Document:

ex10-5.htm

    
      
        

      
Exhibit 10.5

     

    

      PROMISSORY
NOTE

       

      Project
Commonly Known as

       

      “W Hotel
& Residences”

       

      May
2, 2008 Chicago, Illinois

       

       $165,000,000

       

      

       

      

       

      FOR VALUE
RECEIVED, CJUF II STRATUS BLOCK
21 LLC, a Delaware limited liability company (“Maker”), with a mailing
address of c/o Stratus Properties Inc., 98 San Jacinto, Suite 220, Austin, Texas
78701, promises to pay to the order of CORUS BANK, N.A., a national
banking association (“Lender”), at the address set
forth in Section
4.1(e) of
the Loan Agreement (as defined in Section 7 below), or
such other place as Lender may designate in writing, in the manner provided
hereinafter the principal sum of up to One Hundred Sixty-Five Million Dollars
($165,000,000), or so much thereof as may now or hereafter be disbursed by
Lender to or for the benefit of Maker (the “Loan”), on or before the
Maturity Date (as defined in the Loan Agreement) or the date to which the
indebtedness evidenced hereby is accelerated pursuant to the terms of this Note
and the terms of the other Loan Documents, with interest, in the manner and upon
the terms and conditions set forth below.  All capitalized terms not
expressly defined herein shall have the same meanings as set forth in the Loan
Agreement.

       

      1. Interest
Rate.  Interest shall
accrue from the date of first disbursement of the Loan on the principal balance
thereof remaining from time to time outstanding at the rate (“Interest Rate”) established
below.  Unless the Loan is then bearing interest at the Default Rate,
the Interest Rate shall be equal to the greater of: (1) the sum of: (i) three
and one half percent (3.5%) per annum plus (ii) the three month London Interbank
Offered Rate quoted in the Money Rates section of The Wall Street
Journal (the “LIBOR
Rate”); or (2) six percent and one-half percent (6.5%) per
annum.  The LIBOR Rate shall be automatically adjusted without notice
to Maker on the first (1st) day of each January, April, July, and October
following the calendar month in which the Loan Opening Date occurs (the “Quarterly Adjustment Date”)
based on the LIBOR Rate as of the Quarterly Adjustment Date (or, if the
Quarterly Adjustment Date falls on a non-Business Day, then the Interest Rate
shall be adjusted based on the LIBOR Rate on the first Business Day following
the Quarterly Adjustment Date, effective retroactively to the Quarterly
Adjustment Date).  Interest shall be computed based on a 360-day year
and charged for the actual number of days elapsed.

       

      2. Principal
and Interest Payments.
Commencing on the first day of the first month after the initial
disbursement of the Loan, and continuing on the first day of each month
thereafter until the Loan has been repaid in full, interest on the Loan shall be
payable monthly in arrears on the first day of each month (“Payment Date”) in the amount
of all interest accrued and unpaid.  The final payment of the entire
unpaid principal balance of the Loan plus all accrued and unpaid interest, Exit
Fees, charges, fees, and expenses, if not sooner paid, shall be due and payable
on the Maturity Date.

       

      3. Prepayment.  During the twelve
(12) months immediately following the execution of this Note (“Lockout Period”), Maker shall
not be permitted to prepay the Loan in part or in full from any
source.  At Lender’s option, any attempted unpermitted
prepayment

       

      
        
          
             

          

           

        

        
           

          
            

          

        

        
           

        

      

      during
the Lockout Period shall be placed in a non-interest bearing account and held
until such time as prepayment is allowed.  After the Lockout Period,
Maker may prepay the Loan in part or in full (in accordance with the provisions
hereof) upon not less than seven (7) days prior written notice to Lender, except
that no such notice shall be required in the case of the sale of individual
Residential Units.  In the event that Maker repays any portion of the
Loan after the 12-month anniversary of this Note but before the 30-month
anniversary of this Note from a source other than proceeds realized from the
sale of individual Residential Units or of a component of the Project (i.e., the
Venue, the Hotel or the Commercial Space), in each case, in accordance with and
as permitted by the Loan Documents, then Maker shall pay Lender a prepayment
charge (the “Prepayment
Charge”) equal to (x) in the event of a partial prepayment, two percent
(2.0%) of the amount prepaid, or (y) in the event of prepayment in full, the sum
of (i) two percent (2.0%) of the amount prepaid and (ii) two percent (2.0%) of
any Unfunded Commitment.  The Prepayment Charge shall be in addition
to any Exit Fee still outstanding.  There shall be no Prepayment
Charge on casualty or condemnation proceeds which Lender requires be applied to
the Loan.

       

      4. Applicability
of Charges.  Upon acceleration
of the Loan at any time after the date of this Note and prior to the 30-month
anniversary of the date of this Note, in addition to the Exit Fee that may be
due as provided in the Loan Agreement and to the extent permitted by law, Maker
hereby agrees that there shall be added to the indebtedness evidenced hereby and
secured by that certain Construction Deed of Trust, Assignment of Rents,
Security Agreement and Fixture Filing of even date herewith (the “Deed of Trust”) a charge equal
to the Prepayment Charge (calculated as if the outstanding Loan were being
prepaid in full as of  the date of such acceleration, regardless of
whether such acceleration would be deemed a “prepayment” under applicable
Law).  Maker hereby acknowledges that the aforesaid charge payable to
the Lender hereunder is a reasonable pre-estimate of the Lender’s losses and is
not a penalty.

       

      5. Application
of Payments.  Subject to the
application of payments required by Section 14.10 of the
Loan Agreement and other applicable provisions of the Loan Documents, Lender
shall have the right unilaterally (and without the consent of Maker) to allocate
any and all payments that may be received by or tendered to Lender made by Maker
or any other person at any time or from time to time and that relate in any way
to the Loan or any other of the obligations then due and payable under the Loan
Documents in any order of priority as Lender in its sole and exclusive
discretion shall elect, including without limitation to: (i) to the payment of
any costs and expenses of Lender that Maker is responsible for under the Loan
Documents; (ii) to accrued but unpaid interest, Exit Fees, penalties, late
payment fees; and (iii) to principal.  Maker (1) irrevocably waives
the right to direct the application of payments and collections received by
Lender from or on behalf of Maker and/or any other person, and (2) agrees that
Lender shall have the continuing exclusive right to apply and reapply any and
all such payments and collections against the Loan or any other obligations then
due and payable under the Loan Documents in such manner as Lender may deem
appropriate (subject to any express provisions of the Loan Documents to the
contrary), notwithstanding any entry by Lender upon any of its books and
records.

       

      6. Late
Charges.  If any
installment of interest, principal or other amount due under the Loan Documents
is not paid on or before the fifteenth (15th) day after the date such payment is
due, Maker shall pay Lender a late charge in an amount equal to ten percent
(10%) of the amount due on any payment (including, but not limited to, any
payment of principal, interest,

       

      
        
           

        

        
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      unfunded
loan fee, if applicable, or any other payment due other than the payment of the
total principal amount due upon maturity of the Loan [whether at stated maturity
or by acceleration]) to defray part of the increased cost of collecting the late
payments and the opportunity cost incurred by Lender because of the
unavailability of the funds.

       

      7. Security
for Payment.  The payment of
this Note is further evidenced by the Construction Loan Agreement of even date
herewith between Maker and Lender (the “Loan Agreement”), and is
secured, inter alia, by
the Deed of Trust. All of the agreements, conditions, covenants, provisions and
stipulations contained in the Loan Documents are hereby made a part of this Note
to the same extent and with the same force and effect as if they were fully set
forth herein, and Maker covenants and agrees to keep and perform them or cause
them to be kept and performed, strictly in accordance with their
terms.

       

      8. Defaults
and Acceleration.  IT IS HEREBY
EXPRESSLY AGREED BY MAKER THAT TIME IS OF THE ESSENCE HEREOF.  At any
time during the existence of any Event of Default, at the option of Lender, the
entire unpaid principal balance of the Loan with interest accrued thereon and
all other sums due by Maker hereunder or under the provisions of the other Loan
Documents shall, upon demand (except as otherwise set forth in the Loan
Agreement) become due and payable immediately.

       

      9. Default
Rate.  After maturity,
whether by acceleration or at stated maturity, or while any Event of Default
exists, subject to the limitations set forth in Section 14 below, Maker promises
to pay interest on the amount of principal due and outstanding hereunder and any
fees, costs and advances at the rate of ten percent (10%) per annum plus the
Interest Rate that would otherwise be then in effect, and shall be adjusted on
each Quarterly Adjustment Date thereafter (the “Default Rate”), but in no
event will the Default Rate exceed the applicable maximum rate of interest
allowed by law, and shall be payable upon demand, and all unpaid interest that
has accrued under this Note, whether prior or subsequent to the occurrence of
the Event of Default, shall be paid at the time of, and as a condition precedent
to, the curing of the Event of Default.  The Default Rate, when
operative, shall be adjusted based on changes in the Interest Rate, but in no
event will the Default Rate exceed the applicable maximum rate of interest
allowed by law.

       

      10. Nature of
Remedies.  The remedies of
Lender as provided in this Note, the Deed of Trust and any of the other Loan
Documents shall be cumulative and concurrent, and may be pursued singly,
successively, or together against either or any of Maker, the mortgaged
property, any guarantor hereof or any other security, at the sole and absolute
discretion of Lender.

       

      11. Waivers,
Consents, Etc..  Maker and any
endorsers, sureties or guarantors hereof and any and all others who are now or
may become liable for all or part of the obligations of Maker under this Note
(all of the foregoing being collectively referred to herein as “Obligors”), agree to be
jointly and severally bound hereby and jointly and severally waive presentment
for payment, demand, notice of nonpayment, notice of dishonor, protest of any
dishonor, notice of protest, and protest of this Note and all other notices in
connection with the delivery, acceptance, performance, default, or enforcement
of the payment of this Note and, except as expressly provided to the contrary
herein, in the other Loan Documents or by Laws, agree that the liability of each
of them shall be unconditional, joint and several, without regard to the
liability of any other party and shall not in any manner be affected by any
indulgence, extension of time, renewal, waiver or modification granted or
consented to by Lender.  Each Obligor hereby consents to any and all
extensions of time, renewals, waivers or modifications that may be

       

      
        
           

        

        
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      granted
by Lender with respect to the payment or other provisions of this Note, and to
the release of the collateral, or any part thereof, with or without
substitution, and agree that additional makers, endorsers, guarantors, or
sureties may become parties hereto without notice to them or affecting their
liability hereunder.  Maker hereby authorizes Lender, at any time
after, and during the existence of, an Event of Default hereunder, to apply any
money, or other property which Lender may have or hold on deposit or otherwise
for Maker towards the payment of this Note.  By execution hereof,
Maker hereby specifically pledges and grants to Lender a security interest in
any money or other property which Lender may have or hold on deposit for the
undersigned.

       

      12. Non-Waiver.  Lender shall not
by any act of omission or commission be deemed to waive any of its rights or
remedies hereunder unless such waiver is in writing and signed by Lender and
then only to the extent specifically set forth therein.  A waiver on
one event shall not be construed as continuing or as a bar to or waiver of such
right or remedy in connection with a subsequent event.

       

      13. Business
Loan.  Maker warrants
and represents to Lender that Maker shall use the proceeds represented by this
Note solely for proper business purposes, and consistently with all applicable
Laws and statutes.  Maker further warrants and represents to Lender
and covenants with Lender that Maker is not in the business of extending credit
for the purpose of purchasing or carrying margin securities (within the meaning
of Regulation U issued by the Board of Governors of the Federal Reserve System),
and no proceeds represented by this Note will be used to purchase or carry any
margin securities or to extend credit to others for the purpose of purchasing or
carrying any margin securities.

       

      14. Interest
Laws.  It being the
intention of Lender and Maker to comply with applicable Laws, it is agreed that
notwithstanding any provision to the contrary in this Note, the Deed of Trust or
any of the other Loan Documents, no such provision shall require the payment or
permit the collection of any interest (“Excess Interest”) in excess of
the maximum amount of interest permitted by law to be charged for the use or
detention, or the forbearance in the collection, of all or any portion of the
indebtedness evidenced by this Note.  If any Excess Interest is
provided for, or is adjudicated to be provided for, in this Note, the Deed of
Trust or any of the other Loan Documents, then in such event:  (a) the
provisions of this paragraph shall govern and control; (b) neither Maker nor any
of the other Obligors shall be obligated to pay any Excess Interest; (c) any
Excess Interest that Lender may have received hereunder shall, at the option of
Lender, be (i) applied as a credit against the then outstanding principal
balance of the Loan, accrued and unpaid interest thereon not to exceed the
maximum amount permitted by law, or both, (ii) refunded to the payor thereof, or
(iii) any combination of the foregoing; (d) the applicable interest rate or
rates hereunder shall be automatically subject to reduction to the maximum
lawful contract rate allowed under the applicable usury laws of the aforesaid
State, and this Note, the Deed of Trust and the other Loan Documents shall be
deemed to have been, and shall be, reformed and modified to reflect such
reduction in such applicable interest rate or rates; and (e) neither Maker nor
any of the other Obligors shall have any action against Lender for any damages
whatsoever arising out of the payment or collection of any Excess
Interest.

       

      15. Subsequent
Holders.  Upon any
endorsement, assignment or other transfer of this Note by Lender or by operation
of law, the term “Lender” as used herein, shall mean the endorsee, assignee or
other transferee or successor to Lender then becoming the holder of this
Note.

       

      
        
           

        

        
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      16. Subsequent
Obligors.  This Note and all
provisions hereof shall be binding on all persons claiming under or through
Maker.  The terms “Maker” and “Obligors”, as used herein, shall
include the respective successors, assigns, legal representatives, executors,
administrators, devisees, legatees and heirs of Maker and any other
Obligors.

       

      17. Interpretation.  Whenever
possible, each provision of this Note and the other Loan Documents shall be
interpreted in such manner as to be effective and valid under applicable Law,
but if any provision of this Note or any of the other Loan Documents shall be
prohibited or invalid under such Law, such provision shall be ineffective only
to the extent of such prohibition or invalidity, without invalidating the
remainder of said documents.  As used in this Note, the singular shall
include the plural, and masculine, feminine and neuter pronouns shall be fully
interchangeable, where the context so requires.  The headings of
sections and paragraphs in this Note are for convenience only and shall not be
construed to limit or define the content, scope or intent of the provisions
hereof.

       

      18. Counterparts.  This Note may be
executed in one or more counterparts, each of which shall be deemed an
original.

       

      19. Governing
Law.  THE VALIDITY OF
THIS NOTE, ITS CONSTRUCTION, INTERPRETATION AND ENFORCEMENT, AND THE RIGHTS OF
MAKER AND LENDER SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS.

       

      20. Jury
Waiver.  TO THE MAXIMUM
EXTENT PERMITTED BY LAW, MAKER AND LENDER EACH HEREBY EXPRESSLY WAIVES ANY RIGHT
TO TRIAL BY JURY OF ANY ACTION, CAUSE OF ACTION, CLAIM, DEMAND OR PROCEEDING
ARISING UNDER OR WITH RESPECT TO THIS NOTE, OR IN ANY WAY CONNECTED WITH,
RELATED TO, OR INCIDENTAL TO THE DEALINGS OF MAKER AND LENDER WITH RESPECT TO
THIS NOTE, OR THE TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING
OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE.  TO THE MAXIMUM EXTENT PERMITTED BY LAW, MAKER AND LENDER
EACH HEREBY AGREES THAT ANY SUCH ACTION, CAUSE OF ACTION, CLAIM, DEMAND OR
PROCEEDING SHALL BE DECIDED BY A COURT TRIAL WITHOUT A JURY AND THAT MAKER OR
LENDER MAY FILE A COPY OF THIS EXECUTED NOTE WITH ANY COURT OR OTHER TRIBUNAL AS
WRITTEN EVIDENCE OF THE CONSENT OF MAKER AND LENDER TO THE WAIVER OF ITS RIGHT
TO TRIAL BY JURY.

       

      21. Submission
to Jurisdiction.
MAKER HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED
STATES FEDERAL OR ILLINOIS STATE COURT WITH JURISDICTION OVER COOK COUNTY,
ILLINOIS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE OR
ANY OF THE OTHER LOAN DOCUMENTS AND MAKER HEREBY IRREVOCABLY AGREES THAT ALL
CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN
ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE
AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT
OR THAT SUCH COURT IS AN INCONVENIENT FORUM.  NOTHING HEREIN SHALL
LIMIT THE RIGHT OF LENDER TO BRING PROCEEDINGS AGAINST MAKER IN THE COURTS
OF

       

      
        
           

        

        
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      ANY OTHER
JURISDICTION.  ANY JUDICIAL PROCEEDING BY THE MAKER AGAINST LENDER,
DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR
CONNECTED WITH THIS NOTE OR ANY OTHER LOAN DOCU­MENT SHALL BE BROUGHT ONLY
IN A COURT IN CHICAGO, ILLINOIS.

       

      22. Notices.  Any notice that
Lender or Maker may desire or be required to give to the other hereunder shall
be deemed given when presented in accordance with Article
22­­­­­ of the Loan Agreement.

       

      23. Conflicts.  In the event of
any conflict between the provisions of this Note and the provisions of the Loan
Agreement, the provisions of the Loan Agreement shall control.

       

      SIGNATURE
PAGE TO FOLLOW

       

      
        
           

        

        
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      IN
WITNESS WHEREOF, this Note has been executed and delivered under seal on the
date first set forth above.

       

      MAKER:

       

      CJUF II STRATUS BLOCK 21 LLC,
a Delaware limited liability company

      

      
        	
                 
      

              	
                By:

              	
                Stratus
      Block 21 Investments, L.P., a Texas limited partnership,
      Manager

              

      

      

      
        	
                 
      

              	
                By:

              	
                Stratus
      Block 21 Investments GP, L.L.C., a Texas limited liability company,
      General Partner

              

      

      

      By:           /s/ John E.
Baker

      John E.
Baker, Senior Vice President

      

      

      
        	
                 
      

              	
                By:

              	
                Canyon-Johnson
      Urban Fund II, L.P., a Delaware limited partnership,
  Member

              

      

      

      
        	
                 
      

              	
                By:

              	
                Canyon-Johnson
      Realty Advisors II LLC, a Delaware limited liability company, General
      Partner

              

      

      

      
        	
                 
      

              	
                By:

              	
                /s/ K. Robert
      Turner

              

      

      
        	
                 
      

              	
                K.
      Robert Turner, Managing Partner

              

      

      

       

      
        
           

        

        
          7exhibit10-1.htm

    WASTEWATER
      SERVICES
      AGREEMENT

    Northern
      Sussex Regional Water Recycling
      Complex

    

    

    This
      agreement is made this 30th
      day of
      June, 2008, among Artesian Utility Development, Inc., a Delaware Corporation
      (“Artesian”) and Northern Sussex Regional Water Recycling Complex, LLC, a
      Delaware limited liability company, (the “Developer”) (the
“Agreement”).

     

    
      In
        consideration of the mutual promises made and herein set
        forth:

    

    
      

      WHEREAS, Developer
        has
        entered into an agreement for the purchase of a parcel of approximately 75
        acres
        to be subdivided from the property known as Sussex County Tax Parcel
        235-06.00-028.00 (the “Treatment Site”);

      WHEREAS,
        the Developer holds a
        conditional use permit from Sussex County for the right and ability to use
        the
        Treatment Site as a regional wastewater treatment facility;

      WHEREAS,
        Artesian and
        Developer desire to design, construct and operate a regional facility capable
        of
        treating and disposing of up to 12 million gallons per day (“MGD”) of wastewater
        from surrounding communities or governmental entities; and

      WHEREAS,
        Developer intends to
        enter into agreements with Citizens Bank (the “Lender”) to secure a $10 million
        line of credit (the “Loan”) dedicated to and for construction of a wastewater
        treatment facility.

      WHEREAS,
        Artesian provides
        design, building and operational services for wastewater systems in
        Delaware,

      NOW,
        THEREFORE, in
        consideration of the representations, warranties, covenants and agreements
        of
        the parties hereinafter set forth, the Developer and Artesian, intending
        to be
        legally bound hereby, do hereby agree as follows:

       

      
        1.0
          Wastewater Treatment
          Facility

        The
          Northern Sussex Regional Water Recycling Complex will be designed as a
          wastewater treatment facility capable of treating up to 12 MGD of domestic
          wastewater utilizing current technologies, including, but not limited to,
          lagoon
          treatment and storage, membrane filtration and other mechanical treatment
          options (the “Treatment Facility”).  The treatment utilized shall
          assure compliance with all permits, Delaware Department of Natural Resources
          Environmental Control (“DNREC”) regulations and Environment Protection Agency
          (“EPA”) regulations.

         

        The
          Treatment Facility will be constructed in several phases to meet demand
          projections for the ensuing five-year period.  The Developer shall be
          financially responsible for the first phase of the facility, as hereinafter
          described.

         

        
          1.1    
            Design and Permitting

          Artesian
            shall design and obtain permits for a 12 MGD wastewater treatment facility,
            including collection, treatment, storage and disposal.

        

        The
          Scope
          of Work for the design and permitting shall include:

        
          a.)A
            preliminary meeting to discuss treatment equipment and disposal options
            and to
            determine the type of facility that is most cost effective and meets
            the project
            needs.

          
            b.)Preparation
              of construction plans and technical specifications for the wastewater
              treatment
              and disposal facilities designed by a Class “C” designer.  This
              includes civil, mechanical and electrical design.

            
              c.)Preparation
                and construction plans and technical specifications for an economically
                engineered phased approach of the treatment and disposal
                facilities.  The amount of treatment to be supplied in the first phase
                shall be two hundred thousand (200,000) gallons per day or as mutually
                agreed.

              
                d)Application
                  for the DNREC permit to construct the wastewater treatment facility
                  and disposal
                  system.  Artesian will submit all plans and specifications described
                  above and respond to changes or comments provided by DNREC as
                  necessary.

                
                  e)Application
                    for all building permits from Sussex County and other regulatory
                    agencies.

                   

                  
                    1.2    
                      Construction

                  

                

              

            

          

        

        
          Developer
            shall enter into an agreement with Artesian for the construction of the
            first
            phase of the treatment facility.  The wastewater treatment and
            disposal system shall be constructed to meet all applicable State of
            Delaware,
            DNREC and Sussex County effluent standards in effect on the date of this
            agreement and, otherwise, to conform to good engineering
            practices.  

          Services
            provided will include:

          
            a.)Review
              construction bids for the treatment and disposal facilities.

          

          
            b.)Selection
              and management of the subcontractor(s), including on-site
              inspections.

          

          
            c.)Preparation
              of a Plan of Operations and Management for the facilities as required
              by
              DNREC.

          

          
            d.)Submit
              copies of the O&M manual to DNREC for review and provide six (6) copies of
              the final plan.

          

          
            e.)Review
              marked-up drawings prepared by the contractors to record field changes
              made
              during construction.  Prepare record drawings by modifying design
              drawings to include Contractor modifications.

          

          
            f.)Submit
              copies of the Record Drawings to DNREC.

             

            
              1.3    
                Design Build Service Agreement

               

              
                1.3.1    
                  Design and Permit.

                
                  Developer
                    shall enter into an agreement with Artesian to design and obtain
                    the permit to
                    construct the Treatment Facility.  The agreement shall include
                    customary and reasonable terms and conditions at competitive
                    prices that may be
                    found with other engineering firms.  The fee will be cost plus
                    twenty-five percent (25%) and will include all materials and
                    labor necessary to
                    obtain all required permits to construct the Treatment
                    Facility.

                

                 

                
                  1.3.2    
                    Construction.

                  
                    The
                      Treatment Facility will be built in phases.  The Developer, or his
                      assignee (Site Developer or Homebuilder), will pay for the
                      first phase.
                      Artesian, as the construction manager, will be entitled to
                      a fee equal to 20% of
                      all direct cost to the project including any on-site engineering
                      and
                      inspection.

                  

                   

                  
                    2.0    
                      Developer
                      Compensation.

                     

                    
                      2.1    
                        Construction Reimbursement.

                      
                        Artesian
                          will reimburse Developer for the construction of phase
                          1 of the Treatment
                          Facility through customer connection fees.  The connection fee will be
                          split 40% to Artesian and 60% to developer until the Developer’s investment in
                          the design, treatment, storage and disposal facilities
                          are
                          reimbursed.

                      

                       

                      
                        Artesian
                          shall calculate the portion of connection fees accruing
                          to the benefit of the
                          Developer by the 15th
                          calendar day following the end of the month.  That amount, and no
                          more, shall be remitted to the lender charged with administering
                          the debt
                          associated with the construction of Phase 1 of the Treatment
                          Facility until the
                          debt and interest associated with the debt has been fully
                          repaid.

                      

                       

                      
                        2.2    
                          Additional Compensation.

                        
                          Artesian
                            will also provide additional compensation to Developer
                            based on the following
                            conditions and accommodations, beginning with the execution
                            of this
                            agreement.

                        

                         

                        
                          2.2.1    
Land.

                          
                            Artesian
                              shall remit to Developer $300,000 beginning with the
                              execution of this agreement
                              and for the ensuing nine (9) year anniversary of this
                              agreement in compensation
                              for the Treatment Site and contract for the option
                              to purchase the additional
                              land associated with the Treatment Site.  Artesian and Developer agree
                              that these payments do not compensate Developer for
                              the entire investment in the
                              land, but further agree that the payments made under
                              Sections 2.2.2 and 2.2.3
                              reimburse Developer for the remaining investment in
                              the Land as well as the
                              business development incentive.

                          

                           

                          
                            2.2.2     
Business
Development
–
                              Future Incentive Payments.

                            
                              In
                                addition to the compensation to the Developer pursuant
                                to Section 2.2.1,
                                Artesian shall provide future payments to the Developer
                                as described in Schedule
                                A.  Such future payments shall only commence upon
                                the
                                completion of the construction of the Treatment Facility
                                and commencement of
                                operations.

                            

                             

                            
                              3.0    
                                Ownership
                                and
                                Operation of the Treatment Site and Facility.

                              
                                3.1           
                                  Ownership: Phase 1

                              

                              
                                Developer
                                  shall retain ownership of the Treatment Site and
                                  Treatment Facility until
                                  Artesian has reimbursed Developer through connection
                                  fees and any underlying
                                  debt has been repaid.  Developer shall upon acquisition of the
                                  Treatment Site grant to Artesian an exclusive easement
                                  for the Treatment Site
                                  for a nominal consideration of Ten Dollars ($10).  Once the cost of
                                  the Treatment Site and Treatment Facility has been
                                  fully reimbursed, then
                                  Developer shall transfer all rights, title and
                                  interest (fee simple ownership)
                                  in the Treatment Site and Treatment Facility to
                                  Artesian or affiliates for a
                                  nominal fee of $10.  Developer may offer the Treatment Site and
                                  Treatment Facility as collateral for only those
                                  funds borrowed to purchase,
                                  design and construct the Treatment Site and Treatment
                                  Facility and interest
                                  accrued on funds borrowed.  Once the debt and accrued interest have
                                  been repaid Developer is prohibited from securing
                                  any debt with the use of the
                                  Treatment Site and Treatment Facility.

                              

                               

                              
                                3.2
                                  Operations.

                                
                                  Developer
                                    shall lease to Artesian Wastewater Management,
                                    Inc. (“Artesian Wastewater”) the
                                    Treatment Facility until at such time the fee
                                    simple ownership is transferred to
                                    Artesian.  Consideration for leasing the Treatment Facility
                                    is
                                    included in the additional compensation paid
                                    to Developer under Paragraph 2.2.2
                                    of this agreement.  Artesian Wastewater will provide service,
                                    utilizing the Treatment Facility, to all mutually
                                    agreed upon customers
                                    connecting to the Treatment Facility, charging
                                    rates and collecting revenues as
                                    approved and adjusted from time to time by the
                                    Delaware Public Service
                                    Commission (“PSC”).

                                

                                 

                                
                                  4.0    
                                    Developer
                                    Insolvency

                                  
                                    4.1     Developer’s
                                      Insolvency

                                    
                                      In
                                        the
                                        event Developer is unable to fulfill its
                                        obligations to repay outstanding debt
                                        or interest accruing thereto as a result
                                        of Developer’s insolvency then Artesian
                                        shall assume fee simple ownership of the
                                        Treatment Site and Treatment Facility
                                        along with any outstanding liens and debts
                                        associated with the
                                        property.

                                    

                                     

                                    
                                      Further,
                                        in the event Artesian is required to act
                                        under this provision, then any
                                        additional compensation, pursuant to paragraph
                                        2.2 herein, shall only be payable
                                        after fee simple ownership of the Treatment
                                        Site and Treatment Facility is
                                        transferred to Artesian and all debts and
                                        liens assumed as a result of this
                                        provision, have been fully satisfied and
                                        those liens discharged.  For
                                        purposes of this provision, full satisfaction
                                        of the debt shall occur only when
                                        connection fees sufficient to repay the debt
                                        and interest accrued, pursuant to
                                        the calculation in paragraph 2.1 herein,
                                        have been collected from new customers
                                        following enactment of this provision.  Artesian shall not be required
                                        to expedite any repayment in satisfaction
                                        of this provision.

                                    

                                     

                                    
                                      4.2    
                                        Artesian’s Guaranty.

                                      
                                        Notwithstanding
                                          any other provisions of this Agreement,
                                          Artesian agrees to absolutely,
                                          unconditionally and irrevocably guaranty,
                                          as a contract of suretyship, the Loan
                                          and any and all debts and other obligations
                                          as were mutually agreed upon by the
                                          parties which are incurred by Developer
                                          to acquire the Treatment Site and to
                                          construct the Treatment Facility as the
                                          same shall become due and payable,
                                          whether at or after maturity, or by acceleration
                                          on default or
                                          otherwise.  All loan documents with third party lenders
                                          shall include
                                          such guaranty provisions.  Any actual payment by Artesian to third
                                          party lenders shall be credited against
                                          Artesian’s obligations set forth in
                                          Sections 2.1 and 2.2., but shall not divest
                                          Developer of legal or equitable
                                          title to the Treatment Site or Treatment
                                          Facility except as otherwise set forth
                                          herein.  Artesian is granted a security interest
                                          in the Facility Site
                                          that is subordinate to third-party Lendors.

                                      

                                       

                                      
                                        5.0    
                                          Developer’s
                                          Warranties, Representations and Covenants

                                        
                                          Developer
                                            represents to Artesian that to its actual
                                            knowledge based upon its internal
                                            records and not to any attributed knowledge,
                                            that Developer is duly organized,
                                            validly existing, qualified and empowered
                                            to perform and comply with the terms
                                            of this Agreement.  Neither the execution and delivery of
                                            this
                                            Agreement nor its performance will conflict
                                            with or result in the breach of any
                                            contract or agreement to which Developer
                                            is a party or by which Developer is
                                            bound.  Developer has full authority and power
                                            to enter into and carry
                                            out the transactions contemplated by
                                            this Agreement, and this Agreement
                                            constitutes the valid and binding obligations
                                            of Developer, and is enforceable
                                            in accordance with its terms.

                                        

                                         

                                        
                                          6.0    
                                            Artesian’s
                                            Warranties,
                                            Representations and Covenants

                                          
                                            Artesian
                                              represents and warrants to Developer
                                              that it has full power and authority
                                              to
                                              enter into and carry out the transactions
                                              contemplated by this Agreement and
                                              this Agreement constitutes the valid
                                              and binding legal obligation of Artesian,
                                              enforceable in accordance with its
                                              terms.

                                          

                                           

                                          
                                            7.0    
                                              General
                                              Matters

                                            
                                              7.1    
                                                Term.

                                              
                                                This
                                                  agreement shall terminate 30 years
                                                  from the execution date of this
                                                  agreement,
                                                  unless otherwise provided for elsewhere
                                                  herein.

                                              

                                               

                                              
                                                7.2     
                                                  Approvals from Governmental Authorities.

                                                
                                                  Developer
                                                    and Artesian agree that the transactions,
                                                    design and construction of the
                                                    Treatment Facilities are subject
                                                    to various approvals, including
                                                    but not limited
                                                    to, the PSC and DNREC.  Developer and Artesian also recognize
                                                    that
                                                    there may be changes to permits
                                                    or rates and connection fees
                                                    charged to
                                                    customers that may prohibit Artesian
                                                    from satisfactorily fulfilling
                                                    its
                                                    obligations under this agreement.  If such events occur during the
                                                    term of this agreement then Developer
                                                    and Artesian agree to renegotiate
                                                    the
                                                    terms of this agreement in good
                                                    faith to equitably address the
                                                    required
                                                    change.  The purchase of the Treatment
                                                    Site, as provided in Section
                                                    2.2.1 of this agreement, shall
                                                    not be subject to any such adjustment
                                                    and shall
                                                    remain in full force and effect.

                                                

                                                 

                                                
                                                  7.3     
                                                    Severability.

                                                  
                                                    If
                                                      one or more provisions of this
                                                      Agreement shall be held invalid,
                                                      illegal or unenforceable, 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.

                                                  

                                                   

                                                  
                                                    7.4    
                                                      Confidentiality.

                                                    
                                                      a)The
                                                        parties recognize and acknowledge
                                                        that in the past, currently,
                                                        and in the future
                                                        each may have access to certain
                                                        non-public confidential information
                                                        of the other
                                                        parties (including, without
                                                        limitation, the terms and
                                                        conditions of this
                                                        Agreement) (collectively,
“Confidential Information”), such as operational
                                                        policies, pricing and cost
                                                        policies, which are valuable,
                                                        special and unique
                                                        assets.  The parties agree that each
                                                        will not disclose any
                                                        Confidential Information
                                                        to any person for any purpose
                                                        or reason whatsoever,
except
                                                        (i) to the authorized representatives
                                                        of a party who need to know
                                                        information in
                                                        connection with the transactions
                                                        contemplated hereby, and
                                                        (ii) to its own
                                                        representatives, counsel
                                                        and other advisors who first
                                                        agree to the
                                                        confidentiality provisions
                                                        of this Section 7.3, unless
                                                        (A) such information
                                                        becomes known to the public
                                                        generally through no fault
                                                        of any party, or (B)
                                                        disclosure is required by
                                                        Law or valid legal process;
                                                        provided, that prior to
                                                        disclosing any information
                                                        pursuant to this clause (B),
                                                        a party shall, to the
                                                        extent permitted by law or
                                                        valid legal process, give
                                                        prior written notice
                                                        thereof to the other parties
                                                        and provide the other parties
                                                        with the opportunity
                                                        to contest such disclosure.  In the event of a breach
                                                        or threatened
                                                        breach of the provisions
                                                        of this Section 7.4 by a
                                                        party, the other parties
                                                        shall
                                                        be entitled to an injunction
                                                        restraining the other party
                                                        from disclosing, in
                                                        whole or in part, such confidential
                                                        information.  Nothing herein shall
                                                        be construed as prohibiting
                                                        a party from pursuing any
                                                        other available remedy for
                                                        such breach or threatened
                                                        breach, including the recovery
                                                        of
                                                        damages.

                                                       

                                                      
                                                        b)Because
                                                          of the difficulty of measuring
                                                          economic losses as a result
                                                          of the breach of the
                                                          foregoing covenants in
                                                          this Section 7.4, and because
                                                          of the immediate and
                                                          irreparable damage that
                                                          would be caused for which
                                                          they would have no other
                                                          adequate remedy, the parties
                                                          agree that, in the event
                                                          of a breach of this
                                                          Section 7.4 by a party,
                                                          the covenant may be enforced
                                                          by the other parties
                                                          against the party in breach
                                                          by any equitable remedy,
                                                          including, without
                                                          limitation, injunction,
                                                          specific performance and
                                                          restraining order, without
                                                          the
                                                          necessity of proving actual
                                                          damages or posting a bond
                                                          or other
                                                          security.

                                                         

                                                        
                                                          c)This
                                                            Section 7.4 shall survive
                                                            the termination of, or
                                                            closing under, this Agreement
                                                            for a period of five
                                                            (5) years.

                                                           

                                                          
                                                            7.5    
                                                              Amendments
                                                              and
                                                              Waivers.

                                                            
                                                              Any
                                                                term
                                                                of this Agreement
                                                                may be amended, supplemented
                                                                or modified only
                                                                with the written
                                                                consent of Artesian
                                                                and Developer 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.

                                                               

                                                              
                                                                7.6     
                                                                  Choice of Law;
                                                                  Venue.

                                                                
                                                                  This
                                                                    Agreement shall
                                                                    be governed by
                                                                    and construed
                                                                    under, and the
                                                                    rights of the
                                                                    parties determined,
                                                                    in accordance
                                                                    with the Laws
                                                                    of the State
                                                                    of Delaware
                                                                    (without reference
                                                                    to the choice
                                                                    of Law provisions
                                                                    of the State
                                                                    of
                                                                    Delaware).  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 Laws
                                                                    of the State
                                                                    of Delaware.  Each
                                                                    party hereby
                                                                    irrevocably submits
                                                                    to the jurisdiction
                                                                    of any federal
                                                                    or state
                                                                    court located
                                                                    in State of Delaware
                                                                    (and any appellate
                                                                    court there from)
                                                                    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 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.

                                                                

                                                                 

                                                                
                                                                  7.7    
                                                                    Waiver
                                                                    of Jury
                                                                    Trial.

                                                                  
                                                                    EACH
                                                                      PARTY HERETO
                                                                      HEREBY IRREVOCABLY
                                                                      WAIVES ALL
                                                                      RIGHT TO TRIAL
                                                                      BY JURY IN
                                                                      ANY
                                                                      PROCEEDING
                                                                      (WHETHER BASED
                                                                      IN CONTRACT,
                                                                      TORT OR OTHERWISE)
                                                                      ARISING OUT
                                                                      OF OR
                                                                      RELATING TO
                                                                      THIS AGREEMENT
                                                                      OR ANY TRANSACTION
                                                                      OR AGREEMENT
                                                                      CONTEMPLATED
                                                                      HEREBY
                                                                      OR THE ACTIONS
                                                                      OF ANY PARTY
                                                                      HERETO IN THE
                                                                      NEGOTIATION,
                                                                      ADMINISTRATION,
                                                                      PERFORMANCE
                                                                      OR ENFORCEMENT
                                                                      HEREOF.

                                                                  

                                                                   

                                                                  
                                                                    Execution
                                                                      Page to Follow

                                                                  

                                                                   

                                                                  
                                                                    
                                                                      
                                                                      

                                                                    

                                                                    
                                                                      
                                                                      

                                                                      
                                                                        

                                                                      

                                                                    

                                                                    
                                                                      
                                                                      

                                                                    

                                                                  

                                                                  
                                                                    IN
                                                                      WITNESS WHEREOF,
                                                                      the parties
                                                                      have duly executed,
                                                                      sealed and
                                                                      delivered this
                                                                      Agreement as
                                                                      of the date
                                                                      and year first
                                                                      above written.

                                                                     

                                                                    
                                                                      Developer:

                                                                      
                                                                        	
                                                                                Witness:

                                                                              	
                                                                                NORTHERN
                                                                                  SUSSEX
                                                                                  REGIONAL
                                                                                  WATER
                                                                                  RECYCLING
                                                                                  COMPLEX,
                                                                                  LLC

                                                                              

                                                                      

                                                                      

                                                                      

                                                                      

                                                                      ___________________________      By:
                                                                        _________________________________
                                                                        (Seal)Authorized
                                                                        Manager

                                                                      

                                                                      

                                                                      

                                                                      Artesian:

                                                                      Attest:                                                                
                                                                        ARTESIAN
                                                                        UTILITY DEVELOPMENT,
                                                                        INC.

                                                                      

                                                                      

                                                                      

                                                                      ___________________________      By:
                                                                        _________________________________
                                                                        (Seal)

                                                                      Name:
                                                                        Dian C. Taylor

                                                                      Title:   President

                                                                    

                                                                     

                                                                    
                                                                      JOINDER

                                                                      

                                                                      Darin
                                                                        A. Lockwood
                                                                        joins this
                                                                        Agreement
                                                                        for the purposes
                                                                        of guaranteeing
                                                                        the obligations
                                                                        of NORTHERN
                                                                        SUSSEX
                                                                        REGIONAL
                                                                        WATER RECYCLING
                                                                        COMPLEX,
                                                                        LLC.
                                                                        and the confidentiality
                                                                        provisions
                                                                        of
                                                                        Section 7.4.

                                                                    

                                                                     

                                                                    
                                                                      Witness:

                                                                       

                                                                      ________________________________                                
                                                                        ______________________________
                                                                        (Seal)

                                                                                                                                                                                 
                                                                        Darin A.
                                                                        Lockwood

                                                                       

                                                                      
                                                                        
                                                                          
                                                                            	
                                                                                    STATE
                                                                                      OF
                                                                                      DELAWARE

                                                                                  	
                                                                                    )

                                                                                  
	 	
                                                                                    )
                                                                                      ss

                                                                                  
	
                                                                                    COUNTY
                                                                                      OF
                                                                                      NEW
                                                                                      CASTLE

                                                                                  	
                                                                                    )

                                                                                  

                                                                          

                                                                           

                                                                          
                                                                            BE
                                                                              IT
                                                                              REMEMBERED
                                                                              that
                                                                              on
                                                                              this
                                                                              ______day
                                                                              of
                                                                              June,
                                                                              A.D.
                                                                              2008,
                                                                              personally
                                                                              came
                                                                              before
                                                                              me,
                                                                              the
                                                                              Subscriber,
                                                                              a Notary
                                                                              Public
                                                                              of
                                                                              the
                                                                              State
                                                                              of
                                                                              Delaware,
                                                                              _________________________,
                                                                              Managing
                                                                              Member
                                                                              of
NORTHERN
                                                                              SUSSEX
                                                                              REGIONAL
                                                                              WATER
                                                                              RECYCLING
                                                                              COMPLEX,
                                                                              LLC existing
                                                                              under
                                                                              the
                                                                              laws
                                                                              of
                                                                              the
                                                                              State
                                                                              of
                                                                              Delaware,
                                                                              party
                                                                              to
                                                                              this
                                                                              agreement,
                                                                              known
                                                                              to
                                                                              me
                                                                              as
                                                                              such,
                                                                              and
                                                                              acknowledged
                                                                              this
                                                                              agreement
                                                                              to
                                                                              be
                                                                              his
                                                                              act
                                                                              and
                                                                              deed
                                                                              and
                                                                              the
                                                                              act
                                                                              and
                                                                              deed
                                                                              of
                                                                              said
                                                                              L.L.C.;
                                                                              that
                                                                              the
                                                                              signature
                                                                              of
                                                                              the
                                                                              Managing
                                                                              Member
                                                                              thereto,
                                                                              is
                                                                              in
                                                                              his
                                                                              own
                                                                              handwriting
                                                                              and
                                                                              that
                                                                              his
                                                                              act
                                                                              of
                                                                              sealing,
                                                                              executing,
                                                                              acknowledging
                                                                              and
                                                                              delivering
                                                                              said
                                                                              agreement
                                                                              was
                                                                              duly
                                                                              authorized
                                                                              by
                                                                              the
                                                                              L.L.C.

                                                                          

                                                                           

                                                                          
                                                                            GIVEN
                                                                              under
                                                                              my
                                                                              Hand
                                                                              and
                                                                              Seal
                                                                              of
                                                                              Office
                                                                              the
                                                                              day
                                                                              and
                                                                              year
                                                                              aforesaid.

                                                                            
Notary
                                                                              Public

                                                                                                
                                                                              Name:_________________________

                                                                            

                                                                                                
                                                                              Title:  _________________________

                                                                             

                                                                            
                                                                              
                                                                                	
                                                                                        STATE
                                                                                          OF
                                                                                          DELAWARE

                                                                                      	
                                                                                        )

                                                                                      
	 	
                                                                                        )
                                                                                          ss

                                                                                      
	
                                                                                        COUNTY
                                                                                          OF
                                                                                          _____________________

                                                                                      	
                                                                                        )

                                                                                      

                                                                              

                                                                               

                                                                              
                                                                                BE
                                                                                  IT
                                                                                  REMEMBERED
                                                                                  that
                                                                                  on
                                                                                  this
                                                                                  ______day
                                                                                  of
                                                                                  June,
                                                                                  A.D.
                                                                                  2008,
                                                                                  personally
                                                                                  came
                                                                                  before
                                                                                  me,
                                                                                  the
                                                                                  Subscriber,
                                                                                  a
                                                                                  Notary
                                                                                  Public
                                                                                  of
                                                                                  the
                                                                                  State
                                                                                  of
                                                                                  Delaware,
                                                                                  Darin
                                                                                  A.
                                                                                  Lockwood,
                                                                                  residing
                                                                                  in the
                                                                                  State
                                                                                  of
                                                                                  Delaware,
                                                                                  party
                                                                                  to
                                                                                  this
                                                                                  agreement,
                                                                                  known
                                                                                  to
                                                                                  me
                                                                                  as
                                                                                  such,
                                                                                  and
                                                                                  acknowledged
                                                                                  this
                                                                                  agreement
                                                                                  to
                                                                                  be
                                                                                  his

                                                                                

                                                                                GIVEN
                                                                                  under
                                                                                  my
                                                                                  Hand
                                                                                  and
                                                                                  Seal
                                                                                  of
                                                                                  Office
                                                                                  the
                                                                                  day
                                                                                  and
                                                                                  year
                                                                                  aforesaid.

                                                                              

                                                                               

                                                                              Notary
                                                                                Public
                                                                                                    
                                                                                  Name:_________________________

                                                                                

                                                                                                    
                                                                                  Title:  _________________________

                                                                                 

                                                                                 

                                                                              

                                                                              
                                                                                	
                                                                                        STATE
                                                                                          OF
                                                                                          DELAWARE

                                                                                      	
                                                                                        )

                                                                                      
	 	
                                                                                        )
                                                                                          ss

                                                                                      
	
                                                                                        COUNTY
                                                                                          OF
                                                                                          _____________________

                                                                                      	
                                                                                        )

                                                                                      

                                                                              

                                                                               

                                                                              
                                                                                BE
                                                                                  IT
                                                                                  REMEMBERED
                                                                                  that
                                                                                  on
                                                                                  this      day
                                                                                  of
                                                                                  June,
                                                                                  A.D.
                                                                                  2008,
                                                                                  personally
                                                                                  came
                                                                                  before
                                                                                  me,
                                                                                  the
                                                                                  Subscriber,
                                                                                  a
                                                                                  Notary
                                                                                  Public
                                                                                  of
                                                                                  the
                                                                                  State
                                                                                  of
                                                                                  Delaware,
                                                                                  _______________,
                                                                                  __________
                                                                                  of
ARTESIAN
                                                                                  UTILITY
                                                                                  DEVELOPMENT,
                                                                                  INC.,
                                                                                  a
                                                                                  corporation
                                                                                  existing
                                                                                  under
                                                                                  the
                                                                                  laws
                                                                                  of
                                                                                  the
                                                                                  State
                                                                                  of
                                                                                  Delaware,
                                                                                  party
                                                                                  to
                                                                                  this
                                                                                  agreement,
                                                                                  known
                                                                                  to
                                                                                  me
                                                                                  as
                                                                                  such,
                                                                                  and
                                                                                  acknowledged
                                                                                  this
                                                                                  agreement
                                                                                  to
                                                                                  be
                                                                                  his
                                                                                  act
                                                                                  and
                                                                                  deed
                                                                                  and
                                                                                  the
                                                                                  act
                                                                                  and
                                                                                  deed
                                                                                  of
                                                                                  said
                                                                                  corporation;
                                                                                  that
                                                                                  the
                                                                                  signature
                                                                                  of
                                                                                  the
                                                                                  Vice
                                                                                  President
                                                                                  thereto,
                                                                                  is
                                                                                  in
                                                                                  his
                                                                                  own
                                                                                  proper
                                                                                  handwriting
                                                                                  and
                                                                                  that
                                                                                  his
                                                                                  act
                                                                                  of
                                                                                  sealing,
                                                                                  executing,
                                                                                  acknowledging
                                                                                  and
                                                                                  delivering
                                                                                  said
                                                                                  agreement
                                                                                  was
                                                                                  duly
                                                                                  authorized
                                                                                  by
                                                                                  a
                                                                                  resolution
                                                                                  of
                                                                                  the
                                                                                  Board
                                                                                  of
                                                                                  Directors
                                                                                  of
                                                                                  said
                                                                                  corporation.

                                                                                

                                                                                GIVEN
                                                                                  under
                                                                                  my
                                                                                  Hand
                                                                                  and
                                                                                  Seal
                                                                                  of
                                                                                  Office
                                                                                  the
                                                                                  day
                                                                                  and
                                                                                  year
                                                                                  aforesaid.

                                                                              

                                                                               

                                                                              Notary
                                                                                Public

                                                                                                    
                                                                                  Name:_________________________

                                                                                

                                                                                                    
                                                                                  Title:  _________________________

                                                                              

                                                                            

                                                                          

                                                                           

                                                                          
                                                                            
                                                                              
                                                                              

                                                                            

                                                                            
                                                                              
                                                                              

                                                                              
                                                                                

                                                                              

                                                                            

                                                                            
                                                                              
                                                                              

                                                                            

                                                                          

                                                                          
                                                                             

                                                                            SCHEDULE
                                                                              A

                                                                            to
                                                                              the
                                                                              Wastewater
                                                                              Services
                                                                              Agreement

                                                                             

                                                                            
                                                                              Business
                                                                                Development
–
Future
                                                                                Incentive
                                                                                Payments

                                                                               

                                                                              
                                                                                	
                                                                                        1.  

                                                                                      	
                                                                                        New
                                                                                          Customers.  [CONFIDENTIAL
                                                                                          PORTION
                                                                                          DELETED
                                                                                          AND
                                                                                          FILED
                                                                                          SEPARATELY
                                                                                          WITH
                                                                                          THE
                                                                                          COMMISSION].

                                                                                      

                                                                              

                                                                              

                                                                              
                                                                                	
                                                                                        2.  

                                                                                      	
                                                                                        Municipalities
                                                                                          and
                                                                                          Private
                                                                                          Wastewater
                                                                                          Providers.  [CONFIDENTIAL
                                                                                          PORTION
                                                                                          DELETED
                                                                                          AND
                                                                                          FILED
                                                                                          SEPARATELY
                                                                                          WITH
                                                                                          THE
                                                                                          COMMISSION].

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00146-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00146-of-00352.parquet"}]]