County’s right, title
                and interest in and
                to the real property related to the use and operation of each of
                the
                Facilities, including, without limitation, those real properties
                more fully
                described on Schedule
                2.1(b) (the “Owned
                Real Property”).

            


    

     

    
      	
              (c)  

            	
              Leased
                Property and
                Easements.  All of the County’s rights to access or use
                any real property or fixtures (including by lease, license or easement)
                directly or indirectly used in the operation of any Facility or its
                Wastewater Collection System (as defined in Section
                2.1(e)), including, without limitation, those leases and easements
                identified on Schedule
                2.1(c) (collectively, the “Easements”).

            


    

     

    
      	
              (d)  

            	
              Assumed
                Contracts and
                Certain Other Rights of the County.  All right, title and
                interest of the County following the Closing in, to and under all
                instruments, documents, contracts, agreements, arrangements, commitments,
                bids, leases, licenses and any other contract rights (whether written
                or
                oral) (collectively, “Contracts”) of the
                County existing on the Closing Date and used in connection with the
                operation of any Facility or its Wastewater Collection System and
                specified on Schedule
                2.1(d) (the “Assumed
                Contracts”).

            


    

     

    
      	
              (e)  

            	
              Wastewater
                Collection
                Systems.  As to each Facility, all of the County’s right,
                title and interest in and to the wastewater collection system owned,
                leased or otherwise possessed by the County or used in the operation
                of
                such Facility, as more fully described on Schedule
                2.1(e) (each, a “Wastewater
                Collection
                System” and collectively, the “Wastewater
                Collection
                Systems”).

            


    

     

    
      	
              (f)  

            	
              Permits.  All
                approvals, consents, licenses, permits, waivers or other authorizations
                issued, granted, given, applied for at the time of Closing or otherwise
                made available by or under the authority of any Governmental Authority
                (other than the County) (collectively, “Permits”) for the
                ownership or operation of any Facility and its Wastewater Collection
                System, including, without limitation, those Permits specified on
Schedule
                2.1(f) to the extent such Permits are
                assignable.

            


    

     

    
      	
              (g)  

            	
              Customers
                and
                Suppliers.  All rights of the County to serve the
                customers now or hereafter serviced by the County within the Service
                Area
                (collectively, the “Customers”); and all
                rights of the County to be served by or otherwise interact with all
                vendors and suppliers of the County with respect to the
                conduct of the
                operations of one or more of the Facilities or its Wastewater Collection
                System (collectively, the “Suppliers”),
                which
                Suppliers as of the date of this Agreement are identified on the
                attached
                Schedule
                2.1(g).

            


    

     

    
      	
              Section
                2.2  

            	
              Excluded
                Assets.

            


    

     

    Notwithstanding
      anything to the contrary
      contained in Section
      2.1or elsewhere in this
      Agreement, the assets identified on Schedule
      2.2shall not be part of
      the
      sale and purchase contemplated by this Agreement, are excluded from the
      Purchased Assets, and shall remain the property of the County immediately after
      the Closing (collectively, the “Excluded
      Assets”).

     

         
Section
      2.3  Liabilities.

     

    
      	
              (a)  

            	
              Assumed
                Liabilities.  At the Closing, the Buyer will assume
                Liability for and agree to pay, perform and discharge, in a timely
                manner
                and in accordance with the terms thereof, all of the following
                (collectively, the “Assumed
                Liabilities”):

            


    

     

    
      	
              (i)  

            	
              all
                obligations and responsibilities to provide wastewater collection
                and
                treatment services to the Service Area arising from and after the
                Closing;

            


    

     

    
      	
              (ii)  

            	
              all
                accounts payable and trade payables first accruing from and after
                the
                Closing;

            


    

     

    
      	
              (iii)  

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

            


    

     

    
      	
              (iv)  

            	
              all
                Liabilities with respect to any Taxes first accruing immediately
                after the
                Closing and which were incurred in connection with the Buyer’s ownership
                or operation of the Purchased
                Assets;

            


    

     

    
      	
              (v)  

            	
              all
                Liabilities arising out of the ownership and/or operation of the
                Purchased
                Assets subsequent to the Closing
                Date;

            


    

     

    
      	
              (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 the County to the Buyer;
                and

            


    

     

    
      	
              (vii)  

            	
              all
                Liabilities or demands (contingent or otherwise) arising out of any
                Environmental Laws (as defined in Section
                4.8(b)
                hereof) relating to contamination events as a result of the ownership
                and/or operation of the Purchased Assets occurring from and after
                the
                Closing Date.

            


    

     

    
      	
              (b)  

            	
              Excluded
                Liabilities.  Except for the Assumed Liabilities, the
                Buyer shall not assume, and shall not be deemed to have assumed by
                anything contained in this Agreement or otherwise, any Liability
                of the
                County whatsoever (the “Excluded
                Liabilities”).  Without limiting the generality of the
                foregoing, the Buyer shall not assume, and shall not be deemed by
                anything
                contained in this Agreement or otherwise to have assumed any of the
                following Excluded Liabilities:

            


    

     

    
      	
              (i)  

            	
              all
                Liabilities and obligations of the County under this
                Agreement;

            


    

     

    
      	
              (ii)  

            	
              all
                Liabilities arising out of the operation and ownership of the Purchased
                Assets prior to the Closing;

            


    

     

    
      	
              (iii)  

            	
              all
                Liabilities or demands for any Taxes in respect of the Purchased
                Assets
                that are due and payable for periods at or prior to the
                Closing;

            


    

     

    
      	
              (iv)  

            	
              all
                Liabilities or demands arising out of any Liability or demand (whether
                or
                not asserted) or threatened or pending Litigation relating to the
                Purchased Assets for any period ending at or prior to the
                Closing;

            


    

     

    
      	
              (v)  

            	
              all
                Liabilities or demands arising out of any work or Contract that were
                to be
                performed by the County at or prior to the Closing, including, without
                limitation, any warranty claims relating
                thereto;

            


    

     

    
      	
              (vi)  

            	
              all
                Liabilities or demands, including, without limitation, for any interest,
                penalties, late charges, prepayment charges or termination fees relating
                to any Indebtedness outstanding as of the Closing, or Taxes resulting
                from
                cancellation of such Indebtedness, and all Liabilities relating to
                any
                arbitrage rebate liability, audit, examination or other enforcement
                action
                by the Internal Revenue Service or other Governmental Authority with
                respect to any Indebtedness of the County financing or refinancing
                any of
                the Purchased Assets, whether or not such Indebtedness is outstanding
                as
                of the Closing;

            


    

     

    
      	
              (vii)  

            	
              all
                Liabilities or demands for fees, costs or expenses incurred by the
                County
                in connection with the preparation and negotiation of this Agreement
                and
                the consummation of the transactions contemplated hereby (collectively,
                “Transaction
                Expenses”), including without limitation, attorneys’, accountants’
                and consultants’ fees, finder’s fees, costs and expenses, regardless of
                when incurred;

            


    

     

    
      	
              (viii)  

            	
              all
                Liabilities or demands (contingent or otherwise) arising out of any
                Environmental Laws relating to contamination events with respect
                to the
                Purchased Assets occurring at any time before the Closing Date;
                and

            


    

     

    
      	
              (ix)  

            	
              all
                other Liens, Liabilities or demands of the County arising out of
                or
                relating to the ownership, use or operation of any Facility or its
                Wastewater Collection System that are not Assumed
                Liabilities.

            


    

     

             Section
      2.4   Purchase
      Price for the Purchased Assets.

     

    (c) Purchase
      Price for the
      Purchased Assets.  In consideration of the sale, assignment,
      transfer, conveyance and delivery of the Purchased Assets by the County to
      the
      Buyer and in reliance on the representations, warranties, covenants and
      agreements made by the County in this Agreement, the Buyer shall pay the County
      a price (the “Purchase
      Price”) equal to the Net Asset Value (as defined below in Section 4.3)
      of the
      Purchased Assets as of the Closing Date and the Buyer shall also assume the
      Assumed Liabilities. The Purchase Price shall be paid by the Buyer to the County
      as follows:  (i) the assumption of the payment of the Bond
      Indebtedness (as defined below in Section 2.4(b)) of
      the County as provided below in Section 2.4(b) of
      this Agreement and (ii) to the extent that the Net Asset Value of the Purchased
      Assets as of the Closing exceeds the Bond Indebtedness to be paid as provided
      in
Section 2.4(b),
      then the positive difference (if any) shall be paid by the Buyer to the County
      in cash, at the Closing. Alternatively, upon application by the Buyer to the
      County at least sixty (60) days prior to the date otherwise fixed for Closing,
      and with the County's consent, the amount of the cash portion of the Purchase
      Price shall be financed by the County, and shall be repaid upon such terms,
      and
      at such rate of interest as the County and the Buyer shall agree; in which
      case
      the Buyer's repayment obligation shall be evidenced by the Buyer's promissory
      note delivered by the Buyer to the County at the Closing (the “NAV Note”).

     

    (d) Payment
      of Purchase
      Price.  The following provisions shall apply to the “Bond Indebtedness,” which term
      shall mean the principal balance due from the County as of the Closing Date
      with
      respect to the tax-exempt Cecil County Sanitary District Bond, Series 2004B
      (the
“Bond”), as payable
      under the Loan Agreement dated October 12, 2004 by and between the Maryland
      Water Quality Financing Administration and the County and the related note
      (the
“Related Bond
      Documents”):

     

    (i) The
      Bond
      Indebtedness, together with interest and administrative fees (accruing from
      and
      after the Closing Date) thereon, shall be paid by the Buyer to the County at
      such times and in such amounts as the County is required to pay the same in
      accordance with the terms of the Bond and the Related Bond Documents beginning
      at the Closing Date and the County shall immediately upon receipt thereof remit
      such funds in accordance with the terms of the Bond and the Related Bond
      Documents; provided, that
      the provisions
      of this Section
      2.4(a)(i) shall govern the payment of the Bond Indebtedness by the Buyer
      if, and only if, the County shall deliver to the Buyer on or before March 31,
      2009 an original opinion of legal counsel acceptable to the County, the Maryland
      Water Quality Financing Administration and the Buyer to the effect that the
      sale, assignment, transfer, conveyance and delivery of the Purchased Assets
      by
      the County to the Buyer does not adversely affect the tax exemption of interest
      on the Bond Indebtedness; or

     

    (ii) If
      the
      opinion of legal counsel specified in paragraph (i) above cannot be delivered
      on
      or before March 31, 2009, then the County shall obtain replacement financing
      in
      an amount equal to the Bond Indebtedness or, if greater (subject to the terms
      of
      paragraphs (iii) and (iv) below), all such additional amounts as may be required
      to defease or prepay the Bond in full under the Related Bond Documents and
      the
      applicable Internal Revenue Service Regulations, under either a taxable State
      water pollution control revolving fund bond (“SRF Bond”) or other taxable
      bond (“Non-SRF Bond”) to
      be paid in annual or semi-annual equal installments commencing on or after
      the
      Closing Date.  The County shall be obligated to seek such refinancing
      with the advice and counsel of the Buyer as to the terms and conditions of
      such
      refinancing and, to the extent that the Bond may need to be defeased or any
      other actions taken with the Internal Revenue Service or Treasury Department
      to
      preserve the tax exemption of the interest on the Bond (e.g. any VCAP or other
      settlement payment), which actions shall be made with the advice and consent
      of
      the Buyer.  The Buyer shall pay the County with respect to the Bond
      Indebtedness, as so refinanced, at such times and in such amounts as the County
      is to make payment of principal and interest with respect thereto in accordance
      the terms of such SRF Bond or Non-SRF Bond, as the case may be, and the terms
      of
      its related loan agreement and note, which amounts the County shall immediately
      upon receipt thereof remit in accordance with the terms of such SRF Bond or
      Non-SRF Bond, as the case may be, and the terms of its related loan agreement
      and note.

     

    (iii) For
      the
      avoidance of doubt, the County shall pay and otherwise be responsible and liable
      for the payment of all amounts in respect of all accrued and unpaid interest
      on
      the Bond Indebtedness accruing to and including the Closing Date.  To
      the extent that any administrative fee, defeasance fee or other cost, fee or
      expense, including, without limitation, any prepayment premium or penalty,
      is to
      be paid by the County in connection with the defeasance of the Bond, or in
      connection with the refinancing of the Bond Indebtedness (or such greater
      amounts as may be required to defease or prepay the Bond in full), as provided
      in paragraph (ii) above (all such amounts, collectively, “Financing Fees”), then the
      County shall pay such Financing Fees directly to the lender(s) in accordance
      with the payment terms, as the case may be, of the Related Bond Documents
      applicable to the Bond or the related loan agreement and note applicable to
      the
      SRF Bond or the Non-SRF Bond, as the case may be, and the Buyer shall reimburse
      the County for the Financing Fees upon demand by the County.

     

    (iv) Notwithstanding
      the foregoing, all amounts payable in respect of Liabilities on the Bond for
      arbitrage rebate accruing for periods prior to the Closing Date shall remain
      the
      responsibility of the County and shall not be included in the amounts of any
      obligations to be paid by the Buyer from time to time or upon defeasance of
      the
      Bond as provided herein.  If the Buyer shall be required to pay any
      amounts in respect of the County’s Liabilities on the Bond for arbitrage rebate
      accruing for periods prior to the Closing Date, the County shall reimburse
      the
      Buyer for all such amounts actually paid by the Buyer upon demand by the
      Buyer.

     

    
      	
              (e)  

            	
              Prorations.  The
                parties will make customary prorations in respect of any personal
                or real
                property Taxes, rent and power and other utility charges as of the
                Closing
                Date.

            


    

     

    
      	
              (f)  

            	
              Allocation
                of Purchase
                Price.  The Buyer and the County agree to allocate the
                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 the
                Buyer
                and the County prior to Closing.  The Buyer and the County 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 (the “Closing”)
      shall take place at the County's
      administrative offices in Elkton, Maryland, commencing at 10:00 a.m. local
      time
      on the earlier of (i) five (5) Business Days after the satisfaction or waiver
      of
      all of the conditions to Closing of the County and the Buyer set forth in
Article
      VIIIand Article
      IX, respectively, of this
      Agreement, or (ii) June 30, 2009; provided,
howeverthat
      if the condition to Closing set
      forth in Section
      9.4of this Agreement shall
      not have been satisfied on or prior to April 30, 2009, then, subject to
Section
      11.1(e)of this Agreement,
      the date set forth in clause (ii) shall be such subsequent date that the Buyer
      and the County shall mutually agree upon and that is not more than sixty (60)
      calendar days following the receipt of the approval of the Maryland Public
      Service Commission (the “PSC”)
      of the transactions contemplated by
      this Agreement and the customer rates to be charged by the Buyer based on cost
      of service principles for those Customers served by the
      Facilities.  The date of the Closing is herein referred to as the
“Closing
      Date.”

     

    
      	
              Section
                3.2  

            	
              Closing
                Deliveries.

            


    

     

    
      	
              (a)  

            	
              At
                the Closing, the County shall deliver, or cause to be delivered,
                to the
                Buyer each of the following, each of which shall be in form and content
                reasonably acceptable to the Buyer, the County, and their respective
                counsel:

            


    

     

    
      	
              (i)  

            	
              the
                Purchased Assets;

            


    

     

    
      	
              (ii)  

            	
              a
                General Assignment and Bill of Sale, in substantially the form attached
                hereto as Exhibit
                B (the “Bill of
                Sale”), duly executed by the
                County;

            


    

     

    
      	
              (iii)  

            	
              a
                Deed for the Owned Real Property, in substantially the form attached
                hereto as Exhibit
                C (the “Deed”),
                duly executed by
                the County;

            


    

     

    
      	
              (iv)  

            	
              an
                Assignment and Assumption Agreement, in substantially the form attached
                hereto as Exhibit
                D (the “Assignment
                and Assumption Agreement”), duly executed by the
                County;

            


    

     

    
      	
              (v)  

            	
              a
                Residuals Management Agreement in substantially the form of Exhibit
                E attached
                hereto
                (the “Residuals
                Management Agreement”), duly executed by the
                County;

            


    

     

    
      	
              (vi)  

            	
              a
                confirmatory amendment to the Franchise Agreement acknowledging the
                Closing and the transfer of the Purchased Assets, and the resultant
                extension of the Franchise and the Franchise Area to include the
                Service
                Area, all as contemplated in the Franchise Agreement and the Letter
                of
                Intent;

            


    

     

    
      	
              (vii)  

            	
              all
                original certificates of title, manufacturer’s statements of origin, bills
                of sale or other similar title documents for the Plant and Equipment
                that
                are in the possession of the County, duly endorsed for transfer,
providedthat
                if the
                County shall be unable to deliver to the Buyer any original certificate
                of
                title, manufacturer’s statement of origin, bill of sale or other similar
                title document in respect of any Plant, Property and Equipment included
                in
                the Purchased Assets, the County will deliver a bill of sale or similar
                title document to the Buyer, in form and substance satisfactory to
                the
                Buyer in its sole discretion, with respect to each such item of Plant
                and
                Equipment or cooperate with the Buyer’s reasonable requests to obtain any
                replacement certificate of title or similar title
                document;

            


    

     

    
      	
              (viii)  

            	
              all
                Permits listed on Schedule
                2.1(f), to the extent
                transferable;

            


    

     

    
      	
              (ix)  

            	
              all
                Required Consents (as defined below in Section
                8.4) to
                be obtained or made by the County;

            


    

     

    
      	
              (x)  

            	
              a
                correct and complete list of the Customers of the County as of the
                Closing
                Date;

            


    

     

    
      	
              (xi)  

            	
              the
                certificates required by Sections
                9.1
                and 9.2;

            


    

     

    
      	
              (xii)  

            	
              a
                certificate evidencing the approval by the Commissioners of the County
                of
                the execution and delivery of this Agreement and the Transaction
                Documents
                and the consummation of the transactions contemplated
                hereby;

            


    

     

    
      	
              (xiii)  

            	
              the
                original opinion of legal counsel described in Section
                2.4(a)(i) or evidence reasonably acceptable to the Buyer that the
                County has obtained the replacement financing described in Section
                2.4(b)(ii) of this
                Agreement;

            


    

     

    
      	
              (xiv)  

            	
              duly
                executed payoff
                letters or release letters in respect of the Indebtedness of the
                County as
                of the Closing from all the
                lenders thereof, all in form and substance reasonably acceptable to
                the Buyer (the “Payoff
                Letters”), as may be
                reasonably requested by the Buyer; provided,
however
                that if
                the County obtains the opinion of legal counsel specified in Section
                2.4(a)(i) of this Agreement, the County shall not be required
                pursuant to this Section
                3.2(a)(xiii) to obtain and deliver a Payoff Letter for the
                obligations of the County for Indebtedness in respect of the
                Bond;

            


    

     

    
      	
              (xv)  

            	
              duly
                executed UCC-3 termination
                statements, lien releases or such other release and termination
                instruments (or copies thereof), as the Buyer shall reasonably request
                with respect to any and all Liens on the Purchased Assets, including,
                without limitation, any and all Liens in respect of any Indebtedness
                to be
                paid off or refinanced at the Closing, in order to vest all right,
                title
                and interest in and to the Purchased Assets free and clear of all
                Liens;
                and

            


    

     

    
      	
              (xvi)  

            	
              such
                other documents and
                instruments as may be reasonably necessary to effect the intent of
                this
                Agreement and consummate the transactions contemplated
                hereby.

            


    

     

    
      	
              (b)  

            	
              At
                the Closing, the Buyer shall deliver, or cause to be delivered, each
                of
                the following:

            


    

     

    
      	
              (i)  

            	
              if
                the provisions of Section
                2.4(b)(i) or Section
                2.4(b)(ii) shall govern the payment of the Bond Indebtedness, a
                Promissory Note of the Buyer drawn payable to the County evidencing
                the
                obligations of the Buyer to the County with respect to the payment
                of the
                Bond Indebtedness, as provided in Section
                2.4(b)(i) or Section
                2.4(b)(ii), as applicable;

            


    

     

    
      	
              (ii)  

            	
              if
                the Buyer is to pay any amounts pursuant to Section
                2.4(a)
                of this Agreement, the NAV Note, duly executed by the
                Buyer;

            


    

     

    
      	
              (iii)  

            	
              the
                Assignment and Assumption Agreement duly executed by the
                Buyer;

            


    

     

    
      	
              (iv)  

            	
              the
                Residuals Management Agreement duly executed by the
                Buyer;

            


    

     

    
      	
              (v)  

            	
              the
                certificates required by Sections
                8.1
                and 8.2;

            


    

     

    
      	
              (vi)  

            	
              a
                certificate signed by the Secretary or Assistant Secretary of the
                Buyer
                certifying the truth and correctness of attached copies of the certificate
                of incorporation and bylaws, and that the board of directors of the
                Buyer
                has approved the execution, delivery of this Agreement, the Transaction
                Documents to which it is a party and the consummation of the transactions
                contemplated hereby; and

            


    

     

    
      	
              (vii)  

            	
              a
                certificate, dated as of a date no earlier than three days prior
                to the
                Closing Date, duly issued by the applicable Governmental Authority
                in the
                State of Delaware, showing that the Buyer is in good standing and
                authorized to do business in such
                jurisdiction.

            


    

     

    ARTICLE
      IV

    REPRESENTATIONS
      AND WARRANTIES OF THE COUNTY 

     

    The
      County makes the following representations and warranties to the Buyer. Each
      of
      the following representations and warranties, and each part thereof, shall
      be
      read and qualified as being true and correct as of the date hereof (whether
      or
      not any of the same specifically refer to such qualification). The continued
      truth and correctness of the same, as of the Closing Date, shall be a condition
      precedent of the obligation of the Buyer to proceed with Closing on the Closing
      Date.

     

    
      	
              Section
                4.1  

            	
              Authority
                and
                Validity.

            


    

     

    The
      execution and delivery by the County, the performance by the County under,
      and
      the consummation by the County of the transactions contemplated by, this
      Agreement has been, and each of the agreements, instruments and documents
      contemplated hereby (the “Transaction Documents”) to
      which the County is a party will be, duly and validly authorized by all required
      action by or on behalf of the County.  This Agreement has been, and
      each of the Transaction Documents to which the County is a party will be, duly
      and validly executed and delivered by the County, and constitutes the valid
      and
      legally binding obligation of the County, enforceable against the County in
      accordance with its respective terms, except as the same may be limited by
      applicable bankruptcy, insolvency, reorganization, moratorium or similar
      Applicable Laws (as defined in the Franchise Agreement) 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; Required Consents.

            


    

     

    Except
      for, and subject to receipt of, the Required Consents, neither the execution
      and
      delivery of this Agreement or any of the Transaction Documents, nor the carrying
      out of any of the transactions contemplated hereby, will (a) result in any
      violation of, or be in conflict with, the County's powers or authority under
      Applicable Laws, (b) result in any breach of or constitute a default (or with
      notice or 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 the County is a party or by which it or any
      of
      the Purchased Assets are bound or affected, or (c) result in any violation
      of,
      or be in conflict with, any Applicable Law or Permit applicable to the County
      or
      by which the Purchased Assets are bound or affected.

     

    
      	
              Section
                4.3  

            	
              Net
                Asset Value.

            


    

     

    To
      the
      County's Knowledge Schedule
      4.3 sets forth a true, complete and correct estimate of the Net Asset
      Value of the Purchased Assets as of the date of this Agreement and, as of the
      Closing Date, will reflect, to the County’s Knowledge, a true, complete and
      correct accounting of the Net Asset Value of the Purchased Assets as of such
      Closing Date. For purposes of this Agreement, the term “Net Asset Value” means, with
      respect to any Purchased Asset, the original cost for each such Purchased Asset
      (the “Original Cost”)
less
      the depreciation or amortization taken by the County in respect of each such
      Purchased Asset (collectively, the “Depreciation”) less
      any financial contribution in aid of construction of such Purchased Asset made
      by any developer, any Customer or other interested party (“CIAC”).  The amounts
      qualifying as the Original Cost, Depreciation and CIAC shall be determined
      in
      accordance with the depreciation and valuation standards accepted by the
      PSC.  The Net Asset Values of the Purchased Assets reflected in Schedule
      4.3 shall be subject to adjustment between the date of this Agreement and
      the Closing Date in accordance with the formula for calculation of Net Asset
      Value as set forth above and subject to the terms of this Agreement, including,
      without limitation, to reflect changes in the Purchased Assets or the Net Asset
      Values of the Purchased Assets, in each case, that should have been reflected
      on
Schedule
      4.3 as of the date of this Agreement as a result of information
      identified or discovered between the date of this Agreement and the Closing
      Date.

     

    
      	
              Section
                4.4  

            	
              Title
                to and Condition of Purchased
                Assets.

            


    

     

    
      	
              (a)  

            	
              To
                the County's Knowledge the Purchased Assets constitute all assets,
                properties and rights (in each case whether real or personal or tangible
                or intangible) necessary for the County to conduct the operations
                of the
                Facilities or the Wastewater Collection Systems after the Closing
                as they
                are each presently being conducted.


            


    

     

    
      	
              (b)  

            	
              To
                the County's Knowledge, the County has good, marketable, valid and
                legal
                title to, or a valid leasehold interest in, or a valid license to
                use, all
                of the Purchased Assets (in each case whether real or personal or
                tangible
                or intangible) used by the County in the operations of the Facilities
                or
                the Wastewater Collection Systems or located on any property owned,
                leased
                or used by the County, free and clear of all Liens and defects of
                title.

            


    

     

    
      	
              (c)  

            	
              All
                of the Plant and Equipment are in good condition and repair, ordinary
                wear
                and tear excepted, and, to the best of the County’s Knowledge, have been
                maintained and repaired in a good and workmanlike manner in accordance
                with industry standards.

            


    

     

    
      	
              Section
                4.5  

            	
              Real
                Property.

            


    

     

    
      	
              (a)  

            	
              To
                the County's Knowledge,
                (i)  the County does not own or otherwise hold in fee simple any
                real property used and useful in the conduct of the operations of
                any
                Facility or its Wastewater Collection System other than the Owned
                Real
                Property; and (ii) Except as described on Schedule
                4.5(a), the County
                owns in its sole capacity good, marketable, valid and legal fee simple
                title to the Owned
                Real Property,
                subject to no Liens other than
                (A) real property taxes that are not due and payable as of the Closing
                Date, or (B) use and occupancy restrictions of public record that
                are
                generally applicable to properties in the immediate neighborhood
                or the
                subdivision in which such Owned Real Property is
                located.

            


    

     

    
      	
              (b)  

            	
              To
                the County's Knowledge, (i) the County does not lease any real
                property  or have a right to access or use any other real
                property (including by license or easement) used and useful in
                the conduct of
                the operations of any Facility or its Wastewater Collection System,
                except as described on Schedule
                2.1(c) (“Leased
                Property”); (ii) the County has a valid and enforceable leasehold
                interest or easement in each Leased Property and Easement, respectively,
                listed on Schedule
                2.1(c), free and clear of all Liens; and (iii) none of the lease
                agreements for the Leased Property or Easements will terminate as
                a result
                of the execution and delivery of this Agreement or any of the Transaction
                Documents nor the consummation of the transactions contemplated
                hereby.

            


    

     

    
      	
              (c)  

            	
              To
                the County's Knowledge, the Owned Real Property, the Leased Property
                and
                Easements comprise all of the real property interests necessary for
                the
                Buyer to operate the Facilities and the Wastewater Collection Systems
                after the Closing as they are each presently being conducted by the
                County
                and they will each be conducted by the County on the Closing
                Date.

            


    

     

    
      	
              Section
                4.6  

            	
              Contracts.

            


    

     

    The
      County is not a party to any Contract necessary to or otherwise used in the
      operation of the Facilities or the Wastewater Collection Systems other than
      the
      Contracts set forth on Schedule
      2.1(d).  True and complete copies, or, in the case of oral
      Contracts, written summaries of all Assumed Contracts have been delivered to
      the
      Buyer.  All Assumed Contracts are in full force and effect and
      constitute the valid, legal, binding and enforceable obligation of the County,
      and, to the County’s Knowledge, the counterparties thereto in accordance with
      their terms, except as the same may be limited by applicable bankruptcy,
      insolvency, reorganization, moratorium or similar Applicable Laws now or
      hereafter in effect relating to the enforcement of creditors’ rights generally
      or by principles governing the availability of equitable remedies.  No
      act or omission has occurred which, through the passage of time or the
      giving of notice, or both, would with respect to any Contract set forth on
Schedule
      2.1(d): (a) constitute a material default under any such Contract or
      cause the acceleration of any obligations of the County thereunder, (b) result
      in the creation of any Lien on any of the Purchased Assets, or (c)
      give rise to or result in the automatic termination
      thereof.  Except as set forth on Schedule
      4.6, the County has not been notified that any party to any Assumed
      Contract that it intends to cancel, terminate, not renew or not to exercise
      an
      option to renew under any Assumed Contract, whether in connection with the
      transactions contemplated hereby or otherwise and no such action has been
      threatened or contemplated.

     

    
      	
              Section
                4.7  

            	
              Litigation.

            


    

     

    The
      County has no Knowledge of the existence of any outstanding Orders of any
      Governmental Authority involving the Purchased Assets.  The County has
      no Knowledge of the existence of any Litigation and there are no other actions,
      suits, or legal, administrative or arbitral proceedings or investigations
      (collectively, “Claims”)
      (whether or not the defense thereof or Liabilities in respect thereof are
      covered by insurance), pending or, to the County’s Knowledge, threatened against
      or involving the Purchased Assets, and no material Claims have been instituted
      or, to the County’s Knowledge, threatened against or involving the Purchased
      Assets.

     

    
      	
              Section
                4.8  

            	
              Environmental.

            


    

     

    
      	
              (a)  

            	
              The
                County has no Knowledge that any of the Owned Real Property or real
                property subject to any of the Easements (all, collectively, the
“Real Property”) 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 (each, a “Third Party”) or of
                the
                County evaluating whether any remedial action is necessary to respond
                to
                any release of any Hazardous Substance, pollutant or contaminant
                on or in
                connection with such Real Property.

            


    

     

    
      	
              (b)  

            	
              To
                the Knowledge of the County, the County has received no notice, written
                or
                otherwise, which remains outstanding or unresolved, to the effect
                that the
                Facilities and the Wastewater Collection Systems are not being operated
                in
                compliance in all material respects with all Applicable Laws concerning
                the protection of the public health, public safety or the environment
                (“Environmental
                Laws”).  To the Knowledge of the County, the County has
                received no notice, written or otherwise, which remains outstanding
                or
                unresolved, (i) (A) alleging that the County or any of its agents
                is
                liable under any Environmental Law, or (B) ordering the County or any of
                its agents to remedy or recommending that the County or any of its
                agents
                remediate, any environmental damage to any Real Property or modify
                or
                upgrade its assets to comply with Environmental Laws, and (ii) to
                the
                County's Knowledge, no such claims or notices are threatened or
                pending.

            


    

     

    
      	
              (c)  

            	
              The
                County has no Knowledge of any violation of Environmental Laws, which
                remains 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 during the ownership, occupation
                or use
                of such Real Property by the County or any of its
                agents.

            


    

     

    
      	
              (d)  

            	
              Except
                as set forth on Schedule
                4.8(d), there are no and have not been any underground storage
                tanks, above-ground storage tanks, underground piping (except for
                water or
                sewer), asbestos-containing materials, polychlorinated biphenyls
                or
                Hazardous Substances used, stored, treated or disposed of at any
                Real
                Property.

            


    

     

    
      	
              (e)  

            	
              Schedule
                4.8(e) lists all environmental audits, assessments or reports and
                any other written information concerning the County’s actual or potential
                liability under any Environmental Law (collectively, “Environmental Reports”)
                in the possession or control of the County or any of its agents,
                including, without limitation, all Phase I, II and III environmental
                assessment reports with respect to the Real Property in the possession
                or
                control of the County or any of its agents.  A true and complete
                copy of each Environmental Report listed on Schedule
                4.8(e) has previously been delivered by the County to the
                Buyer.

            


    

     

    
      	
              Section
                4.9  

            	
              Taxes;
                Rebates. 

            


    

     

    
      	
              (a)  

            	
              The
                County has no unpaid liability for Taxes required to have been paid
                with
                respect to any taxable periods ending on or prior to the Closing
                Date.

            


    

     

    
      	
              (b)  

            	
              The
                County has no unpaid liability for any rebates or penalties in lieu
                of
                rebates with respect to the Bond pursuant to Section 148 of the
                Code.

            


    

     

    
      	
              (c)  

            	
              The
                County has filed or will cause to be timely filed all filings to
                be made
                with the Internal Revenue Service or any other Governmental Authority
                in
                respect of the Bond required to have been filed prior to or with
                respect
                to any periods ending on or prior to the Closing
                Date.

            


    

     

    
      	
              (d)  

            	
              The
                County has not made or permitted to be made any use of the proceeds
                of the
                Bond that has caused or would cause the Bond to be “arbitrage bonds”
                within the meaning of Section 148 of the Code.  The County has
                complied with the provisions of Section 148 that are applicable to
                the
                Bond.

            


    

     

    
      	
              (e)  

            	
              (i)
                No deficiency for any amount of rebates or penalties in lieu of rebates
                has been asserted or assessed by the Internal Revenue Service or
                any other
                Governmental Authority with respect to the Bond; (ii) no notice of
                audit
                or possible assessment has been received by the County from the Internal
                Revenue Service or any other Governmental Authority with respect
                to the
                Bond, and (iii) the County has not agreed to any waiver or extension
                of
                the statute of limitations applicable to the imposition, assessment
                or
                collection of any rebate or penalties in lieu of rebate with respect
                to
                the Bond.

            


    

     

    
      	
              Section
                4.10  

            	
              Compliance
                with
                Applicable Laws; Permits.

            


    

     

    
      	
              (a)  

            	
              To
                the County's Knowledge, the County has received no notice, written
                or
                otherwise, which remains unremedied or unresolved, respecting any
                violation by the County or its agents of any Applicable Law applicable
                to
                the operations of one or more of the Facilities or the Wastewater
                Collection Systems as they are currently conducted or the other Purchased
                Assets as currently operated. The County has timely paid all applicable
                fees, including registration fees and maintenance fees, if any, required
                by any Governmental Authority to maintain the Permits in good
                standing.

            


    

     

    
      	
              (b)  

            	
              Schedule
                2.1(f) lists all Permits that are used by the County in the
                ownership, maintenance or operation of the Purchased Assets, as presently
                owned, maintained or operated.  A true and complete copy of each
                Permit listed on Schedule
                2.1(e) has previously been delivered by the County to the
                Buyer.  To the County's Knowledge, all such Permits are in full
                force and effect, and the County has received no notice, written
                or
                otherwise, of default, suspension, revocation, or cancellation of
                any
                Permit from any Governmental Authority. To the County's Knowledge,
                the
                Permits listed in Schedule
                2.1(f) are all of the Permits necessary for the County to conduct
                the operations of the Facilities, the Wastewater Collection Systems
                and
                the other Purchased Assets as currently
                conducted.

            


    

     

    
      	
              Section
                4.11  

            	
              Employees
                and Employee Benefits.

            


    

     

    
      	
              (a)  

            	
              The
                County has heretofore delivered to the Buyer (and will re-deliver,
                as of
                the Closing Date) a true and complete list of all the employees of
                the
                County whose primary responsibilities are in respect of the operations
                of
                one or more of the Facilities, the Wastewater Collection Systems
                or the
                other Purchased Assets, their current respective positions or job
                classifications and their current respective wage scales or salaries,
                as
                the case may be, and vacation benefits (including all accrued vacation
                time). To the County's Knowledge, the County is, in respect of the
                operations of the Facilities, the Wastewater Collection Systems or
                the
                other Purchased Assets, in compliance in all material respects with
                all
                Applicable Laws respecting employment and employment practices, terms
                and
                conditions of employment and wages and hours, and is not engaged
                in any
                unfair labor practice.

            


    

     

    
      	
              (b)  

            	
              To
                the County’s Knowledge, the consummation of the transactions contemplated
                by this Agreement will not entitle any employee to severance pay,
                unemployment compensation or any similar payment, or accelerate the
                time
                of payment or vesting, or increase the amount of any compensation
                due to,
                or in respect of, any employee.

            


    

     

    
      	
              (c)  

            	
              As
                of the Closing Date and for a period of at least three (3) years
                prior
                thereto, the County has not been a party to any labor and collective
                bargaining agreements with any employees whose responsibilities are
                in
                respect to the operations of the Facilities, the Wastewater Collection
                Systems or the other Purchased
                Assets.

            


    

     

    
      	
              Section
                4.12  

            	
              Undisclosed
                Liabilities.

            


    

     

    The
      County has no material liabilities or obligations of any type (whether accrued,
      contingent, unliquidated or otherwise and regardless of when asserted) arising
      out of or which could reasonably be expected to arise out of any acts or
      omissions relating to the County or the ownership or operations of the
      Facilities, the Wastewater Collection Systems or the other Purchased Assets
      at
      or prior to the date hereof, or at or prior to the Closing Date, other than
      liabilities set forth on Schedule
      4.12.

     

    
      	
              Section
                4.13  

            	
              Service
                Area and
                Customers.

            


    

     

    
      	
              (a)  

            	
              The
                County has valid and enforceable rights to use and access the Service
                Area
                and to use, access, operate and otherwise conduct the operation of
                the
                Purchased Assets located within the Service Area, including the right
                to
                access and maintain the Purchased Assets located within the Service
                Areas.
                To the County's Knowledge, there is no pending Litigation by any
                Person
                involving the County’s ability to provide services or otherwise conduct
                the operations of the Facilities and the Wastewater Collection Systems
                or
                to access its properties or assets within, on or under the Service
                Area,
                including, without limitation, any Litigation by the County to annex
                or
                condemn all or any portion of the assets or properties of another
                Person
                within the Service Area.

            


    

     

    
      	
              (b)  

            	
              As
                of the Closing Date, the Franchise Area will be extended to include
                the
                Service Area and the Buyer's Franchise and rights and obligations
                under
                the Franchise Agreement will extend to include its right to operate
                the
                Facilities and the Wastewater Collection System for their intended
                purposes, all subject to the terms, covenants and conditions set
                forth in
                the Franchise Agreement.

            


    

     

    
      	
              Section
                4.14  

            	
              Absence
                of Material Adverse Change.

            


    

     

    Since
      December 31, 2007, there has been no Material Adverse Change or, to the County’s
      Knowledge, any event or circumstance, or liability or obligation of any nature
      (whether accrued, contingent, absolute, determined, determinable or otherwise),
      that, individually or in the aggregate, would reasonably be expected to result
      in a Material Adverse Change.

     

    
      	
              Section
                4.15  

            	
              Customer
                and Supplier Relationships.

            


    

     

    Schedule
      2.1(g) lists all of the Suppliers of the County as of the date hereof,
      which Schedule
      2.1(g) will be updated prior to the Closing to list all of the Suppliers
      as of the Closing Date.  Except as set forth on Schedule
      4.15, the County has not received any written notice from any Customer or
      Supplier regarding its intent to, or its attempt or threat to, cancel its
      Contract or its other relationship with the County or to substantially reduce
      its purchases from the County or its sales to the County, as the case may be,
      whether as a result of the transactions contemplated by this Agreement or
      otherwise.  To the County’s Knowledge, the County is not engaged in
      any disputes with any Customer or Supplier the outcome of which could result
      in
      a Material Adverse Change.

     

    
      	
              Section
                4.16  

            	
              No
                Brokers.

            


    

     

    Neither
      the County or any Person acting on behalf of the County nor any Representative
      of the County 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 any such payment could be based, other than payments for which the Buyer
      will have no liability or obligation.

     

    
      	
              Section
                4.17  

            	
              Disclosure.

            


    

     

    All
      agreements, schedules, exhibits,
      certificates or reports furnished or to be furnished to the Buyer by or on
      behalf of the County in connection with this Agreement or the transactions
      contemplated hereby are true, complete and accurate in all material
      respects.  None of the representations and warranties set forth in
      this Agreement (as modified by the disclosure schedules thereto), the schedules
      and certificates furnished by the County to the Buyer 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.

     

    
      	
              Section
                4.18  

            	
              No
                Other
                Representations and
                Warranties.

            


    

     

    Except
      for the representations and warranties contained in this Article IV, the
      County makes no other representations or warranty with respect to the County,
      the Facilities, the Purchased Assets, the Bond or the Related Bond
      Documents.

     

                                                                   
      

    ARTICLE
      V 

    REPRESENTATIONS
      AND WARRANTIES OF THE BUYER

     

    The
      Buyer
      makes the following representations and warranties to the County. Each of the
      following representations and warranties, and each part thereof, shall be read
      and qualified as being made only to the Buyer's Knowledge, as being true and
      correct as of the date hereof (whether or not any of the same specifically
      refer
      to such qualification). The continued truth and correctness of the same, as
      of
      the Closing Date, shall be a condition precedent of the obligation of the County
      to proceed with Closing on the Closing Date.

     

    
      	
              Section
                5.1  

            	
              Organization
                and Good Standing.

            


    

     

    The
      Buyer is a corporation duly
      organized, validly existing and in good standing under the Applicable Laws
      of
      the State of Delaware.  The 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.

            


    

     

    The
      execution and delivery by the Buyer, the performance by the Buyer under, and
      the
      consummation by the Buyer of the transactions contemplated by, this Agreement
      and the Transaction Documents to which the Buyer is a party, have been duly
      and
      validly authorized by all required corporate action by or on behalf of the
      Buyer.  This Agreement has been, and the Transaction Documents to
      which the Buyer is a party will be, duly and validly executed and delivered
      by
      the Buyer and constitute valid and binding obligations of the Buyer, enforceable
      against the Buyer in accordance with their respective terms, except as the
      same
      may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
      or similar Applicable 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
      the
      Buyer, threatened against the Buyer, nor is there any Judgment outstanding
      against the Buyer or to or by which the Buyer is subject or bound that
      materially adversely affects the ability of the Buyer to consummate any of
      the
      transactions contemplated hereby.

     

    
      	
              Section
                5.4  

            	
              Consents.

            


    

     

    Except
      for and subject to the receipt of
      the Required Consents, no consent, approval, permit, authorization of,
      declaration to or filing with any Governmental Authority or any other Person
      on
      the part of the Buyeris
      required in connection with the execution and delivery of this Agreement or
      the
      consummation of the transactions contemplated hereby.

     

    
      	
              Section
                5.5  

            	
              No
                Brokers.

            


    

     

    Neither
      the Buyer nor any Person acting
      on behalf of the Buyer has agreed to pay a commission, finder’s fee, investment
      banking fee or similar payment in connection with this Agreement or any matter
      related hereto nor has the Buyer taken any action on which a claim for any
      such
      payment could be based.

     

    
      	
              Section
                5.6  

            	
              Disclosure.

            


    

     

    None
      of
      the representations and warranties set forth in this Agreement (as modified
      by
      the disclosure schedules thereto), the schedules and certificates furnished
      by
      the Buyer to the County 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.

     

    
      	
              Section
                5.7  

            	
              No
                Other
                Representations and
                Warranties.

            


    

     

    Except
      for the representations and warranties contained in this Article V, the Buyer
      makes no other representations or warranty with respect to the
      Buyer.

     

                                                                  
      

    ARTICLE
      VI  

    PRE-CLOSING
      COVENANTS

     

    During
      the period from the date of this
      Agreement through and including the Closing Date:

     

    
      	
              Section
                6.1  

            	
              Conduct
                of Business Pending Closing.

            


    

     

    Except
      as
      set forth in Schedule
      6.1 or as may be first consented to by the Buyer in writing, during the
      period from the date of this Agreement through and including the Closing Date,
      the County shall conduct the operations of the Facilities, the Wastewater
      Collection Systems and the other Purchased Assets according to its ordinary
      and
      usual course of business and preserve intact the Purchased Assets and will
      not
      sell, lease, transfer, assign or convey any Purchased Assets, amend modify,
      cancel or terminate any Assumed Contract, will not amend any Tax Return and
      will
      otherwise maintain satisfactory relationships with respect to the Purchased
      Assets with other Governmental Authorities, Suppliers, agents, Customers, and
      others having relationships with the County in respect of the operations of
      the
      Facilities, the Wastewater Collection Systems or the other Purchased Assets
      or
      the Bond.  In addition, the County shall promptly notify the Buyer in
      writing of any notice or other communication that it receives (written or oral)
      respecting any Litigation or Audit involving or affecting the Purchased
      Assets.  Without limiting the foregoing and except as set forth on
Schedule
      6.1 or as may be first consented to by the Buyer in writing, the County
      shall not:  

     

    
      	
              (a)  

            	
              enter
                into any Contract other than with Customers or Suppliers in the ordinary
                course of business substantially as conducted
                heretofore;

            


    

     

    
      	
              (b)  

            	
              cause
                any Material Adverse Change or perform or not perform 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 to any Customer, Supplier or employee whose
                responsibilities involve the operation of the Purchased Assets, other
                than
                for services provided to Customers on credit or advances to employees
                under a Benefit Plan, in each case, in the ordinary course of business
                consistent with past practice;

            


    

     

    
      	
              (d)  

            	
              (i)
                incur any Indebtedness in respect of the Purchased Assets, 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;

            


    

     

    
      	
              (e)  

            	
              cancel,
                waive or release any debt, right or claim in respect of the Purchased
                Assets or the ownership or operation thereof, except, in each case,
                in the
                ordinary course of business consistent with past
                practice;

            


    

     

    
      	
              (f)  

            	
              change
                the accounting principles, methods or practices (including, without
                limitation, any change in depreciation or amortization policies or
                rates)
                utilized by the County involving or affecting the Purchased Assets
                or the
                ownership or operation thereof;

            


    

     

    
      	
              (g)  

            	
              make
                any capital expenditure or commitment therefore for which the Buyer
                will
                be liable at or following the Closing or that will increase the Net
                Asset
                Value of any of the Purchased
                Assets;

            


    

     

    
      	
              (h)  

            	
              make,
                revoke or change any Tax election, or settle any matter relating
                to Taxes
                involving or affecting the Purchased Assets or the ownership or operation
                thereof or any matter relating to rebates or penalties in lieu of
                rebates
                involving or affecting the Bond;

            


    

     

    
      	
              (i)  

            	
              increase
                the wages or salaries, as the case may be, or vacation benefits provided
                to any employee whose primary responsibilities are in respect of
                the
                operations of one or more of the Facilities or the Wastewater Collection
                Systems, other than such increases in the ordinary course of business
                substantially as conducted heretofore;
                or

            


    

     

    
      	
              (j)  

            	
              take
                any action that if taken after the date of this Agreement would constitute
                a variance from or breach of the representations and warranties set
                forth
                in Article
                IV of this Agreement.

            


    

     

    
      	
              Section
                6.2  

            	
              Supplements
                to Schedules.

            


    

     

    The
      County, on the one hand, and the Buyer, on the other, shall promptly give to
      the
      other notice with respect to any matter or change hereafter arising which,
      if
      existing or occurring on or before the date hereof, would have been required
      to
      be set forth or described in any of the Schedules hereto or which is necessary
      to correct or make the representations and warranties contained herein correct
      and complete as of the Closing Date and shall supplement or amend the Schedules
      hereto as appropriate with respect to such matters.  If at any time at
      or prior to the Closing the County discloses pursuant to this Section 6.2 any such
      change that constitutes a Material Adverse Change, or relates to any material
      and adverse events, facts or circumstances, then the Buyer shall have the right
      and option, exercisable at any time prior to Closing, to terminate this
      Agreement upon giving written notice to the County or, alternatively, to accept
      the disclosure in exchange for indemnification by the County in respect
      thereof on terms mutually acceptable to the Buyer and the County.

     

    
      	
              Section
                6.3  

            	
              Access
                and Cooperation; Results of Due Diligence
                Investigation.

            


    

     

    
      	
              (a)  

            	
              The
                County shall provide the Buyer and its Representatives with all
                information that the Buyer may reasonably request in connection with
                this
                Agreement and the transactions contemplated hereby in auditable
                form.  Upon reasonable prior notice, the County shall provide
                the Buyer and its Representatives with access during regular business
                hours to the Purchased Assets and the Books and Records (as defined
                in the
                Franchise Agreement) relating to the Purchased Assets, Customers
                and
                Suppliers of the County and the Bond and Related Bond
                Documents.  The
                County and its Representatives will also cooperate with the Buyer
                and its
                Representatives, including the Buyer’s auditors and counsel, in the
                Buyer’s due diligence investigation of the Purchased Assets (including,
                without limitation, a title review or in obtaining title opinions
                satisfactory to the Buyer as to the County’s rights, title or interest in
                and to the Owned Real Property, the Easements, the Leased Property
                and the
                Plant and Equipment) and any Liabilities in respect thereof and the
                Liabilities or obligations of the County in respect of the Bond or
                other
                Indebtedness of the County involving or affecting the Purchased
                Assets.  In addition, the County and its Representatives will
                cooperate with the Buyer and its Representatives in the preparation of
                any documents
                or other materials required in connection with the transactions
                contemplated by this Agreement, including, without limitation, the
                refinancing or financing, as the case may be, contemplated by Section
                2.4(b) of this
                Agreement.  The County and the Buyer shall also use their
                respective reasonable efforts to satisfy all conditions to Closing
                and all
                other matters relating to the consummation of the transactions
                contemplated by this Agreement and the Transaction
                Documents.  The County and the Buyer shall cooperate with each
                other in connection with any filings with any other Governmental
                Authority, including, without limitation, all filings with the PSC,
                and
                shall use their reasonable efforts to furnish to each other all
                information required for any such filing to be made with any Governmental
                Authority in connection with the transactions contemplated by this
                Agreement.

            


    

     

    
      	
              (b)  

            	
              If
                in the course of the Buyer’s due diligence investigation, the Buyer
                discovers or identifies any Purchased Assets that are not in good
                condition or repair (ordinary wear and tear excepted), defects of
                title,
                defects or impediments in the right to use, or Liens or Liabilities
                other
                than the Liens or Liabilities disclosed by the County in the Disclosure
                Schedules attached hereto with respect to, any of the Purchased Assets,
                or
                Indebtedness other than the Bond Indebtedness then, prior to the
                Closing
                and promptly following discovery or identification thereof, the Buyer
                shall notify the County of such deficiencies in condition, defects
                of
                title, defects or impediments to use, Liens or Liabilities or Indebtedness
                discovered or otherwise identified by the Buyer in the course of
                its due
                diligence investigation.  Promptly following receipt of such
                notice from the Buyer and prior to the Closing, the County shall
                notify
                the Buyer as to whether it intends to elect to use its commercially
                reasonable efforts to repair, or remove or otherwise correct all
                defects
                of title or defects or impediments in the right to use, any of the
                Purchased Assets so discovered or identified by the Buyer or to satisfy
                and discharge or obtain and, if applicable, file with the appropriate
                Governmental Authority, duly executed release agreements, termination statements,
                lien
                releases or such other release and termination instruments with respect
                to
                any and all such Liens or Liabilities or Indebtedness so discovered
                or
                identified by the Buyer. The County
                shall be under no
                obligation to make any such election, provided that, (i) the County
                shall
                be obligated to take action to satisfy and discharge any Indebtedness
                and
                to remove or release any Lien or Liability with respect to any of
                the
                proposed Purchased Assets to the extent that any such Indebtedness
                may be
                satisfied and discharged or such Lien or Liability may be removed
                or
                released solely by the payment of money (in which case the County
                shall be
                obliged to take action to make such payment and to satisfy and discharge
                such Indebtedness or to remove or release such Lien or Liability,
                as the
                case may be, not later than the Closing Date); and (ii) under no
                circumstances shall the County be obliged to commence, prosecute,
                join in
                or to defend against any judicial action with respect to any such
                defects of title, defects or impediments in the right to use
                or
                Liens or Liabilities as identified by the Buyer. If, at or prior to
                Closing, the
                Buyer shall not be satisfied in its sole discretion that the County
                shall convey to the Buyer (i) the Purchased Assets in good condition
                and
                repair (subject to ordinary wear and tear), (ii) good, marketable,
                valid
                and legal title to or a valid right to use any Purchased Asset, free
                and
                clear of all Liens, or (ii) that the Indebtedness to be satisfied
                and
                discharged or the Liens or Liabilities requested by the Buyer to
                be
                released pursuant to this Section
                6.3
                have not been respectively satisfied and discharged or released,
                in each
                case, as determined by the Buyer in its sole discretion, then the
                Buyer
                shall have the right and option, exercisable by written notice at
                any time
                at or prior to Closing, (w) to exclude one or more of such assets
                from the
                Purchased Assets (which assets the Buyer shall identify in writing
                to the
                County) and to reduce the Cash Purchase Price to be paid to the County
                by
                the amount of the Net Asset Value ascribed to each such asset, (x)
                solely
                with respect to such Purchased Assets for which the Buyer shall determine
                that the County shall not convey to the Buyer good, marketable, valid
                and
                legal title, and subject to the agreement of the County, to accept
                indemnification from the County in respect of all Liabilities of
                the Buyer
                arising out of or relating to such defects of title, notwithstanding
                any
                provisions to the contrary in Section
                10.1 of
                this Agreement, but otherwise subject to the terms, conditions and
                limitations set forth in Article
                X of
                this Agreement, or (y) to terminate this Agreement.  If the
                Buyer elects to exclude any asset from the Purchased Assets pursuant
                to
                clause (w) of the foregoing sentence, the Buyer hereby waives any
                right to
                indemnification or other remedies available to the Buyer under this
                Agreement with respect to any inaccuracies in or breaches of the
                representations and warranties contained in this Agreement with respect
                to
                each such asset that is excluded from the Purchased
                Assets.

            


    

     

    
      	
              Section
                6.4  

            	
              Application
                for PSC Approval.

            


    

     

    Not
      later
      than three (3) full calendar months prior to the date otherwise fixed for
      Closing, the Buyer will prepare and submit all necessary applications to the
      PSC
      for the approval of the
      transactions contemplated by this Agreement and the customer rates to be charged
      by the Buyer based on cost of services principles for those Customers served
      by
      the Facilities.

     

    
      	
              Section
                6.5  

            	
              Exclusive
                Dealing Prior to
                Closing.  

            


    

     

    The
      provisions of the paragraph under the caption “Exclusive Dealing” of the Letter
      of Intent shall continue in full force and effect until Closing, at which time
      such provisions shall terminate and be of no further force or
      effect.  

     

    
      	
              Section
                6.6  

            	
              Compliance
                with Bulk
                Transfer Act.

            


    

     

    If
      the parties determine that all or any
      part of the transactions contemplated in this Agreement constitute a bulk
      transfer subject to the provisions of Title 6 of the Commercial Law Article
      of
      the Annotated Code of Maryland then, on or before the fifteenth (15th) day
      prior
      to the anticipated date of the Closing, the County shall deliver to the Buyer
      a
      statement (the “Bulk
      Transfer
      Statement”) containing each
      and every item of information that is required to be included in a notice to
      creditors under the provisions of Section 6-107 of the Commercial Law Article
      of
      the Annotated Code of Maryland.  The County hereby jointly and
      severally represent, warrant and covenant that the information set forth in
      the
      Bulk Transfer Statement shall be accurate and complete at and as of the date
      delivered and at and as of the Closing.  The Buyer shall then submit a
      notice to all creditors specified in the Bulk Transfer Statement and to the
      Comptroller of the State of Maryland at least ten (10) days prior to
      Closing.  If any creditor (or the Comptroller) asserts a claim in
      response thereto prior to Closing, the County shall, at Closing, pay and
      discharge all such claims to the applicable creditor.

     

    
      	
              Section
                6.7  

            	
              Cooperation
                Obtaining
                Approvals from Governmental
                Authorities.

            


    

     

    From
      the
      date of this Agreement through the Closing Date, upon request by the Buyer,
      the
      County shall support in writing and otherwise reasonably cooperate with the
      Buyer to assist the Buyer in the obtaining of, any authorizations or other
      Permits, including a franchise, from any Governmental Authority sought by the
      Buyer in connection with this Agreement or the transactions contemplated
      hereby.

     

    
      	
              Section
                6.8  

            	
              Financing;
                Engagement of Nationally Recognized Bond
                Counsel.

            


    

     

    Within
      ten (10) days following the execution and delivery of this Agreement by the
      Buyer and the County, the County shall engage nationally recognized bond counsel
      of its own choosing and acceptable to the Maryland Water Quality Financing
      Administration and the Buyer to render the opinion of legal counsel contemplated
      by Section
      2.4(b)(i) and, if applicable, to represent the County in connection
      with the refinancing arrangements contemplated by Section 2.4(b)(ii) of
      this Agreement.  Promptly following the County’s engagement of its
      nationally recognized bond counsel pursuant to the foregoing sentence, the
      County and its bond counsel shall consult with the Buyer and the Buyer’s legal
      counsel regarding the opinion of legal counsel contemplated by Section 2.4(b)(i)
      and/or the refinancing arrangements contemplated by Section 2.4(b)(ii) of
      this Agreement.  If the nationally recognized bond counsel retained by
      the County pursuant to this Section 6.8, after
      consultation with the Buyer and its legal counsel, shall determine that it
      shall
      not be able to render an opinion in accordance with Section 2.4(b)(i) of
      this Agreement, the County shall promptly notify the Buyer of such determination
      by its legal counsel and immediately upon the giving of such notice the County
      shall be obligated to take all actions reasonably necessary, appropriate or
      convenient to obtain refinancing in accordance with Section 2.4(b)(ii) of
      this Agreement, including, without limitation, determining, soliciting and
      obtaining all consents, approvals and other authorizations of any Governmental
      Authority or other Person required to issue an SRF Bond or Non-SRF-Bond, as
      the
      case may be, and preparing, negotiating and entering into such agreements,
      instruments, certificates, schedules and other documents necessary, appropriate
      or convenient to issue an SRF Bond or Non-SRF Bond, as the case may
      be.

     

                                                                  
      

    ARTICLE
      VII  

    POST-CLOSING
      COVENANTS

     

    
      	
              Section
                7.1  

            	
              Payment
                of Taxes and
                Rebates; Audits.

            


    

     

    From
      and after the Closing through and
      including the date that is the seventh (7th) anniversary of the Closing Date,
      the County and the 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, rebates or penalties in lieu
      of rebates with respect to the Bond pursuant to Section 148 of the Code, filings with the Internal
      Revenue
      Service or other Governmental Authorities in respect of Taxes or the Bond and
      other information as may be reasonably requested for the preparation by the
      Buyer or the County of any Tax Returns or other filings with the Internal
      Revenue Service or other Governmental Authorities in respect of the Bond (or
      rebates or penalties in lieu of rebates in respect thereof), elections, consents
      or certificates required to be prepared and filed by the Buyer or the County
      and
      any audit or other examination by the Internal Revenue Service or any
      Governmental Authority, or judicial or administrative examination, proceeding
      or
      other enforcement action relating to liability for Taxes or in respect of the
      Bond (or rebates or penalties in lieu of rebates in respect thereof) by the
      Internal Revenue Service or other Governmental Authority (each, an “Audit”).  The
      Buyer and the County
      will each retain and provide to the other party all Books and Records and other
      information which may be relevant to any such Tax Return or filings with the
      Internal Revenue Service or other Governmental Authorities in respect of the
      Bond (or rebates or penalties in lieu of rebates in respect thereof), Audit
      or
      determination, and will each provide the other party with any final
      determination of any such Audit or determination that affects any amount
      required to be shown on any Tax Return of the other party for any period or
      in
      respect of the Bond.  Without limiting the generality of the
      foregoing, each of the Buyer and the County shall retain copies of all Tax
      Returns or other filings with the Internal Revenue Service or other Governmental
      Authorities in respect of the Bond (or rebates or penalties in lieu of rebates
      in respect thereof), supporting work schedules and other records relating to
      tax
      or other reporting periods or portions thereof ending prior to or on the Closing
      Date.

     

    
      	
              Section
                7.2  

            	
              Access
                to Books and
                Records.

            


    

     

    From
      and
      after Closing, the County will give the Buyer and its Affiliates such access
      to
      the Books and Records and other documents relating to the Purchased Assets
      in
      the possession of the County or its agents relating to the periods ending at
      or
      prior to the Closing and reasonable access during normal business hours to
      such
      individuals as were elected or appointed officials, officers, boards,
      commissions, commissioners, agents, employees or other service providers of
      the
      County during any periods ending at or prior to the Closing and who are
      employees of the County or its agents as of the date of such request as the
      Buyer shall reasonably request as necessary for the preparation of the Tax
      filings of the Buyer or its Affiliates and to defend or prosecute any
      Litigation.  The County and its agents shall maintain all such Books
      and Records and other documents for a period of at least seven (7) years or
      as
      otherwise required by Applicable Laws.  From and after the Closing,
      the Buyer will give the County and its agents such access to any Books and
      Records relating to the periods ending at or prior to the Closing within the
      possession or control of the Buyer or its Affiliates and reasonable access
      during normal business hours to such individuals as were employees of the County
      during any periods ending at or prior to the Closing and who are employees
      of
      the Buyer as of the date of such request as the County and its agents shall
      reasonably request as necessary for the preparation of reports of the County
      required by Applicable Laws or to prosecute any Litigation.  The Buyer
      shall maintain all such Books and Records for a period of at least seven (7)
      years or as otherwise required by Applicable Laws.

     

    
      	
              Section
                7.3  

            	
              Employee
                Matters.

            


    

     

    
      	
              (a)  

            	
              At
                or immediately after the Closing, the Buyer or one of its Affiliates
                shall
                offer employment to commence at the Closing Date to up to nine (9)
                employees of the County identified on schedules previously delivered
                to
                the Buyer by the County, on the same terms and conditions with respect
                to
                salary or wages and vacation (as such salary or wages and vacation are
                respectively described on such provided schedules) at which
                each such
                employee was employed by the County immediately prior to the Closing
                Date;
                provided,
                however,
                that this Section
                7.3(a)
                shall obligate the Buyer to offer employment only to those employees
                of
                the County set forth on such provided schedules who are actively
                employed
                by the County as of the close of business on the day immediately
                prior to
                the Closing Date.

            


    

     

    
      	
              (b)  

            	
              All
                employees hired by the Buyer or its Affiliates pursuant to offers
                of
                employment under Section
                7.3(a)
                (the “Hired
                Employees”) will be permitted to elect to participate in the health
                and welfare employee benefit plans of the Buyer or its Affiliates
                in which
                the Buyer’s employees with similar positions and responsibilities may
                elect to participate, subject to the employment policies and procedures
                of
                the Buyer or its Affiliates and the applicable terms and conditions
                of the
                employee benefit plans of the Buyer or its Affiliates.  The
                Buyer shall not be required to accept, and shall not accept, any
                rollovers
                or other transfers of any amounts into its or any of its Affiliate’s
                employee benefit plans.

            


    

     

    
      	
              (c)  

            	
              All
                Hired Employees shall be “at-will” employees of the Buyer or its
                Affiliates and nothing expressed or implied in this Agreement will
                obligate the Buyer or its Affiliates or their respective successors
                or
                assigns to provide continued employment to any such Hired Employee
                for any
                specified period of time following the Closing Date.  After the
                Closing Date, the Buyer and its Affiliates will be the sole judge
                of the
                number, identity and qualifications of the employees necessary for
                the
                conduct of the operations of the Facilities, the Wastewater Collection
                Systems and the other Purchased Assets and reserves the right to
                take any
                personnel action it deems necessary or appropriate with respect to
                the
                Hired Employees.

            


    

     

    
      	
              Section
                7.4  

            	
              Nutrient
                Credits.

            


    

     

    
      	
              (a)  

            	
              If
                the Buyer or its Affiliates shall convert the wastewater facility
                known as
                the Cherry Hill Wastewater Facility (the “Cherry Hill Facility”),
                in accordance with Section 7.4 of the Cherry Hill/Harbourview Asset
                Purchase Agreement, then nutrient credits may be made available as
                a
                result thereof.  Any such available nutrient credits shall first
                be available for the Buyer’s use in connection with its operation of its
                owned wastewater facilities in the Service Area, and all excess available
                nutrient credits shall be available for the County’s use in connection
                with its operation of wastewater facilities in the Service Area,
                including
                the wastewater facility known as the Seneca Point Wastewater
                Facility.

            


    

     

    
      	
              (b)  

            	
              The
                Buyer shall notify the County of any known or expected completion
                date for
                the conversion of the Cherry Hill Facility to a transfer station,
                and the
                parties shall generally coordinate plans and schedules with one another
                and with the Maryland Department of the Environment to make nutrient
                credits available at such times as are necessary and convenient to
                assist
                in the efficient development of the respective wastewater facilities
                of
                the Buyer and the County, and to ensure that such nutrient credits
                are
                used promptly upon their
                availability.

            


    

     

    
      	
              (c)  

            	
              The
                County shall cooperate with the Buyer and its Affiliates, in connection
                with all consents, approvals, authorizations and Permits relating
                to
                making nutrient credits available for use by the Buyer and the County
                in
                accordance with Section
                7.4
                (such costs of preparing and filing the application(s) to be borne
                by the
                Buyer and its Affiliates) and will furnish to the Buyer or its Affiliates
                any information in the County’s possession required for such applications
                to be made with the Governmental Authority.  Nothing set forth
                in this Agreement shall require the Buyer or its Affiliates to defend
                against any governmental challenges or denials of any application
                made by
                the Buyer or its Affiliates pursuant to this Section
                7.4.

            


    

     

    
      	
              Section
                7.5  

            	
              Rate
                Structure.

            


    

     

    
      	
              (a)  

            	
              From
                the Closing Date until December 31, 2010 (the “Rate Stabilization
                Period”) and subject to the approval of the PSC, the Buyer shall
                be
                permitted to increase the rates for customers in existence on and
                after
                the Closing Date in the Service Area only on an annual basis by the
                change
                in the Revised Consumer Price Index for all Urban Consumers, all
                items,
                U.S. City Average, as reported by the Bureau of Labor Statistics,
                Department of Labor (the “CPI”).  The
                change in the CPI shall be determined by multiplying
                the existing customer rates by a fraction (a) the numerator of which
                is
                the difference between (i) the CPI for the last full calendar year,
                and
                (ii) the CPI for the last full calendar year for the preceding year
                (the
                “Prior Year’s
                CPI”), and (b) the denominator of which is the Prior Year's
                CPI.  Each change in CPI pursuant to this Section
                7.5(a)
                shall be calculated as of January 1 of each calendar year within
                the Rate
                Stabilization Period and shall be determined by the Buyer within
                forty-five (45) days after the date on which the CPI for the last
                full
                calendar year is publicly released by the Bureau of Labor Statistics,
                Department of Labor, which adjustment in rates shall be applied
                retroactively to January 1 of each such calendar year within the
                Rate
                Stabilization Period.

            


    

     

    
      	
              (b)  

            	
              During
                the Rate Stabilization Period, upon request by the Buyer, the County
                shall
                support in writing and otherwise reasonably cooperate with the Buyer
                to
                assist the Buyer in the obtaining of any authorizations or other
                Permits
                from the PSC sought by the Buyer in connection with the adjustment
                of the
                customer rates for the Service Area pursuant to Section
                7.5(a).

            


    

     

    
      	
              (c)  

            	
              Nothing
                set forth in this Agreement shall prohibit the Buyer’s imposition of
                PSC-approved connection fees or charges on new customers in the Service
                Area who are served by any Facility beginning after the Closing
                Date.

            


    

     

    
      	
              Section
                7.6  

            	
              Further
                Assurances.

            


    

     

    At
      any time and from time to time after
      the Closing, at the Buyer’s reasonable request and without further consideration
      (but at the Buyer’s cost of preparation and filing), the County promptly shall
      execute and deliver such confirmatory instruments of sale, transfer, conveyance,
      assignment and confirmation, and take such other reasonable action, as the
      Buyer
      may reasonably request to transfer, convey and assign to the Buyer, and to
      confirm the Buyer’s right, title and interest in and to, all of the Purchased
      Assets, to put the Buyer in actual possession and operating control thereof,
      to
      assist the Buyer in exercising all rights with respect thereto and to carry
      out
      the purposes and intent of this Agreement.

     

                                                                
      

    ARTICLE
      VIII    

    CONDITIONS
      PRECEDENT TO THE OBLIGATIONS OF THE COUNTY

     

    The
      obligations of the County with
      respect to actions to be taken on the Closing Date are subject to the
      satisfaction by the Buyer or waiver by the County on or prior to the Closing
      Date of each of the conditions set forth in this Article
      VIII.

     

    
      	
              Section
                8.1  

            	
              Representations
                and
                Warranties.

            


    

     

    All
      representations and warranties of the Buyer contained in this Agreement shall
      be
      true and correct as of the Closing Date with the same effect as though such
      representations and warranties had been made on and as of such date; and a
      certificate to the foregoing effect dated the Closing Date and signed by an
      authorized officer of the Buyer shall have been delivered to the
      County.

     

    
      	
              Section
                8.2  

            	
              Performance
                of
                Obligations.

            


    

     

    Each
      and all of the agreements of the
      Buyer to be performed on or before the Closing Date pursuant to the terms of
      this Agreement shall have been duly performed in all material respects, each
      of
      the documents, agreements, consents and other items to be delivered to the
      County pursuant to Section
      3.2(b)shall have been
      delivered, and the Buyer shall have delivered to the County a certificate,
      dated
      as of the Closing Date, to such effect signed by an authorized officer of the
      Buyer.

     

    
      	
              Section
                8.3  

            	
              No
                Litigation

            


    

     

    No
Litigation
      before a court or any
      other Governmental Authority shall have been instituted or threatened seeking
      to
      restrain or prohibit the transactions contemplated by this Agreement, and no
      Governmental Authority shall have taken any other action prohibiting the County
      from proceeding with the transactions hereunder.

     

    
      	
              Section
                8.4  

            	
              Consents
                and Approvals.

            


    

     

    All
      necessary consents of and filings required to be obtained or made with any
      Person or any Governmental Authority relating to the consummation of the
      transactions contemplated herein (collectively, “Required Consents”) to be
      obtained or made by the Buyer shall have been obtained and made by the Buyer
      and
      the Buyer shall be ready to perform under such Required Consents.

     

                                                                 
      

    ARTICLE
      IX   

    CONDITIONS
      PRECEDENT TO THE OBLIGATIONS OF THE BUYER

     

    The
      obligations of the Buyer with
      respect to actions to be taken on the Closing Date are subject to the
      satisfaction by the County (as applicable) or waiver by the Buyer on or prior
      to
      the Closing Date of all of the conditions set forth in this Article
      IX.

     

    
      	
              Section
                9.1  

            	
              Representations
                and Warranties.

            


    

     

    All
      the representations and warranties
      of the County contained in this Agreement shall be true and correct as of the
      Closing Date with the same effect as though such representations and warranties
      had been made on and as of such date; and a certificate to the foregoing effect,
      dated as of the Closing Date and signed by an authorized person on behalf of
      the
      County, shall have been delivered to the Buyer.

     

    
      	
              Section
                9.2  

            	
              Performance
                of Obligations.

            


    

     

    Each
      and all of the agreements of the
      County to be performed on or before the Closing Date pursuant to the terms
      of
      this Agreement shall have been duly performed in all material respects, each
      of
      the documents, agreements, consents and other items to be delivered to the
      County pursuant to Section
      3.2(a)shall have been
      delivered, and the County shall have delivered to the Buyer a certificate,
      dated
      as of the Closing Date to such effect, signed by an authorized person on behalf
      of the County.

     

    
      	
              Section
                9.3  

            	
              No
                Litigation.

            


    

     

    No
Litigation
      before a court or any
      other Governmental Authority shall have been instituted or threatened seeking
      to
      restrain or prohibit the transactions contemplated by this Agreement, and no
      Governmental Authority shall have taken any other action prohibiting the Buyer
      from proceeding with the transactions hereunder.

     

    
      	
              Section
                9.4  

            	
              PSC
                Approval.

            


    

     

    An
      order
      or other authorization of the PSC approving the transactions contemplated
      by this
      Agreement and the customer rates to be charged by the Buyer based on cost of
      service principles for those Customers served by the Facilities shall
      have been obtained by the Buyer and shall be in full force and effect as of
      the
      Closing.

     

    
      	
              Section
                9.5  

            	
              Consents
                and Approvals.

            


    

     

    All
      Required Consents to be obtained or made by the County shall have been obtained
      and made and the County shall be ready to perform under such Required
      Consents.

     

    
      	
              Section
                9.6  

            	
              Financing.

            


    

     

    The
      County shall have obtained the opinion of legal counsel specified in Section 2.4(b)(i) of
      this Agreement or obtained replacement financing in accordance with Section 2.4(b)(ii) of
      this Agreement, in each case, on terms and conditions satisfactory to the Buyer
      in its reasonable discretion; and, if Buyer shall have made application to
      the
      County to finance the cash portion of the Purchase Price, pursuant to Section 2.4(a) of
      this Agreement, the Buyer shall have obtained such financing.

     

    
      	
              Section
                9.7  

            	
              Satisfaction
                of
                Indebtedness; Release of
                Liens.

            


    

     

    The
      County shall have provided the Buyer with the Payoff Letters and UCC-3s or
      other
      releases or documentation to be delivered pursuant to Section 3.2(a)(xiv)
      and (xv) for
      the payment and satisfaction in full all obligations of the County for the
      Bond
      Indebtedness and any and all other Indebtedness of the County involving or
      affecting the Purchased Assets, and fully and finally released and terminated
      all Liens in respect thereof.

     

    
      	
              Section
                9.8  

            	
              Absence
                of Certain Changes.

            


    

     

    No
      change
      that constitutes or results in a Material Adverse Change shall have occurred
      or
      arisen.

     

    
      	
              Section
                9.9  

            	
              Due
                Diligence.

            


    

     

    The
      Buyer
      shall have notified the County in writing that the Buyer has completed and
      is
      satisfied, as determined by the Buyer in its sole discretion, with its due
      diligence, investigation, review and analysis of the Facilities, the Wastewater
      Collection Systems and the other Purchased Assets, including, without
      limitation, an investigation into the condition of the Purchased Assets and
      a
      review and analysis (including such title or other opinions as the Buyer may
      determine in its sole discretion) of the County’s title to or rights to use the
      Purchased Assets, the Liabilities associated therewith, including, without
      limitation, any Indebtedness involving or affecting the Purchased Assets, in
      each case, satisfactory to the Buyer in its sole discretion.

     

                                                                   
      

    ARTICLE
      X 

    INDEMNIFICATION

     

    
      	
              Section
                10.1  

            	
              Obligations
                of the County.

            


    

     

    Subject
      to the provisions below, the County shall, at its sole cost and expense,
      indemnify, hold harmless, and defend the Buyer and its Affiliates and their
      respective owners, members, directors, managers, officers, employees, agents,
      representatives successors and assigns (each, a “Buyer Indemnified Person” and
      collectively, the “Buyer
      Indemnified Persons”) against any and all Liabilities, suits, causes of
      action and proceedings, whether for damages or otherwise, arising out of or
      alleged to arise out of (a) any
      inaccuracy in, or breach or nonperformance of, any of the representations,
      warranties, covenants or agreements made by the County in or pursuant to this
      Agreement (other than the representations and warranties made by the County
      in
Sections
      4.4(b) or 4.5(a)(ii))
or
      (b) the Excluded
      Liabilities.

     

    
      	
              Section
                10.2  

            	
              Obligations
                of the Buyer.

            


    

     

    Subject
      to the provisions below, the Buyer shall, at its sole cost and expense,
      indemnify, hold harmless, and defend the County and the elected and appointed
      officials, officers, boards, commissions, commissioners, agents, and employees
      (each, a “County Indemnified
      Person” and collectively, the “County Indemnified
      Persons”),
      against any and all Liabilities, suits, causes of action and proceedings,
      whether for damages or otherwise, arising out of or alleged to arise out (a) any inaccuracy in, or breach
      or
      nonperformance of, any of the representations, warranties, covenants or
      agreements made by the Buyer in or pursuant to this Agreement, or (b) the
      Assumed Liabilities.

     

    
      	
              Section
                10.3  

            	
              Procedure.

            


    

     

    
      	
              (a)  

            	
              Each
                Buyer Indemnified Person and County Indemnified Person shall be referred
                to collectively herein as an “Indemnified
                Person.”  Any Indemnified Person seeking indemnification
                with respect to any actual or alleged Liability shall give notice
                to the
                Person from whom indemnification is sought (each, an “Indemnifying Person”) on
                or before the date specified in Section
                10.4,
                but within thirty (30) day of receipt of notice of a Liability for
                which
                an Indemnifying Person is obligated to indemnify an Indemnified
                Person.  The
                Indemnified
                Person shall take action necessary to avoid entry of a default judgment
                if
                such action is needed before the Indemnified Person provides the
                Indemnifying Person notice; provided, however, that no such action
                shall
                in any way prejudice or harm the Indemnifying
                Persons.  In the event that the Indemnified Person does
                not timely notify the Indemnifying Person under this Section
                10.3 of
                any Liability for which the Indemnifying Person is obligated to indemnify
                the Indemnified Person and such failure in any way prejudices or
                harms the
                Indemnifying Person (including, without limitation, any defense,
                right or
                remedy of the Indemnifying Person), then the Indemnifying Person
                shall be
                under no obligation to indemnify the Indemnified Person to the extent
                of
                any such prejudice or harm to the Indemnifying
                Person.

            


    

     

    
      	
              (b)  

            	
              With
                respect to an Indemnifying Person’s indemnity obligations set forth in
                Section
                10.1 or 10.2,
                as the
                case may be, the Indemnifying Person shall provide the defense of
                any
                Liability brought against the Indemnified Person by selecting counsel
                of
                the Indemnifying Person’s choice to defend the Liability, subject to the
                consent of the Indemnified Person, which shall not be unreasonably
                withheld, conditioned or delayed. Nothing in this Agreement shall
                be
                deemed to prevent the Indemnified Person from cooperating with the
                Indemnifying Person and participating in the defense of any Liability
                by
                its own counsel at its own cost and expense, provided however, that
                after
                consultation with the Indemnified Person, the Indemnifying Person
                shall
                have the right to defend, settle or compromise any claim, suit, cause
                of
                action, or proceeding arising hereunder, so long
                as the
                settlement includes a full release of the Indemnified Person, and
                the Indemnifying Person shall have the authority to decide the
                appropriateness and the amount of any such settlement. If the Indemnified
                Person does not consent to the terms of any such settlement or compromise,
                then the Indemnifying Person shall not settle the Liability but its
                obligation to indemnify the Indemnified Person shall in no event
                exceed
                the amount of such settlement.  Notwithstanding the foregoing,
                the Indemnifying Person shall be entitled to settle or compromise
                any
                Liability for which the Indemnifying Person is obligated to indemnify
                the
                Indemnified Person without the consent of the Indemnified Person,
                if such
                settlement or compromise requires only the payment of money damages
                and/or
                a full release of the Liability against the Indemnified
                Person.  If the Indemnifying Person fails, after notice pursuant
                to Section
                10.3(b), to undertake the Indemnified Person’s defense of any
                Liabilities encompassed within this Article
                X, then
                the Indemnifying Person’s indemnification shall include, but is not
                limited to, the Indemnified Person's reasonable attorneys' fees,
including
                fees for
                outside counsel hired to defend the Indemnified Person, incurred in
                defending against any such claim, suit, cause of action, or proceeding,
                any interest charges arising from any claim, suit, cause of action,
                or
                proceeding arising under this Agreement or Applicable Laws, the
                Indemnified Person’s out-of-pocket expenses, and the reasonable value of
                any services rendered by the County Attorney, or the County staff
                or its
                employees, if the County is the Indemnified Person, or, if the Buyer
                is
                the Indemnified Person, the reasonable value of any in-house attorney,
                staff or employees of the Buyer.

            


    

     

    
      	
              (c)  

            	
              Neither
                the provisions of this Article
                X nor
                any damages recovered by the Indemnified Person shall be construed
                to
                limit the liability of the Indemnifying Person or its contractors
                or
                subcontractors for damages under the Agreement or Applicable Laws
                or to
                excuse the faithful performance of obligations required by the Agreement,
                except to the extent that any monetary damages suffered by the Indemnified
                Person have been satisfied by a financial recovery under this section
                or
                other provisions of the Agreement or Applicable Laws.  The
                Indemnified Person shall not be entitled to recover any amount under
                this
                Agreement with respect to any Liability for which the Indemnifying
                Person
                is obligated to indemnify the Indemnified Person, if and to the extent
                that the Indemnified Person shall have actually recovered any amount
                with
                respect to such Liability.  The Indemnified Person shall use its
                reasonable efforts to claim and recover any damages suffered by it
                under
                any insurance policy or third party indemnity it may have, which
                amounts
                shall be deducted from any amount for which the Indemnifying Person
                is
                obligated to indemnify the Indemnified Person under this
                Agreement.

            


    

     

    
      	
              (d)  

            	
              Nothing
                in this Agreement shall be construed to waive the County’s governmental
                immunity.

            


    

     

    
      	
              (e)  

            	
              In
                the event of any action or proceeding brought against an Indemnified
                Person for which the Indemnified Person is entitled to indemnification
                under this Agreement, the Indemnifying Party shall not admit any
                liability
                in any such  matter on behalf of the Indemnified Party, and the
                Indemnified Party shall not admit any liability for any such Liability
                for
                which the Indemnified Party is indemnified under this Agreement without
                the prior written consent of the Indemnifying
                Party.

            


    

     

    
      	
              (f)  

            	
              Anything
                to the contrary in this Agreement notwithstanding, neither party
                shall be
                liable to the other party or to any insurance company (by way of
                subrogation or otherwise) insuring the other party for any loss or
                damage
                to any building, structure or other tangible property, when such
                loss is
                caused by any of the perils which are or could be insured against
                under a
                standard policy of full replacement costs insurance for fire, theft
                and
                all risk coverage, or losses under workers’ compensation laws and
                benefits, event though such loss or damage might have been occasioned
                by
                the negligence of such party, its agents or employees (this clause
                shall
                not apply, however, to any damage caused by intentionally wrongful
                actions
                or omissions).

            


    

     

    
      	
              Section
                10.4  

            	
              Survival
                of Certain Provisions.

            


    

     

    
      	
              (a)  

            	
              The
                representations and warranties of the County and the Buyer set forth
                in
                Article
                IV and Article
                V shall
                survive the Closing and shall continue in full force and effect without
                limitation after the Closing until the expiration of the statute
                of
                limitations applicable thereto has
                expired.

            


    

     

    
      	
              (b)  

            	
              Except
                as otherwise set forth in Section
                10.4(a), each of the covenants, agreements and obligations of the
                parties contained in this Agreement, including, without limitation,
                the
                indemnification obligations of the County and the Buyer set forth
                in Sections
                10.1
                and 10.2
                will survive the Closing and will continue in full force and effect
                in
                accordance with its terms, or, if not specific as to duration, until
                the
                expiration of the applicable statutes of limitations relating
                thereto.

            


    

     

    
      	
              (c)  

            	
              Each
                period of survival of the representations and warranties, covenants
                and
                agreements prescribed by Section
                10.4(a)
                and (b)
                above is referred to as a “Survival
                Period.”  The liabilities of each party under its
                respective representations and warranties, covenants and agreements
                will
                expire as of the expiration of the applicable Survival Period; provided,
                however, that such expiration will not include, extend or apply to
                any
                representation or warranty or covenant the breach of which has been
                asserted by a party in a written notice to the other party before
                such
                expiration.

            


    

     

    
      	
              (d)  

            	
              All
                indemnities provided for in the Agreement shall apply even in the
                event of
                joint and/or concurrent negligence, strict liability, or other fault
                of
                the party whose liability is
                indemnified.

            


    

     

    
      	
              Section
                10.5  

            	
              Remedies.

            


    

     

    (a)           
      Each party hereto acknowledges
      that irreparable damage would result if this Agreement is not specifically
      enforced.  Therefore, the rights and obligations of the parties under
      the Agreement, including, without limitation, their respective rights and
      obligations to sell and purchase the Purchased Assets and comply with the
      covenants set forth in this Agreement, shall be enforceable by a decree of
      specific performance issued by any court of competent jurisdiction, and/or
      appropriate injunctive relief may be applied for and granted in connection
      therewith.  Each party hereto agrees that monetary damages would not
      be adequate compensation for any loss incurred by reason of a breach by it
      of
      the provisions of this Agreement relating to the Closing and hereby agrees
      to
      waive the defense that a remedy at law would be adequate in any action for
      specific performance or injunctive relief hereunder.  Each party
      hereto agrees to waive any rights to require the other party hereto to prove
      actual damages or post a bond or other security as a condition to the granting
      of any equitable relief under this Section
      10.5.

     

    
      	
              (a)  

            	
              Except
                as otherwise provided herein, no delay of or omission in the exercise
                of
                any right, power or remedy accruing to any party as a result of any
                breach
                or default by any other party under this Agreement shall impair any
                such
                right, power or remedy, nor shall it be construed as a waiver of
                or
                acquiescence in any such breach or default, or of any similar breach
                or
                default occurring later; nor shall any waiver of any single breach
                or
                default be deemed a waiver of any other breach or default occurring
                before
                or after that waiver.  All rights and remedies of any party
                described in this Agreement are cumulative of each other and of every
                right or remedy such party may otherwise
                have.

            


    

     

                                                                 
      

    ARTICLE
      XI   

    TERMINATION

     

    
      	
              Section
                11.1  

            	
              Termination.

            


    

     

    This
      Agreement may be terminated at any
      time prior to the Closing upon the occurrence of any of the
      following:

     

    
      	
              (a)  

            	
              at
                any time, by mutual written consent of the Buyer and the
                County;

            


    

     

    
      	
              (b)  

            	
              by
                either the Buyer or the County at any time (if such party itself
                is not
                then in material breach of any of its representations and warranties,
                covenants, agreements or other obligations contained in this Agreement),
                if the other party is in material breach or default of any of its
                representations and warranties, covenants, agreements or other obligations
                herein, which breach or default remains uncured for a period of thirty
                (30) days after such other party’s receipt of written notice of such
                breach or default;

            


    

     

    
      	
              (c)  

            	
              by
                the Buyer at any time pursuant to Section
                6.2 or
                Section
                6.3(b) of this Agreement; 

            


    

     

    
      	
              (d)  

            	
              by
                the Buyer at any time,
                if the Buyer
                determines in its sole discretion that the condition to Closing set
                forth
                in Section
                9.9of the Agreement
                shall not be satisfied; or

            


    

     

    
      	
              (e)  

            	
              by
                either the Buyer, on the one
                hand, or the County, on the other, (if such party itself is not then
                in
                material breach of any of its representations and warranties, covenants,
                agreements or other obligations contained in this Agreement) upon
                written
                notice to the other, if the transactions contemplated by this Agreement
                shall not have closed by December 31,
                2009.

            


    

     

    
      	
              Section
                11.2  

            	
              Consequences
                of Termination.

            


    

     

    In
      the
      event that this Agreement shall be terminated pursuant to this Article XI,
      (a) each party will redeliver all documents, work papers and other material
      of any other party relating to the transactions contemplated hereby, whether
      so
      obtained before or after the execution hereof, to the party furnishing the
      same,
      and (b) all further obligations of the parties under this Agreement shall
      terminate without further liability of any party to any other party, except
      that
      (i) the provisions of this Section 11.2 and the
      provision contained in Article XII shall
      survive such termination and continue in full force and effect, and (ii) nothing
      herein shall relieve any party under Sections 10.1 or
10.2,
      as
      applicable, from liability for any fraudulent or willful breach of any
      representation, warranty, covenant, agreement or other provision of this
      Agreement prior to such termination.

     

                                                                
      

    ARTICLE
      XII    

    GENERAL
      PROVISIONS

     

    
      	
              Section
                12.1  

            	
              Actions
                of Parties.

            


    

     

    In
      any
      action by the County or the Buyer that is mandated or permitted under the terms
      of this Agreement, such party shall act in a reasonable, expeditious, and timely
      manner; provided that nothing in this Section 12.1 nor any
      other provision of this Article XII shall
      limit the right of the County to act, or to decline to act, in the unfettered
      exercise of its discretion when action or inaction by the County is permitted
      to
      be governed by such standard.

     

    
      	
              Section
                12.2  

            	
              Preemption.

            


    

     

    If
      federal or state Applicable Laws preempt a provision or limit the enforceability
      of a provision of this Agreement, then the provision shall be read to be
      preempted to the extent, and for the time, but only to the extent and for the
      time, required by such Applicable Law.  In that event, the parties
      shall negotiate in good faith to reconstitute this Agreement in a form that,
      to
      the maximum extent possible, is consistent with the parties’ original intent and
      preserves the benefits bargained for by each party. If such federal or state
      Applicable Law is subsequently repealed, rescinded, amended or otherwise changed
      so that the provision of this Agreement that had been preempted is no longer
      preempted, then such provision shall return to full force and effect, and shall
      thereafter be binding on the parties hereto, without the requirement of further
      action on the part of the County.

     

    
      	
              Section
                12.3  

            	
              Expenses.

            


    

     

    Except
      as
      provided in Sections
      10.1 and 10.2 or
      as otherwise
      specifically provided in this Agreement, 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
      Consent of such
      party.

     

    
      	
              Section
                12.4  

            	
              Amendments
                and Waivers.

            


    

     

    Any
      term of this Agreement may be
      amended, supplemented or modified only with the written consent of the Buyer
      and
      the County and the observance of any term of this Agreement may be waived
      (either generally or in a particular instance and either retroactively or
      prospectively), only with the written consent of the party against whom the
      waiver is sought to be enforced.  No waiver of any of the provisions
      of this Agreement shall be deemed or shall constitute a waiver of any other
      provision hereof (whether or not similar), nor shall such waiver constitute
      a
      continuing waiver unless otherwise expressly provided.

     

    
      	
              Section
                12.5  

            	
              Binding
                Acceptance; Assignment.

            


    

     

    This
      Agreement shall bind and benefit the parties hereto and their respective heirs,
      beneficiaries, administrators, executors, receivers, trustees, successors and
      assigns; providedthat,
      this Agreement and all rights
      and
      obligations hereunder may not be assigned or transferred without the prior
      written consent of the other parties hereto.

     

    
      	
              Section
                12.6  

            	
              Third
                Party Beneficiaries.

            


    

     

    The
      rights created by this Agreement are
      solely for the benefit of the parties hereto and the respective successors
      or
      permitted assigns, and no other Person shall have or be construed to have any
      legal or equity right, remedy or claim under or in respect of or by virtue
      of
      this Agreement or any provision herein contained; provided,
however,
      that the provisions of Sections
      7.2, 7.3and
7.5and
Article
      Xabove are intended for
      the
      benefit and burden of the parties specified therein, and their respective legal
      representatives, successors, heirs, executors and assigns.

     

    
      	
              Section
                12.7  

            	
              Choice
                of Law;
                Venue.

            


    

     

    This
      Agreement shall be governed by and
      construed under, and the rights of the parties determined, in accordance with
      the Applicable Laws of the State of Maryland (without reference to the choice
      of
      law provisions of the State of Maryland) and applicable federal
      law.  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 registered, certified or first class mail, postage prepaid, to such
      party at such party’s address set forth herein, or by any other method provided
      or permitted under the Applicable Laws of the State of Maryland. Each
      party hereby irrevocably submits to the jurisdiction in the U.S. District Court
      for the District of Maryland and the Circuit Court for Cecil County, Maryland,
      over 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 Applicable Law,
      any
      objection it may have to venue and the defense of an inconvenient forum to
      the
      maintenance of such action or proceeding in such courts.

     

    
      	
              Section
                12.8  

            	
              Waiver
                of Jury Trial.

            


    

     

    THE
      BUYER
      AND THE COUNTY EACH HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE
      TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE
      EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THIS
      AGREEMENT OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION
      THEREWITH.  THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY
      AND VOLUNTARILY BY THE BUYER AND THE COUNTY, AND IS INTENDED TO ENCOMPASS
      INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL
      BY
      JURY WOULD OTHERWISE ACCRUE.  THE COUNTY OR THE BUYER, AS APPLICABLE,
      IS HEREBY AUTHORIZED TO FILE A COPY OF THIS SECTION IN ANY PROCEEDING AS
      CONCLUSIVE EVIDENCE OF THIS WAIVER BY THE BUYER OR THE COUNTY, AS
      APPLICABLE.

     

    
      	
              Section
                12.9  

            	
              Attorneys’
                Fees.

            


    

     

    Notwithstanding
      anything to the contrary in this Agreement, in the event that either the Buyer
      or the County, as the case may be, shall bring a lawsuit against the other
      party
      to enforce their respective rights under this Agreement, the losing party shall
      pay the prevailing party’s costs and expenses incurred in connection with such
      litigation, including without limitation reasonable attorneys’
fees.  The “prevailing party” shall be determined by the court hearing
      such matter.

     

    
      	
              Section
                12.10  

            	
              Notices.

            


    

     

    Unless
      otherwise expressly stated in this Agreement, all notices, requests and other
      communications under this Agreement shall be in writing and shall be delivered
      (i) in person, (ii) by registered or certified mail, return receipt requested,
      (iii) by recognized overnight delivery service providing positive tracking
      of
      items (for example, Federal Express), or (iv) by facsimile or other electronic
      transmission if a copy is sent simultaneously by a method described in clause
      (i), (ii) or (iii), addressed as hereinafter provided or at such other address
      of which the County or the Buyer shall have given notice as provided in this
      Section
      12.10.  All such notices, requests and other communications
      shall be deemed to have been sufficiently given for all purposes hereof only
      upon receipt by the party to whom such notice is sent.  Notices by the
      parties may be given on their behalf by their respective
      attorneys.  Notices should be provided in accordance with this Section 12.10 at the
      following addresses:

     

    If
      to the Buyer,
      to:                                                                            
With a copy
      to:

     

    Artesian
      Wastewater Maryland,
      Inc.                                             DLA Piper US LLP

    c/o
      Artesian Resources
      Corporation                                              6225 Smith Ave

    664
      Churchmans
      Road                                                                      
Baltimore, Maryland
      21209

    Newark,
      Delaware
      19702                                                                   Attn:  Carville B. Collins,
      Esq.

    Attn:  David
      Spacht                                                                         
Telephone: 410-580-4125

    Telephone:
      302-454-6912                                                                  Telecopier:
      410-580-3001

    Telecopier
      302-453-6980                                                                   
Email:  carville.collins@dlapiper.com

    Email: 
      DSpacht@artesianwater.com

    


    If
      to the County
      to:                                                                            
With a copy
      to:

    


    C/O
      the County Administrative
      Officer                                           The Director of Sanitary
      Facilities

    Cecil
      County Administration
      Building                                             Cecil County Administration
      Building

    200
      Chesapeake
      Boulevard                                                                200 Chesapeake
      Boulevard

    Elkton,
      Maryland
      21921                                                                     
Elkton, Maryland
      21921

     

    
      	
              Section
                12.11  

            	
              Severability.

            


    

     

    If
      one or more provisions of this
      Agreement shall be held invalid, illegal or unenforceable, or shall violate
      the
      tax exemption requirements of the Bond, such provision shall, to the extent
      possible, be modified in such manner as to be valid, legal and enforceable
      but
      so as to most nearly retain the intent of the parties, and if such modification
      is not possible, such provision shall be severed from this
      Agreement.  In either case, the balance 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
                12.12  

            	
              Entire
                Agreement.

            


    

     

    This
      Agreement, together with the Disclosure Schedules, Exhibits, certificates and
      Transaction Documents contemplated hereby, embodies the entire understanding
      and
      agreement of the County and the Buyer with respect to the subject matter of
      this
      Agreement and merges and supersedes all prior representations, agreements,
      and
      understandings, whether oral or written, between the County and the Buyer with
      respect to the subject matter hereof, including, without limitation, any and
      all
      written or oral statement or representations by any official, employee, agent,
      attorney, consultant, or independent contractor of the County or the
      Buyer.  Notwithstanding anything in this Agreement to the contrary,
      nothing in this Section 12.12 shall
      limit or affect, or be construed to limit or affect, the Franchise Agreement
      in
      any manner.

     

    
      	
              Section
                12.13  

            	
              Recitals.

            


    

     

    The
      Recitals of this Agreement forms a part of this Agreement.

     

    
      	
              Section
                12.14  

            	
              Construction.

            


    

     

    
      	
              (a)  

            	
              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 any party by virtue of authorship of any
                provision
                of this Agreement.  The titles and subtitles used in this
                Agreement are used for convenience only and are not to be
                considered in construing or interpreting this
                Agreement.

            


    

     

    
      	
              (b)  

            	
              The
                attached exhibits are incorporated in this Agreement by reference
                and
                expressly made a part of this
                Agreement.

            


    

     

    
      	
              (c)  

            	
              The
                captions and headings of articles and sections throughout this Agreement
                are intended solely to facilitate reading and reference to the sections
                and provisions of this Agreement. Such captions shall not affect
                the
                meaning or interpretation of this
                Agreement.

            


    

     

    
      	
              Section
                12.15  

            	
              Counterparts.

            


    

     

    This
      Agreement may be executed in two or
      more counterparts, including by means of telefaxed signature pages, each of which shall be
      deemed an
      original, but all of which together shall constitute one and the same
      instrument.

     

    
      	
              Section
                12.16  

            	
              Time
                is of the Essence.

            


    

     

    The
      parties hereto hereby agree that
      time is of the essence with respect to the performance of each party’s
      respective obligations and commitments under this Agreement.

    

 

     

    [
      SIGNATURES APPEAR ON THE FOLLOWING
      PAGE. ]

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

    ATTEST:                                                                
BUYER:

     

    ARTESIAN
      WASTEWATER
      MARYLAND, INC., a Delaware
      corporation

     

    /s/
      Joseph
      A.
      Dinunzio                                                           
By:    /s/
      Dian C.
      Taylor                                                   


    Name:
      Joseph A.
      Dinunzio                                                                     Name:  Dian
      C.
      Taylor

    Title:
      Executive Vice
      President  and
      Secretary                                                    Title:  President and
      CEO

     

    THE
      COUNTY:

    


    CECIL
      COUNTY,
      MARYLAND, a body corporate
      and politic under the laws of the State of Maryland, as represented by THE
      BOARD
      OF THE COUNTY COMMISSIONERS OF CECIL COUNTY

     

    /s/
      William
      C.
      Manlove                                                                      


    .                                                                        
      William C. Manlove,
      President

     

    /s/
      Mark H.
      Guns                                                                      


    Mark
      H. Guns, Vice
      President

     

    /s/
      Rebecca
      Demmler                                                                      


    Rebecca
      Demmler,
      Commissioner

     

    /s/
      Brian
      Lockhart                                                                      


    Brian
      Lockhart,
      Commissioner

     

    /s/
      Wayne
      Tome,
      Sr.                                                                      


    Wayne
      Tome, Sr.,
      Commissioner

    


    ATTEST:

    


    /s/
      Alfred
      C. Wein,
      Jr.                                                           


    Alfred
      C. Wein, Jr.

    County
      Administrator