20190114Eagle Water to Staff 1 - Redacted.pdf

Wlotty O'Ledr)
!,;il,.1J1,lI ih F,l{ 9:08
:1,5',)Lt*' r. llSSiClj
ln| W. State Street, #150
Boise, ldaho 83702
Voice/Text: 208.453.6105
E-Mail: Molly@ BizCounselorAtlaw.com
14 January 201?
Ms. Diane Hanian
Commision Secreary
ldaho Public Utilities Commision
P O Box 83720
Boise lD 8T12O4o74
Hand Deliverd
RE Gse No. SUZ-WJW2IEAG-W-18-01
Dear Ms. Hanian:
I am enclosing an originaland three E) copies of EAGLE WATER COMPANY, lNCs
RESPONSE TO COMMTSSION STAFF',S FTRST PRODUCflON REQUEST.
A portion of the document provided in response to the Suffls First Production Request is filed
under seal, pursuant to Rule 2J/.02 of the C.ommission's Rules of Procedure.
An additional copy of EAGLE WATER COMPANY, INC'S RESPONSE TO COMMISSION
STAFF'S FIRST PRODUCIION REQUEST is enclosed to be datesumped and returned for our
files.
Very truly yours,
Ita-
M
l-aw, PLLC
Molly O'Leary
BizCounselor@ Law, PLLCln|W. State Street #150
Boise, ldaho 83702
Telephone: [208] 45}{,106
Mollv @ BizCou nselorAtLaw.com
Attorneys for Eagle Water Company, lnc.
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE JOINT
APPLICATION OF EACLE WATER
COMPANY, INC. AND SUEZ WATER
IDAHO, INC. FOR APPROVAL OF SALE
AND ACQUISIT|ON OF EACLE WATER
COMPANY, INC.ASSETS BY SUEZ WATER
IDAHO, INC. AND AMENDMENT OF
CERTIFICATE OF PUBLIC CONVENIENCE
AND NECESSITY NO. I43 AND APPROVAL
OF RATES AND CHARCES
CASE NO. SUZ-W-t*O2|
EAG-W.I&OI
EACLE WATER COMPANY, INC.'S
RESPONSE TO COMMISSION
STAFF'S FIRST PRODUCTION
REQUEST
COMES NOW, undersigned counsel for Eagle Water Company, lnc. and files this
RESPONSE TO COMMISSION STAFF'S FIRST PRODUCTION REQUEST TO EACLE
WATER COMPANY, INC.
REQUEST NO. I Please provide a copy of the asset purchase agreement between Eagle
Water Company and H2O Eagle Acquisition, LLC.
EAGLE WATER COMPANY, INC.'S
RESPONSE TO STAFF'S FIRST PRODUCTION REQUEST.l
RESPONSE TO REQUEST NO. I Please see the attached document. A portion of Section
2.O4 of the requested document has been redacted pursuant to IPUCRP 233 and the ldaho
Trade Secret Act, Title 48, Chapter 8, Idaho Code. A CONFIDENTIAL copy of the un-
redacted document has been filed with the Commission in accordance with IPUCRP 233.02.
DATED this l4th day of January, 2019.
BizCounselor@ Law, PLLC
lrr,-
A Company,
Inc.
EAGLE WATER COMPANY, tNC.',S
RESPONSE TO STAFF',S FIRST PRODUCTTON REQUEST- 2
EAGLE WATER COMPANY INC'S RESPONSE
TO
COMMISSION STAFF'S
FIRST PRODUCTTON REQUEST
EAGLE WATER COMPANY, INC.'S
RESPONSE TO STAFF',S FTRST PRODUCnON REQUEST- 3
DEFII\ITIYE ASSET PURCHASE AGREEMENT
TEIS ASSET PURCHASE AGREEMENT ('Agreemenf') is made and entered into as
of &e 18e day of September, 2018 (*Effective Dut '), by and between H2O Eagle Acquisition
LLC, a Wyoming limited liability company (the *Buyet''), and Eagte Water Company, Inc.. an
Idaho Corporation (the "!ellef).
WITNESSETH:
IVHEREAS, Seller owns r*ility assets that consist generally of water production, storage
aod distibution facilities used to provide water utility service in the Service Area ('Service Area')
ryecified in Exhibit A;
WIIEREAS, Buyer desires to purchase, and Seller desires to sell, the Purchased Assets
upon the terms and conditions set forth in this Agreemen[ and
WffiREAS, Buyer and Seller are parties to that certain Asset Purchase Agreement dated
lvlzy 14,2018 (*Odginal Agreemenf), this Agreement when executed strall update and replace
the Original Agreement.
NOW, TIIEREtr'ORE, h consideration of the mutual covenants, conditions,
representations and agreements coatained herein, the parties agree as follows:
ARTICLE I
DEFINITIONS AI{D CONSTRUCTION SECTION
As used in &is Agreement the following terms shall lays the meanings as defined herein
unless the context requires otherwise:
*Closiqg" or "Closing Date" has the meaning set forth in Section 9.01 of this Agreement.
"Connection Charges" means the fuods collected from new customers of the Utility System
at or prior to initial cormection to the Utility System in order tc defray the cost of making utility
service available.
DEF.o{TfivE AssET PURCfl ASE AGREEMENT - 1
'Ctstomer Deposits" means all firnds or deposim required to be made by ostomers of the
Utility System to Seller upon becoming a customer or by persons requesting extension of service
and connection to the Utility System, including, customer advances and contributions in aid of
constuction where such connection or extension has not been made. Said fimds are being held by
Seller and shall be transferred to Buyer at Closing. A listing of said Customer DeposiB is atached
hereto as Exhibit F and incorporated herein by this express reference. Said list *hall be updated at
Closing to reflect additions and subtactions from said listing from the Effective Date until the date
of Ciosing.
"Deposif'means &e sum of $50,000 together with any iilerest earned therein and deposit
with Escrow Agent as provided in Section 2.04(A).
"lEagle" meaus Eagle Water Company, an Idaho corporation.
'Easements" mea[s all existing easenoents and/or rights-of-way necessary or convenient
for ingress, egress, rrccess to, or the location, operation and/or maintenance of the Purchased
Assets, that are not within a plat or dedicated roadway, including but not limited to those
Easements set forth in fi'.vhibit B.
*Encumbrance" mean-s aay charge, claim, condition, equitable interesq lieo, option,
pledge, security interest, mortgage, right of way, easemen! encroachmen! servitude, right of first
option, right of first rcfusal or similar restiction, including, but not limited to, auy restriction on
use, voting (in the case of any security or equity intersst), transfer, receipt of income or exercise
of any other attribtrte of oumership.
"Escrov/'means the escrow account established with the Escrow Agent for coordinating
the Closing and receiving &e documents for the Closing and disbursemelrt of firnds for the
purchase provided for hereunder.
DsrrNrrrys AssET PURCHASE AGR-EEItIE}m - 2
*Esctow Agent" shall be the Title Company.
*Esmow Insructions' means the escrow instnrstions of the Escrow Agent in customary
form to carry out the terms of this Agreement
*Excluded Assets" means those assets, properties and rights, tangible and/or intangible,
real and/orpersonal,listed in E*ibit C.
"Fee Parcels" means the fee simple rsal prope{y listed in Exhibit D, including any leased
parcels to be converted to Fee Parcels at or prior to Closing.
*Governmeutal Aufhorization" means final approval, license, certificate of public
convenience and necessity, registratioa or final p€rmit issue4 granted, given or otherwise made
available by or underthe authority of any Crovernmental Body.
"Governmental Body" means any governmental authority of any nature, including, butnot
limited to, the Idaho Public Utility Commissisa ('IEUC"), City of Eagle Idaho, and Idaho
peearme* of Environmeatal Quality C'LpEQ).
*Hookup F@s" meaos the funds collected from new customers of the Utility System at or
prior to initial connection to the Utility System in order to defray the cost of making utility service
available. Any Hoolorp Fees held by Sellerfor hookups to occur afrer Closing slrall be hansferred
to Buyer at Closing. SuchHookup Fees shall be shoum on Exhibit F'.
"Permitted Real Estafe Encumbrances" shall mean all rights of way, easements and
@venants of record pertaining to the Fee Parcels and the Easements so long as the same do not
materially impairthe rxe, valtre or marketability of any Fee Parcel and Fasement. Permitted Reai
Estate Encumbrances shall not include any equitable interest, lien, option" pledge, security interest
modgage, right of first option, right of first refusal or similar rqs&iction, including any restriction
DEFIMITYE ASSET PURCHASE AGREEMENT. 3
on voting (in the case of any security or equity futerest), ftansfer, recelpt of income or exercise of
any other aUribute of ownership.
'Personal Propef,y" means the personal propefiy that is owned and used by Seller in
operation of the Utility System and identified in E*ibit E.
?nrchased Assets" has the nsening set forth in Section 2.02 hereof.
"service Area" means the service area identified in E*ibit A.
*Title Commitmenf'means the title insurauce commituent with respect to the Fee Parcels
and &e Easements in an amount not to exceed the Purchase Price, issued by the Title Company
committing the Title Company to issue and deliver the Title Policy to Buyer upon compliance with
the requirements stated in Schedule B, Section I thereof, subject to the terms and conditions
contained therein.
"Title Company" means TitleOne Corporation.
"Tifle Policy'' mesns the ALTA oumer's policy of title insuraqce, issued by the Title
Company in accordance with the Title Commitraent that meets the requirements of Section 3.03
ofthis Agreement.
"Utility Systed' means (t) the Fee Parcels, (2) the Easementg and (3) the Persoral
Proper! used to provide utility service in the IPUC authorizcd Service Area
"Water Rights" meaos all State of Idaho water rigbts and permits associated with the Utility
Systerr, insluding, without limitation, the following: State ofldaho waterrightnumbers: 63-7368,
63-7618,63-9245, and 63-1 1798;63-12147 and 63-12559.
DEFINn"IVE AssET PUR,CHASE AGH.EEMENT - 4
ARTICLE tr
PURCHASE A}ID SALE OF A,SSETS
SECTION 2.01 PURCEASE AI{D SALE COVENAIIT. At Closing, Buyer shall
purchase from Seller and Seller shall sell to Buyer the Purchased Assets, upon the terms and
subject to the conditions set forth in this Agreement
SECTION 2.02 PURCEASED ASSETS.
(A) The Purchased Assets consist of the following:
(1) The Fee Parcels described inExhibit D hereto.
@ The Easements, together with any other easement rights possessed by Seller
at Closing whether identified prior to or after Closing, incluCing but not necessarily limited to
those Easements identified ia Exhibit B hereto if they are integral to the Utility System.
(3) Aay and all Govemmental.Authorizations.
(4) Any and allPersonal Pmperty, inchrding, butnot limitedto, all watersupply
and disaibution facilities, pumps, tanks, treatment plants, other facilities, transmission mains,
distibutiou mains, supply plpes, valves, meters, meter boxes, service connections, equipment,
vehioleg part$ tools, chemicals, office buildiugs and all other physical facilities, equipment,
appurtenances and property instailations used by and for the operation of the Utility System, and
third party war mties that relate to completed construction, or consEuction in the process of being
cornpleted. Personal Prope*y includes, but is not necessarily limited to those items identified in
Eftibit E hereto if they are integral to the Utility System.
(5) All existing Customer Deposits and Hookup Fees made to and held by
Seller prior to the Closing.
(6) AII existing Connection Charges collected and held by Seller prior to
Closing.
DCTWTTTVE ASSET I'URCTIASE AGREEMENT - 5
(A A[ existing Waier Rights and Walcr Right Permits belonging to and held
by the C.ompany.
Aay of the foregoing held in the name of any afrliatc of Seller or by Robert DeShazo
aud/or any other person shall fs inchrdd in thc foregoiqg and h subject to the terms and
conditions hcreof.
(B) Prouptly during the due diligeirce InspesdoD Perioq provided for in Error!
Refercucc source not found.Section 3.02 the Seller shall provide Buyer copres of all curent
customer records, as.built surveys and infrastnrctne plas, plats, eugineeriog and other drawings,
designs, blu€prints, plans and specifications, mainteoance aad ope,rcing maruals, €ogheering
reportg catculxions, strdies, non-coqrcrzte accounting, and tron-co4rorate business records
contrrolled by or in the possession of Seller tbat relate to the description and operation ofthe Utility
Systmu
SECTION A([l EKCLUDED ASSETS. Notwithstmding any other provision ofthis
Agreement that may be construed to the contary, the hrchased Assets do not include the
Excluded Assets as shown in E*ibit C-
SECTION 2.04 PURCIIASE PRICE. The Purchase Price forthe hrcbasd Assets
(*Purcbase Price) zubject to
proratious and adjustuents set for& in this Agreemat The Pru,chase Price shall be payable by
Buys to Sellcr in immodiarcly available filnds at Clositr& by wire treder, pursustrt to wire
insruc{ions to be provided by Sellerto Buyerat or priorto Closiag.
(A) Buyer will delivcr tbc Deposit to Escnow Agent witbin thrce (3) Busincss Days
bllowing &e Effctive Daie. Buyerwill deliverthe balance of the hrchase Frice not lderthan
ee Cbsing Darc- Escrow Agc,nt will place &e kposit in a federally insurod account otr behalf of
DEFINTTTYE ASSEf, PURCUAIIE.IIGBEEMENT. 5
Seller and Buyer. Buyer will insilnrct Escrow Agent whether Buyer elects to have such account be
interest-bearing: Th. Price will be paidto Seller at Closing.
(B) The Deposit will be applied as follows: (i) if Buyer terminates this Agreement when
Brryer is expressly eutitledto do so as provided inthis Agreement &e Deposit Qess the Transaction
Fee, as provided below) will be retirned to Buyer; (ii) if the Deposit is to be received by Seller as
provided in this Agreement the Deposit will be paid to Seller; and (iii) if Closing occurs, the
Deposit will be credited to Buyer, applied against the Purchase Price, and paid to Seller at Closing.
(C) The Transaction Fee is the independent consideration for the execution of this
Agreement by Seller and the provision of the Diligence Period by Selier to Buyer. Upon any
termination of this Agreement prior to Closing, the Transaction Fee will be deducted from the
Deposit and paid by Escrow Agent to Seller. The Transaction Fee is earned by Seller as of the
Effective Date of this Agreement and is non-refundable in all events, and any reference in this
Agreement to a return of the Deposit to Buyer will mean such amount "less the Transaction Fee;"
provided, howwer, that if Closing occurs, the Transaction Fee will be included in the Deposit
amount credited to Buyer and applied to the Furchase Price as provided above.
(D) This Agreement including the Escrow Instnrctions, will constitute the instructions
for the Escrow Agent's handling of the purchase and sale transaction contemplated herein. Seller
and Buyer will execute such zupplemental escrow instructions as may reasonably be required by
Escrow Agent to enable Escrow Agent to comply with the terms sf this Agreement. If any conflict
exists between this Agreement and the provisions of any supplemental escrow instructions, the
tcrms of this Agreement will control unless a contrary intent is e:rpressly indicated in the
supplemental instruc'tions and zuch supplemental instnrctions are signed by both Buyer and Seller.
DnrncrrlvE ASSET PURCHASE AGREEMENT - 7
SECTION 2.05 ASSUIffiD OBLIGATIONS. With the sole exception of Buyer's
agreement to provide water senrice to individual customers tbrough the Utility System from the
Closing through the date Buyer assigns or transfers all or a material portion of the Utitity System,
Buyer shall not assume and shall not be liable for any debt, liabilities or contactual obligations of
Seller or any other party of any nature whalsoever. Seller shall remain fi.rlly and solely liable for
any and all debts, obligations or liabilities arising front Selle/s operation of the Utility System
priorto the Closing.
SECTION 2.06 EMPLOYEES. Buyer may after Closing hire any employees of
Seller that it desires to hire. Seller shall be reqponsibie for updating existing employee information
through completed employment applications &om all existing employees. Buyer shall review each
application aod schedule individual meetings when appropriate.
ARTICLE III
DUE DILTGENCE ISSUES
SECTION 3.01 PROYISION OS' IN}'ORMA'TION BY SELLER"
(A) Seller has provided or will provide to Buyer, within 20 days after the Effective
Date, an inventory of equipment parts and other personal proprty used by Seller in connection
with and for the operation of ths Utility System as of the Effective Date to be included h this
Agreement as Exhibit E.
(B) After the Efrective Date, and after reasonable advance notice, Seller shall cooperate
with Buyer in providing updated informatioa and access to all aspects of the Utility System by
Buyey's representatives(s) during nomral business hours.
(C) After the Effective Date, and after reasonable advance notice, Se1ler shall make any
existing plats, surveys, plans or specifications for the Utility System in Sellet's possession
available to Buyer, and/or its representatil'es for inqpectiou dixing normal business hours.
De rnmivr AssET PURCHASE AGAEEMEKT - 8
(D) Within fifteen (I5) days after the Effective Date Seller shall provide Buyer with a
resohrtion of all of its Shareholder's approvipg 'his Agreement and the tansaclion provided for
herein
SECTION 3.02 DUE DILIGENCE DTTERMINATTONS.
(A) Buyer shall have until December 31, 2018 (the "Inspection-Period') to connplete its
finat dus diligence. Buyor shall hays until &e dats that is ninety (90) Business Days after the
expiration of the Inspection Period ("Due Diligence Termination Date') herein to terminate this
Agreement at its sole dissretion for any re:uc,n or Do reaso& by delivering notice of its termiaatioa
as provided in Section I 1.02 ofthis Agreement; otherwise, Buyer and Seller shall proceed to obtain
the Governmental Approvals under Section 3.05 and Section 5.01 of this Agreement. Upon
termination 6f this Agreeme,nt undq Section 3.02 hereirl neither Party to this Agreement shali
have any firther liability or obligation to the otherpertaining to this Agreement.
(B) The time period for the Due Diligence Termination Date may be extended by Buyer
for up to tbree (3) fifteen (15) &y periods by Notice to Seller, to be given on or before the Due
Diligeuce Termination Date as it may be o<tended to complete Title Review, environmental and
satisfy the conditions precedents under Article VI-
SECTION 3.03 CITRRENT EVIDENCE OF TITLE.
(A) Within thirty (30) days after the Effective Date herein, and at Selle/s expense,
Seller shall fimish or have delivered to Buyer, from the Tifle Company, the following information:
(1) A Title Commitnaent issued by the Title Company (the *Ii![g
Commiment') to insure title to the Fee Parcels and the Easements of record in an amount not to
exceed the Purchase Price, naming Btryer as the proposed insured and having the effective date as
set forth therein, wherein the Title Company will have ageed to issue at Closing an ALTA form
DEFINITTYE ASSET PURCUASE AGREEMENT. 9
owner's title insurance policy, with Idaho modifi.cations and extended coverage at Btryer's
election; and
(2) Copies of atl recorded documents listed as special Schedule B exceptions
thereunder (the "Recorded Documents');
(3) UCC search for all UCC security interests that may apply to any of the
Purchased Assets; and
(4) Judgment search to determine if there are auy judgments against Seller
and/or liens therefrom against any ofthe Purchased Assets.
(B) The Title Commitment shall include the Title Company's requirements for issuing
the Title Policy, which shall be met by Seller as provided in Section 3.03(E) herein on or before
the Closing Date (includitrg those rhat must be met by releasing or satisffing
monetary Encumbrances, but excluding Encumbrances thatwill remain after Closing as agreedto
by the Buyer).
(C) If any of&e following occur, they shall constinrte aTitle Objection:
(1) The Title Commihent orotherevidence oftitle or search ofthe appropriate
real estate records discloses that any party other than Seller has title to the insured estate cove,fed
by the Title Commituent;
Qj Any title excqrtionis disclosedin Schedule B to any Titte Commitnoentthat
is not one of the Permitted Real Estate Encumbrances; or
(3) Any current survey discloses any matter that Buyer reasonably believes
could materially and adversely affect BuyeCs material use and enjoyment of the Fee Parcels and
Easements described therein; in such case, Buyer shall astify Seller in uriting of zuch matters no
Iaier than 15 days prior to the Closing Date.
DEFINTTTVE ASSET PURCEASE AGREEMEN"- 10
P) Seller shall use its best efforts to cure each Title Objection and take all steps
required by the Title Company to eliminate eash Title Objection as an exception to the Titie
i.
Commiuoent Any Title Objection that the Title Company is wilting to insure, on terms acceptable
to Seller and Buyer, is herein referred to as an "Insured Exception." The Insured Exceptions
acceptable to Buyer, together with any title exception to the Title Commitnent or matters disclosed
by any survey and not objected to by the Buyer in the manner aforesaid, shall be deemed to be
acceptable to Buyer. In the event Seller is uable to cure a Title Objection and/or Buyer objects to
an Insured Exception, Buyer shall bave the right to terminate this Agreement and shall have no
liability or firther obligation underthis Agreeme,lrl
(E) Seller shall compty with the requirements of [Schedule B Section 1] of the Title
Commitment
(F) Buyer shall have ee righq but not the obligation, to do such surveys on the Fee
Parcels as Buyer desires. Surveys procured by Buyer shall be at the sole cost and expense ofBuyer.
(G) If Buyer desires to have any standard survey exceptions deleted or modified in the
Title Policy, Buyer shall deliver to the Title Company, no later than 15 days prior to the Closing
Date, properly certified and current original surveys of the specified Fee Parcels that comply with
Idaho law.
DEm{r[vE AssET PURCSASE AGREEITIENT - 11
SECTION3.O4 MPROVISIONS.
(A) For purposes of this Section:
(1) "llazardous Materials" means any substance or material regulated by auy
federal, state or local governme,ntal entity under any Environmental Law as s hazardorrc material,
hazardous zubstance, hazardous waste, pollutant contaminant, toxic waste, toxic zubstance or
words of similar import, including peholeum aad petroleum productg by-products or breakdoum
products;
Q) "Environmental Laws" rleans any statute, law, regulation, orditrance,
injunction, judgment, order, or other decree of any governmental authority pertaining to the
protection of the em'ironmeng including the Federal Clean Water Act- 33 II.S.C. $ 1251 et seq.
(1972), the Comprehensive Environmental Reqponse, Compensation and Liability Act, &e
Resource Conservatioa and Recovery Acq the Federal Water Pollution Contol Act, the Oil
Pollution Act of 1990, Toxic Substances Conhol Ac! Superfund Amendment and Reauthorization
Act of 1986, &e Resource Conservation and Recovery Act and any comparable state statute, iaw,
regulation, ordinance, injrurction, judpenL order, or other decree. Any reference to legislative
acts or regulations shall be deemed to include all amendments thereto and all regulations, ordetrs,
decrees, judgments or notices issued &ereunder.
(B) Seller wanants that it has obtained all environmerrtal permits and other
Govemmental Authorizations that are required in connectioa with the business and operation of
the Utility System.
(C) Seller warrants that Utility Systeno is in full compliauce with all applicable
Environmental Laws and Company held environmental permits, Seller has 1s knowledge of any
basis for a violation, alleged violation or liability.
DEFINTTTVE ASSBT PURCHASE AGREEMENT. I?
(D) Seller warrants that it has not received notice of any violatioq alleged violation or
liability arising uuder any applicable Heral, state or local statutes, laws and regulations
(inctuding, without limitation, any applicable environmental, fuilding, zoning, or other law,
ordinance or regulation) materially or adversely affecting the Purchased Assets or Utility Systern.
(E) Seller warxants that &ere are no Ilazardous Materials present aroun4 on or in the
e,nvironment of the Utility Syste,m that are not in compliance with applicable Euvironmental Laws,
including, but not limited to, aoy hazardous Materials contained in barels, aboveground or
rmderground storage tanks, equipment (whether moveable or fxed) or other containers, either
te,noporary or perlunent. Seller has not disposed of any Hazardous Materids on the Fee Parcels or
EasemEnts, nor has Seller removed Hazardous Materials &om the Fee Parcels or Easemeots, except
asprovidedby law.
(F) Buyer, at its expense, may perform assessments, as it deems approprirate, including
Phase I Environmental Site Assessments (ESA) pursuant to applicable ASTM standards and
Phase II Environmental Site Assessments forrecognized environmental concerns identified in the
Phase I Environmental Site Assessnaents. Seller shall cooperate with Buyer and/or its agents by
providing reasonable aocess to the Utility System and Fee Parcels so that Buyer aud/or its agents
may conduct auy Environmental Site Assessments Buyer deems necessary.
(G) If the ESA reveals Hazardow Maferials on the Fee Parcels that require remedial
action, Buyer, in its sole discretion, shall either (a) demand that Seller take prompt action as
necessary to elipeditiously remediate the reported }lazardous Materials and provide the Buyer with
copies of all documentation veriSing that all remediation has occured and applicable regulatory
requirements have been satisfie4 (b) attempt to negotiate with Seller a lesser Purchase Price for
the Purchased Assets and proceed 1e f,[osing under the terms contained herein; provided, however,
DEFINTIVE .ASSET PURCIIASE AGREEMENT - 13
that if Seller and Buyer are unable to negotiate in good faith a lesser Purchase Price within twenty
(20) days of Buyels first remediation offer to Seller, Buyer may terminate this Agreemenq or
(c) tenninate this Agreement Seller shall be required to remediate under this Section 3.Oa(GXa)
rmless &e cost is estimated to exceed $100,000.00, in which case Seller shall have the option to
terminate this Agreement, orrenegotiate the pruchaseprice withBuyerin accordance with Section
3.04(G) or O). [Jpoa any termination under this Section 3.04, Seller and Brryer shall have no
firther liability or obligation to each other under ihis Agreemenl
ARTICLE [V
REPRESENTATTONS AND WARRANTIES
SECTION 4.01 REPRESENTATIOhIS ATID WARRANTMS OF SEI,LER
Seller represents and warrants to Buyer as follows:
(A) Seller is duly organized, validly existing and has an active status rmder the laws of
the State of Idaho. Seller has the power and authority to enter into this Agree,ment and to perform
the terms and conditions oftlis Agleemaent.
(B) There are rro peding orthredened legal actions, suib, mediations, arbitrations, or
other legal or administrative proceedings pending or threatened against Seller that could afect the
disposition Purchasd Assets in any way or couid prevent consummation of the transactions
contemplated by this Agreement Furthennore, that there exists no fact or facts that may result in
any actioa, suit, mediation, arbitatior, or other proceedings &at migbt result in any adverse
change in the Purchased Assets.
(C) Seller is uot in defauit with any Governmental Authority or under any
Governmental Authorizationpertaining to &e operationofthe Utility System or disposition ofthe
Puchased Assets. Additionally, the Seller has not receivd notice of any claim of default with
respect to any Governmeutal Authorization. Seller is not in defarilt with respect to any judgmeng
DETNITTVE ASSET PURCFiASE AGREEMENT. 14
order, unit, verdict rqiunctioo, decree or award applicable to it or any court or other government
T*** or arulratol navil juisai* o:t: n * *rt'1ii* to the operation of the Utility
System or the Purchased Asses.
(D) The execution and performance of this Agreement by Seller does not and wiil not
violate or result in the breach of any teinrc or condition, or require the consent of any prson not a
party hereto under: (i) the by-laws of Seller and (ii) any material mortgage, indenture, contact,
lease, license or other instrument, document or understanding, oral or wriften, to which the Seller
is a party or subject.
(E) Seller is not in default under aoy contract agreenent, lease or other instrument to
which it, the Utility Sys&em or the Purchased Assets are bound- Seller has rrs knowledge of auy
orlstanding debts or accounts payable relating to the Puchased Assets to which Seller is a party.
(F) Alltaxretums, informationand/orother reportsrequiredby Sellerto be filed in any
jurisdiction have been timely filed and all such ta:c returns and/or reports are true, correct and
complete in all marerial respects. All tanes applicable to Seller for the Purchased Assets that are
due and payable have been paid-
(G) Seller warrants rhat, other than 1fos Permitted Real Estate Encumbrances, Seller is
the sole legal owner and has fult tiglt, power and ability and will convey to Buyer at Closing the
fee simple absolute interest and good and marketable title to the Fee Parcels and Easements, free
and clear of all liens, claims, encumbrances and interests in the Fee Parcels and Easements.
GD Mthout limiting the generality of any other provision of this Section 4.01, Seller
warrants that as of Closing, Seller is the sole legal owner aud has full rigtrq power and ability to
convey to Buyer clear title to all of the Purchased Assets.
DEFSfiTTVE ASSET I'URCSASE AGNEEMENT - 15
(I) Seller's environmental representations and warranties contained in Section 3.04 are
tnre and ascurate and incorporated by reference into fhis Section 4.01.
SBCTION 4.02 REPRESENTATIONS AND WARRANTIES Otr'BIIYER. Buyer
represents and wamuts to Seller as follows:
(A) Buyer is duly organized" validly existing and has an active status underthe laws of
the State of Wyoming. Buyer has the power and authority to enter iuto this Agree,ment and to
prform the tersrs and couditions herein
(B) Buyer is not subject to, nor a party to aoy action, zuit claim or o&er legal
proceeding, legal requirement or a$y other restriction of any kind or character that would prevent
consummation of the bansactions contemplatedby this Agree,menl
(C) Buyer has not dealt with a broker, salesomn, or finder iu connection with any part
of the tra$ac:tion contemplated by this Agreement an{ insofar as it knows, no broker, salesman
or other person is entitled to any commission or fee with respect to said transaction
(D) The executioo and performance of this Agreement by Brryer does not and wiil not
violate or result in the breach of any term or condition, or require the sonseut of any person not a
party hereto undsr: (t) the bylaws of Seller; (ii) any maferial mortgage, iadenture, contrac! lease,
license or other insEument document, agresment or understanding, oral or qnitten, to which the
Buyer is a party or subject
ARTICLE V
ISSUANCE AITTD TRANSFER OT GOVERNMENTAL AUTHORIZATIONS
SECTION 5.01 ESUANCE A}ID TRANSTER O[' GOYERNMEI{TAL
AUTHORIZATIONS. Within tm (10) days after the Due Diligence Termination Date or earlier
at Buyer's request Seller and Buyer jointly shali apply for, and &ereafter diiigently seek and
pursue, &e issuance, cancellation and/or traosfer of all Governmental Authorizations necessary to
DEnNITTVE AssET PURCHASE AGa.EEMENT. 16
tansfer the huchased Assets to Buyer to operate the Utility System. Each party shall be
responsible for its orrnr fees and costs in this regard. Any ltiog fees incuned in seeking such
govemmental authorizations shall be qplit evenly between the parties.
ARflCLE VI
CONDrrIONS PRECEDENT TO THE BUTER'S OBLIGATTON TO CLOSE AND
.ADDTTIONAL COYENANTTS
Buyer's obligation to purchase the Purchased Assets and to take any and all other actions
required to be taken by Buyer at the Closing is subject to the satisfaction, at or prior to the Closing,
of each of the followiag conditions (any of which may be waived by the Buyer, in whole or in part:
SECTION 6.01 SELLER'S PERtrOBMANCE. All of the covenants and
obligations that Seller is required to perform or to comply wi& pursuant to this Agreement at or
prior to the Closing (considered collectively), &d each of these covenants and obiigations
(considered individually) strall have been duly performed and complied with in atl materiai
respects.
SECfiON6.O2 SEI,I,ER'S REPRESENTATIONS AND WARRANTIES. AIl
representations and warranties made by Seller in this Agreement shall be true, correct and complete
as of the Effective Date, and no breach or violation of such representations and warranties shali
have occurred &om the Eftective Date up to and including the Closing Date.
SECTION 6.03 ADIIITIONAL DOCUMENTS. Seiler shall have caused the
documents and instruments requited by this Agreement and the following documents to be
delivered to the Escrow Agent for Closing in a form reasonably satisfactory to the Buyer:
(A) Resolution reflecting approval of this Agreemeut by Seller;
(B) Resolution ofthe Shareholders of Sellerreflecting approval of this Agreement;
(C) Such other documents as Buyer may reasonably request for the purpose of:
DEFINTTTVE AssET PURCSASE AGREELTENT . 17
(l) Evidencing the prfonnance by Seller of, or the complimce by Seller witb,
any covenant or obligatioo required to be performed or complied wi& by Seller; or
@ Evidencing the release of all liens, secruity interests, and any other
encunbrance or encumbrances other than Permitted Real Estate Encumbrauces.
SXCTION 6.04 NO CONFLICT. Neither the consummationnor the performance of
&is Agreement will, directly or indirecfly, materially coutavene or conflict with or result in a
material violation of or cnuse Buyer to suffer any material adverse consequence under aay
applicable Governmental Authorization or other legai order.
SECTION 6.05 GO\IERNMENTAL AUTHORIZATIONS. All Governmental
Authorizations shall have been issued, cancelled or transferred, as the case may be, in accordance
with Section 5.01 of this Agreement under terms satisfactory to Buyer.
SECTION 6.06 ASSIGI$MENT OI'AGREEMENT. The Buyer shall have the right
to assign this Agreement at Buyer's sole cliscretion and at any time to any other Party without the
consent of the Seller by notifying the Selier in vniting.
ARTICLE VII
CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE
Seller's obligationto sell the Purchased Assets and to take any and all other actions required
to be taken by Seller at the Closing is subject to its satisfaction, at or prior to the Closing, of each
of the following conditions (any of which may be waived by Seller in whole or in part):
SECTION 7.Ol TEE BTIYER'S PERtrORMAIICE. All of the covenants and
obligxions that Buyer is required to perform or to comply with pursuaot to this Agreement at or
prior to the Ciosing (considered collectively); and each of these covenants and obligations
(considered individually), shall have been performed and complied with in all material respects.
DEFINITTVE ASSET FURCIIASE AGREEMENT- 18
SECTION 7.02 BIIYER,'S REPRESENTATIONS AND WARRAIYTIES. AII
representations and warranties made by Buyer in this Agreement shall be mre, corre.ct and
complete as of the Effective Date, and no breach or violation of such, representations and
warranties shall have occurred from the Effective Date up to and including the Closing Date.
ARTICLE VItr
COVENA}ITS OF SELLER
SECTION 8.01 OPERATION OF TIIE BUSINESS Otr. SELLER Between the
Effective Date and&e Closing, Seller shall:
(A) Conduct its business in the ordinary course of business consistent with past
practice;
(B) Confer with Buyer prior to implementing any operational decisions that night
change, in any way, the disposition of the Purchassd Assets and/or operation relating to the Utility
System of a material narure;
(C) ldaintaiu the Purchased Assets in a state of repair and condition that complies with
legal requirements and is consistentwiththe requiremeuts andnormalconduct of Selleds business;
(D) Comply with all legal requirements and contactual obligations applicable to the
operations of Seller's business;
CE) Use its best efforts tcr mainfain its relationship and good-wiu with any and all of its
suppliers, customers and/or any otherperson or entity with which it has a business relationship;
(F) Cooperate with Buyer and assist Brryer aud/or Buyer's agen(s) in identifying the
Govemmeatal Authorizations required by Buyer to operate the business from and after the Closing
Dafe and either (i) tansfening existing Governmental Aurthorizations of Seller to Buyer, where
permissible, or assisting Buyer in obtaining uew Govenrmental Authorizations;
DEFINITT\TE ASSET I,URCEASE AGR,EEMENT - i9
(G) Upon rcquest from time to time, execute and deliver an documents, make all
tnrthful oaths, testi& in any proceedings, whether before or after Closing, and do all other acts that
may he re,asonably necessary to consummate this Agreemen! all without any firther consideration;
G{) Maintain and make available for review by Buyer all books and records of Seller
relating to Sellet's business in the ordinary course of business;
(D Notrs and consult with Buyer prior to the initiatiog developmen! or execution of
any plans for expamion of or improvements to the Utitity System;
(J) Cooperate with Buyer in sendi"g any customer notices thaq in Buyer's judgment
ilre Bsessary or desirable in connectionwith the transactions contemplated herein;
(K) Not allow the levels of raw maferials, suppiies or other materials included in the
Purchased Assets to vary from the ievels customarily maintained;
(L) Not make any material modificationto any Governmental Authorizationthat relates
to the Purchased Assets; aod
(M) Not enter into any agreements, contracts, letters of intent or understanding or other
documents or modifr, terminate or assign any existing agreements, contracts, lefiers of intent or
understanding orotherdocuments withEagle (including aay shareholderofEagle) withoutBuyet's
priorwriuen consent.
SECTION 8.02 NOTIFICATION. Benreen the Effective Date and Closing, Seller
shall promptly notifr Buyer, in writing, if it becomes arvare of (a) any fact or conditionthat causes
or constitutes a breach 6f this Agree,meng (b) the occltrlsnce after the Effective Date of any fact
or condition that would or be reasonabiy likely to (except as expressly contemplated by this
Agreement) cause or constitute a breach of this Agreemen! or (c) any materi2[ damage or
destuction to the Purchased Assets. During the same perio{ Seller also shall promptly notiS the
DTTtr.,{I TvE AssET PURCTIASE AGREEMENT - 20
Buyer of the occurre,lrce of any breach of any covenant of Seller in this Agreement or the
ocsrgreqps 9f qny.evo,at -thet qay qake,the rptisfaction of,lhp cpnditions in this Agreement
impossible or unlikely.
SECTION 8.03 PAYMENT OF LIABILITIES. Seller shall pay or otherwise satis$
in the ordinary course of busiuess all of its liabilities and obligations as they come due.
.ARTICLE U{
CLOSING A}ID RELATED PROCEDT]RES ANII ADJUSTMENTS
SECTION 9.01 ESCROW CLOSING DATE AI\ID PLACE.
(A) Within three (3) business days of the Effective Date, Buyer and Seller shall open
Escrow with the Escrow Agent The parties shall execute the Escrow Insfiuctions in customry
form to carry out the terms of this Agreement
(B) On or before the Closing Date, Buyer and Seller strall deposit in escrow with
Escrow Agent all insEuments, documents and monies (payable in cash by wire funds or official
bank check), and closing instructions necessary to complete the tansaction in accordance with this
Agreemenl Tlre Escrow Agent's closing fees shall be equally divided between Selier and Buyer.
AII other exlreoses not specifically referenced in this Age€ment and incurred by Seller or Buyer
with respect to the tansactions set forth herein shall be borne and paid exclusively by the Party
incuring the same, without reimbr:rsement.
(C) The Closiug shall he held at the office of the Escrow Agent within ten (10) days
after satisfactiou of the conditions rmder Article VIError! Reference source not or such
other date mutually acceptable to Seller and Buyer but no later than twenty (20) days after receipt
of final Govemmental Authorizations and other conditions precedent under Article VI (the
"ebsisg_Da!g').
DEFn{ITIVE ASSET PURCEASE AGREEMENT . 2 1
SECTION 9.02 RECORDING FEES.ATTD TAIGS AND TTTLE INSURANCE.
(A) Fees to record the deeds and any other instruments necessary to deliver title to
Buyer shali be paid by Buyer.
(B) To the extent that taxes or other charges are drrc and payable with respect to the
deeds and/or o&er instnrments necessary to deliver title to the Purchased Assets to Buyer, said
transfer ta(es shall be paid by Buyer. Any income taxes due and payable by Seller as a result of
the sale ofthe Purchased Assets shall be paid by Seller.
(C) The cost of the Title Policy, standard coverage, shall tre paid by Seiler, the
additional cost of extended coverage and any endorsements requested by Buyer shall !s paid by
Buyer.
SECTION 9.03 ACCOUNTS RECEMBLE; ACCOUNTS PAYABLE;
CUSTOMER DEPOSITS.
(A) AII accounts receivable for services provided to customers prior to the
Closing Date shall belong to Seller and Seller shall have the right and obligation to collect such
accouts receivable. All accounts receivable generated for services provided to customers on aud
afterthe CiosingDate shall belongto BuyerandBuyer shall havetherightaudobligatiouto collect
such accounts receivable.
(B) Ail bills for services, materials and sugplies rendered in connrction with &e
operation of the Utility System prior to &e Closing Date f'Accounts_Payable'), shall be paid by
Seller.
(C) Seller shall be responsible for all ad valorem or property taxes, prorated through
&e Ciosing Date. Ta:<.es due thereafter, if any, shall be paid by Buyer.
Dprnrrrrvr AssET PuRcHAsE AGREL'uEI.{? - ?3
SECTION 9.04 CONNECTION CEARGES.
!1 .,
ty1:
:, :r:*'"::::31 :T ::',**1ol l"u': flna customers who, prior
to the Closing Date have not been hooked up to the Utility System or othenvise received the
services for which such customer funds were collected" shatl be a Purchased Asset.
(B) Hookup Fees collected from and after Closing shall be Buyer's sole and separate
properly.
SECTTON 9.05 COSTS AIID PROTESSIONAL FEES.
(A) E ch patty shall be responsible for securing its own counsel aad/or advisor(s) for
representation in connection with the negotiation of &is Agreement and all other matters
associated with performance, cancellation or closing hereunder r$lsss otherwise specified herein.
Each party shall be responsible for the paSrment of its own attonreys, bankers, engineers,
accountant$ and other professional advisors or consultants in connection herewith- Buyer will be
responsible for the recording of the deeds and other instnrmerts necessary to deliver title to Buyer.
SECTION 9.06 RISK OF LIISS. At all times prior to and through the time of
Closin& Seller shall aairJain adequate fire and orteuded insurance coverage for the cost of any
replacement or repairs to the Purchased Assets that may be required as a result of casualty damage.
Repairs or repiacements must be of equal or betler gualrty than existed prior to ttre loss or damage.
The risk of loss to the Utility System prior to Closing sbali be bonre by Seller. The risk of loss to
the Utility System after Closing shall be borae by Buyer.
SECTION 9.07 CLOSING PROCEDT'RE.
(A) On or prior to the Closing Date, Seller and Buyer shall execute all documents
necessary to close the taosaction.
Dnrnrrrvu AssET PURCXIASE AGR.EEMENT- 23
(B) At Closing, the appropriate party shall execute or cag5g to be executed and
delivered to the Closing the foliowing documents in final form acceptable to Buyer, together with
any exhibits or appendices f'Transfer Document$"):
(1) General warmnty deed(s) for the conveyance of Fee Parcels and the Water
Right to be conveyd
@ AssignmentofEasements;
(3) Ifnecessary, general assigrment of any Governmental Arxhorizations;
(4) Bills of Sale or other documents of assignme,lrt and transfer, with fiiU
warrauties of title to the personal properly portion of Purchased Assets;
(5) Post-closing agreem€,uts, affdavits, assigrments, certificates, estoppel
certificates, corrective irstnunents, releases, satisfactions or terminations necessary or required
pursuant to this Agreement
(O Title Policy consistent with Section 3.03 of this Agreement;
(7) Non-foreign affidavit;
(8) Any affidavits, assignments, certificates, estoppel certificares, cortective
iostruments, releases, satisfactioas, terminatious or waivers aecessary to close, including, but not
limited to a no lien affidavit, a "gap" affidavit and those instruments identified by the Title
Company insr:ringthe Fee Parcels;
(9) Documents, in a form reasonably satisfrctory to the Buyer, and the Titie
Company evidencing the reiease of all liens, secudty interestq and other eneumbrances othertlan
Permitted R€al Estafe Encumbrances.
SECTION 9.08 DOCUMENTS AFTER TIilD CLOSING. From time-to-time after
the Closing, each party hereto shall, upon request of the other, execute, acknowledge md deliver,
DEFINITIVE AssET PURCHASE ACREEMENI'- 24
or shall cause to be executd acknowledged aod delivered, all such firther acts, deeds,
assignments, bills of sale, transfers or other documentation for (1) confirming or correcting title in
the rame of Buyer or its successors) or perfecting possession by Buyer or its successor(s) of any
or all ofthe Purchased Assets, including the establishment of a record of Easements without resort
to litigation, expenditure of monies or other extraordinary means, for all facilities that are a part of
the Ut'ility System in exisbnce or use at the time of Closing, or (2) otherwise fulfilling the
obligations of the parties hereunder and to facilitae the tansition of services to customers and
operation of the Utility System. Further, &om time-to-time after Closirg, should the parties
discover that certain land parcels, Easements, or other rights owned or enjoyed by Seller prior to
Q[ssing and uecessary to the proper operation and maintenance of the Utilrty System were not
included in the Appeadices hereto, and thus not trausferred to the Buyer or its successor(s) at
Closing in accordance with this Agreement then tbe parties agree that Seller shall execute or cause
to be otecuted the docume,nts including, but not limited to, deedso easements and bills of sale
necessary to convey such ownership or rights to Buyer or its predeoessor(s), at no cost to Buyer,
provided such conveyarces may be accomplished without resort to litigation, expenditure of
monies or other exhaordinary means.
ARTICLE X
IhiDEMNTTY AI\TD ATTORNTEYS I{EES
SECTION 10.01 INDEMNITY AltD ATTORIIEYS FEES. Seller agrees to
indemnifr (or defend at Buyeds sole option) Buyer, its successors and assigns, and hold them
hannless against any loss, demage, liability, expense or cost arising out of or atnibutable to: 1) any
act or omission of Seller or its agents, employees or contractors relating to Seliet's ownership,
maintenance, or operation of the Utility System prior to Closing, or 2) any misrepresentation or
breach of any represeotation, warrarfy or covenant on &e pafr of Seller under this Agreemenl
DSI,IIiTTTVS ASSET PURCEASE AGREEMENT - 25
SECTION 10.02 ATTORNEYS trEES. Inthe eveirt litigation is necessary to resolve
any dispute arising underthis Agreemen! the prevailingparty shall be entitldtorecover fromthe
non-prevaiiing party reasonable afiorney's fees aod elpenses to the exteut allowed by Idaho law.
ARTICLE }il
GEIYERAL PROVISIONS
SECfiON 11.01 APPLICABLE LAW; JURISDICTION AI\ID YEniUE. This
Agreement shall be govemed by and constrrred in accordance with the laws of the State of
Wyoming excluding any choice of law rules that may direct the application of the laws of any
otherjruisdiction.
SECTION 11.02 NOTICE.
(A) All notices, certificates or other communication^s hereunder shall be srfficieatly
given and shall be deemed given when hand delivered or mailed by registered or oertified *ail,
postage prcpai4 or by courier service, charges prepaid, to the parties at the fotlowing addresses:
To Seller:
Eagle Water Company, inc.
188 W. State Street, Suite 4
Eagle,.ID 83616
Atta: Robert Deshazo
To Brryer:
H2O Eagle Acquisition, tLC
30 N. Gould St.
Suite N
gfuqirtan, Wyoming g2 g0 1
(B) .A,ny writtennotice given in one person in subsection (A) of this Sestion shall also
be copied and provided to all other persons ideatified in subsection (A,).
(C) The parties may, by notice in qnitilg given to the others; designate any ftrture or
different addresses to whichthe zubsequent notices, certificates or other communications shallbe
sent. Any aotices shall be deemed givenonthe date suchnotice is deliveredbyhand orby facsimile
tansmission or five (5) days afterthe date mailed-
DSFINITIVE .A.ssET PURCflASE AGREEMENT - 26
SECTION 11.03 ASSIGIIMENT A]\ID JOINDER,.
(A) Other thanthe assignmentpursuautto Section 6.06 hereof, this Agreement may not
be assigned without the prior written conse,nt of the non-assigning party, which contpnt shall not
be r.rnreasonably withheld-
(B) This Agreement shall be cons&ued as solely for the bendfit of Seller and Buyer and
their successors and assigts aod no claim or cause of action shall accrue to or for the benefit of
any otherparty.
(C) This Agreement shall be binding on ond shall inure to the benefit of the parties to
it and their respective successo*i and permitted assigns.
SECTION 11.04 AMENDMENTS AliD WAMRS. Except as otherwise provided
itr this Agreement no amendmenf supplemen! modification or waiver of this Agreement shali be
binding qpon any party hereto tmless executed in writing by such party. No waiver of any of the
provisions sf this Agreement shall be deemed or shall constitute a waiver of any other provision
of this Agreement whether or not similar, ualess otherwise e:cpressly provided.
SECTION 11.05 ENTIRE AGREEMENT. This Agreement is the entire agreement
Mween the parties and zupersedes all prior and contemporaneous agreements, uaderstandings,
negotiations and/or discussions ofthe agreements, understandingg negotiations aod/or discussions
of the parties, whether oral or written, pertaining to the subject matter hereoi and there are no
waEanties, representations or other agree,rnents between the parties in connection with the subject
matter hereof, except as qpecifically set forth herein-
SECTION 11.06 REMEDIES; TERMINATION EVENTS. By notice given prior to
or at the time of Closing, this Agree,me,nt may be terminated as follows:
DertrrlrrrlrE ASSET ITJRCSASE AGREEIUE IT- 27
(A) lilithout limithg any of the rights and remedies at law available to Brryer arising
from Sellet's failure to comply with its obligatioas under this Agreement, including, withor$
limitation, the remedy of specific performance, if the Governmental Authorizations set out in
Article V, or if all conditions precedeut to Buyer's obligation to close set out in Article M have
not been satisfied prior to the Closing Date, Buyer shall have the right of terminatioq by delivery
of notice to Sellsr.
(B) Without limiting the rights and remedies available to Seller pursuant to Section
11.07(4.) hereof in connection wi& Buyer's failrre to comply with its obligations under &is
Agreemen! ifthe Govemmeutal Authorizatiorls set out in Article V, or if all conditions precedent
to Sellet's obligation to close set out in Article VII have not been satisfied on or prior to the Closing
Date, Buyer shall have the right of termination, without fiuther recourse or liability to Buyer, by
delivery ofnotice to Selier.
(C) As otberwise provided in this Agreemenl
SECTION 11.07 REMEDIES; EFFECT OF IERMINATION.
(A) Each party's right of termination under Section 11.06 is in addition to any other
righb it may have under this Agreement or otherwise and the exercise of such right oft€rmination
is not au election of remedies. if this Ageement is terminated pursuant to Swtion 11.06, all
oblisations of the parties under this Agreement shall terminate unless othehvise staled in this
Agreemen! provide4 however, that if this dgree,me,nt is terminated because of a breach of this
Agreement by Seller or because otre otmore ofthe conditiors to the Buyet's obligations underthis
Agreement is not satisfied as a result of the Seller's faihne to comply with its obligations under
this Agreemen! Buyer's right to purzue all legal and equitable remedies will surrive such
termination rrnimFaired, Norwithstanding anything herein contained to the contrary, Selle/s sole
DEFTNITIVE ASSET T'IjIRCHASE AG}{EEMEIST. 2t
remedy for a default by Buyer of its obligations under this Agreement shall be to terminate this
Agreement by giving qrittennotice to Buyerprior to or atClosing and recover liquidated damages
in the amount of $5,000.00. Seller and Buyer agree that the foregorng amount is a fair and
reasonable amount to be paid to Seller as agreed and liquidated damagcs in ligbt of Seller entering
into this Agreement and incurring costs pursuant hereto, and the foregoiag amomt shall not
constitrse a penalty or forfeihre. Seller and Buyer agree that Se[et's damagos resulting from
Buyeds default hereunder are difficult to determine and the foregoing sum is a fair estimate of such
dauages which has been agreed to in an effort to crus& the amount of such damages to be certain-
Furthermore, notwithstanding aoything herein contained to the contraq/, Seller shall not have the
remedy of specific performance in connection with any breach of this Agreement by Buyer or
Buyet's failure to purchase the Pruchased Assets.
(B) Nei&er Seller nor Buyer shell !s liable to the other in the event that after the
Effective Date there occurs (1) a change of lawthatprevents the Closing, (2) any action by a third
prty thatprevents the Closing, or (3) any legal orderthatpreve,nts the Closing. Bothparties shall
diligently defend against a third party's attempt to prevent a Closing or Govemmental
Ardhorization.
(C) If a material breach of any provisiou of this Agrecment has been committed by
Seller and sr:ch Breach has not been waived by Buyer, but does not result in termination of this
Agreemeng Buyer retains all re,medies available to it at law or in equity with respect to such breach.
(D) Nei&er Seller nor Buyer shall !s liable to the other for any qpecial, consequential
orpunitive damag€s.
SECTION 11.08 COIINTERPARTS. This Agreemeat may be executed in
counterparts, each of which shall be considered an original. The Parties expect rhat the Seller wiil
DEF$ITm\rE AssET IIIRCHASE AGNEEMENT - 29
execute this Agreement before execution by the Buyer. Seller understands and agrees that Buyer
will not execute this Agreement without the prior approval of its Board of Directors, whose
discretion to accept or reject this Agrwment prior to execution by Buyer shall in no way be limited
by Seller's execution hereof.
SECTION 11.09 SECTION IffiADINGS. Any headings preceding the texts of the
several articles, sections or exhibits in this Agreement shall be solely for the convenience of
refe'rence and shall not constitute apart of this Agreementnor affect its meaning, consfuctiou or
effect.
SECTION 11.10 SEVERABILffY. In the event any tem or provision of this
Agreement is held b be invalid, illegal or unenforceable in any respect, srrch invalidity, illegality
or unenforceability shall not affect any other provisions of this Agreement and the remainder of
this Agreement shall be consEuedto be in fullforce and effect
SECTION 11.11 EXHIBITS AND SCHEDIILES. Ail exhibits, schedules and
attachments referred to herein are inteuded to be and hereby are made specifically a parr sf this
Agreement.
SECTION tr1.12 STOCK ACQUISITION. At any time prior to the Closing Date,
Buyer may elect in Buyer's sole discretion to purchase 100% of the stock in Eagte in lieu of
purchasing the Fuchased Assets. Within five (5) days after receip of Buyet's written notice, Seller
shall enter into the Stock Purchase Agreement ("$P41. Upon Buyer and Seller executiqg aad
entering into the SPA, this Agreement shall automatically terminale and Buyer's and Selleds
obligations and liabilities hereunder shail become nuli and void.
SECTION 11.13 PUBIJCITY. No public announcement of this Agreement or the
transactions contemplated hereby will be made without the prior consert ofBuyer as to both timing
I}EFNTTIVE ASSET PU*CHASE AGREEiiIE.NT . 30
and content, except that ei&er parly, without the other parQy's consent may make such
atrnouncements and disclosures as it believes advisable pursuant to law. Buyer and Seller
covenasts anA agee to keep s[ictly confiA*iA (excep for necessary disclosure to advisors,
including, but not limit€d to, Iawyers and accountants) the purchase price and the terms and
conditions under this Agreement
SECTtrON 11.14 EXCLUSWTIY. Seller covenants to Buyer that during the term of
this Agreemeat it will not seek or eatertain any agreement with any other person for the sale ofthe
Puohased Assets or the Utility System.
[Signature Page Follows]
DEFINITTyE AssET Puncgese AGREEMENT - 31
IN WITNESS WHEREOF, ths Seller and Buyer have caused this Agreement io be duly
executed and entered into oa the date first above written.
Bl.rvEk HZO Eogle Aequisition LLC,
A Wyoming limited liability company
SELLER:
Consented and agreed to with respect to
EagEe Water Companp Inc.,
aa Idaho corporation
Exhibit A
Exhibit B
Exhibit C
Exhibit D
Exhibit E
Exhibit F
Service Area
Easements
Excluded Assets
Fee Parcels
Persoaal Property
Customer Deposie and Hcokup Fees
DEfiItirrrYE AssET PURCHASE AGEEEMENT. 32
STATE OF IDAHO
County of Ada
On this I I day of September, 2018, before me, the undersigned, a Notary Public ia and
for said state, personally appeared Robert DeShrzo, Jr,, known or identified to me to be the
President ofEagleWater Compan;r, the personwho executedthe foregoing instrument on behalf
of said company, and acknowledged to me tbat he executed the same in said corporations name.
IN WITNESS WHEREOF,I have hereuato set my hand and affixed my official seal the
day and year in this fust above written.
Notary Pubiic
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My Commission expires
STATE OF IDAHO
Couuty of A.da
On this ll- day of September, 2018, bsfore me, the undersignetJ, aNotary Public in and for
said State, personally appeared Robert DeShazo, known to me to be the person who signed the
foregoing instrument and ac*nowledged to Ee that he executed the same.
IN WITNESS WHEREOF,I have hereunto
day and year in this certificaf€ first above written.
affixed my official seai the
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DErIIIITTVE ASSET PURCflASE AGREEMEIiT - 33
My Commissionexpires
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STATE OF IDAHO )
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County of Ada
On this jl OuV of September, 2018, before me, &e undersignd a Notary Public in and
for said state, personally appeared N" L. Bangle knoum or identified to me to be a Dirrcctor of
EllO Eagte Acquisition LLC, thepersonwho executedthe foregoing instnrmentonbehalfofsaid
company, and acknowledged to me that she executed the same.
IN MTNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year inthis certificate first above writteu
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Notary Crf. 6T,{R ;,-Y Residing at f
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DETHITTVE ASSET FUR,CHASE AGREEMf,hT - 34
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EXIIIBIT A
SERVTCE AREA
All of that area within Ada County,Idaho within which Eagle Water Company,Inc.
is authorized to provide regulated water utility service pursuant to Certificate of
Convenience and Necessity No. 278, as iszued, ameuded and revised per orders of the Idaho
Pub1ic Utilities Commission, as generally depicted below, together with any areas served by
Eagle Water Company at the date of Closing, whether included in CPCN No. 278 or not.
DEFINITIVE ASSET PURCEASE AGREEMENT - 35
E,XHM{T B
EASE,MEFTTS
AII existing easements andUor rights-of-way necessary or convenient for ingress, egre$r,
access to, or the location, operation and/or maintenance of the Purchased Assets, that are
not within a plat or dedicated roadway, including but not limited to trose recorded
Easements set forth below:
Sage Acres Booster Punrp Station - Fublic Water Supply Equipment Access Easement
Agreement with Ada Couuty. Dated August 21,2A12. AgreementNo. 9754
Pipeline easement for yard booster pump station suction piping - Alison and Greg Guymon
properly
Pipeline on Dry Creek Cemetery property
Pipelines on the west side of the system, north of Old State Street (depicted on 2007 ldaster Flan
noap as "firhrre", were these installed?)
Pipeline on Jade LLC properties (southwest of Hili Rd/Old Horseshoe Bend Road Intersection)
and tbrough the storage units south of ttrat.
Pipeline through Winco/IIome Depot psrking lot
Any canal crossing easements/agreements
Ofter piplines not in the public right-of-way ideatified by H2O and EWC
(Aryy CITrrERs To BE AIIDED ATXER. COMPLETTON OF DUE DILIGEI\ICE)
Df,I,INITIVE AssET PURCqASE AGREEMEF{T - 36
EX}IIBIT C
EXCI,UI}ED ASSETS
1. Any aad all custoner water service lines that run from outside &e meter box or curbside
connectiou to each itrdividual residence, commercial or industrial sEucture served by the
Rrchased Assets;
2. All piping and fixtures internal to each of tlre custorner's skucture;
3. Seller's cash aud accounts receivables, iucluding surcharge amounts, up to &e date of
Closing;
4. Seller's asset retireme,nt obligatioc, if any;
5. Construction equipment and tailers;
6. Motor vehicles;
7. The shop building and real properly located at 10255 N. Elorseshoe Bend Roa4 Eagle,
Idaho (exclusive of the neighboring Yard Booster Pump Station property, and all pipeline
routes, and ingress/egress access Easemeats, which are to be acquired as Purchased
Assets).
8. The office space at 188 W. State Sbeet.
9. Parcel at62l N. Pebble Beach Way
DsrrNrrrrre A$ET PURcfiASE AGREEMETi,IT - 37
EXI TT D
FEE PARCELS
AII that real property located in Ada County,Idaho and legally dqscribed in:
Exhibit A to Amended Lease Agreement dated August 1, i990 by and between Rowland Jones
and Robert V. Deshazo, Sr. as grartor and Eagle Water Company, Inc. as Grantee, Ada County
loshument No. 9041853 (to be coaverted to Fee prior to Closing or to some other fom of
mutually acceptable arrangement)
Exhibit A to Amended Lease Agreemeut dated Augpst 1, 1990 by and between Rowland Joues
aod Robert V. Deshazo, Sr. as grantor and Eagle Water Company, Inc. as Grantee, Ada County
Instnrment No. 9041854 (to be converted to Fee prior to Closing or to some other form of
mutually acceptable arrangemeat)
Corporation Warranty Deed dated January 4,1978,Ada County InstnrmetrtNo.7929797 (Weli
3).
Warrauty Deed dated February 11, 2005, Ada County InsEument No. 105018423 (Well4)
Warranty Deed dated January 23,1996, AdaCounty lnstrumentNo. 95013622 (Well6)
Corporate Warranty Deed Dated April 9, 2010, Ada County InstnrmentNo. 110033057 (Well 7
and V/ell8)
Quitclaim Deed dated January 28,2011, Ada County InstrumentNo. 111009730 (Parcel A Yard
Bmster Pump Station)
Quitclaim Deed dated January 28,201l, Ada County Instn:ment No. 1 1 I 00973 I (Parcel B Yard
Booster Pump Station)
(AI{Y OTIIERS TO BE ADDED AFTER CGMPLETION OF.'DIIE DILIGENCE)
DEFINTfiVE AssET PURC.HASE AGR,EEF{ENT. 38
EXIIIBIT E
PERSONAI, PROPERTY
All Personal Property within the meaning given in Article 2" Section 2.02(AX4) of this
Agreemen! including without limitation the following specific assets, properties, and rights of
Sell€r:
1. All water disEibution system piping, meters, hydrants, PRV's, connection vaults to other
water systems, and atl other associated apprnteuances, generally including the following arnounts
ofprp-e.
Pipine Description Linear F'ootage
Service lines (mainly 1.5"
and 2')
24J34
4"11,074
6"45,476
8"150.324
12"86,514
Total 317,518
(60.1 miles)
2. All stored inventory of meters and hydrants.
3. Well Facilities including all generators,6uildings, appnrtenances, and associated land,
easertrents, Ieases, and right-of-ways.
WelI Facilitv Capacity (mm)
I Not Active
2 325
3 NotActive
4 1,800
6 2,500
7 1,350
8 1.800
Total 8,025
4. A11 Booster pumping facilities including all generators, buildings, appurtenances, and
associated land, easements, leases, and rigbt-of-ways.
Booster Pumping Facility EWC Reported Capasity
(sDm)
Yard Booster Pump Station 5.900
Sage Acres BoosterPump
Station
1,900
DEFE.TnyE A$'ET PURCfiASE AGREENilENT - 39
5. All water rights, permits, licenses and associated implemeats, including but not liniited to:
6. All cash and accouuts receivables after the closing date, iacluding surcharge amounts.
7. lilling sy$em, all custonaer accouots andrecords.
8. AU facility records and as-built documentation of the water system-
(ANY OTIIERS TO BE ADDED AFTER COMPLETION OF DITE DILIGENCE)
FIRE
PROTECTION 2.00 900
MUNICIPAL 2.00 900
63-7368
63-7618
1,2,3
1,2,3
11t15t1970
14t25t1572 MUNICIPAL 1.40 630
FIRE
PROTECTION 3.50 1,575
MUNICIPAL 1-10 495
6/8i1S79
4117t1992
9t29t1994
63-9245
63-11798
63-12147
1,2,3,8
4
4,6
MUNICIPAL
MUNICIPAL
1.34
5.O0
603
",250
7 12/15/i999 MUNICIPAL63-12559 3.00 1,350
DEF.INITIVE AssET FURCHASS AGI{EEI}ISNT - 48
EXEIBIT F
[to be provided by SeIIerl
(Arvy oTmRs To BE ADDED ArTER COMPLETION OF DUE DILIGENCE)
DErtrrrrfivE A.$9ET PUR,CHASE AGREEN,GN"I'- 41