I'RATT- 18 CHARLOTTE STREET PHONE: 843.727.2200 THOMAS I WALKER CHARLESTON, SC 29403 FAX: 843.727.2238 ATTORNEYS AT PO ORAWER 22247 paoFass(SHAL assoc(ST(oo WWW.P. TW.COM CHARLESTON, SC 29413.2241

February 12, 2016

E-MAIL:gtwep-tw.corn DIRECT DIAL: 843.727.22O8 FAX: 843.727.2231

VIA ELECTRONIC FILING

Jocelyn D. Boyd Chief Clerk and Administrator Public Service Commission 101 Executive Center Drive, Suite 100 Columbia, SC 29210

Re: A lication of Kiawah Island Utilit Inc. Our File No.: 5435.002

Dear Ms. Boyd:

Enclosed for filing please find the Application of Kiawah Island Utility, Inc. for Approval to Enter into Amended and Restated Utility Service Agreement, for Expedited Consideration and Waiver of Hearing, Certificate of Service, and Docket Cover Sheet. A docket number has not yet been assigned. Thank you for processing this Application at the Commission's earliest convenience.

With kind regards, I am,

Sincerely,

PRATT-THOMAS VVALKER, P.A.

G. Trenholm Walker

GTVNnjd Enclosures (As noted) c: F. David Butler, Esq. C. Dukes Scott, Esq. Dawn Hipp Shannon Hudson, Esq. Andrew Bateman, Esq. Becky Dennis (By Email) Townsend Clarkson (By Email)

E. oouotas FRavTTHOMas ( o. vosouo(M waLKER I w. aooREw oowoER, 38. L. ausvso K. (388 (uuosav sMnuvaocEv (sc, Nc( I THOMas H. Hssss (sc, oa( HIN w. FREEMAN (sc, ca) THoMAO P. SREOOETTE, 3R. KATHLEEN ( (sc, Usvu ( FowLER M08oc I 30HN P. LINTQN, 3R. Jocelyn Boyd RE: KIIJ Water Rate Increase February 12, 2016 Page 2

Patrick Melton (By Email) H. C. "Trey" Howell, III, Esq. (By Email) Charles L. A. Terrini, Esq. (By Email) BEFORE THE PUBLIC SERVICE COMMISSION OF SOUTH CAROLINA

IN RE: ) ) Application of Kiawah Island ) APPLICATION FOR APPROVAL Utility, Inc., for Approval to ) TO ENTER INTO AMENDED AND Enter Amended and Restated ) RESTATED UTILITY SERVICE Utility Service Agreement, ) AGREEMENT, FOR EXPEDITED for Expedited Consideration, and ) CONSIDERATION, AND Waiver of Hearing ) WAIVER OF HEARING ______)

Kiawah Island Utility, Inc. (“Applicant” or “KIU”) submits this Application for approval of an Amended and Restated Utility Service Agreement with Kiawah

Resort Associates, L.P. (“KRA”), the master developer of Kiawah Island, and for expedited disposition of the Application.

KIU files this Application pursuant to 10 S.C. Code Regs. R. 103-743 and R.

103-541 (Supp. 2012) and the Commission’s Rules of Practice and Procedure. In support of its request, the Applicant respectfully submits:

1. The Applicant provides water and wastewater services for compensation to

customers located in its approved service area on Kiawah Island,

Charleston County, South Carolina. The Applicant is a “public utility” under

the terms of S.C. Code Ann. §58-5-10(4) (Supp. 2015), and subject to the

regulatory jurisdiction of the Commission.

2. The rates and charges of the Applicant are regulated and subject to the

approval of the Commission. The current rates and charges for Applicant’s

water and wastewater service were approved by the Commission in Docket

Number 2011-317-WS by Order Number 2012-098, dated February 8,

1

2012, as most recently modified by Order 2015-864 that adjusted the rates

for water to pass through an increase in the bulk water charges by St. Johns

Water Company.

THE UTILITY SERVICE AGREEMENTS

3. On July 29, 1994, KIU and KRA entered the first Utility Service Agreement.

At that time KIU was wholly owned by KRA. The agreement documented

the mutually dependent relationship between the developer (KRA) and the

utility (KIU) and outlined their respective obligations, including KIU’s

commitment to render timely service to KRA and have adequate water and

sewer capacity for the projected development on Kiawah Island.

4. On June 6, 1996, KRA and KIU terminated the first Utility Service

Agreement.

5. On July 8, 1997, KIU and KRA entered the second Utility Service Agreement

for the same purposes as the first Utility Service Agreement with largely the

same terms as the first Utility Service Agreement.

6. KRA and KIU entered into the First Amendment to Utility Service Agreement

on November 26, 1997, and the Second Amendment to Utility Service

Agreement on May 21, 1999.

7. Numerous changes have occurred over the course of the last nineteen

years since the second Utility Service Agreement was entered.

8. In 2014, the Commission approved the transfer of stock from KRA to KIU

Holdings, LLC in Orders No. 2013-107 and 2014-549.

2

9. KIU and KRA now seek to update their agreement to take into account

numerous changes in conditions since 1997 and slightly modify their

respective obligations by entering an amended and restated agreement,

copy attached as Exhibit 1 hereto.

10. Regulations 103-541 and 103-743 of the South Carolina Code of

Regulations provide that an Applicant must seek the Commission’s

approval of or agreements which “impact, pertain to, or effect …”

its “ability to provide water service [sewer service], including but not limited

to treatment of said water . . . .” 10 S.C. Code Regs. R. 103-743 (Supp.

2012).

11. The proposed new Utility Service Agreement is mutually beneficial to KIU

and KRA as well as the customers and future customers of KIU by assuring

that KIU will have adequate water and sewer capacity as residential and

other construction occurs within the KIU service area.

12. KIU and KRA believe that the terms of the proposed Amended and Restated

Utility Service Agreement are reasonable and fair. The terms contain

safeguards for both KIU and KRA and do not impose obligations on either

that are radically different from the Utility Service Agreements between

them that have been in effect since 1994.

13. KIU’s proposed replacement Amended and Restated Utility Service

Agreement is for lawful purposes within its corporate purpose, is reasonably

necessary and appropriate for and consistent with the proper performance

3

of its services to KRA and the public, and will not impair KIU’s ability to

perform those services.

14. Based upon the foregoing, KIU submits it is in the best interests of the

customers of the Applicant and the public that this Commission approve the

Amended and Restated Utility Service Agreement. Accordingly, the

Applicant submits that the public convenience and necessity will be served

by the Commission’s approval of this request.

REQUEST FOR EXPEDITED CONSIDERATION AND WAIVER OF HEARING

15. Time is of the essence with respect to the Amended and Restated Utility

Service Agreement, and KIU requests that the Commission waive a hearing

and grant expedited consideration of this matter.

16. The South Carolina Office of Regulatory Staff is being served with a copy

of this Application.

WHEREFORE, having fully set forth its Application, KIU prays that review of the within Application be expedited, that the Commission issue its directive and order approving the Amended and Restated Utility Service Agreement to replace the one that has been in place since 1997, and that KIU be granted such other and further relief as the Commission may deem just and proper.

Respectfully submitted.

s/ G.Trenholm Walker G. Trenholm Walker PRATT-THOMAS WALKER, P.A. 16 Charlotte Street

4

Charleston, SC 29403 (843) 727-2208 [email protected]

ATTORNEYS FOR KIAWAH ISLAND UTILITY, INC.

February 12, 2016

Charleston, South Carolina

5

EXHIBIT 1

STATE OF SOUTH CAROLINA ) AMENDED AND RESTATED ) UTILITY SERVICE AGREEMENT COUNTY OF CHARLESTON )

This Amended and Restated Utility Service Agreement (this "Agreement") is made and entered into this _____ day of February, 2016, to be effective as of the Effective Date (as defined herein), by and between Kiawah Resort Associates, L.P., a Delaware limited partnership, and

Kiawah Island Utility, Inc., a South Carolina corporation.

W I T N E S S E T H

Kiawah Resort Associates, L.P. ("KRA"), a Delaware limited partnership, and Kiawah Island

Utility, Inc. ("KIU"), a South Carolina corporation, entered into that certain Utility Service Agreement

(as heretofore amended, the “1997 Agreement”) on or about June 5, 1997, on their separate behalves and on behalf of their successors and assigns, and recorded a Memorandum of the 1997

Agreement in the RMC Office for Charleston County at Book U 286, Page 740.

KRA and KIU entered into that certain First Amendment to Utility Service Agreement on

November 26, 1997, and that certain Second Amendment to Utility Service Agreement on May 21,

1999.

KRA and its Affiliates own the unsold of that certain comprising approximately 2,000 acres of undeveloped real property more particularly described in Exhibit A attached hereto (the "Property") located on Kiawah Island, South Carolina (references in this

Agreement to KRA shall be deemed to include those Affiliates of KRA that own any portion of the

Property). For purposes of this Agreement, “Affiliate” means, at any time, and with respect to any

Person, (a) any other Person that at such time directly or indirectly through one or more intermediaries Controls, or is Controlled by, or is under common Control with, such first Person, and (b) any Person beneficially owning or holding, directly or indirectly, 10% or more of any class of voting or equity interests of another Person or any subsidiary or any corporation of which such other Person and its subsidiaries beneficially own or hold, in the aggregate, directly or indirectly,

10% or more of any class of voting or equity interests. As used in the definition of “Affiliate”, (i) 2105-1009 / 449329.2 “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by or otherwise, and (ii) “Person” means an individual, partnership, corporation, limited liability company, trust or unincorporated organization, and a government or agency or political subdivision thereof. Unless otherwise noted herein, references to “Affiliates” are to Affiliates of

KRA.

KIU owns approximately 30 acres of real property more generally described in Exhibit B attached hereto (the "KIU Property") located on Kiawah Island, South Carolina, together with various improvements, equipment, contract rights, , and other property rights.

KIU operates a water distribution and wastewater collection and treatment system (the

"System") on the KIU Property for service to persons and businesses on Kiawah Island, South

Carolina.

KRA is in the process of developing the Property pursuant to the Amended and Restated

Development Agreement (as the same may be modified, amended or supplemented from time to time, “Development Agreement”) with the Town of Kiawah Island, dated December 3, 2013, recorded in the RMC Office for Charleston County at Book BP0377 Page 802. KIU has long supplied KRA with the water and sewer needs and capacities necessary to allow KRA to develop the Property to its current state and KIU's continued supply of sufficient water and sewer capacity for future development of the Property is essential to the value of the developed and undeveloped portions of the Property.

The historical relationship between KRA and KIU has been in large part responsible for the development of Kiawah Island as a first-class residential and resort community, as well as the sound financial status of KIU. The timely provision of water and sewer infrastructure and services assures that the highest values are created and maintained for all Kiawah properties. A utilities agreement is deemed by the parties, subject to approval by the Public Service Commission of South Carolina

2105-1009 / 449329.2

2 (“PSC”), to be necessary and desirable in order to facilitate and assure the continued mutual benefits to both KRA and KIU as development of Kiawah Island continues.

KRA and KIU hereby acknowledge and agree that there have been numerous changes affecting the 1997 Agreement, including, but not limited to KIU’s subsequent acquisition of additional real property. As a result, KRA and KIU now wish to amend and restate the 1997 Agreement in its entirety as set forth in this Agreement as of the Effective Date in order to address those changes and to set forth their contractual relationship for the purchase by KRA, and the supply by KIU, of water distribution and wastewater collection and treatment services with respect to the Property, subject to approval by the PSC.

KRA desires to contract with KIU to provide tor the timely supply of water distribution and wastewater collection and treatment with respect to the Property. Such water and wastewater services as KRA’s ongoing development of the Property may require are referred to herein collectively as the "Requirements," or, separately, as the "Water Requirements" or the "Sewer

Requirements". The parties hereto acknowledge that the Requirements may change from time to time in accordance with the entitlements granted to KRA in the Development Agreement. KIU desires to contract with KRA to assure that future needs for expansion and improvement of its capabilities are provided for in a timely and sufficient manner. Both parties acknowledge and agree that any failure or delay by KIU in complying with the terms, conditions, and obligations set forth in this Agreement will have a material and substantial adverse impact on the value of the Property and the ability of KRA to complete the development of the Property in accordance with the entitlements granted to KRA in the Development Agreement.

NOW, THEREFORE, in consideration of the mutual promises set forth herein and other good and valuable consideration flowing to both parties, the receipt and adequacy of which are hereby acknowledged, the parties do hereby agree as follows:

2105-1009 / 449329.2

3 1. Commencing as of the Effective Date and continuing for the entire term of this Agreement,

KIU, its successors and assigns, shall:

a. Supply KRA, its successors and assigns, with all present and future

Requirements for all or any portion of the Property which is either developed, under

development or planned for development pursuant to the entitlements granted to

KRA in the Development Agreement, as the same may be amended from time to

time;

b. Maintain and operate the System in accordance with all applicable Legal

Requirements, and

c. Expand, modify, update, upfit, maintain, repair, improve and operate the

System in such manner as is necessary to allow KIU to supply the Requirements

provided for herein. This shall include, but not be limited to, expending such capital

in a timely manner as may be necessary to expand the water delivered by the City of

Charleston Commission of Public Works ("CPW") and/or the St. John's Water District

so as to serve KRA's future development of the Property.

2. So long as KIU complies with the terms of this Agreement and has the physical plant and capacity to supply the Requirements to KRA, its successors or assigns, KRA, its successors or assigns, agrees to purchase all of the water and sewer services for the Property exclusively from

KIU at the rates which are currently published by the PSC, or at such increased or decreased rates as may be approved by the PSC from time to time. Anything to the contrary contained in the previous sentence notwithstanding, KRA may provide irrigation water, but not potable water, to all or any portion of the Property owned by KRA or its Affiliates from certain wells that KRA may establish from time to time. The parties hereto agree that, from and after the Effective Date, KRA, KIU and their respective engineers and agents shall collectively review and determine projected Requirements on

2105-1009 / 449329.2

4 a regular basis throughout the term of this Agreement, and in any event no less frequently than annually.

3. Subject to applicable Legal Requirements, KIU will not (i) apply for or support any change in rates by PSC which shall be discriminatory against KRA, its successors or assigns, or any portion of the Property; (ii) enter into any agreement, arrangement or contract whereby any other entity, property or project will have a greater priority than KRA or the Property with respect to the supply of water distribution and/or wastewater collection and treatment; (iii) charge KRA any fee, exaction, or other monetary payment of any kind for provision of water and sewer services other than those approved by the PSC; (iv) apply to the PSC to impose availability fees or impact fees, or (v) apply to the PSC for the imposition of rates or charges that disproportionately shift the cost of water or sewer service to a particular class of customer that is not specifically related to the costs to satisfy the usage or provision of service to that particular class of customer in comparison to other class of customers.

KIU and KRA acknowledge that the effluent presently being produced by KIU's sewer treatment plant is a result of an aeration treatment process. In the event that subsequent to the Effective Date either:

(a) any Legal Requirement necessitates that the treatment of wastewater be increased to a higher standard with a resultant increase in the water quality of the effluent; or (b) any capital expenditures are made by KIU for purposes of receipt and handling of sewerage or effluent, or the treatment and delivery of water; then in such event the cost thereof will be paid for by KIU and recovered by KIU by such permitted rate increases as are approved by the PSC, provided, however, that KRA agrees not to object to a rate increase requested by KIU if KRA determines, in its sole discretion, that such rate increase is reasonable and consistent with the terms of this Agreement.

4. As KRA sells lots (the "Lots") or other parcels or tracts (collectively, the "Parcels") of land in the course of the development of the Property, to the extent reasonably required by KIU, KRA will reserve easements for the construction and maintenance of water and sewer lines required for the supplying of the Requirements to the particular Lot or Parcels being sold and all remaining portions

2105-1009 / 449329.2

5 of the Property. KRA, at its sole cost and expense, shall construct the distribution lines to the extent necessary to supply the Requirements. Additionally, KRA shall, at times convenient to its normal development process, transfer the water and sewer lines and all related easements to KIU. KRA shall convey the distribution lines and related easements to KIU at no cost. KIU shall accept such transfers and shall maintain, repair, and replace those improvements and easements in a good, professional and workmanlike manner, from time to time, to the extent necessary to supply the

Requirements. KIU's obligations to accept transfer of the lines and all related easements, and to maintain, repair, and replace the same, shall be unconditional, provided that the transferred facilities, including the lines, have received a written Permit to Operate from the South Carolina Department of Health and Environmental Control (“DHEC”). KIU shall issue ‘Will Serve’ notices to KRA, its successors and assigns, consistent with historic practice (in substantially the same form as the sample ‘Will Serve’ letters attached hereto as Exhibit C) within ten (10) days of receipt of written request from KRA for service within KIU’s service area.

5. When the actual amount of the average daily sewage flow reaches 80% of the design capacity of the wastewater System (as then existing), KIU will promptly take all commercially reasonable steps consistent with industry standards necessary to expand said capacities in order to provide for the Requirements, as the same may change from time to time. KIU agrees to proceed with the construction, and to take all steps necessary for the construction, of the second potable water supply line from Johns Island in a timely manner and to complete its construction not later than two (2) years following the date on which the following conditions are both satisfied: (a) all permits required for the construction of the second potable water supply line from Johns Island have been received by KIU (for the sake of clarity, as of the date of this Agreement, the remaining permits are Temporary MS4 Storm Water Permit (Charleston County); Site Plan Approval

(Charleston County); Storm Water Permit (SCDHEC); and Final MS4 Storm Water Permit

(Charleston County)) (collectively, “Permits”), and (b) KIU shall have issued Notice(s) to Proceed

2105-1009 / 449329.2

6 to the relevant contractor(s) performing the construction. KIU shall proceed without delay to use commercially reasonable efforts to obtain the remaining Permits and to issue the Notice(s) to

Proceed promptly after all of the Permits are obtained. KIU shall install a third ASR well if KIU determines, in its reasonable discretion consistent with industry practice, that such installation is necessary to satisfy the Requirements.

6. KIU agrees to satisfy all applicable Legal Requirements related to the operation or maintenance of the System and the supply of the Requirements. KRA agrees not to object to a rate increase requested by KIU if KRA determines, in its sole discretion, that such rate increase is reasonable and consistent with the terms of this Agreement.

7. As used herein "Legal Requirements" shall mean the requirements, approvals, consents, permits, and the like which are imposed or required by all applicable , ordinances, rules. regulations or conditions of any federal, state, county, city or local government agency or authority, including, without limitation, the South Carolina Department of Health and Environmental Control and/or PSC.

8. The rights, covenants, obligations, duties, benefits, burdens, easements and other provisions created, declared or contained in this Agreement shall benefit the Property and bind the KIU

Property, respectively, and each owner, purchaser, tenant, invitee, mortgagee, licensee, user, and lienholder of any part or such portions of the Property or of the KIU Property and each of their respective successors and assigns, and shall at all times hereafter be commercially necessary, appurtenant to, affect and run with the land (i.e., the Property or the KIU Property, respectively) generally. Each of KRA and KIU shall have the right to assign its rights and obligations under this

Agreement to its successors-in-interest or successors-in-, provided that, with respect to an by KIU, its assignee shall be the authorized owner and operator of the public sewer and water services on Kiawah Island.

2105-1009 / 449329.2

7 9. KRA and KIU acknowledge and agree that any failure or refusal of either party hereto, its successors or assigns, to strictly comply with the terms of this Agreement could have serious and irreparable consequences to the non-defaulting party. As a result, in addition to any other right or remedy to which a party hereunder may be entitled, at law or in equity, each party shall be entitled to seek to enforce any provision of this Agreement by a decree of specific performance and to seek temporary, preliminary and permanent injunctive relief to prevent breaches or threatened breaches of any of the provisions of this Agreement, without posting any bond or giving any other undertaking. In the event of any litigation between KRA and KIU arising out of breach or enforcement of or emerging from this Agreement, the prevailing party in such litigation (or appeal therefrom) shall be entitled to reasonable attorney's fees and all reasonable costs of such action, including the cost of expert witnesses. EACH PARTY, KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY,

WAIVES ITS RIGHT TO TRIAL BY JURY IN ANY PROCEEDING ARISING OUT OF OR

RELATING TO THIS AGREEMENT, WHETHER SOUNDING IN CONTRACT, , OR

OTHERWISE.

10. This Agreement shall commence upon the Effective Date and shall continue in effect until thirty (30) years after the Effective Date (“Initial Term”), with one automatic five-year renewal term if KRA owns any portion of the Property at the end of the Initial Term, and up to two additional five (5) year renewal terms upon the mutual written agreement of the parties; provided; however, that this Agreement may be terminated by either party upon the occurrence of a default by the other party in the performance of a material obligation under this Agreement which is not cured within thirty

(30) days after written notice of default to such defaulting party, or, if the subject default(s) requires more than thirty (30) days to cure, if the defaulting party fails to begin performance within such thirty

(30) day period and does not diligently and continuously proceed with such performance until completion. For purposes of this Agreement, the “Effective Date” shall mean the date on which the

PSC issues an order approving the form and substance of this Agreement. For the sake of clarity,

2105-1009 / 449329.2

8 this Agreement shall have no force or effect until the Effective Date, and until such time, the 1997

Agreement with its associated amendments shall continue in full force and effect.

11. All notices, elections and communications permitted or required hereunder shall be in writing, signed by the party making the same, and shall be delivered personally or by registered or certified mail, return receipt requested, to the other parties hereto at the addresses set forth below their respective signature block. The date of such notice of communication shall be the date of personal delivery or mailing as the case may be. In the event any date on which any notice or election is required to be made hereunder falls on a Saturday, Sunday, or federal holiday, then the date on which notice is required to be given or made hereunder shall, for all purposes, be deemed to be the next following business day.

12. All rights and remedies of the parties hereunder shall be cumulative, and none shall be exclusive of any other, or of any rights and remedies allowed by law, and pursuit of any one of said rights or remedies does not preclude pursuit of any one or more of such other rights or remedies.

13. The parties shall cause this Agreement (or a memorandum of agreement evidencing this

Agreement) to be recorded in the Office of the Register of Mesne Conveyances for Charleston

County, South Carolina. The parties shall share any recording fees and other charges related to such recording.

14. If any term of this Agreement is declared to be illegal or unenforceable, all other terms hereto shall remain in full force and effect.

15. No , term or condition hereof shall be deemed waived, except by written consent of the party against whom the waiver is claimed, and any waiver of the breach of any covenant, term or condition shall not be deemed to be a waiver of any preceding or succeeding breach of the same or any other covenant, term or condition of this Agreement. Acceptance of any performance by a party after the time the same shall have become due shall not constitute a waiver by the

2105-1009 / 449329.2

9 nondefaulting party of the breach or default of any covenant, term or condition of this Agreement unless otherwise expressly agreed to by the non-defaulting party in writing.

16. In the event either party to this Agreement, despite diligent efforts by such party to avoid delays in the performance of its obligations hereunder, is delayed in the performance of the terms of this Agreement by causes or circumstances (other than financial inability) beyond its reasonable control, including, but not limited to, acts of God (e.g., fires, explosions, earthquakes, drought, tidal waves, exceptional weather conditions, and floods), war (whether or not declared), civil disturbance, terrorism or threats of terrorism, national disaster, strikes or shortages of labor, shortages or unavailability of materials, and so forth, the period for performance by such party will be extended by a period equal to the aggregate period(s) of such delay.

17. Upon the Effective Date, this Agreement, together with any later written modifications or amendments thereto, shall constitute the entire agreement between the parties with respect to the subject matter hereof and shall supersede any prior or contemporaneous agreements or understandings (including, without limitation, the 1997 Agreement), whether written or oral, which the parties, their agents or representatives may have had relating to the subject matter hereof. No modification, alteration or waiver of any term, condition or covenant of this Agreement shall be valid unless in writing and signed by both parties hereto.

18. This Agreement is entered into in South Carolina and shall be enforced and construed in accordance with the laws thereof.

19. Time is of the essence with respect to all obligations to be performed by the parties hereunder.

[Remainder of Page Intentionally Blank.]

2105-1009 / 449329.2

10 IN WITNESS WHEREOF, Kiawah Resort Associates, L.P., and Kiawah Island Utility, Inc. have caused these presents to be executed this _____ day of February, 2016.

SIGNED, SEALED AND DELIVERED KIAWAH RESORT ASSOCIATES, L.P. IN THE PRESENCE OF: By: Coral Canary GP, L.L.C. a Delaware limited liability company

Its: General Partner

______By: ______Patrick Melton Its: President ______

STATE OF SOUTH CAROLINA ) ) ACKNOWLEDGMENT COUNTY OF CHARLESTON )

THE FOREGOING INSTRUMENT was acknowledged before me by KIAWAH RESORT ASSOCIATES, L.P., by Coral Canary GP, L.L.C., a Delaware limited liability company, its General Partner, by Patrick Melton, its President, this ______day of ______, 2016.

______(SEAL) Notary Public for South Carolina My commission expires: ______

2105-1009 / 449329.2

11 SIGNED, SEALED AND DELIVERED KIAWAH ISLAND UTILITY, INC. IN THE PRESENCE OF:

By: ______Its: President

______

STATE OF SOUTH CAROLINA ) ) ACKNOWLEDGMENT COUNTY OF CHARLESTON )

THE FOREGOING INSTRUMENT was acknowledged before me by KIAWAH ISLAND UTILITY, INC., by its President, this _____ day of ______, 2016.

______(SEAL) Notary Public for South Carolina My commission expires: ______

2105-1009 / 449329.2

12 Exhibit A

Description of KRA's "Property"

All those certain pieces, parcels, and tracts of land situate, lying and being on Kiawah Island, in the County of Charleston, State of South Carolina, presently owned by Kiawah Resort Associates, L.P. or its Affiliates, having been conveyed to Kiawah Resort Associates, L.P. by (i) of conveyance from Kiawah Resort Associates, a South Carolina joint venture dated June 26, 1992, and recorded in Book L215, page 486, in the R.M.C. Office for Charleston County, S.C.; and (ii) deed of conveyance from KRA/Strawmarket, L.P. dated June 26, 1992, and recorded in Book L215, page 455, in said R.M.C. Office, SAVING AND EXCEPTING THEREFROM, all those certain lots, pieces, parcels and tracts of land previously conveyed by Kiawah Resort Associates, L.P. to unaffiliated third parties by of conveyance dated and recorded in said R.M.C. Office prior to the date of execution of the within written instrument.

AND ALSO:

ALL that certain lot, piece or parcel of land, with the buildings and improvements thereon, situate, lying and being on Kiawah Island, County of Charleston, State of South Carolina, containing 1.748 acres and located on the south side of Beachwalker Road, and more particularly described on a plat entitled "Kiawah Island Office Park" prepared by Coastal Co., Inc., dated September 28, 1977, and recorded October 13, 1977, in Plat Book AJ, at Page 104, in the RMC Office for Charleston County. BEING the same property conveyed to Beachwalker Partners, L.P. (an Affiliate of Kiawah Resort Associates, L.P.) by deed of Beachwalker Partners, L.P. dated July 2, 2008, and recorded on July 3, 2008, in the RMC Office for Charleston County, South Carolina in Book V663, at Page 863.

AND ALSO:

Any and all property situate, lying and being on Kiawah Island, in the County of Charleston, State of South Carolina, hereafter acquired by Kiawah Resort Associates, L.P. and/or any Affiliate of Kiawah Resort Associates, L.P. to the extent any such property is in the existing service territory of KIU.

2105-1009 / 449329.2

Exhibit B

The “KIU Property”

Sora Rail Utility Tract Legal Description: All those certain pieces, parcels, or tracts of land situate, lying and being in the Town of Kiawah Island, Charleston County, South Carolina, containing 16.5731 acres and 7.696 acres, more or less, shown and designated as “721,923 SF, 16.5731 AC” and “335,228 SF 7.696 AC.”, respectively, on a plat prepared by Southeastern Surveying of Charleston, Inc., entitled “A LINE ADJUSTMENT PLAT OF THE KIAWAH ISLAND UTILITY TRACT TMS #209-01-00-120 AND TMS #209-01-00-100 OWNED BY KIAWAH ISLAND UTILITY INC., LOCATED IN THE TOWN OF KIAWAH ISLAND, CHARLESTON COUNTY, SOUTH CAROLINA” dated March 30, 2009, last revised April 20, 2009, and recorded in Plat Book L09 at Page 0184, in the RMC Office for Charleston County, South Carolina, said tracts having such locations, butts and bounds, metes, courses, and distances as will by reference to said plat more fully appear. Street Address: 31 Sora Rail Road Kiawah Island, SC 29455 Tax Map Number: 209-01-00-120 ALSO Governor’s Drive Parcel Legal Description: All that certain piece, parcel or tract of land situate, lying and being in the Town of Kiawah Island, Charleston County, South Carolina, containing 1.847 acres, more or less, shown and designated as “Lot 18” on a plat prepared by Southeastern Surveying, Inc., entitled “A BOUNDARY LINE ADJUSTMENT PLAT OF A 1.847 ACRE TRACT BEING A PORTION OF PARCEL 30 SUBDIVISION 432 OWNED BY KIAWAH RESORT ASSOCIATES, L.P., LOCATED IN THE TOWN OF KIAWAH ISLAND, CHARLESTON COUNTY, SOUTH CAROLINA” dated April 3, 1996, and recorded in Plat Book EB at Page 183, in the RMC Office for Charleston County, South Carolina, said tract having such location, butts and bounds, metes, courses, and distances as will by reference to said plat more fully appear. Street Address: Governor’s Drive Kiawah Island, SC 29455 Tax Map Number: 264-04-00-121

2105-1009 / 449329.2

2 ALSO

Shell Creek Utility Tract Legal Description: All that certain piece, parcel or tract of land situate, lying and being in the Town of Kiawah Island, Charleston County, South Carolina, containing 0.253 acres, more or less, shown and designated as “NEW UTILITY TRACT” on a plat prepared by Engineering, Surveying & Planning, Inc., entitled “FINAL SUBDIVISION PLAT SHOWING A UTILITY TRACT AND 5 LOTS ON SHELL CREEK LANDING PARCEL 36 SUBDIVISION 438 PHASE III LOT 12 TOWN OF KIAWAH ISLAND, CHARLESTON COUNTY, SOUTH CAROLINA” dated April 3, 1998, last revised December 3, 1998 and recorded in Plat Book ED, at Page 43, in the RMC Office for Charleston County, South Carolina, said tract having such location, butts and bounds, metes, courses, and distances as will by reference to said plat more fully appear. Street Address: Governor’s Drive and Shell Creek Landing Kiawah Island, SC 29455 Tax Map Number: 265-09-00-040

ALSO

Cougar Island Utility Tract Legal Description: ALL that certain piece, parcel or tract of land, situate, lying and being in the Town of Kiawah Island, Charleston County, South Carolina, shown and designated as “112,538 SF 2.584 AC” on a plat thereof entitled “A BOUNDARY SURVEY OF KIAWAH ISLAND UTILITY FACILITY OCEAN PARK OWNED BY KIAWAH RESORT ASSOCIATES LP LOCATED IN THE TOWN OF KIAWAH ISLAND CHARLESTON COUNTY, SOUTH CAROLINA,” dated April 12, 2013, last revised April 22, 2013, prepared by SWA Surveying, LLC, and recorded May 10, 2013, in Plat Book L13, at page 0169, in the RMC Office for Charleston County, South Carolina, said lot having such size, shape, location, butting and bounding as are shown on said plat. Street Address: Ocean Course Drive Kiawah Island, SC 29455 Tax Map Number: 207-00-00-030

2105-1009 / 449329.2

3 Exhibit C Sample Will Serve Notices [See attached.]

2105-1009 / 449329.2 April 17, 2014

Mr. Frank Toland Subdivision Administrator Charleston County Planning Department 4045 Bridgeview Drive North Charleston, SC 29405

Re: Ocean Park, Phase 6, 7, and 8 (94 Lots) Kiawah Island, SC

Dear Mr. Toland:

Kiawah Island Utility, Inc, has adequate capacity and agrees to furnish potable water and sanitary sewer service to the referenced properties pending approval from SCDHEC. ~yi&~Respectfully, Becky J Dennis General Manager

CC: Bill Fellers Ray Pantlik

31 Sora Rail Road ~ Kiawah Island ~ Johns Island, SC 29455 Phone (843) 768-0641 ~ www,kiawahislandntility.corn ~ Fax (843) 768-1816 August 14, 2013

Mr. Frank Toland Subdivision Administrator Charleston County Planning Department 4045 Bridgeview Drive North Charleston, SC 29405

Re: Little Rabbit Island Kiawah Island, SC

Dear Mr. Toland:

I have reviewed the engineer's estimate of water and sewer costs for the referenced project and they appear to be reasonable and acceptable.

Respectfully,

Becky J. Dennis General Manager

CC: Bill Fellers, Thomas 5 Hutton September 19, 2013

Mr. Bill Fellers Thomas and Hutton Engineering 682 Jonnie Dodds Blvd. Mt. Pleasant, SC 29464

Re: Little Rabbit Island Kiawah Island, SC

Dear Mr. Fellers:

Kiawah Island Utility, Inc. has adequate capacity and agrees to furnish potable water and sanitary sewer service to the referenced property. Contingent on approval by SCDHEC, Kiawah Island Utility will own, operate, and maintain the water and sewer systems associated with this property.

If you require any additional information please do not hesitate to contact me either by phone (843) 768-0641 or email

Sincerely,

Becky J Dennis General Manager

CC: Spencer Nash, Rabbit Island Kiawah, LLC.