STOCK PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS BY AND BETWEEN GLOBAL WATER, INC. and MICHAEL SAUNDERS DATED DECEMBER 30, 2006
EXHIBIT
2.2
STOCK PURCHASE AGREEMENT
AND ESCROW INSTRUCTIONS
AND ESCROW INSTRUCTIONS
BY AND BETWEEN
GLOBAL WATER, INC.
and
XXXXXXX XXXXXXXX
DATED
DECEMBER 30, 2006
THIS STOCK PURCHASE AGREEMENT (“Agreement”), dated as of December 30, 2006, by and
between GLOBAL WATER, INC., a Delaware corporation, or permitted assignee
(“Acquiror”), and Xxxxxxx Xxxxxxxx, (the “Shareholder”).
WITNESSETH:
WHEREAS, Shareholder desires to sell, and Acquiror desires to purchase, all of the issued and
outstanding shares of capital stock of Xxxxxxxxx Xxxxxx Utilities Company, an Arizona corporation
(the “Company”), held by Shareholder (the “Shares”) for the consideration, on the
terms and subject to the conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual promises, representations and warranties
herein contained, and on the terms and subject to the conditions herein set forth, the parties
hereto agree as follows:
ARTICLE 1
DEFINITIONS
DEFINITIONS
The terms defined in this Article 1, whenever used in this Agreement (including in the
Schedules) shall have the respective meanings indicated below for all purposes of this Agreement.
All references herein to a Section, Article or Schedule are to a Section, Article or Schedule of
or to this Agreement, unless otherwise indicated.
AA.A: means the American Arbitration Association.
ACC: means the Arizona Corporation Commission.
Act: as defined in Section 6.2(b).
Acquiror: as defined in the first paragraph to this Agreement.
Acquiror Indemnitees: as defined in Section 5.1.
ADWR: means the Arizona Department of Water Resources.
Affiliate: of a Person means a Person that directly or indirectly through one or more
intermediaries, controls, is controlled by or is under common control with, the first Person.
“Control” (including the terms “controlled by” and “under common control with”) means the
possession, directly or indirectly, of the power to direct or cause the direction of the management
or policies of a Person, whether through the ownership of voting securities, by contract or credit
arrangement, as Shareholder or executor, or otherwise.
Agreement: means this Stock Purchase Agreement, including the Schedules and Exhibits hereto.
Applicable Law: means all applicable provisions of all (i) constitutions, treaties, statutes,
laws (including the common law), rules, regulations, ordinances, codes or orders of any
Governmental Authority, (ii) Governmental Approvals, and (iii) orders, decisions, injunctions,
judgments, awards and decrees of or agreements with any Governmental Authority.
Arbitration Rules: as defined in Section 6.2.
Business: means all of the business operations of the Company as currently conducted.
CC&N: means all Certificates of Convenience and Necessity granted by the ACC to the Company
(and its predecessors in interest), as heretofore amended.
Closing: as defined in Section 2.2.
Closing Date: as defined in Section 2.2.
Code: means the Internal Revenue Code of 1986, as amended.
Company: means Xxxxxxxxx Xxxxxx Utilities Company.
Consent: means any consent, approval, authorization, waiver, permit, grant, franchise,
concession, agreement, license, exemption or order of, registration, certificate, declaration or
filing with, or report or notice to, any Person, including but not limited to any Governmental
Authority.
Contracts: as defined in Section 3.1.10(a).
Dispute: as defined in Section 6.1.
Environmental Laws: mean all Applicable Laws, regulations, standards, requirements,
ordinances, policies, guidelines, orders, approvals, notices, permits or directives, or parts
thereof, pertaining to environmental or occupational health and safety matters, in effect as at
the date hereof.
Escrow Agent: means First American Title Insurance Company.
Existing Service Area: means the area covered by the CC&N and certain other areas as to
which, as of the Closing Date, the Company has either applied, or has entered into agreements
obligating it to apply, to the ACC to extend the CC&N, which Existing Service Area (according to
current ACC records) is depicted on Schedule 1A attached hereto.
FGUSA: Xxxxxxxxx Xxxxxx USA, Inc., an Arizona corporation.
Final Order: An official order, “order preliminary” or other official determination by the
ACC, provided, that such order will constitute a “Final Order” for purposes of this Agreement if:
(a) no application for rehearing is filed with the ACC within twenty (20) days after the date such
order is issued, as required by A.R.S. § 40-253; or (b) if an application for rehearing is filed
with the ACC, such application is not granted within the time periods required by A.R.S. § 40-253.
If
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an application for rehearing is granted by the ACC within the time period required by A.R.S. §
40-253, the order modifying the original order (following either (a) or (b) above) shall be deemed
a “Final Order” for purposes of this Agreement. As used herein, “order preliminary” means an order
issued by the ACC pursuant to A.R.S. § 40-285 that contains a binding commitment by the ACC to
issue a certificate of convenience and necessity, subject only to the satisfaction of standard and
customary conditions. For avoidance of doubt, the filing in any court of law of any appeal, action
for judicial review, action for injunctive or other equitable relief, declaratory judgment,
special action or action for extraordinary or prerogative writ, or any combination of such
actions, will not, alone, prevent an ACC order from constituting a “Final Order” for purposes of
this Agreement. If the ACC denies a request to transfer the CC&Ns as contemplated by this
Agreement, and a court of law reverses the ACC’s decision on appeal, such court decision will
constitute a “Final Order” for purposes of this Agreement.
Financial Statements: as defined in Section 3.1.4.
GMP: means generally accepted accounting principles as in effect in the United States of
America as determined by the Financial Accounting Standards Board from time to time applied on a
consistent basis as of the date of any application thereof.
Governmental Approval: means any Consent of, with, or from any Governmental Authority.
Governmental Authority: means any nation or government, any state or other political
subdivision thereof, any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, including, without limitation, any
government authority, agency, department, board, commission or instrumentality of the United
States, any State of the United States or any political subdivision thereof, and any tribunal or
arbitrator(s) of competent jurisdiction, and any self-regulatory organization.
Hazardous Substance: means any substance, material or waste which is regulated by
Environmental Law, including petroleum, petroleum products, asbestos, presumed asbestos-containing
material or asbestos-containing material, urea formaldehyde and polychlorinated biphenyls.
Indemnified Party: as defined in Section 5.3.
Indemnifying Party: as defined in Section 5.3.
Knowledge: means the knowledge, after due inquiry, of Shareholder, or the Company, as
applicable.
Letter of Credit: as defined in Section 2.3.2.
Lien: means any mortgage, deed of trust, pledge, hypothecation, right of others, claim,
security interest, encumbrance, lease, sublease, license, occupancy agreement, adverse claim or
interest, easement, covenant, encroachment, burden, title defect, title retention agreement, voting
Shareholder agreement, interest, equity, option, lien, right of first refusal, charge or other
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restrictions or limitations of any nature whatsoever, including but not limited to such as may
arise under any Contracts.
Losses: as defined in Section 5.1.
Permit: means any consent, license, permission, authorization, approval, registration, permit
or right-of-way issued, granted, given or otherwise made available by or under the authority of
any Governmental Authority or pursuant to any Applicable Law.
Person: means any natural person, firm, partnership, association, corporation, company,
limited liability company, limited partnership, Shareholder, business Shareholder, Governmental
Authority or other entity.
Purchase Price: as defined in Section 2.3.
PVUC: means, collectively, Palo Verde Utilities Company, an Arizona limited liability
company, and Global Water — Palo Verde Utilities Company, an Arizona corporation.
Schedules: means each of the schedules and exhibits attached to and made a part of this
Agreement.
SCWC: means, collectively, Santa Xxxx Water Company, an Arizona limited liability company,
and Global Water- Santa Xxxx Water Company, an Arizona corporation.
Shareholder Indemnitees: as defined in Section 5.2.
Shareholder: as defined in the first paragraph to this Agreement.
Shares: means all Shares of the Company. This term also includes any and all shares or
interests (legal or equitable) in any predecessor company to the Company, including the dissolved
Arizona corporation of the same name.
Tax or Taxes: means any federal, state, provincial, local, foreign or other income,
alternative, minimum, accumulated earnings, personal holding company, franchise, capital stock,
net worth, capital, profits, windfall profits, gross receipts, value added, privilege, sales, use,
goods and services, excise, customs duties, transfer, conveyance, mortgage, registration, stamp,
documentary, recording, premium, severance, environmental (including taxes under Section 59A of
the Code), real property, personal property, transfer ad valorem, intangibles, rent, occupancy,
license, occupational, employment, unemployment insurance, social security, disability, workers’
compensation, payroll, health care, registration, withholding, estimated or other similar tax,
duty or other governmental charge or assessment or deficiencies thereof (including all interest
and penalties thereon and additions thereto whether disputed or not).
Tax Return: means any return, report, declaration, form, report, claim for refund or
information return or statement relating to Taxes, including any schedule or attachment thereto,
and including any amendment thereof.
Transaction Expenses: as defined in Section 7.1.
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ARTICLE 2
PURCHASE AND SALE OF THE SHARES; CLOSING
PURCHASE AND SALE OF THE SHARES; CLOSING
2.1 Sale and Purchase of Shares. Shareholder hereby agrees to sell the Shares to Acquiror, and
Acquiror agrees to purchase the Shares from Shareholder.
2.2 Place and Date. The closing of the sale and purchase of the Shares (the “Closing”)
will take place upon the date of this Agreement (the “Closing Date”).
2.3 Purchase Price; Security.
2.3.1 The total purchase price (the “Purchase Price”) payable hereunder for all of the
Shares shall be $8,000,000. Acquiror will pay the entire amount of the Purchase Price, to
Shareholder immediately by wire transfer of immediately available funds to an account designated by
Shareholder within five (5) business days after the ACC: (a) issues a Final Order determining that
the water and wastewater CC&Ns previously held by the Company (or any substantial portion thereof)
are held by PVUC or SCWC (or any other Affiliate of Acquiror)(; or (b) grants to PVUC or SCWC (or
any other Affiliate of Acquiror) one or more certificates of convenience and necessity for the
Existing Service Area (or any substantial portion thereof) for both water and wastewater service.
If neither of the conditions set forth in (a) or (b) of this paragraph have been satisfied within
twenty-four (24) months following the Closing Date and no payments have been made under Section
2.3.3 below, this Agreement will terminate, the escrow account described below will terminate, the
Letter of Credit described below and any funds held by the Escrow Agent will be released to
Acquiror, and the Shares and stock powers held by the Escrow Agent will be released to Shareholder;
provided, however, that the foregoing time limitation will be tolled during the pendency of an
appeal of the type described in the last sentence of the definition of “Final Order” in Article 1.
2.3.2 As security for such payment obligation, on the Closing Date Acquiror will deliver to
Escrow Agent one or more irrevocable, automatically renewing, standby letters of credit which total
the full amount of the Purchase Price (together, the “Letter of Credit”) in such form as may be
reasonably acceptable to Shareholder and with a term of at least one (1) year after the Closing
Date. The Letter of Credit shall be issued by a financial institution that is a member of the New
York Clearing House or a financial institution that is a commercial bank or trust company having a
net worth (including affiliates) of at least one billion dollars ($1,000,000,000). Such institution
or an affiliate shall have offices in Phoenix, Arizona, but the parties acknowledge that a Letter
of Credit may still require presentation at an office outside the State of Arizona but within the
continental United States. The Letter of Credit shall be governed by the International Standby
Practices established by the International Chamber of Commerce. The Letter of Credit will remain in
full force and effect until the Purchase Price has been paid in full to Shareholder. Acquiror will
take no action to terminate or otherwise interfere with the Letter of Credit; provided, however,
that Acquiror may replace the Letter of Credit with another Letter of Credit on identical terms at
any time (so long as the replacement is simultaneous with the release to Acquiror of any Letter of
Credit from Acquiror (and in the same amount of the released Letter of Credit) then held by Escrow
Agent) and, additionally, any Letter of Credit then held by Escrow Agent may be replaced by another
Letter of Credit upon Acquiror paying any portion of the Purchase Price to Shareholder, but
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reduced by the amount of such payment, at which time the previous Letter of Credit will be returned
to Acquiror. If Acquiror fails to pay all or any portion of the Purchase Price when due,
Shareholder may instruct Escrow Agent to immediately draw on the Letter of Credit to recover that
portion of the Purchase Price then due. Except in the event of a default under this Agreement by
Shareholder that has gone uncured following not less than five (5) business days written notice
from Acquiror, if at any time Acquiror instructs Escrow Agent not to draw on the Letter of Credit
to pay that portion of the Purchase Price then due, Shareholder may, at her option, immediately
instruct Escrow Agent to terminate the escrow account and to release the certificates evidencing
the Shares to Shareholder and the Letter of Credit to Acquiror. If the Letter of Credit is due to
expire or be revoked or terminated and it is not renewed or replaced with a new Letter of Credit on
identical terms on or before the date that is thirty (30) days prior to the expiration, termination
or revocation of the Letter of Credit, Shareholder, following not less than five (5) business days
written notice to Acquiror, may direct Escrow Agent to immediately draw on the Letter of Credit for
the entire amount of the Purchase Price and direct Escrow Agent to hold the same in an escrow
account established for the benefit of Shareholder for payment (or return to the Acquiror if the
contingency in 2.3.1 is not fulfilled) in accordance with the terms and conditions set forth in
section 2.3.1 above. Escrow Agent will promptly forward to Shareholder any notices or other
correspondence it receives from the Letter of Credit issuer pertaining to the Letter of Credit.
2.3.3 Notwithstanding the foregoing, in the event that the ACC issues any Final Order
confirming that the CC&Ns are held in the name of the Company, Acquiror will, within five (5)
business days after the date of such order or confirmation, pay to Shareholder $5,000,000 by wire
transfer of immediately available funds to an account designated in writing by Shareholder. Such
payment will be treated as a payment of the Purchase Price and the Letter of Credit may be reduced
to $3,000,000. In such event, Acquiror will pay the remaining $3,000,000 of Purchase Price to
Shareholder as follows: (a) $1,500,000 will be paid on the later of six (6) months after the
Closing Date or the date on which the above-referenced $5,000,000 payment is made; and (b) the
remaining $1,500,000 will be paid twelve (12) months after the Closing Date; provided, however,
that if the ACC issues any Final Order determining that the CC&Ns (or one or more new certificates
of convenience and necessity for the Existing Service Area or substantial portion thereof) are then
held by PVUC or SCWC (or any other Affiliate of Acquiror) prior to the aforementioned six and
twelve month anniversaries, then Acquiror will, within five (5) business days after the date of
such Final Order, pay the remaining unpaid Purchase Price to Shareholder by wire transfer of
immediately available funds to an account designated by Shareholder. The Letter of Credit required
by Section 2.3.2 above will continue to be required for purposes of this Section 2.3.3, but in the
amounts specified in this Section 2.3.3.
2.4 Closing.
2.4.1 On the Closing Date, Shareholder will deliver, or cause to be delivered, to the Escrow
Agent: (a) certificates representing the Shares, duly endorsed (or accompanied by duly executed
stock powers) for transfer to Acquiror; (b) written resignations of all of the Company’s directors
and officers, effective as of the Closing Date (and such resignations and voting powers shall be
released to Acquiror on the Closing Date); and (c) such other evidence of the performance of
Shareholder’s obligations under this Agreement as may be reasonably
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required by Acquiror or its counsel. The Letter of Credit and all items delivered by Shareholder
and held by Escrow Agent shall be released to Acquiror having received the entire amount of the
Purchase Price.
2.4.2 On the Closing Date, Acquiror will execute and deliver the Letter of Credit to the
Escrow Agent.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties to Acquiror. As of the date hereof, Shareholder hereby
represents and warrants to Acquiror as follows:
3.1.1 Authorization, etc. Shareholder has duly executed and delivered this Agreement and that
this Agreement and any agreements executed by Shareholder in connection herewith constitute the
legal, valid and binding obligation of Shareholder enforceable against Shareholder in accordance
with their terms, subject to bankruptcy, insolvency, reorganization, fraudulent transfer and
conveyance, receivership, moratorium and similar laws affecting creditors’ rights generally, and to
the availability of equitable remedies (whether asserted at law or in equity).
3.1.2 Corporate Status. The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Arizona with full corporate power and authority to
carry on its business and to own or lease and to operate its properties as and in the places where
such business is conducted and such properties are owned, leased or operated; Shareholder has
delivered to Acquiror complete, up to date and correct copies of the Company’s respective articles
of incorporation, bylaws, minute books or other organizational documents, in each case as amended
and in effect on the date hereof; the Company is not in violation of any of the provisions of its
articles of incorporation or bylaws or any other organizational documents; the Company has no
subsidiary, nor does the Company own, directly or indirectly, any equity interest or investment in
any other Person; all of the issued and outstanding shares of capital stock of the Company are
owned of record and beneficially by Shareholder, with no other Person owning or having any rights
(including without limitation any voting rights, whether as proxy, attorney-in-fact, assignee,
transferee or otherwise) in or with respect thereto.
3.1.3 No Conflicts, etc. The execution, delivery and performance by Shareholder of this
Agreement, and the consummation of the transactions contemplated hereby do not and will not
conflict with or result in a violation of or a default under (with or without the giving of notice
or the lapse of time or both) (i) any Applicable Law applicable to the Company, Shareholder or any
Affiliate of the Company or Shareholder, or any of the properties or assets of the Company, (ii)
the articles of incorporation or bylaws or other organizational documents of the Company, (iii) the
CC&Ns or (iv) any Contract to which Shareholder or the Company is a party or by which Shareholder
or the Company or any of its properties or assets, may be bound or affected; and no Governmental
Approval or other Consent is required to be obtained or made by Shareholder or the Company in
connection with the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby.
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3.1.4 Financial Statements. Shareholder has made available to Acquiror ACC annual reports,
which include financial statements of the Company as at and for the periods ended on December 31,
2005, 2004, 2003 and 2002 (collectively, the “Financial Statements”), and the Financial
Statements are complete and correct in all material respects, accurately reflect in all material
respects the assets, liabilities, results of operations and financial condition of the Company as
of their respective dates.
3.1.5 Absence of Undisclosed Liabilities. The Company has no liabilities, guarantees or
obligations of any nature, whether known or unknown, absolute, accrued, contingent or otherwise and
whether due or to become due except (a) as and to the extent disclosed or reserved against in the
Financial Statements or (b) liabilities arising in the ordinary course of business consistent with
prior practice.
3.1.6 Taxes. Shareholder has delivered to Acquiror complete and correct copies of all Tax
Returns and supporting schedules filed by the Company for each of the fiscal years ended on
December 31 of 2005, 2004, 2003 and 2002. Except for current filings, which are the subject of
extensions under applicable procedures and which are identified in Schedule 3.1.6, the
Company has filed all Tax Returns that the Company was required to file prior to the date hereof.
Except as set forth in Schedule 3.1.6, all such Tax Returns were correct and complete in
all material respects. The Company has not been a member of any affiliated group filing a
consolidated federal income Tax Return; and except as set forth in on Schedule 3.1.6:
(a) all Taxes owed by the Company (whether or not shown on any Tax Return) with respect to Tax
Returns the due date of which preceded the date hereof have been paid;
(b) all other Taxes due and payable by the Company with respect to periods ending on or as of
December 31, 2005 (whether or not a Tax Return is due on such date) have been paid or are accrued
in a manner customarily applied by the Company on the applicable Financial Statements;
(c) there are no outstanding requests, agreements, consents or waivers to extend the statutory
period of limitations applicable to the assessment or collection of any Taxes or deficiencies
against the Company, and there are no pending or, to the Knowledge of Shareholder, threatened
audits, disputes or other proceedings concerning the Company’s liability for any Taxes and no
issues have been raised with Shareholder or the Company in any examination by any taxing authority
which could reasonably be expected to result in a proposed deficiency for any tax period following
the Closing Date;
(d) no power of attorney relating to the Taxes or Tax Returns of the Company has been executed
or filed with any Person including any taxing authority;
(e) the Company has no liability for Taxes of any other Person as a transferee or successor by
operation of law, by contract or otherwise;
(f) there are no Liens on the assets of the Company or on any of the Shares relating or
attributable to Taxes (other than Liens on assets of the Company for sales, use and payroll Taxes
not yet due and payable), and neither Shareholder nor the
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Company have any Knowledge of any reasonable basis for the assertion of any claim relating or
attributable to Taxes which, if adversely determined, would result in any Lien on any asset of the
Company or on any of the Shares;
(g) the Company has withheld and paid all Taxes required to have been withheld and paid in
connection with any amounts paid or owing to any employee, independent contractor, creditor,
shareholder or other Person; and
(h) there have been, and, to the Knowledge of Shareholder, there are proposed or threatened,
no accounting method changes of the Company that could reasonably be expected to give rise to an
adjustment to any Taxes after the Closing Date.
3.1.7 Absence of Changes. Except as set forth in Schedule 3.1.7 or otherwise disclosed
herein or in the Financial Statements, since December 31, 2005, the Company has conducted the
Business only in the ordinary course consistent with prior practice and has not:
(a) incurred any material (i.e., in excess of $1000 for any individual item) obligation or
liability, absolute, accrued, contingent or otherwise, whether due or to become due, except current
liabilities for trade or business obligations incurred in the ordinary course of business
consistent with prior practice;
(b) mortgaged, pledged or subjected to Lien, any property or assets, tangible or intangible;
(c) sold, transferred, leased to any Person or otherwise disposed of any assets, except in the
ordinary course of business consistent with prior practice, or canceled or compromised any debt or
claim, or waived or released any right of substantial value;
(d) received any notice of termination of any Contract or suffered any damage, destruction or
loss (whether or not covered by insurance) in excess of $10,000;
(e) made any material change in the rate of compensation, commission, bonus or other direct or
indirect remuneration payable, or paid or agreed or orally promised to pay, conditionally or
otherwise, any bonus, incentive, retention or other compensation, retirement, welfare, fringe or
severance benefit or vacation pay, to or in respect of any director, officer, employee, consultant,
Affiliate or agent of the Company;
(f) instituted, settled or agreed to settle any litigation, action or proceeding before any
court or Governmental Authority;
(g) entered into any transaction, contract or commitment other than in the ordinary course of
business or paid or agreed to pay any legal, accounting, brokerage, finder’s fee, Taxes or other
expenses in connection with, or incurred any severance pay obligations by reason of, this Agreement
or the transactions contemplated hereby, other than such fees or other expenses or Taxes which are
payable solely by Shareholder and as to which neither the Company nor Acquiror shall have any
liability or obligation;
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(h) written up the carrying value of any of the Company’s assets;
(i) suffered any material loss of customers or received any notice of any pending material
loss of customers;
(j) entered into or assumed any obligations under any material employment, compensation or
consulting agreement or any collective bargaining agreement with any Person or group, or modified
or amended in any material respect the terms of any such existing agreement;
(k) materially amended, modified or terminated, or agreed to amend, modify or terminate, any
existing Contract;
(l) amended the articles of incorporation, bylaws or other governing corporate documents of
the Company;
(m) made any material change or modification in the Company’s accounting practices, policies
or procedures; or
(n) taken any action or omitted to take any action that could reasonably be expected to result
in the occurrence of any of the foregoing within ninety (90) days after the Closing Date.
3.1.8 Litigation. There is no action, claim, demand, lawsuit, proceeding, arbitration,
grievance, citation, summons, subpoena, inquiry or investigation of any nature, civil, criminal,
regulatory (including any ACC complaint proceeding) or otherwise, in law or in equity, which has
been served upon the Company or of which Shareholder or the Company have Knowledge or, to the
Knowledge of Shareholder or the Company, overtly threatened against Shareholder, or the Company
which materially affects Shareholder or the Company, the Shares (or any of them), the Company’s
assets and/or business, or relating to the transactions contemplated by this Agreement, and there
is no valid basis for the same, (ii) the Company (and its assets) is not a party to, subject to or
bound by, any decree, order, injunction, settlement agreement or arbitration decision or award (or
agreement entered into in any administrative, judicial or arbitration proceeding with any
Governmental Authority) with respect to or affecting the properties, assets, personnel or business
activities of the Company, and (iii) no citation, fee or penalty has been levied or asserted
against Shareholder or the Company under any Environmental Law or by the ACC or any other
Governmental Authority.
3.1.9 Capitalization. The authorized capital stock of the Company consists of ten (10) shares
of common stock, $1 par value, of which ten (10) shares are issued and outstanding. The Company has
no other issued or outstanding securities. All of the Company’s outstanding capital stock is owned
beneficially and of record by Shareholder, is owned free and clear of all Liens, is validly issued,
fully paid, non-assessable and has not been issued in violation of any pre-emptive rights of any
other Person (including other shareholders); except for this Agreement, there are no outstanding
subscriptions, options, rights, warrants, convertible securities or other agreements or commitments
(contingent or otherwise) obligating Shareholder to sell or transfer any of the capital stock of
the Company owned by Shareholder or obligating the Company to issue or to transfer from treasury
any additional shares of, or any securities
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convertible or exchangeable into, the capital stock of the Company; there are no stock transfer
restrictions or shareholder agreements operating or in effect relating to the capital stock of the
Company (or any such restrictions are hereby waived by Shareholder) with respect to the
transactions provided for in this Agreement), there are no restrictions or qualifications of any
kind on the sale or transfer of such stock; and, except as set forth in Schedule 3.1.9,
neither Shareholder nor any of her Affiliates are creditors of the Company.
3.1.10 Contracts.
(a) Schedule 3.1.10 contains a complete and accurate description of all agreements,
contracts, commitments and other instruments and arrangements (whether written or oral) of the
types described below by which the Company or any of its assets, businesses or operations receive
benefits or to which the Company is a party or by which the Company is bound, other than
insignificant contracts entered into in the ordinary course of business consistent with past
practice (the “Contracts”), including:
(i) leases, licenses, permits, franchises, insurance policies, warranties, guarantees,
Governmental Approvals and other contracts concerning or relating to the Company’s real property,
(ii) contracts for capital expenditures in excess of $50,000 each;
(iii) performance bonds, completion bonds, bid bonds, suretyship agreements and similar
instruments;
(iv) joint venture, partnership and similar contracts involving a sharing of profits and/or
expenses; and
(v) agreements providing for the leasing to or by the Company of personal property.
(b) Shareholder has delivered or provided (or prior to Closing will provide) access to
Acquiror to complete and correct copies of all written Contracts, together with all amendments
thereto, and accurate descriptions of all material terms of all oral Contracts, set forth or
required to be set forth in Schedule 3.1.10.
(c) all Contracts are in full force and effect and enforceable against each party thereto.
There does not exist under any Contract any event of default or event or condition that, after
notice or lapse of time or both, would constitute a violation, breach or event of default
thereunder on the part of the Company or, to the Knowledge of Shareholder, any other party thereto.
No consent of any third party is required under any Contract as a result of or in connection with,
and the enforceability of any Contract will not be affected in any manner by, the execution,
delivery and performance of this Agreement or the consummation of the transactions contemplated
hereby.
(d) The Company has no outstanding power of attorney. Nor is the Company a member of any
property owner’s association.
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3.1.11 Insurance. Schedule 3.1.11 contains a complete and correct list and summary
description of all insurance policies maintained by or for the benefit of the Company; Shareholder
has delivered to Acquiror complete and correct copies of all such policies together with all riders
and amendments thereto; such policies are in full force and effect, and all premiums due thereon
have been paid; the Company has complied in all material respects with the terms and provisions of
such policies; Schedule 3.1.11 sets out all claims made by the Company (excluding any
claims by employees under health, dental, life or similar insurance) under any policy of insurance
during the past two years; and Shareholder has no Knowledge of any basis on which a claim should or
could be made under any such policy.
3.1.12 Certain Real and Personal Property. To Shareholder’s knowledge, the Company does not
own or lease any real or tangible personal property. If any assets related to water provision or a
wastewater treatment facility used to service the Xxxxxxxxx Xxxxxx Resort owned by the Shareholder
are ultimately determined to be owned by the Company, such fact will not result in a breach of this
representation, and the parties will address such matter by separate agreement, which, among other
things, will provide for the transfer of such assets to Shareholder or her designee for no
additional consideration, subject to ACC approval, if required.
3.1.13 Permits. Neither the Shareholder nor the Company has received notice from any
Governmental Authority of any actual or potential defect in the CC&Ns. Except for the CC&Ns and as
otherwise set forth in Schedule 3.1.13, the Company has no Permits. Copies of the CC&Ns,
including copies of all related, material correspondence with the ACC, have been delivered to
Acquiror; except as disclosed in Schedule 3.1.13, the Company is in full compliance with
the provisions of each CC&N and no CC&N will be terminated, cancelled or revoked or become
terminable, cancelable or revocable or otherwise impaired in any respect as a result of the
execution and delivery by the parties hereto of this Agreement or the consummation of the
transaction contemplated hereby; provided, however, that the anticipated transfer of the CC&Ns to
PVUC and SCWC following the Closing Date will require advance approval from the ACC.
3.1.14 Environmental Matters.
(a) Except as set forth in Schedule 3.1.14: (i) the Company has complied and is in
compliance in all material respects with all applicable Environmental Laws pertaining to the
conduct of its business; the Company has not received any written communication alleging that it is
not in compliance with any applicable Environmental Law, and (ii) there is no claim pending or, to
the Knowledge of Shareholder or the Company, threatened, against the Company relating to any
alleged or actual violation of Environmental Law.
(b) Neither the Company nor, to the Knowledge of Shareholder, any other Person acting under
the Company’s direction or on its behalf, has caused or taken any action or is aware of any action
that could reasonably result in, and the Company is not subject to, any material liability or
obligation relating to the past or present use, management, handling, transport, treatment,
generation, storage, disposal or release of any Hazardous Substance.
(c) Shareholder has made available to Acquiror all (and not withheld from Acquiror any)
information, including all studies, analyses and test results, in the possession, custody or
control of or otherwise known to Shareholder or the Company relating to (i)
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environmental conditions or requirements relating to the operation of the Business at the present
time or in the past, and (ii) any Hazardous Substances used, managed, handled, transported,
treated, generated, stored, disposed of or released by the Company or any other Person in
connection with the use or operation of any of the properties and assets of the Company, or the
Business.
3.1.15 No Class A Utility. Neither Shareholder, the Company nor any Affiliate acting on their
behalf has ever consented to the Company being a Class A Utility (as that term is defined in A.A.C.
R14-2-103), received notice from any Person that the Company is or may be a Class A Utility or
satisfied the requirements in effect at any applicable time for the Company to be a Class A
Utility.
3.1.16 Brokers, Finders, etc. All negotiations relating to this Agreement and the transactions
contemplated hereby have been carried on without the participation of any Person acting on behalf
of the Company or Shareholder in such manner as to give rise to any valid claim against the Company
or Acquiror, or any of their Affiliates for any brokerage or finder’s commission, fee or similar
compensation, or for any bonus payable to any officer, director, shareholder, employee, agent or
sales representative of or consultant to the Company, Shareholder or any Affiliate of the Company
or Shareholder upon consummation of the transactions contemplated hereby or thereby or otherwise.
Shareholder hereby agrees and covenants to defend, indemnify, and hold harmless Acquiror and the
Company from any and all such claims for any brokerage or finder’s commission, fee or bonus
dependent upon consummation of the instant transaction.
3.1.17 No Contractual Interference. At no time in the course of the discussions of the
transactions contemplated by this Agreement did Acquiror induce Shareholder or the Company to
impair or terminate any contractual relationship to which it is a party or to deprive any Person of
any prospective economic benefit.
3.1.18 All Assets. Except as set forth in Schedule 3.1.18, the assets of the Company
described in the Schedules to this Agreement include all assets, rights, properties and contracts
which are currently used by the Company to carry on the Business.
3.1.19 Receivables. The Company has no accounts receivable.
3.1.20 Accounts Payable. The Company has satisfied, paid and discharged its accounts payable
and other current liabilities and obligations in a timely manner, excepting only those current
liabilities disclosed in the Financial Statements, and (ii) liabilities that are the subject of a
currently unresolved bona fide dispute, any and all of which bona fide disputes are described on
Schedule 3.1.20.
3.1.21 Intellectual Property. To the Knowledge of Shareholder, the Company has no intellectual
property rights, other than properly acquired licenses of off the shelf “shrink-wrap” software
products, if any; to the Knowledge of Shareholder, the Company has not used, sold or supplied any
goods or services in any manner that would constitute an infringement of the intellectual property
rights of any other Person; and neither Shareholder nor the Company has
13
received any notification, warning, threat of legal action or proceeding or other written notice
that the Company has violated or is violating the intellectual property rights of any Person.
3.1.22 Employees. The Company has no employees.
3.1.23 Employee Benefit Plans. The Company has no employee benefit plans, including plans
relating to retirement or insurance.
3.1.24 Compliance with Applicable Law. Except as set forth on Schedule 3.1.24, the
Company is in material compliance with all Applicable Laws; and without limiting the generality of
the foregoing, except as set forth on Schedule 3.1.24, the Company has satisfied all of its
obligations to date with respect to the filing of annual reports with the ACC and ADWR.
3.1.25 No Guarantees. None of the obligations or liabilities of the Company are guaranteed by
or subject to a similar contingent obligation of any other Person; the Company has not guaranteed
or become subject to a similar contingent obligation in respect of the obligations or liabilities
of any other Person; and there are no outstanding letters of credit, surety bonds or similar
instruments relating to the Company.
3.1.26 Payments to Shareholder. Since December 31, 2005, neither the Company nor any other
Person acting on behalf of or for the benefit of the Company has, directly or indirectly, made any
distributions, or paid any dividends or made any other payments of any kind or nature to
Shareholder.
3.1.27 Absence of Certain Business Practices. Neither the Company nor any manager, member,
employee or agent of the Company, nor any other Person acting on its behalf, has, directly or
indirectly, within the past two (2) years, given or agreed to give any gift, bribe, rebate or
kickback or otherwise provided any similar benefit to any customer, Governmental Authority employee
or other Person who is or may be in a position to help or hinder the Company (or assist the Company
in connection with any actual or proposed transaction) (i) which subjected or might have subjected
the Company to any damage or penalty in any civil, criminal or governmental litigation or
proceeding, (ii) which if not given in the past, or if not continued in the future, may adversely
affect the Company or its business or subject the Company to legal action, fine or penalty in any
private or governmental litigation or proceeding, (iii) for any of the purposes described in
Section 162(9) of the Code, or (iv) for the purpose of establishing or maintaining any concealed
fund or concealed bank account; and the Company has complied with all applicable tariffs in
providing service to its customers.
3.1.28 Solvency. The Company is not insolvent, nor is Shareholder. Neither the Company nor
Shareholder have committed an act of bankruptcy, proposed a compromise or arrangement to their
creditors generally, had any petition in bankruptcy filed against them, filed a petition or
undertaken any action or proceeding to be declared bankrupt, to liquidate its assets or to be
dissolved; and the transactions contemplated by this Agreement will not cause Shareholder to become
insolvent or to be unable to satisfy and pay her debts and obligations generally as they come due.
3.1.29 Title to Shares. Shareholder owns the Shares free of any Liens.
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3.1.30 Accuracy of Representations. To the Knowledge of Shareholder, no representation,
warranty or schedule furnished by Shareholder or the Company to Acquiror in connection with this
Agreement or the transactions contemplated hereby contains any untrue statement of material fact or
fails to state any material fact necessary to make the statements contained herein or therein not
materially misleading.
3.2 Representations and Warranties of Acquiror. Acquiror represents and warrants to
Shareholder as follows:
3.2.1 Corporate Status; Authorization, etc. Acquiror is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware with full corporate power and
authority to execute and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery by Acquiror of this
Agreement, and the consummation of the transactions contemplated hereby, have been duly authorized
by all requisite corporate action of Acquiror. Acquiror has duly executed and delivered this
Agreement. This Agreement is a valid and legally binding obligation of Acquiror enforceable against
Acquiror in accordance with its terms, subject to bankruptcy, insolvency, reorganization,
fraudulent transfer and conveyance, receivership, moratorium and similar laws affecting creditors’
rights generally, and to the availability of equitable remedies (whether asserted at law or in
equity).
3.2.2 No Conflicts, etc. The execution, delivery and performance by Acquiror of this Agreement
and the consummation of the transactions contemplated hereby do not and will not conflict with or
result in a violation of or under (with or without the giving of notice or the lapse of time or
both) (i) the certificate of incorporation or bylaws of Acquiror, (ii) any Applicable Law
applicable to Acquiror or any of its properties or assets or (iii) any contract to which Acquiror
is a party or by which it or any of its respective properties or assets may be bound or affected.
3.2.3 Litigation. There is no action, claim, suit or proceeding pending, or to the knowledge
of Acquiror, threatened, by or against or affecting Acquiror in connection with or relating to the
transactions contemplated by this Agreement or of any action taken or to be taken in connection
herewith or the consummation of the transactions contemplated hereby.
3.2.4 Brokers, Finders, etc. All negotiations relating to this Agreement and the transactions
contemplated hereby have been carried on without the participation of any Person acting on behalf
of Acquiror who would be entitled to make a valid claim against Shareholder for any brokerage
commission, finder’s fee or similar compensation upon consummation of the transactions contemplated
hereby or otherwise. Acquiror hereby agrees and covenants to defend, indemnify and hold harmless
Shareholder from any and all such claims for any brokerage or finder’s commission, fee or bonus
dependent upon consummation of the instant transaction.
3.2.5 No Class A Utility. With respect to periods on and prior to the Closing Date, Acquiror
has never consented to being a Class A Utility (as that term is defined in A.A.C. R14-2-103) and
has never received notice from any Person that Acquiror either: (a) is or may be
15
a Class A Utility or (b) satisfied the requirements in effect at any applicable time for the
Company to be a Class A Utility.
3.3 No Other Representations or Warranties. Each party to this Agreement hereby expressly
acknowledges and agrees that it has not relied on, and no other party has made, any representation
or warranty, expressed or implied (all implied warranties being hereby expressly disclaimed),
except for those representations and warranties that are expressly set forth in this Agreement.
ARTICLE 4
COVENANTS
COVENANTS
4.1 Public Announcements. Neither Shareholder nor Acquiror shall make, or permit any Affiliate
to make, any public announcement in respect of this Agreement or the transactions contemplated
hereby without the prior written consent of Acquiror, in the case of any announcement by
Shareholder, or by Shareholder, in the case of any announcement by Acquiror.
4.2 Further Actions.
4.2.1 As promptly as is practicable, but in no event later than thirty (30) days, after the
Closing Date, Acquiror will file appropriate documents with the ACC seeking confirmation that the
CC&Ns are currently held by the Company and approval to transfer the CC&Ns from the Company to PVUC
and SCWC (or another Affiliate of Acquiror). Acquiror will diligently pursue such matters and will
use all commercially reasonable efforts to obtain such approvals or grants as quickly as possible.
Subject to Section 4.2.5, Acquiror (or its Affiliate) will control all ACC proceedings contemplated
under this Section 4.2.1.
4.2.2 If Acquiror fails to initiate the ACC proceedings described in Section 4.2.1 within the
aforementioned 30-day time period, Shareholder shall have the right to initiate proceedings in the
ACC seeking a declaration or order confirming that the CC&Ns are currently held by the Company. If
and when the ACC issues such a Final Order, the provisions of Section 2.3.3 shall apply. Acquiror
hereby constitutes and appoints Shareholder, her successors and assigns, as the true and lawful
attorney-in-fact of Acquiror, in the name of the Company or Acquiror (as Shareholder may determine
in her sole discretion) but for the benefit and at the expense of Shareholder (except as otherwise
herein provided) solely and exclusively for the purpose of initiating the above described ACC
proceedings and otherwise enforcing her rights under this Section 4.2.2. The foregoing power of
attorney is coupled with an interest and shall be irrevocable. For avoidance of doubt, the
foregoing power of attorney shall have no force or effect if Acquiror (or its Affiliate) files the
documentation and requests the confirmation contemplated in Section 4.2.1 within thirty (30) days
after the Closing Date, and continues to diligently pursue such matters thereafter.
4.2.3 Shareholder and Acquiror shall (at Acquiror’s expense)
reasonably cooperate with each other in good faith as may be reasonably
necessary in support of the ACC’s determination that the CC&Ns are held by
PVUC and SCWC (or another Affiliate of Acquiror, or any proceeding
contemplated in Section 4.2.2.
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4.2.4 Without limitation, Shareholder shall be deemed to have reasonably cooperated in
accordance with Section 4.2.3 if she (or her representative, as permitted by the ACC) (a) appears
and testifies at all ACC hearings of which she is given at least ten (10) business days advance
written notice; (b) complies with any data request or other discovery request sent to her by the
ACC, ACC staff or any other party to the ACC proceedings contemplated by Sections 4.2.1, 4.2.2 and
4.2.3; and (c) otherwise does not make any statements or take (or fail to take) any action with the
intent of frustrating Acquiror’s goal of obtaining the CC&Ns.
4.2.5 Acquiror will request that counsel for Shareholder be included in the service list for
the proceedings contemplated by Section 4.2.1. Aquiror will: (a) promptly notify Shareholder’s
counsel in writing or by electronic mail of any meetings or conference calls between Acquiror or
the Company and the ACC staff concerning any proceedings contemplated in this Section 4.2 and allow
Shareholder (or her representative) a reasonable opportunity to attend and participate in such
meetings or conference calls; (b) promptly upon receipt, provide Shareholder with copies of all
correspondence not filed with the ACC’s docket control center but received by Acquiror or the
Company from the ACC or its staff concerning any proceedings contemplated in this Section 4.2; and
(c) prior to sending any correspondence or application to the ACC or its staff concerning the
proceedings contemplated in this Section 4.2, and prior to filing an application pursuant to
Section 4.2.1, provide a draft of such correspondence or application to Shareholder and allow her
(or her representative) a reasonable period of time to review and comment on such draft. Acquiror
will not make any statement or take (or fail to take) any action intentionally to frustrate or
delay the goal of obtaining the CC&Ns as quickly as possible consistent with sound and customary
regulatory practices. Shareholder will be responsible for her own attorneys’ fees and other
expenses incurred in connection with (i) monitoring any proceedings as contemplated by this Section
4.2.5 and (ii) participating in any proceedings for which her participation is not otherwise
required by the ACC or by this Section 4, it being agreed that any such required participation will
be at Acquiror’s expense.
4.2.6 Shareholder does not guarantee, and will not be responsible for, the outcome of any ACC
decision and an unfavorable decision will not result in a determination that Shareholder did not
perform her obligations under this Section 4.2. This provision expressly survives the Closing.
However, notwithstanding the foregoing, and notwithstanding any other term of this Agreement,
should the ACC conclude that either the water or wastewater CC&Ns is not valid, not in effect or
that the Company does not hold either the water or wastewater CC&Ns, then Shareholder and Acquiror
shall (at Acquiror’s expense) reasonably cooperate in good faith with each other to appeal any such
order.
4.3 Further Assurances. Following the Closing Date, Acquiror and Shareholder
shall, and shall cause each of its Affiliates to, from time to time, execute and
deliver such additional instruments, documents, conveyances or assurances consistent
with the terms of this Agreement and take such other actions consistent with the terms
of this Agreement as shall be necessary, or otherwise reasonably requested by any
other party, to confirm and assure the rights and obligations provided for in this
Agreement and render effective the consummation of the transactions contemplated
hereby. All reasonable expenses incurred by any party or Affiliate at
17
the request of any party shall be paid or reimbursed promptly by the requesting party upon receipt
of reasonable documentation evidencing the amount and purpose of each such expense.
4.4 Post-Closing Agreements. Within ten (10) business days after the Closing Date: (a)
Acquiror and Shareholder will negotiate to enter into a Limited Agent Agreement providing for
certain matters relating to the Xxxxxxxxx Xxxxxx Resort and other matters, as agreed by Acquiror
and Shareholder, each acting in their sole discretion; and (b) Acquiror and Shareholder will
negotiate to amend this Agreement to further define “substantial portion thereof” as that phrase is
used in Sections 2.3.1 and 2.3.3, as well as the consequences in the event PVUC, SCWC (or another
Affiliate of Acquiror) ultimately obtains less than a substantial portion of the CC&Ns previously
held by the Company. Each party will negotiate in good faith with respect to the agreements
contemplated by this Section 4.4, but each party will be free to act in its sole discretion and
neither party will be obligated to enter into any such agreement. If the parties are unable to
agree as to either agreement contemplated by this Section 4.4 within ten (10) business days after
the Closing Date, this Agreement will automatically terminate, the Letter of Credit will be
released to Acquiror and all items deposited with the Escrow Agent by the Shareholder will be
released to Shareholder.
ARTICLE 5
INDEMNIFICATION
INDEMNIFICATION
5.1 Indemnification By Shareholder. To the extent permitted by Applicable Law, but subject to
the limitations set forth in Sections 5.4 and 5.5 unless otherwise set forth herein, Shareholder
covenants and agrees to defend, indemnify and hold harmless Acquiror, and its officers, directors,
employees, agents, advisers, representatives and Affiliates (which, following the Closing, shall
include the Company) (collectively, the “Acquiror Indemnitees”) from and against, and to
pay or reimburse Acquiror Indemnitees for, any and all claims, amounts paid in settlement of
claims, liabilities, obligations, losses, fines, costs, royalties, proceedings, deficiencies or
damages (whether absolute, accrued, conditional or otherwise and whether or not resulting from
third party claims), including without limitation any out-of pocket expenses and reasonable
attorneys’ and accountants’ fees incurred in the investigation or defense of any of the same or in
asserting any of their respective rights hereunder but excluding any consequential damages
(collectively, “Losses”), resulting from or arising out of:
(a) any material inaccuracy of any representation or warranty by Shareholder made or contained
in this Agreement; or
(b) any failure of Shareholder to perform any covenant or agreement hereunder or to fulfill
any other obligation in respect hereof, including without limitation any failure to pay Taxes due
prior to the Closing Date, unless such Taxes were disclosed to Acquiror in connection with this
Agreement.
5.2 Indemnification by Acquiror. To the extent permitted by Applicable Law, but subject to the
limitations set forth in Sections 5.4 and 5.5, Acquiror covenants and agrees to defend, indemnify
and hold harmless Shareholder and her employees, agents, advisors,
18
representatives and Affiliates (collectively, the “Shareholder Indemnitees”) from and
against, and to pay or reimburse Shareholder Indemnitees for, any and all Losses resulting from or
arising out of:
(a) any material inaccuracy in any representation or warranty by Acquiror made or contained in
this Agreement; or
(b) any failure of Acquiror to perform any covenant or agreement hereunder or to fulfill any
other obligation in respect hereof.
5.3 Indemnification Procedures. In the case of any claim by an Acquiror Indemnitee or a
Shareholder Indemnitee (any of which, an “Indemnified Party”) for indemnification under
this Article 5, notice shall be given by the Indemnified Party to the party required to provide
indemnification (the “Indemnifying Party”) promptly after such Indemnified Party has actual
knowledge of any claim as to which indemnity may be sought, and the Indemnified Party shall permit
the Indemnifying Party (at the expense of such Indemnifying Party) to assume the defense of any
claim or any litigation resulting therefrom; provided that (i) the counsel for the Indemnifying
Party who shall conduct the defense of such claim or litigation shall be reasonably satisfactory to
the Indemnified Party, (ii) the Indemnified Party may participate in such defense at such
Indemnified Party’s expense, and (iii) the failure by any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its indemnification obligation under
this Agreement except to the extent that such omission results in a failure of actual notice to the
Indemnifying Party and such Indemnifying Party is materially prejudiced as a result of such failure
to give notice. Except with the prior written consent of the Indemnified Party, no Indemnifying
Party, in the defense of any such claim or litigation, shall consent to entry of any judgment or
enter into any settlement that provides for injunctive or other nonmonetary relief affecting the
Indemnified Party or that does not include as an unconditional term thereof the giving by each
claimant or plaintiff to such Indemnified Party of a release from all liability with respect to
such claim or litigation. In the event that the Indemnified Party shall in good faith determine
that the conduct of the defense of any claim subject to indemnification hereunder or any proposed
settlement of any such claim by the Indemnifying Party might be expected to affect adversely the
Indemnified Party’s tax liability or the ability of the Indemnified Party to conduct its business,
or that the Indemnified Party may have available to it one or more defenses or counterclaims that
are inconsistent with one or more of those that may be available to the Indemnifying Party in
respect of such claim or any litigation relating thereto, the Indemnified Party shall have the
right at all times to take over and assume control over the defense, settlement, negotiations or
litigation relating to any such claim at the sale cost of the Indemnifying Party, provided that if
the Indemnified Party does so take over and assume control, the Indemnified Party shall not settle
such claim or litigation without the written consent of the Indemnifying Party, such consent not to
be unreasonably withheld. In the event that the Indemnifying Party does not accept the defense of
any matter as above provided, the Indemnified Party shall have the full right to defend against any
such claim or demand and shall be entitled to settle or agree to pay in full such claim or demand.
In any event, the Indemnifying Party and the Indemnified Party shall cooperate in the defense of
any claim or litigation subject to this Section 5.3, including tax audits and claims, and the
records of each shall be available to the other with respect to such defense.
19
5.4 Time Limitations. Except for claims arising out of a breach of Section 3.1.1 or 3.1.9,
which shall have no time limitation other than any applicable statute of limitation, Shareholder
will have liability with respect to Section 5.1(a) only if on or before the date which is twelve
(12) months after the first installment of the Purchase Price is paid to Shareholder pursuant to
Section 2.3 above, Acquiror notifies Shareholder in writing that it is seeking indemnification,
specifying the factual basis of the claim in reasonable detail to the extent then known by
Acquiror. Acquiror will have liability with respect to Section 5.2 only if on or before the date
which is twelve (12) months after the Closing Date, Shareholder notifies Acquiror in writing of the
claim, specifying the factual basis of the claim in reasonable detail to the extent then known by
Shareholder. Notwithstanding the foregoing, if before 5:00 p.m. (Arizona time) on the date
specified in the first sentence hereof, any party against which an indemnification claim has been
made hereunder has been properly notified in writing of such claim and such claim has not been
finally resolved or disposed of as of such date, then such claim shall continue to survive and
shall remain a basis for indemnity hereunder until such claim is finally resolved or disposed of in
accordance with the terms of this Agreement.
5.5 Limitations on Indemnification. Shareholder shall have no liability (for indemnification
or otherwise) with respect to claims arising under Sections 5.1(a) unless and until each such Loss
exceeds $1,000 and the total of all Losses with respect to such matter exceeds $15,000; provided,
however, that should the aggregate amount of Losses calculated in this manner exceed $15,000,
Acquiror shall be entitled to indemnification for the full amount of such Losses (including the
first $15,000). Acquiror shall have no liability (for indemnification or otherwise) with respect to
claims arising under Section 5.2 until the total of all Losses with respect to such matters exceed
$15,000; provided, however, that should the aggregate amount of Losses exceed $15,000, Shareholder
shall be entitled to indemnification for the full amount of such Losses (including the first
$15,000). The aggregate liability of Shareholder for all claims of Losses shall not exceed fifty
percent (50%) of the Purchase Price actually paid to Shareholder, except that this limitation shall
not apply to claims (i) arising with respect to any of Sections 3.1.1, 3.1.6, 3.1.8, 3.1.9, 3.1.10,
3.1.13 or 3.1.14, with respect to any Loss as to which a Claim is made within the applicable time
period as set forth in section 5.4 above; (ii) for any breach of any of Shareholder’s
representations and warranties for which Shareholder had actual knowledge at any time prior to the
date on which such representation and warranty was made; or (iii) resulting from any intentional
breach by Shareholder of any representation, warranty, covenant or obligation contained in this
Agreement, and with respect to the foregoing clauses (i), (ii) and (iii), the aggregate liability
of Shareholder for all claims of Losses shall not exceed one hundred percent (100%) of the Purchase
Price actually paid to Shareholder. For avoidance of doubt, in no event will Shareholder have any
liability to Acquiror for any amounts in excess of the Purchase Price actually paid to Shareholder.
5.6 Exclusive Remedy. The right to indemnification provided in this Article 5 is intended to
be the sole and exclusive remedy of Acquiror or Shareholder following the Closing, except for the
remedies provided in Article 4.
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ARTICLE 6
DISPUTE RESOLUTION
6.1 Disputes. Any claim, dispute or other matter in controversy (herein called
“Dispute”), whether based on contract, tort, statute or other legal theory (including but
not limited to any claim of fraud or misrepresentation), arising out of or related to the Agreement
or the breach thereof shall be settled according to the procedures set forth in this Article 6
exclusively; provided however, that either party may seek preliminary judicial relief in the form
of a provisional remedy or injunctive relief if such remedy is otherwise available and such party,
in its judgment, considers such action necessary to avoid irreparable damage during the pendency of
such procedures.
6.2 Arbitration. If the parties have first attempted in good faith to resolve the Dispute by
direct negotiations and the Dispute remains unresolved sixty (60) days after good faith
negotiations are attempted by any party, then the Dispute shall be settled by arbitration in
Phoenix, Arizona in accordance with the then current Commercial Rules of Arbitration
(“Arbitration Rules”) of the AAA in effect on the date of this Agreement, as supplemented
or modified by the following:
(a) Notice of demand for arbitration shall be filed with the other party and AAA after the
expiration of the period set forth in this Section 6.2 or such other date as the parties mutually
agree.
(b) Notwithstanding any choice of law or other provisions of this Agreement to the contrary,
the agreement to arbitrate set forth in this Article 6 shall be governed by the Federal Xxxxxxxxxxx
Xxx, 0 X.X.X. §0 et seq (the “Act”), which shall not be superseded or supplemented by any
other arbitration act, statute or regulation.
(c) In the event that all or a portion of the Dispute is the responsibility in whole or in
part of a Person who is under no obligation to arbitrate such matter with the parties in the same
proceeding, then the parties shall, in the absence of an agreement between them to the contrary,
delay or stay any arbitration between them pending the determination, in a separate proceeding, of
the responsibility and liability of or to such Person for the Dispute or matter involved, provided
that the parties shall use their best efforts to cause any Affiliate of such party to participate
in such arbitration proceedings. Each party agrees that any arbitration instituted by them under
this Section 6.2 may, at the election of the other party, be consolidated with any other
arbitration proceeding involving a common question of fact or law between the electing party and
any other Persons. In any Dispute concerning the application of this Section 6.2(c), the question
of arbitrability shall be decided by the appropriate court and not by arbitration,
(d) A party who files a notice of demand for arbitration must assert in the demand all claims,
disputes or other matters then known to that party on which arbitration is permitted to be
demanded. When a party fails to include a claim through oversight, inadvertence or excusable
neglect, or when the claim had not matured at the time of the notice of demand or was acquired
subsequently, the arbitration panel shall permit amendment. In no event shall a demand for
arbitration be made when the
21
institution of legal or equitable proceedings based on such Dispute would be barred by laches or
any applicable statute of limitations; and whether or not a Dispute is time-barred shall be decided
by an appropriate court having jurisdiction and not by arbitration.
(e) If the claim in the Dispute does not exceed $250,000, there shall be a single arbitrator
selected by mutual agreement of the parties or, if the parties cannot agree on an arbitrator within
ten (10) days, appointed according to the Arbitration Rules. If the claim in the Dispute exceeds
$250,000, the arbitration panel shall consist of three (3) members, selected according to the
Arbitration Rules. All arbitrators must be neutral and must be knowledgeable in the subject matter
of the Dispute. At least two (2) of the arbitrators on the panel (or the single arbitrator, as the
case may be) must be or have been a partner in a highly respected law firm for at least fifteen
(15) years specializing in either general corporate, commercial transactions or commercial
litigation matters.
(f) In advance of the hearing, the arbitrator(s) may compel the parties to exchange a detailed
statement of their claims, including the names and addresses of the witnesses and a brief
description of the documents on which they intend to rely. The arbitrator(s) may exclude from the
hearing the introduction of any evidence or the testimony of any witness not disclosed to the other
party in advance as ordered by the arbitrator(s). The arbitrator(s) may also permit the oral
depositions of the parties and any expert witnesses to be taken. However, there shall be no other
pre-hearing discovery unless and then only to the extent that all parties otherwise agree in
writing.
(g) Except for good cause, or in case of emergency, the arbitration hearing shall commence
within sixty (60) days after the notice of demand for arbitration is given and shall proceed during
each business day thereafter until concluded.
(h) The award may not grant any relief that could not be granted in court litigation to
resolve the Dispute under Applicable Law. A monetary award may only be made for compensatory
damages, and if any other damages (whether exemplary, punitive, consequential or other) are
included, the award shall be vacated and remanded, or modified or corrected as appropriate to
promote this damage limitation. The arbitration panel shall award the prevailing party in the
arbitration its reasonable attorneys’ fees and costs incurred in connection with the arbitration.
Any party who succeeds, by claim or counterclaim, in court proceedings to stay litigation or compel
arbitration shall also be entitled to recover all costs incurred in connection with such
proceedings, including attorneys’ fees to be awarded by the court. In addition, the arbitration
panel shall award the costs of administration by AAA as it may in its judgment decide.
(i) The arbitration award shall be in writing and shall include a statement of findings of
fact and conclusions of law for the award. Except as otherwise expressly provided in this Section
6.2, the award rendered by the arbitrator(s) shall be final and judgment may be entered upon it in
accordance with the Act in any court having jurisdiction.
22
(j) Within fifteen (15) days after the date of the arbitration award, either party may request
the arbitration panel to correct clerical, typographical or computational errors in the award and
to make an additional award as to claims presented in the arbitration proceedings but not dealt
with in the award.
(k) Either party can appeal to any state court of record having jurisdiction, to vacate and
remand, or modify or correct the arbitration award for any of the grounds specified in the Act.
(l) At the request of either party, but only if contained in the initial written demand for
arbitration or in the initial response to the demand, the arbitration proceedings shall be
conducted in secrecy. In such case (a) the fact of the pending arbitration shall not be disclosed
or confirmed by the parties or the arbitration panel to any Person who is not a party to, or called
to testify at, the proceedings until the arbitration award has been made, (b) the proceedings shall
not be recorded or transcribed in any manner, and (c) all documents, testimony and records (other
than the contract documents out of which the Dispute arises) shall be received, heard and
maintained by the arbitrator(s) in secrecy, available for inspection only by the parties, their
attorneys and by experts who shall agree, in advance and in writing, to receive all such
information in secrecy. Also in such case, the information shall not be described in the
arbitration award in such manner as to be commercially useful.
ARTICLE 7
MISCELLANEOUS
MISCELLANEOUS
7.1 Expenses. Shareholder and Acquiror shall bear their respective expenses, costs and fees
(including attorneys’ fees) in connection with the transactions contemplated hereby, including the
preparation, execution and delivery of this Agreement and compliance herewith (the “Transaction
Expenses”), whether or not the transactions contemplated hereby shall be consummated.
Notwithstanding anything in this Agreement to the contrary, Shareholder shall be responsible for
and bear the Company’s Transaction Expenses in connection with the transactions contemplated
hereby. The prevailing party in any action or proceeding arising out of or related to this
Agreement shall be entitled to its reasonable attorney’s fees and costs in connection therewith.
7.2 Severability. If any provision of this Agreement, including any phrase, sentence, clause,
section or subsection is inoperative or unenforceable for any reason, such circumstances shall not
have the effect of rendering the provision in question inoperative or unenforceable in any other
case or circumstance, or of rendering any other provision or provisions herein contained invalid,
inoperative or unenforceable to any extent whatsoever.
7.3 Notices. All notices, demands and other communications provided for hereunder shall be in
writing (including facsimile or similar transmission) and mailed (by U.S. certified mail, return
receipt requested, postage prepaid), sent or delivered (including by way of overnight courier
service);
23
| (a) | If to Acquiror, addressed to: | ||
| Global Water, Inc. 00000 X. 00xx Xxxxxx, Xxxxx 000 Xxxxxxx, Xxxxxxx 00000 Phone: (000) 000-0000 Facsimile: (000) 000-0000 Attn: Xxxxxx Xxxx |
|||
| with a copy to: | |||
| Xxxxx & Xxxxxxxxxx, P.A. 000 Xxxx Xxxxxx Xxxx Xxxxxxx, Xxxxxxx 00000 Phone: (000) 000-0000 Facsimile: (000) 000-0000 Attn: Xxxxxx Xxxxxxx, Esq. |
|||
| (b) | If to Shareholder, addressed to: | ||
| Xxxxxxx Xxxxxxxx 000 Xxxxx Xxxxxxxxxx Xxxxxxxxx Xxxxxxxx, Xxxxxxx 00000 |
|||
| and | |||
| Xxxxxx X. Xxxxx Quincy Investments, LLC 0000 Xxxx Xxxxxx Xxxxxxxx, Xxxxxxx 00000 |
|||
| with a copy to: | |||
| Xxxxx and Roca LLP 00 Xxxxx Xxxxxxx Xxx. Xxxxxxx, Xxxxxxx 00000Xxxxx: (000) 000-0000 Facsimile: (000) 000-0000 Attention: Xxxxxxx X. Xxxxxxx, Esq. |
or, as to each party, to such other Person and/or at such other address or number as shall be
designated by such party in a written notice to the other party. All such notices, demands and
communications, if mailed, shall be effective upon the earlier of (i) actual receipt by the
addressee, (ii) the date shown on the return receipt of such mailing, or (iii) three (3) days after
deposit in the mail. All such notices, demands and communications, if not mailed, shall be
effective upon the earlier of (i) actual receipt by the addressee, (ii) with respect to facsimile
and similar electronic transmission, the earlier of (x) the time that electronic confirmation of a
successful transmission is received, or (y) the date of transmission, if a confirming copy of the
24
transmission is also mailed as described above on the date of transmission, and (iii) with respect
to delivery by overnight courier service, the day after deposit with the courier service, if
delivery on such day by such courier is confirmed with the courier or the recipient orally or in
writing.
7.4 Headings. The headings contained in this Agreement are for purposes of convenience only
and shall not affect the meaning or interpretation of this Agreement.
7.5 Entire Agreement. This Agreement (including the Schedules hereto) constitutes the entire
agreement among the parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings, both written and oral, between the parties.
7.6 Counterparts. This Agreement may be executed in several counterparts, in original form or
by electronic facsimile, each of which shall be deemed an original and all of which shall together
constitute one and the same instrument. This Agreement shall not be effective as between any
parties unless and until one or more counterparts has been executed by Shareholder and Acquiror.
7.7 Governing Law. This Agreement shall be governed in all respects, including as to validity,
interpretation and effect, by the internal laws of the State of Arizona, without giving effect to
the conflict of laws rules thereof.
7.8 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, executors, personal representatives, successors and
permitted assigns.
7.9 Assignment. This Agreement shall not be assignable or otherwise transferable by any party
hereto without the prior written consent of the other parties hereto.
7.10 No Third Party Beneficiaries. Except as provided in Article 5 with respect to
indemnification of Indemnified Parties hereunder, nothing in this Agreement shall confer any rights
upon any Person or entity other than the parties hereto and their respective, successors and
permitted assigns.
7.11 Amendment; Waivers, etc. No amendment, modification or discharge of this
Agreement, and no waiver hereunder, shall be valid or binding unless set forth in
writing and duly executed by the party against whom enforcement of the amendment,
modification, discharge or waiver is sought. Any such waiver shall constitute a waiver
only with respect to the specific matter described in such writing and shall in no way
impair the rights of the party granting such waiver in any other respect or at any
other time. Neither the waiver by any of the parties hereto of a breach of or a
default under any of the provisions of this Agreement, nor the failure by any of the
parties, on one or more occasions, to enforce any of the provisions of this Agreement
or to exercise any right or privilege hereunder, shall be construed as a waiver of any
other breach or default of a similar nature, or as a waiver of any of such provisions,
rights or privileges hereunder. The representations and warranties of Shareholder
shall not be affected or deemed waived by reason of any investigation made by or on
behalf of Acquiror (including but not limited to, by any of its advisors, consultants
or representatives) except to the extent that Acquiror or any of such advisors,
consultants or representatives knew that any such representation or warranty is or
might be inaccurate.
25
7.12 Interest. Any sums not paid when due pursuant to this Agreement shall bear interest from
the due date thereof until paid at a per annum rate equal to the lesser of: (i) the maximum rate,
if any, allowed by applicable law; or (ii) the greater of: (a) 10%; or (b) the “prime rate” as from
time to time published in the Wall Street Journal as the “base rate or corporate loans posted by at
least 75% of the nation’s 30 largest banks” (or equivalent) plus 2%.
7.13 Xxxxxxxxx Xxxxxx Resort. Xxxxxxxxx Xxxxxx USA, Inc. (“FGUSA”) operates a private
wastewater treatment system and related plant and equipment (“Resort Facilities”) for the sole
benefit of the Xxxxxxxxx Xxxxxx Resort owned by the Shareholder. To Shareholder’s knowledge, the
Resort Facilities are not owned or operated by the Company. If and to the extent it is ultimately
determined, by mutual agreement of the parties hereto, each acting reasonably, that the Resort
Facilities (or any portion thereof) are owned by the Company, such fact will not result in a breach
of this representation, and the parties will address such matter by separate agreement which, among
other things, will provide for the transfer of such assets to Shareholder or her designee for no
additional consideration. Shareholder and FGUSA, jointly and severally, will indemnify the Company
and Acquiror from and against any and all claims, losses, damages, attorneys’ fees and other costs
resulting from the transfer of said assets to the Shareholder or her designee, except to the extent
resulting from the Company’s or the Acquiror’s negligence or willful misconduct. Shareholder and
FGUSA warrant the accuracy of the foregoing to the Acquiror and further expressly acknowledge that
the holding of the water and wastewater CC&Ns by PVUC and SCWC (or any other Affiliate of Acquiror)
shall not be construed, directly or indirectly, as an assumption by Acquiror or its Affiliates of
any duties or obligations in connection with the operation, maintenance, reporting obligations in
or otherwise related to the Resort Facilities, which Shareholder and FGUSA will cause to be
operated in compliance with all rules and regulations adopted by the Arizona Department of
Environmental Quality (“ADEQ”) or other governmental agency. Notwithstanding the foregoing,
Acquiror acknowledges and agrees that it (or PVUC, SCWC or another Affiliate of Acquiror) will be
obligated under the CC&Ns to provide sewer service with respect to future development within the
wastewater portions of the Existing Service Area not serviced by the Resort Facilities. If it is
determined that the Company owns the Resort Facilities, Shareholder and FGUSA agree that if and
when requested by Acquiror or its Affiliate, Shareholder and FGUSA shall purchase the Resort
Facilities from the Company for no additional consideration, subject to ACC approval, if needed. In
addition, in such circumstance, Shareholder and FGUSA shall support the removal of the Resort
Facilities from the Company’s utility plant in-service. Shareholder agrees to pay all reasonable
applicable service, loading, and infrastructure fees (together with any other applicable
tariffs/fees) in the event Shareholder desires to decommission the Resort Facilities and connect to
the infrastructure of PVUC or SCWC or other Affiliates of Acquiror or the infrastructure of the
City of Casa Grande. In connection with any such decommission, Shareholder and FGUSA shall be
responsible for complying with and fulfilling all regulatory requirements including but not limited
to all ADEQ-mandated clean closure requirements. This provision shall expressly survive the
Closing.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first above
written.
26
SHAREHOLDER:
|
GLOBAL WATER. INC. | |||||
/s/ Xxxxxxx Xxxxxxxx |
||||||
XXXXXXXXX XXXXXX USA, INC. |
||||||
(solely for purposes of Section 7.13) |
||||||
/s/ Xxxxxxx Xxxxxxxx
|
||||||
Xxxxxxx Xxxxxxxx, President |
27
SHAREHOLDER:
|
GLOBAL WATER. INC. | |||||
| /s/ Xxxxxx Xxxx | ||||||
XXXXXXXXX XXXXXX USA, INC. |
||||||
(solely for purposes of Section 7.13) |
||||||
27
SHAREHOLDER:
|
GLOBAL WATER. INC. | |||||
/s/ Xxxxxxx Xxxxxxxx |
||||||
XXXXXXXXX XXXXXX USA, INC. |
||||||
(solely for purposes of Section 7.13) |
||||||
/s/ Xxxxxxx Xxxxxxxx
|
||||||
Xxxxxxx Xxxxxxxx, President |
27
SHAREHOLDER:
|
GLOBAL WATER. INC. | |||
| /s/ Xxxxxx Xxxx | ||||
Xxxxxxx Xxxxxxxx, individually
|
Xxxxxx Xxxx, President | |||
XXXXXXXXX XXXXXX USA, INC. |
||||
(solely for purposes of Section 7.13) |
||||
27
SCHEDULE 1A
| • | Existing Service Area territory maps attached |
SCHEDULE 3.1.6
[Not Applicable]
2
SCHEDULE 3.1.7
| • | Xxxxxxxxx Xxxxxx Utilities Company adopted Bylaws on December 11, 2006, effective as of March 29, 2002, which Bylaws are identical to the original Bylaws of Xxxxxxxxx Xxxxxx Utilities Company, which have been provided to Acquiror | |
| • | Transfer of a portion of Xxxxxxxxx Xxxxxx Utilities Company’s Certificate of Convenience and Necessity to Arizona Water Company, Arizona Corporation Commission Docket No. W-01445A-05-0700 and Docket No. WS-01775A-05-0700; Decision No. 68654 dated April 12, 2006 |
3
SCHEDULE 3.1.9
[Not Applicable]
4
SCHEDULE 3.1.10
| • | Arizona Corporation Commission Certificate of Convenience and Necessity. Issued to Giant Utility Company in Decision No. 33465 dated October 20, 1961, and Decision No. 33900 dated May 18, 1962; transferred from Giant Utility Company to Xxxxxxxxx Xxxxxx Utilities Company in Decision 47711 dated March 3, 1977 | |
| • | Pinal County. Board of Supervisors. Acknowledgement of Assignment of Franchise, February 22, 1977, such that Giant Utility Company assigned and set over to Xxxxxxxxx Xxxxxx Utility Company that certain franchise issued to X.X. Xxxxxxx, or his nominee on the 18th day of May 1959, and, transferred to Giant Utility Company on the 7th day of May 1962 | |
| • | Water System Agreement entered into on June 2, 1999, by and among Arizona Water Company, Xxxxxxx Xxxxxxxx, and Xxxxxxxxx Xxxxxx Utility Company | |
| • | Arizona Department of Water Resources Water Provider Permit No. 56-001349.0000 Xxxxxxxxx Xxxxxx Utility Company | |
| • | Arizona Department of Environmental Quality, Public Water System, PWS #11-333 [inactive] | |
| • | Pinal County. Department of Public Works. Permit to Use Right of Way | |
| • | Non-Potable Water Facilities Contribution Agreement entered into on October 13, 2003 by and between Arizona Water Company and Xxxxxxxxx Xxxxxx Utility Company |
5
SCHEDULE 3.1.11
(Not Applicable)
6
SCHEDULE 3.1.13
| • | Pinal County. Department of Public Works. Permit to Use Right of Way | |
| • | Xxxxxxxxx Xxxxxx Utilities Company (“Original Company”), which was incorporated on February 4, 1977 and was transferred the Certificate of Convenience and Necessity pursuant to the Arizona Corporation Commission Decision 47711 dated March 3, 1977, was administratively dissolved on January 10, 1997 for failure to file its annual report for 1995 with the Arizona Corporation Commission Corporations Division. On March 29, 2002, Xxxxxxxxx Xxxxxx Utilities Company was incorporated as a new corporation with a name identical to the Original Company (“New Company”). Except as set forth in Schedule 3.1.24, Xxxxxxxxx Xxxxxx Utilities Company has complied with all filing requirements of the Arizona Corporations Commission Utilities Division |
7
SCHEDULE 3.1.14
[Not Applicable]
8
SCHEDULE 3.1.181
Water Xxxxx:
ADWR ID#55-603936: 200 horsepower pump, 580 gpm yield, 12.75” casing diameter
ADWR ID#55-603937: 75 horsepower pump, 200 gpm yield, 20” casing diameter
ADWR ID#55-603940: 40 horsepower pump, 190 gpm yield, 20” casing diameter
ADWR ID#55-603937: 75 horsepower pump, 200 gpm yield, 20” casing diameter
ADWR ID#55-603940: 40 horsepower pump, 190 gpm yield, 20” casing diameter
Booster pumps:
3 — 65 horsepower
1 — 25 horsepower
1 — 25 horsepower
Metal and fiberglass tanks:
1 — 250,000 capacity storage tank
1 — 170,000 capacity storage tank
1 — 12,000 pressure tank
1 — 170,000 capacity storage tank
1 — 12,000 pressure tank
Mains:
2 — 6 inch transite, 3960 feet
3 — 6 inch xxxx xxxx, 2640 feet
1 — 10 inch transite, 5280 feet
3 — 6 inch xxxx xxxx, 2640 feet
1 — 10 inch transite, 5280 feet
Lift Station Facilities at Maintenance Yard:
2 pumps, 3 horsepower per pump, 180 gpm capacity, 1500 gallons wet well capacity
2 pumps, 1.5 horsepower, 90 gpm capacity, 1500 gallons wet well capacity
2 pumps, 1.5 horsepower, 90 gpm capacity, 1500 gallons wet well capacity
Manholes:
8 standard
Cleanouts:
4
Collection Mains:
6” potable clay, 2680 feet
8” sewer clay, 2680 feet
8” sewer clay, 2680 feet
Extended Aeration Digestion Solids Processing and Handling Facility
Chlorinator Chamber (contact gas) Disinfection Equipment
Clarifier Filtration Equipment
Fence
Chlorinator Shed
Chlorinator Chamber (contact gas) Disinfection Equipment
Clarifier Filtration Equipment
Fence
Chlorinator Shed
| 1 | As noted elsewhere in the Agreement, some or all of the assets listed in this Schedule 3.1.18 may not be owned by the Company. |
9
SCHEDULE 3.1.20
[Not Applicable]
10
SCHEDULE 3.1.24
| • | Except for failing to file annual reports for 2002 and 2003, Xxxxxxxxx Xxxxxx Utilities Company has filed annual reports with Utilities Division of the Arizona Corporation Commission since 1998 |
| • | Annual Water Withdrawal and Use Reports regarding Water Provider Permit No. 56-001349.0000 have been filed with the Arizona Department of Water Resources since 1992 |
11
[STAMP]
BEFORE THE ARIZONA CORPORATION COMMISSION
IN THE MATTER OF THE APPLICATION OF GIANT UTILITY COMPANY FOR A CERTIFICATE OF CONVENIENCE AND
NECESSITY TO SERVE WATER FOR DOMESTIC AND COMMERCIAL PURPOSES, AND FOR THE COLLECTION AND DISPOSAL
OF SEWAGE IN THE AREA DESCRIBED AS SECTIONS 16, 17, 18. 19, 20, 21, 28, 29 AND 30, TOWNSHIP SOUTH,
RANGE 5 EAST, G&SRB&M, PINAL COUNTY, ARIZONA
| DOCKET NO. U-1775 | DECISION NO. Illegible |
OPINION AND ORDER
BY THE COMMISSION:
Notice having been given as provided by law, the above entitled matter came on for hearing
before the Commission on the 5th day of July, 1961, sitting in Tucson, Pima County,
Arizona.
Applicants were represented by their attorneys, Xxxxxxx, Xxxxxx and Xxxxx, Xxxx Xx. Xxxxxxx of
counsel, and appearance in opposition to the application was made and entered in behalf of Arizona
Water Company.
Testimony was presented and evidence entered, both oral and documentary, and from the
evidence, testimony, records and files in the matter it appears that certain of the area concerned
in the petition has here to fore been certified to Arizona Water Company, and, upon such showing,
petitioner moved that previously certificated areas be deleted from
the area sought in the
petition; upon completion of the foregoing, the Commission is of the opinion that the petition
should be granted.
WHEREFORE, IT IS ORDERED that this Order shall be and constitute a
Certificate of Convenience and Necessity pursuant to Section
40-281, Arizona Revised Statutes, authorizing applicant herein to
construct, operate and maintain a domestic water utility and a
system for the collection and disposal of sewage in the territory
described as all of Sections 19 and 20, Township 6 South, Range 5
East, G&SRB&M, Pinal County, Arizona, and to furn-
| Arizona Corporation, Commission Docket No. U-1775. Decision No. 33465 (granting (Illegible) for water & sewage, (Illegible) |
ish water to the residences and business establishment therein and to collect from said
residences and business establishments sewage and dispose of the same within said area and
territory.
A rate of charge of Five $5.00 Dollars for the first five thousand (5,000) gallons of water
provided each consumer, and Fifty (50) Cents per thousand (1,000) gallons in excess thereof is
approved and authorised by the Commission as a monthly charge.
A rate of charge of Five ($5.00) Dollars per month per connection for the disposal of sewage
is approved and authorised by the Commission.
| BY ORDER OF THE ARIZONA CORPORATION COMMISSION. IN WITNESS WHEREOF, I, XXXXXXX X. XXXXXX Secretary of the Arizona Corporation Commission, have hereunto set my hand and caused the official seal of this Commission to be affixed, at the Capitol in the City of Phoenix, this 20th day of October, 1961. |
||||
| /s/ Xxxxxxx X. Xxxxxx | ||||
| XXXXXXX X. XXXXXX | ||||
| SECRETARY | ||||
| /s/ Illegible | /s/ Illegible | |||
CHAIRMAN
|
COMMISSIONER | COMMISSIONER |
-2-
| Arizona Corporation Commission | ||
| DOCKETED | ||
| MAY 18, 1962 | ||
| DOCKETED BY (Illegible) |
BEFORE THE ARIZONA CORPORATION COMMISSION
IN THE MATTER OF THE APPLICATION OF GIANT UTILITY COMPANY, AN ARIZONA CORPORATION, FOR A
CERTIFICATE OF CONVENIENCE AND NECESSITY TO SERVE AND TO A CERTIFICATE OF CONVENIENCE AND
COMMERCIAL PURPOSES, AND FOR THE COLLECTION AND DISPOSAL OF SEWAGE, AND ADDITIONAL AREA DESCRIBED
AS SECTIONS 13, 14, 15, 22, 23, 24, 25, 26, 27, 34, 35 AND 26, TOWNSHIP 6 South, Range 4 EAST, AND
SECTIONS 17, 18, 29, 30, 31 AND 32, TOWNSHIP 6 SOUTH, RANGE 5 EAST, ALL G&SRB&M, PINAL COUNTY,
ARIZONA.
| DOCKET NO. U-1775 | DECISION NO. 33900 |
OPINION AND ORDER
BY THE COMMISSION:
Notice having been given as provided by law, the above entitled matter came on for hearing
before the Commission sitting in Tucson, Arizona on March 27, 1962.
Applicant was represented by Xxxx Xx. Xxxxxxx, of the law firm of Xxxxxxx, Xxxxxx & Xxxxx, and
by X. X. Xxxx, engineer. There was no appearance in opposition to the granting of the application.
Testimony was presented and from such testimony, record and files in the matter it appears
that Applicant has complied with the statutes of the State of Arizona and with the rules and
regulations of this Commission for the granting of a certificate of convenience and necessity.
WHEREFORE, IT IS ORDERED that this order shall constitute and be a certificate of convenience
and necessity as contemplated by 240-281, Arizona Revised Statutes, to construct, operate and
maintain a public water system in the additional territory described as Sections 13, 14, 15, 22,
23, 24, 25, 26, 27, 34, 35 and 36 in Township 6 South, Range 4 East, and in Sections 17, 18, 29,
30, 31 and 32 in Township 6 South, Range 5 East, all G&SRB&M, Pinal County, Arizona, and to also
furnish the collection and disposal of sewage in the forgoing described area.
IT IS FURTHER ORDERED that the rules heretofore approved for this Company are hereby approved
and shall apply in this area.
BY ORDER OF THE ARIZONA CORPORATION COMMISSION.
| Arizona Corporation Commission, Docket No. U-1775, Decision No. 33900 (extending (Illegible) in (Illegible) (May 18, 1962) |
| DOCKET NO. U-1775 | DECISION NO. 33900 |
IN WITNESS WHEREOF, I, XXXXXXX X. XXXXXX, Secretary of the Arizona Corporation Commission,
have hereupto set my hand and caused the official seal of this Commission to be affixed, at the
Capitol in the City of Phoenix, this 18th day of May, 1962.
| /s/ Xxxxxxx X. Xxxxxx | ||||
| XXXXXXX X. XXXXXX | ||||
| SECRETARY | ||||
| By | ||||
| Acting Secretary | ||||
/s/ Illegible
|
/s/ Illegible | |||
CHAIRMAN
|
COMMISSIONER | COMMISSIONER |
-2-
BEFORE THE ARIZONA CORPORATION COMMISSION
[STAMP]
XXX XXXX
Chairman
XXXXXX XXXXXXXX
Commissioner
XXX XXXXX
Commissioner
Chairman
XXXXXX XXXXXXXX
Commissioner
XXX XXXXX
Commissioner
IN THE MATTER OF THE APPLICATION
|
) | DOCKET NO. U-1775 | ||||
OF GIANT UTILITY COMPANY, AN
|
) | |||||
ARIZONA CORPORATION, AS TRANSFEROR,
|
) | CASE NO. 10102-U | ||||
TO TRANSFER ITS CERTIFICATE OF
|
) | |||||
CONVENIENCE AND NECESSITY AUTHORIZING
|
) | DECISION NO. 47711 | ||||
GIANT UTILITY COMPANY TO CONSTRUCT,
|
) | |||||
OPERATE AND MAINTAIN A PUBLIC WATER
|
) | |||||
SYSTEM AND TO ALSO FURNISH THE
|
) | |||||
COLLECTION AND DISPOSAL OF SEWAGE
|
) | |||||
WITHIN CERTAIN PORTIONS OF PINAL
|
) | |||||
COUNTY, TOGETHER WITH THE ASSETS OF
|
) | |||||
GIANT UTILITY COMPANY,
|
) | |||||
TO XXXXXXXXX XXXXXX UTILITIES COMPANY
|
) | |||||
AN ARIZONA CORPORATION.
|
) | OPINION AND ORDER | ||||
| ) | ||||||
PLACE OF HEARING:
|
Phoenix, Arizona | |
DATE OF HEARING:
|
February 24, 1977 | |
HEARING OFFICER:
|
Xxxxx X. Xxxxxxx |
APPEARANCES:
Xxxxxx Xxxxxxx, Assistant Director, and Xxxxxx Xxxxxx, Chief Rate Analyst, Utilities
Division for the Arizona Corporation Commission.
Xxxxx and Xxxx, by Xxxxx X. Xxxxxx, for the Applicant.
Verity, Smith, Xxxx, Xxxxx & Xxxxx, by Xxx X. Xxxxx, and X. X. Xxxxxxxxxxx, Assistant
to the President. The Xxxxx Mining Company, for Xxxxxxxxx Xxxxxx Utilities Company.
FINDINGS OF FACT
1. Giant Utility Company, an Arizona corporation,
presently holds a certificate to provide domestic water
and sewage collection and disposal services in an area
west of Casa Grande, Arizona which includes the property
on which there is situated the Xxxxxxxxx Xxxxxx Resort and
related facilities.
2. Giant Utility Company is a subsidiary of National Exhibition
Company, a New Jersey corporation. National Exhibition Company entered into an
agreement with Coastal Mining Company, a Delaware corporation, to sell to
Coastal Mining Company all land, buildings and improvements constituting the
Xxxxxxxxx Xxxxxx Resort and, as a part of that transaction to attempt
Page two
U-1775
Decision No. 47711
U-1775
Decision No. 47711
to cause the certificate and the other assets of Giant Utility Company to be sold and transferred
to Coastal Mining Company, or its nominee.
3. Coastal Mining Company is a wholly owned subsidiary of the Xxxxx Mining Company, a Delaware
corporation.
4. Xxxxxxxxx Xxxxxx Utilities Company has been nominated as the transferee of the certificate
and related assets and is also a wholly owned subsidiary of the Xxxxx Mining Company.
5. In partial implementation of the terms of the agreement between National Exhibition Company
and Coastal Mining Company, the land, buildings and improvements owned by National Exhibition
Company have been sold and transferred to Xxxxxxxxx Xxxxxx Resort, Inc., a Delaware corporation,
which is a wholly owned subsidiary of the Xxxxx Mining Company.
6. Xxxxxxxxx Xxxxxx Resort, Inc. is presently the only user of domestic water furnished by the
applicant.
7. Xxxxxxxxx Xxxxxx Utilities Company is prepared to undertake the obligation of furnishing
domestic water within the certificated area and to operate under the statutes of the State of
Arizona and the rules and regulations of the Arizona Corporation Commission pertaining to domestic
water companies.
8. The Pinal County Board of Supervisors, by resolution dated February 22, 1977, has approved
a transfer to Xxxxxxxxx Xxxxxx Utilities Company of the franchise previously granted to Giant
Utility Company and an acknowledgement of that resolution signed by the Pinal County Board of
Supervisors and attested to by the administrator-clerk of the Pinal County Board of Supervisors has
been filed with the Commission.
CONCLUSIONS OF LAW
The Commission concludes that the transferee is a fit and proper person to provide service
under the certificate.
ORDER
WHEREFORE, IT IS ORDERED: that the certificate presently held by Giant Utility Company be, and
the same hereby is, transferred to Xxxxxxxxx Xxxxxx Utilities Company to the area described as:
Page three
U-1775
Decision No. 47711
U-1775
Decision No. 47711
Sections 17, 18, 19, 20, 30 and 31,
Township 6 South, Range 5 East, G&SRB&M,
and Sections 13, 14, 15, 22, 23, 24,
25, 26, 27, 34, 35, and 36, Township 6
South, Range 4. East, G&SRB&M, Pinal
County, Arizona.
IT IS FURTHER ORDERED: that the assets of Giant Utility Company may be transferred to
Xxxxxxxxx Xxxxxx Utilities Company.
IT IS FURTHER ORDERED: that the rates and charges presently on file for Giant Utility Company
shall be maintained by Xxxxxxxxx Xxxxxx Utilities Company until further order of the Commission.
BY ORDER OF THE ARIZONA CORPORATION COMMISSION.
/s/ Illegible
|
/s/ Illegible | /s/ Illegible | ||
CHAIRMAN
|
COMMISSIONER | COMMISSIONER |
(Illegible)
EXHIBIT 1
PINAL COUNTY
BOARD OF SUPERVISORS
(Illegible)
(Illegible)
| (Illegible) | (Illegible) |
ACKNOWLEDGEMENT OF ASSIGNMENT OF FRANCHISE
Before the Board of Supervisors, County of Pinal, State of Arizona, there appeared the
Xxxxxxxxx Xxxxxx Utility Company, by and through its attorney Xxxxxx Xxxxxx and/or Xxxxxx
Xxxxxxx, and lodged with said Board of Supervisors a certain affidavit of Xxxx X. Xxxx of Giant
Utility Company which documents satisfactory evidence to the Board that said Giant Utility Company
assigned and set over to Xxxxxxxxx Xxxxxx Utility Co. that certain franchise issued to X. X.
Xxxxxxx, or his nominee, on the 18th day of May 1959, and, transferred to Giant Utility Company on
the 7th day of May 1962 and held by said Giant Utility Company continuously since that date.
Now, therefore it is hereby Ordered by the Pinal County Board of Supervisors, all being
present this date in Regular Continued Session, all being fully advised in the premises, all
finding the public interest best served; that the records of this Board shall henceforth indicate
that said franchise shall be held in the name of Xxxxxxxxx Xxxxxx Utility Company.
Said franchise is for the establishment and for maintaining and operating a system for the
distribution and sale of water for Domestic and Commercial purposes in the following described
areas:
Sections 13 thru 15; Sections 22 thru 27 and Sections 34 and 36 in Township 6S, Range 4E, and,
Sections 13 thru 36 in Township 6S, Range 5E, G&SRB&M, Pinal County, State of Arizona.
Done in Open Session this 22nd day of February 1977.
ATTEST:
|
PINAL COUNTY BOARD OF SUPERVISORS | |||||
/s/ Xxx Xxxxxxx
|
/s/ Xxxxx X. Xxxxx, Xx.
|
| /s/ Xxxxxx X. Xxx | ||||
| Xxxxxx X. Xxx, Member of (Illegible) | ||||
| /s/ Wm. Xxxxxxxxx | ||||
| Xx. Xxxxxxxxx, Member | ||||
WATER SYSTEM AGREEMENT
THIS AGREEMENT is made and entered into this 2nd day of June 1999 by and among ARIZONA WATER
COMPANY, an Arizona corporation, (the “Company”), XXXXXXX XXXXXXXX, a sole proprietor
(“Developer”), and XXXXXXXXX XXXXXX UTILITY COMPANY, an Arizona corporation (“Xxxxxxxxx Xxxxxx”).
RECITALS
A. Developer is planning a mixed-use residential and commercial development surrounding the
existing Xxxxxxxxx Xxxxxx resort hotel, restaurant and golf course to be known as the Xxxxxxxxx
Xxxxxx Master Planned Community (the “Development”) to be located in Xxxxxxx 00, Xxxxxxxx 0 Xxxxx,
Xxxxx 0 Xxxx, Xxxx and Salt River Base and Meridian, Pinal County, Arizona, generally westerly from
and in the vicinity of the City of Casa Grande, Arizona, as shown on the map in Attachment “A-1”
hereto, and more particularly described in Attachment “A-2” hereto, and which Attachments “A-1” and
“A-2” are by this reference incorporated herein. Developer represents that it will provide the
Company with sufficient documentary evidence showing that it either owns all of the real property
in such Section 20 in fee or holds the lawful right to represent and bind the fee owner to the
extent contemplated by this Agreement.
B. Developer has requested that the Company make available and provide, and the Company is
desirous of making available and providing, water service to the Development, and to future
development within Sections 30 and 31 of said Township 6 South, including, but not limited to,
domestic, irrigation, reclaimed water, public fire hydrant service and private fire service
(hereinafter collectively referred to as “Water Service”).
C. Developer acknowledges that Water Service can be provided
to the Development by Company only in accordance with this
Agreement, the Company’s tariffs on file with the Arizona
Corporation Commission (the “Commission”), and the rules,
regulations and orders of any other governmental agency
having jurisdiction in the premises.
D. The Company and Developer agree that to provide water service to the first 350 lots of the
Development, it will be necessary to extend a water main from the Company’s closest existing main
of adequate size and pressure to the closest compatible location in the Development. The Company
and the Developer agree that the cost of the main will be advanced by the Development under the
applicable provision of A.A.C. R14-2-406 and Section V of the Company’s Terms and Conditions for
the Provision of Water Service which may be amended from time to time (hereinafter referred to as
the “Main Extension Rule”).
E. Developer understands that, in order for the Company to provide Water Service to the
Development, it will be necessary for Developer to make arrangements with the Company for the
design, construction and installation of certain water system infrastructure facilities consisting
of off-site water transmission and distribution mains and appurtenances required by the Company to
provide Water Service to the Development (which facilities are collectively
-1-
referred to herein as “Infrastructure Facilities”), as listed in Attachment “B” hereto, which by
this reference is incorporated herein. Developer further understands that the Infrastructure
Facilities are to be constructed or installed either by the Company or at its direction.
F. Sections 20, 30 and 31 of said Township 6 South are located within Xxxxxxxxx Xxxxxx’x
Certificate of Convenience and Necessity issued by the Commission, and as shown in Attachment “C-l”
hereto and more particularly described in Attachment “C-2” hereto, which by this reference is
incorporated herein. The Company and Xxxxxxxxx Xxxxxx are willing and able to make the appropriate
filings with the Commission to have the Development and Sections 30 and 31 of said Township 6 South
deleted from Xxxxxxxxx Xxxxxx’x Certificate of Convenience and Necessity and added to the Company’s
Certificate of Convenience and Necessity.
G. Subject to the terms and conditions of this Agreement. the Company is willing and able to
provide Water Service to the Development in accordance with the Company’s tariffs on file with the
Commission, and the rules, regulations and orders of the Commission, and subject to any approval of
the Commission which may be required.
In consideration of the premises and mutual agreements, covenants, promises, representations
and understandings contained in this Agreement and other good and valuable consideration, the
parties hereto have entered into the following Agreement.
1. WATER SERVICE; INFRASTRUCTURE FACILITIES. The Company and Developer agree that, subject to
the conditions of Paragraph 8 of this Agreement, Company will provide Water Service to the
Development, and Infrastructure Facilities will be constructed and installed in accordance with
this Agreement, the Company’s tariffs on file with the Commission, and the rules, regulations and
orders of the Commission and any other governmental agency having jurisdiction in the premises.
2. MAIN EXTENSION CONTRACT FOR INFRASTRUCTURE FACILITIES. In the event a water line of
sufficient size has not been extended down State Highway 84 past the Development before Developer
requests water service as described below, the Company and Developer further agree that, to provide
Water Service to the Development and maintain water system capacity for the Company’s existing and
future customers in the general area of the Development, Developer will be required to enter into a
main extension contract with the Company for construction and installation of Infrastructure
Facilities that previously have not been constructed and installed. The applicable provisions of
the Main Extension Rule shall apply to the extent not in conflict with this Agreement or any main
extension contract executed by the Company and Developer with respect to the Infrastructure
Facilities. Such Infrastructure Facilities must be constructed and installed following Developer’s
request for water service to serve lots in addition to the first 350 lots in the Development and no
lots in addition to the first 350 lots will be served until the construction and installation of
Infrastructure Facilities are completed.
3. THE COMPANY’S COST ESTIMATE; DEPOSIT. Prior to entering into any main extension contract
for Infrastructure Facilities, Developer will deposit with the Company the amount of the Company’s
estimated cost of construction and installation of such Infrastructure
-2-
Facilities including, but not limited to, engineering overheads, and related costs pursuant to the
Main Extension Rule. All Infrastructure Facilities shall be designed and constructed in accordance
with the Company’s design standards and specifications. Plans for the design of the Infrastructure
Facilities shall be prepared by Developer and shall be subject to the Company’s prior written
approval. Any amount so deposited for the Infrastructure Facilities shall be adjusted to actual
cost after installation of the Infrastructure Facilities is completed and all costs are known. If
the amount of the deposit is less than the Company’s actual costs, Developer will pay the
difference upon presentation of an invoice therefore. If the amount of the deposit exceeds the
Company’s actual costs, the Company shall refund the difference to Developer within sixty (60) days
after the Company’s actual costs have been determined.
4. EXCLUSIVE WATER SERVICE. It is expressly agreed and understood that the Company shall be
the sole purveyor of all Water Service to the Development. However, the parties specifically agree
that, at the option of the Developer and Xxxxxxxxx Xxxxxx, irrigation water and effluent may be
provided to the golf course landscaping and golf course facilities located within the Development
by the Developer or Xxxxxxxxx Xxxxxx and any treated or untreated CAP water must be provided by the
Company.
5. ADDITIONAL MAIN EXTENSION CONTRACTS. The Company will enter into main extension contracts
with Developer or others in accordance with the Main Extension Rule for the purpose of providing
water main extensions in addition to those described in this Agreement as actual development occurs
in the Development. The Company will enter into such additional main extension contracts provided
all Infrastructure Facilities required by the Company have been constructed and installed or are
being constructed and installed in accordance with this Agreement.
6. EASEMENTS AND REAL PROPERTY PARCELS. Developer shall grant or cause to be granted to the
Company, upon the Company’s request, all easements the Company requires as part of the
Infrastructure Facilities, on forms supplied by the Company, as well as easements for ingress and
egress purposes. The value of such easements shall not be subject to refund.
7. TITLE TO FACILITIES; GOVERNMENTAL AUTHORIZATIONS. Title to all facilities constructed and
installed under this Agreement shall be vested in the Company, which shall own and maintain such
facilities. Developer agrees to execute any and all documents, in a form acceptable to the Company
evidencing, where Company deems necessary, any transfer of title to the Company, free and clear of
liens, encumbrances, claims, assessments, and any other item not acceptable to the Company.
Developer agrees to assist the Company in obtaining any and all permits, licenses, franchises or
other governmental authorizations that may be required for the construction and installation of
Infrastructure Facilities.
8. CORPORATION COMMISSION APPLICATION. Promptly following the execution of this Agreement by
the parties hereto, the Company and Xxxxxxxxx Xxxxxx will make an appropriate joint application
with the Commission for approval of this Agreement and for the purpose of securing authority to
allow the Company to expand its certificated area to include the portions of Xxxxxxxxx Xxxxxx’x
certificated area shown in Attachment “C-1” hereto, and to have
-3-
such portions of the certificated area deleted from Xxxxxxxxx Xxxxxx’x Certificate of Convenience
and Necessity. The Company may also make such other filings as it otherwise deems necessary to
serve the Development. Developer will fully cooperate with and support the application or other
filings. The Company’s obligations under this Agreement are, at the Company’s option, subject to
its receipt of an acceptable order or orders of the Commission transferring such portions of the
certificated area to the Company and authorizing it to serve the Development, which does not impose
terms, conditions, or duties upon the Company which the Company considers unduly burdensome or
unreasonable. For the purpose of this paragraph, a “final order” shall be understood to mean an
order concerning which all appeal periods have expired or in the event of an appeal then upon the
entry of the final order, judgment or decision of the Commission or the courts, as the case may be.
The parties agree that if the Commission does not allow the Company to expand its certificated urea
to include the Development, and to have the Development deleted from Xxxxxxxxx Xxxxxx’x Certificate
of Convenience & Necessity, this Agreement shall be deemed null and void and the parties shall have
no further obligations under this Agreement.
9. REMEDIES. If Developer fails to perform any monetary obligation under this Agreement or
under the provisions of any main extension contract Developer enters into pursuant to this
Agreement, the Company, in addition to and without waiving the exercise of any rights and remedies
it may have, shall have the right to offset any refund provided in any such main extension
contract. Also, the Company shall have the right to offset against any refund due pursuant to such
main extension contract the amount, either in part or in full, of any indebtedness due or owing by
Developer to the Company.
10. INDEMNITY. Developer agrees to indemnify the Company and hold it harmless from and against
any and all liability for the death of, or injury to, any person or for the loss of, or damage to,
any property including, without limitation, the Infrastructure Facilities, which may arise in
connection with the development of the Development or by reason of acts done or omitted to be done
in the design and installation of the Infrastructure Facilities or the performance of any work by
Developer or Developer’s employees, agents, representatives, contractors, or subcontractors, or
which may result from such design and installation, or work, and Developer further agrees to
reimburse the Company upon demand for all costs and expenses which the Company may incur in
resisting or defending any claim which may be made against the Company for any such death,
injury, loss, or damage to any person or property, save and except in those instances where such
death, injury, loss, or damage is caused solely by the willful act or negligence of the Company.
Developer expressly agrees that the agreements contained in this section shall survive the
performance of this Agreement or any Agreement for Extension of Water Facilities entered into
pursuant to this Agreement and shall remain in full force and effect notwithstanding such
performance.
11. INSURANCE.
A. Developer agrees that during the period beginning with the date of
this Agreement, continuing for the duration of construction of the Infrastructure
Facilities, and terminating not earlier than twelve months following final
acceptance of the same by the
-4-
Company, the following insurance will be maintained in full force and effect by Developer without
cost or expense to the Company:
(1) Comprehensive general liability insurance, including bodily injury liability insurance,
with limits of not less than One Million Dollars ($1,000,000) per person and Two Million Dollars
($2,000,000) per occurrence; and property damage insurance with a limit of not less than One
Million Dollars ($1,000,000) per occurrence; insuring the Company against any and all claims and
liability including, without limitation, claims and liability for the death of or injury to any
person or for the loss of or damage to any property, which may arise in connection with the
Development or by reason of acts done or omitted to be done in the design and installation of the
Infrastructure Facilities or which may result from such design and installation, and further
insuring the Company against all costs and expenses incurred by the Company in resisting any claim
that may be made against the Company for any such liability, injury, or damage to any person or
property.
(2) Comprehensive automobile liability insurance with limits of not less; than One Million
Dollars ($1,000,000) per person and Two Million Dollars ($2,000,000) per occurrence; and property
damage insurance with a limit of not less than One Million Dollars ($1,000,000) per occurrence;
such insurance shall protect Developer and the Company against all claims for injuries to persons
and damage to property of others arising from the use of motor vehicles, and shall cover operation
on or off the site of all motor vehicles, whether they are owned, non-owned, or hired.
(3) Builder’s Risk insurance of the “all risks” type, which shall be written in completed
value form, and shall protect Developer and the Company against risks of damage to the
Infrastructure Facilities including, without limitation, buildings, structures, and materials and
equipment. The amount of such insurance shall be not less than the insurable value of the
Infrastructure Facilities at completion. Builder’s Risk insurance shall provide for losses to be
payable to the Company. The policy shall contain a provision that, in the event of payment for any
loss under the coverage provided, the insurance company shall have no rights of recovery against
Developer and the Company. The Builder’s Risk policy shall insure against all risk of physical loss
or damage to property from any external cause including flood and earthquake.
(4) Workers’ Compensation and Employers’ Liability insurance in accordance with statutory
requirements and an endorsement thereto shall be written providing that the underwriter thereof
waives all right of subrogation against the Company by reason of any claim rising directly or
indirectly from any work on or associated with the Development.
B. Each such policy shall: (1) be issued by an insurance company approved in writing by the
Company, which is qualified to do, and is doing, business in the State of Arizona; (2) name the
Company as an additional insured; (3) specify that it acts as primary insurance and that no
insurance obtained by the Company shall be called upon to cover a loss under the policy so procured
or caused to be procured by Developer; (4) provide that the policy shall not be canceled or altered
without thirty (30) days’ prior written notice to the Company; and (5) otherwise be in form
satisfactory to the Company. Each such policy or a certificate thereof shall be delivered to the
Company concurrently with the execution of this Agreement.
-5-
12. ASSURED WATER SUPPLY. As of the date of this Agreement, the Company’s Casa Grande water
system bas not been designated as having an Assured Water Supply by the Arizona Department of Water
Resources (the “ADWR”). As such, the Developer will be required to apply to the ADWR for a
Certificate of Assured Water Supply for each subdivision within the Development. While obtaining a
Certificate of Assured Water Supply for the Development shall be the sole responsibility of
Developer, the Company shall cooperate with Developer in supplying necessary information to the
ADWR.
13. TIME IS OF THE ESSENCE. The Company and Developer agree that time is of the essence and
that each will diligently perform its obligations hereunder in a timely fashion in accordance with
the provisions of this Agreement.
14. CHANGES OR MODIFICATIONS. The parties hereto may change or modify this Agreement only
upon written consent of the parties hereto.
15. NOTICE PROVISIONS. Written notices to any party to this Agreement concerning this
Agreement shall be sent by certified mail or hand delivered (except that invoices and other similar
communications may be sent by first class mail) addressed as follows:
| To the Company: | Arizona Water Company | |||
| Attention: President | ||||
| 0000 Xxxxx Xxxxx Xxxxxx Xxxxxxx | ||||
| Xxxx Xxxxxx Xxx 00000 | ||||
| Xxxxxxx, Arizona 85038-9006 | ||||
| To Developer: | Xxxxxxx Xxxxxxxx | |||
| Xxxxxxx Xxxxxxxx & Company | ||||
| 0000 Xxxx Xxxxxx | ||||
| Xxxxxxxx, XX 00000 | ||||
| To Xxxxxxxxx Xxxxxx: | Xxxxxxxxx Xxxxxx Utility Company | |||
| Attention: Xxxxxxx Xxxxxxxx | ||||
| 0000 Xxxx Xxxxxx | ||||
| Xxxxxxxx, XX 00000 |
16. SUCCESSION. This Agreement shall be binding upon and shall inure to the benefit of the
successors and assigns of the parties.
17. COMPLETE AGREEMENT. Except for the main extension contracts referred to in paragraphs 2
and 5 of this Agreement, this instrument contains the entire agreement between the parties with
respect to the subject matter contained herein and no amendment or modification shall be binding
unless made in the manner provided for in writing and signed by duly authorized representatives of
the parties hereto.
-6-
18. HEADINGS. Headings on each paragraph or subparagraph are merely for convenience and shall
under no circumstances be used to interpret or construe this Agreement.
19. ATTORNEY’S FEES. In the event any claim, controversy, or legal action arises out of this
Agreement, the prevailing party shall be entitled to recover from the other party in such action
all costs, expenses and fees incurred therein by said prevailing party (including such attorney’s
fees as shall be fixed by the court).
20. FURTHER INSTRUMENTS. Company, Developer and Xxxxxxxxx Xxxxxx agree that they each shall
execute any further instruments and perform any further acts which are or may become reasonably
necessary to carry out the terms of this Agreement.
21. COMMISSION. Nothing contained herein shall be construed as limiting in any manner (a) the
Company’s right to cancel, amend, or file additional tariffs in accordance with the Commission’s
rules, regulations and orders; or (b) the Commission’s authority or jurisdiction over the subject
matter of this Agreement.
22. WAIVER. No wavier hereunder, expressed or implied, shall imply any other waiver, at the
same or subsequent time, whether of the same obligation or of any other obligation. No waiver
hereunder shall be deemed effective unless expressly set forth in writing.
23. CONFLICTS. If any conflict arises between the provisions of this Agreement and the
Company’s tariffs on file with the Commission and the rules and regulations of the Commission, the
provisions of this Agreement will prevail.
IN WITNESS WHEREOF, each of the parties hereto has caused this instrument to be executed by
their respective officers theretofore duly authorized as of the date first written above.
| ARIZONA WATER COMPANY, an Arizona corporation |
||||||
By
|
[Illegible]
|
|||||
Its
|
President | |||||
| XXXXXXX XXXXXXXX, a Sole Proprietor |
XXXXXXXXX XXXXXX UTILITY COMPANY, an Arizona corporation |
|||||||||
By
|
/s/ Xxxxxxx Xxxxxxxx
|
By | /s/ Xxxxxxx Xxxxxxxx
|
|||||||
Its
|
Its | President | ||||||||
-7-
ATTACHMENT “A-2”
Section 20,
Township 6 South. Range 5 East of the Gila and Salt River Base and Meridian, Pinal
County, Arizona.
ATTACHMENT “B”
Infrastructure Facilities:
Three and one half miles of 16-inch ductile iron pipe installed along State Hwy.84 from Company’s
Casa Grande system to the Development.
ATTACHMENT “C-2”
Section 20. Section 30, and Section 31, all in Township 6 South, Range 5 East of the Gila and Salt
River Base and Meridian, Pinal County, Arizona.
|
PINAL COUNTY DEPARTMENT OF PUBLIC WORKS Highways • Flood Control • Fleet Maintenance • Emergency Services X.X. Xxx 000. 31 N Final St., Building F, Florence, AZ 00000 (000) 000-0000 FAX (000) 000-0000 APPLICATION FOR PERMIT TO USE RIGHT OF WAY (UTILITY COMPANIES) |
A MINIMUM FEE OF $50.00 OR $0.13 CENTS PER LINEAR FOOT FOR TRENCHING (WHICHEVER IS GREATER) MUST
ACCOMPANY THIS APPLICATION AT THE TIME OF FILING AS WELL AS TWO (2) SETS OF COUNTY APPROVED PLANS.
IF THE WORK DESCRIBED HEREIN IS TO BE CONNECTED TO OR BENEFIT APPLICANTS REAL PROPERTY, A
DESCRIPTION OF THAT PROPERTY MUST ALSO ACCOMPANY THE APPLICATION AT THE TIME OF FILING. THE FILING
OF THIS APPLICATION AND THE PAYMENT OF THE FEE DO NOT GURANTEE OR GRANT THE INSURANCE OF A
PERMIT.
THIS APPLICATION IS FOR WORK IN FINAL COUNT RIGHT-OF-WAY ONLY. VERIFICATION OF RIGHT-OF-WAY IS
THE RESPONSIBILITY OF THE PERMITTEE.
IF GRADED OR DISTURBED AREA EQUALS OR EXCEEDS 0.1 AC., YOU MUST APPLY FOR A
DUST CONTROL PERMIT FROM AIR QUALITY CONTROL (520-866-6929).
LINEAR FEET: (TRENCHING) 14, 340
|
PERMIT FEE | |||
APPLICANT:
FIRM/INDIVIDUAL NAME: XXXXXXXXX XXXXXX UTILITY COMPANY
CONTACT PERSON (If Different from Above): XXXXXXX XXXXXXXX
TITLE: XXXXXXXXX
XXXXXXX (Xxxx, Xxxxxx, Xxxxx, Zip Code): 000 X. XXXXXX XXXXXX XXXXXXXX, XX 00000
PHONE & FAX: 000-000-0000 000-000-0000
CONTRACTOR NAME & LICENSE NO:
SCOPE OF WORK/DESCRIPTION: (i.e. overhead, underground, trench, bore, pavement cut, length)
CONSTRUCT 18TH GEAUNTY FLOW IRRICATION PIPE LINE, ROAD BORES & MANHOLES PER CONSTRUCTION DRAWINGS
SPECIAL CONDITON (to be completed by QA Supervisor) |
||
RIGHT OF WAY LOCATION:
|
Section 19, 30, 31 | Township 65 | Range 5E |
ROAD NAME & OTHER INFORMATION: (Closest Intersection, Direction, Distance)
XXXXXXXXXX ROAD FROM 1/2 [ILLEGIBLE] North of SR84 13,000 feet South to SELMS HWY; SELMS HWY From
Xxxxxxxxxx Xx 1,300 feet west.
EXPECTED:
|
Start Date: Aug 15 | Duration (Days) 60 | Completion Date Oct 15 |
/s/ Xxxxxxx Xxxxxxxx
|
8-1-03 |
THIS APPLICATION IS NOT A PERMIT. NO WORK WILL BE ALLOWED TO TAKE PLACE INSIDE THE
RIGHT-OF-ANY UNTIL A PERMIT IS ISSUED BY FINAL COUNTY, HEREINAFTER REFERRED TO AS “COUNTY’ AND
POSTED BY PERMITTEE ON SITE. THE PERMIT WILL BE SUBJECT TO GENERAL, CONDITIONS SET FORTH HEREIN AND
ANY SPECIAL CONDITIONS APPLICABLE TO THE SCOPE OF WORK. ALL MINIMUM FEES ARE NON REFUNDABLE.
|
ARIZONA WATER COMPANY 0000 Xxxxx Xxxxx Xxxxxx Xxxxxxx — X.X. Xxx 00000 — Phoenix, AZ. 85038-9006 Voice: (000) 000-0000 — Fax: (000) 000-0000 |
NON-POTABLE WATER FACILITIES CONTRIBUTION AGREEMENT |
||
CUSTOMER:
|
Xxxxxxxxx Xxxxxx Utility Company | Contact No: | ||||
Address:
|
00000 Xxxx Xxxx Xxxxxxx | X.X. No: | ||||
| Case Xxxxxx, XX 00000 | ||||||
| DATE OF AGREEMENT: | October 10, 2003 | |||||
WATER FACILITIES: |
Install 12 ·inch meter, two water valves and related appurtenances to serve Xxxxxxxxx Xxxxxx golf course | |||||
CUSTOMER’S
DEVELOPMENT:
|
Xxxxxxxxx Xxxxxx Resort | |||||
| ESTIMATED COST OF CONSTRUCTION OF THE WATER FACILITIES: | TOTAL $5000.00 | |||||
THIS AGREEMENT Is made and entered into by and between ARIZONA WATER COMPANY, an Arizona
corporation, (hereinafter called the “Company”), and the Customer as shown above. In consideration
of the services to be performed by the Company and the sums of money to be paid by the Customer, in
accordance with this Agreement, it is agreed as follows:
| 1. | The Company Will construct, or will arrange for the construction of the Water Facilities as described above. | ||
| 2. | The Customer will pay to the Company upon signing this Agreement the Total shown above, receipt of which is hereby acknowledged by the Company. The total amount shown above is the Company’s estimated cost of construction of the Water Facilities. The Company will determine and inform the Customer of the actual cost of construction within thirty (30) days after the completion of construction or the Company’s receipt of all invoices and charges related to the construction. The Customer and the Company agree that, if the Company’s actual cost of construction is less than the total amount paid by the Customer, the Company shall refund the difference to the Customer. If the Company’s actual cost of construction is more than the estimated cost of construction of the Water Facilities, the Customer shall pay the difference to the Company within thirty (30) days of receipt of an invoice from the Company. Information about the actual cost of construction will be forwarded to the Customer to be an attachment to this Agreement. Except as expressly provided in this section, all amounts the Customer pays to the Company are non-refundable. In lieu of making this payment, Xxxxxxxxx Xxxxxx Utility Company will install the Facilities and upon their completion will convey ownership of the Facilities to the Company through a xxxx of sale. For purposes of this Agreement and billing under NP-260, the value of the Facilities is estimated at five thousand dollars ($5000.00). | ||
| 3. | Non-potable CAP water will be furnished under the Company’s Non-Potable Central Arizona Project Water Tariff No. NP-260 (ACC No. 440) (“Tariff”) which is incorporated by reference herein. | ||
| 4. | The Customer has specified the maximum monthly and annual quantities of non-potable CAP water in acre feet (AF) that it intends to use under the Tariff and pursuant to this Agreement, as shown on the attached schedule, which is incorporated by reference herein. This quantity of water has been used to design the Water Facilities and will be the Customer’s maximum demand for non-potable CAP water (“CAP Demand”) during any calendar year. The Customer will be responsible for the annual Central Arizona Water Conservation District (“CAWCD”) M&J Water Service Capital Charge on the CAP Demand and for the other charges set forth in the Tariff. | ||
| 5. | The Arizona Department of Water Resources (the “Department”) has adopted management plans for Active Management Areas that may require the Company to report the Customer to the Department as an “Individual user.” Should the Customer be determined to be an “Individual user,” the Customer will be responsible for complying with the Department’s Individual user requirements, as the Department determines. | ||
| 6. | The Water Facilities shall be the sole property to the Company, and the Customer shall have no right, title or interest in or to any such Water Facilities. | ||
| 7. | The size, design, type, quality, location and manner of Installation of the Water Facilities shall be specified by the Company to comply with requirements of the Arizona Corporation Commission or other public agencies having jurisdiction. | ||
| 8. | The Customer agrees to furnish to the Company at the Customer’s expense adequate and recordable easements and rights-of-way as required by the Company for the installation of the Water Facilities. The Customer agrees that all easements and rights-of-way shall be free of obstacles which might interfere with the construction or operation of the Water Facilities. If the project of which Customer’s Development is a part involves road construction, all road construction, all roads and drainageways will be brought to grade by the Customer prior to beginning the installation of the Water Facilities. No pavement or curbs shall be installed prior to completion of all Water Facilities. If any street, road, alley or drainageway is installed at a different grade or location after the beginning of the installation of Water Facilities, the Customer shall bear all costs incurred by the Company to relocate the Water Facilities as a result of the different grade or location. Such costs shall be non-refundable. | ||
| 9. | The Customer agrees to pay to the Company any additional costs incurred as a result of design changes made or caused by the Customer or his agent, the Arizona Department of Environmental Quality, the Arizona Corporation Commission, the CAWCD, any county health department or other public agency under whole jurisdiction the subject construction may fall, or anticipated changes in existing Company facilities, due to any work associated with the Customer’s Development. Such additional costs shall be non-refundable. | ||
| 10. | This Agreement shall be binding upon and for the benefit of the heirs, administrators, executors, successors and assigns of the Company and the Customer. No assignment or transfer of this Agreement by the Customer shall be binding upon the Company or create any rights in the assignee until such assignment or transfer is approved and accepted in writing by the Company. | ||
| 11. | This Agreement, and all rights and obligations hereunder, including those regarding non-potable CAP water service to the Customer, are subject to the Company’s tariffs and the requirements of the CAWCD and other agencies having jurisdiction. |
| ARIZONA WATER COMPANY Company |
Xxxxxxxxx Xxxxxx Utility Company Customer |
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By:
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/s/ Xxxxxxx X. Xxxxxxxx
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By: | /s/ Xxxxxxx Xxxxxxxx
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| Xxxxxxx X. Xxxxxxxx | Title: President | |||||||||
| Title: President | ||||||||||
