8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 14, 2006

ARTESIAN RESOURCES CORPORATION

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation)
000-18516
(Commission
File Number)
51-0002090
(IRS Employer Identification No.)

664 Churchmans Road, Newark, Delaware
(Address of principal executive offices)
19702
(Zip Code)

Registrant’s telephone number, including area code: 302-453-6900

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 Written communications pursuant to Rule 425 under the Securities Act

 Soliciting material pursuant to Rule 14a-12 under the Exchange Act

 Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

 Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

Item 1.01 Entry into a Material Definitive Agreement.

Artesian Resources Corporation (the “Company”) entered into another indemnification agreement with KPMG LLP (“KPMG”), the Company’s former independent registered public accounting firm, dated as of August 14, 2006 (the “Indemnification Agreement”), pursuant to which the Company agreed to indemnify and hold KPMG harmless against and from any and all legal costs and expenses incurred by KPMG in its successful defense of any legal action or proceeding that may arise as a result of its consent to include or incorporate by reference its audit report on the Company’s consolidated financial statements as of December 31, 2004 and for each of the years in the two-year period ended December 31, 2004 in the Company’s Registration Statement on Form S-3 (Registration Statement No. 333-136184) filed with the Securities and Exchange Commission on July 31, 2006 as amended August 15, 2006. The Indemnification Agreement also provides that KPMG shall not be indemnified, and shall refund to the Company, any amounts paid to KPMG pursuant to the Indemnification Agreement in the event there is court adjudication that KPMG is guilty of professional malpractice, or in the event that KPMG becomes liable for any part of the plaintiff’s damages by virtue of settlement. In addition, the Indemnification Agreement provides that, in the event that KPMG is requested pursuant to subpoena or other legal process to produce its documents relating to the Company in judicial or administrative proceedings to which KPMG is not a party, the Company is required to reimburse KPMG at standard billing rates for its professional time and expenses, including reasonable attorney’s fees, incurred in responding to such requests.

The foregoing is a summary description of certain terms of the Indemnification Agreement and is incomplete. It is qualified in its entirety by the Indemnification Agreement, which is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

The following exhibit is furnished with this report:

Exhibit Number	Exhibit Title
99.1	Indemnification Agreement, dated as of August 14, 2006, between Artesian Resources Corporation and KPMG LLP

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	ARTESIAN RESOURCES CORPORATION
Date: August 15, 2006	By:	/s/ David B. Spacht
		David B. Spacht Chief Financial Officer

INDEX TO EXHIBIT

Exhibit Number	Exhibit Title
99.1	Indemnification Agreement, dated as of August 14, 2006, between Artesian Resources Corporation and KPMG LLP

EX-99.1

EXHIBIT 99.1

[KPMG Letterhead]

August 11, 2006

Artesian Resources Corporation

664 Churchmans Road

Newark, DE 19702

Attention: Dian C. Taylor, Chair of the Board, CEO and President

Artesian Resources Corporation (the “Company”) has requested that we consent to the incorporation by reference of our report on the Company’s consolidated financial statements as of December 31, 2004 and for each of the years in the two-year period ended December 31, 2004 in the registration statement on Form S-3 filed on July 31, 2006 as amended Augsut 15, 2006.

By agreeing to the terms of this letter, you agree to indemnify KPMG LLP (“KPMG”) from certain risks inherent in incorporating by reference our audit report on the Company’s consolidated financial statements as of December 31, 2004 and for each of the years in the two-year period ended December 31, 2004 in the registration statement on Form S-3 filed on July 31, 2006 as amended Augsut 15, 2006.. Specifically, you agree to indemnify and hold KPMG harmless against and from any and all legal costs and expenses (including reasonable fees and expenses of attorneys, experts and consultants) which we may incur in connection with our successful defense of any legal action or proceeding that may arise as a result of our consent to the incorporation by reference of our report on the Company’s consolidated financial statements in the registration statement on Form S-3 filed on July 31, 2006 as amended Augsut 15, 2006., whether brought under the federal securities laws or other statutes, state statute, or common law, or otherwise. In the event KPMG incurs legal costs or expenses indemnified hereunder, you agree to reimburse KPMG for those costs as incurred on a monthly basis. KPMG shall not be indemnified, and shall refund to you, any amounts paid to it pursuant to this indemnification in the event there is court adjudication that we are guilty of professional malpractice, or in the event that KPMG becomes liable for any part of the plaintiff’s damages by virtue of settlement. In the event KPMG is requested pursuant to subpoena or other legal process to produce its documents relating to the Company in judicial or administrative proceedings to which KPMG is not a party, the Company shall reimburse KPMG at standard billing rates for its professional time and expenses, including reasonable attorney’s fees, incurred in responding to such requests.

Please indicate your acceptance of these terms by signing and returning a copy of this letter to me.

Very truly yours,

KPMG LLP

/s/ Carl E. Hertrich

Partner

ACCEPTED:

Artesian Resources Corporation

/s/ Dian C. Taylor

Chair of the Board, CEO and President

August 14, 2006