WATER SHARES PURCHASE AGREEMENT
"THIS AGREEMENT is made and entered into this 5th day of March
1999, between The XXXXXX XXXXXX, Xxxx Xxxxxx Xxx 000, Xxxxxxxx,
Xxxxxx, 00000, hereinafter referred to as the "Seller" and The
Great Basin Water Company, Xxxx Xxxxxx Xxx 0000, Xxxxxxxx,
Xxxxxx, X0000, and/or assigns and/or nominees, hereinafter
collectively referred to as the "Purchaser" (the term
"Purchaser'' shall extend to in the first instance the original
Purchaser named herein and also the assigns of such Purchaser.);
WITNESSETH:
WHEREAS, the Seller is the record owner and holder of the claimed
water shares of the water rights on parcels 01-53521, all in pump
well registrations under xxxxx number 604107, (a 14 inch well),
604106, (a 14 inch well), 604105, (a 14 inch well) and 604108,
(a 16 inch well), (2,733.35 acre feet in total), all in pump well
shares (Arizona), and;
WHEREAS, the Purchaser desires to purchase all of the water
shares from the pump xxxxx, and the Seller desires to sell or
cause to be sold all of the pump well shares, upon the terms and
subject to the conditions hereinafter set forth;
NOW THEREFORE, in consideration of- the mutual covenants and
agreements contained in this Agreement, and in order to
consummate the purchase and the sale of the water shares
aforementioned, it is hereby agreed as follows:
1. PURCHASE AND SALE: CLOSING
a. Purchase and Sale of Sellers Pump Well Accounts.
Subject to the terms and conditions hereinafter set forth,
at the closing of the transaction contemplated hereby, the
Seller shall sell convey and transfer or cause to be sold,
conveyed or transferred, all of the Water Shares (2,733.35
acre feet) and deliver to the purchaser certificates, Or
reports representing shares, and the Purchaser shall
purchase from the Seller the Water Shares in consideration
of the purchase Agreement. The certificates representing the
Water Shares for the total, (2,733.35 pump well shares)
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shall be duly endorsed for transfer or accompanied by
appropriate water share transfer powers duly executed in
blank, in either case with signatures guaranteed in the
customary fashion, and shall have all the necessary
documentary transfer tax stamps affixed thereto at the
expense of the Seller.
Procedures for Closing. The Closing of the transactions
contemplated by this Agreement (the Closing), shall be held
at the offices of the The Great Basin Water Company, on the
16th day of March, 1999, at 1:00 P.M. or such other place,
date and time as the parties hereto may otherwise agree
(such date to be referred to in this Agreement as the
Closing Date), so long as the closing is within one year of
the date of the agreement. After such time, the controlling
corporation shall be the purchaser, The Great Basin Water
Company, and is to be governed under the laws of the State
of Nevada.
2. AMOUNT AND PAYMENT OF PURCHASE PRICE. The total
consideration and method of payment thereof are fully set out in
Exhibit "A" attached hereto and made a part hereof by this
reference.
3. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby
warrants and representS:
a. Organization AND Standing. Corporation is a corporation
duly organized, validly existing and in good standing under
the laws of the State of Nevada and has the corporate power
and authority to carry on its business as it is now being
conducted. A true and correct copy of:
i. the certificate of Incorporation and" all amendments
thereto to date certified by the Secretary of State of
the Sate of Nevada, and
ii. the Bylaws as now in effect,
will be delivered by Seller to the Purchaser prior to the
Closing Date. The Corporations minute books will be made
available to the Purchaser and its representatives at any
reasonable time or times prior to the Closing for inspection
and will be complete and correct as of the date of any such
inspection.
b. Capitalization. The authorized capital accounts of the
Corporation consists of Twenty Four Million Shares Common
Stock of $0.001 par value common stock, and One Million
Shares of Preferred Stock at $0.10 par value.
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C. Restrictions on Stock.
i. Neither the Corporation nor Seller is a party to any
agreement, written or oral, creating rights in respect
to the Corporations Accounts any third person or
relating to the voting of the Corporations Accounts.
ii. Seller is the lawful owner of all the Corporation's
Accounts, free and clear of all security interests,
liens, encumbrances, equities and other charges.
iii. There are no existing warrants, options, stock
purchase agreements, redemption agreements,
restrictions of any nature, calls, or rights to
subscribe of any character relating to the Capital
accounts of the Corporation, nor are there any
securities convertible into such accounts.
d. Subsidiaries.. The Corporation has The Shadow Ridge
Water Company as a wholly owned subsidiary.
e. Authority Relative to this Agreement. Except as
otherwise stated herein the Seller has full power and
authority to execute this Agreement and carry out the
transactions contemplated by it and no further action is
necessary by the Seller to make this Agreement valid and
binding upon Seller and enforceable against it in accordance
with the terms hereof, or to carry out the actions
contemplated hereby. The execution, delivery and performance
of this Agreement by the Seller will not:
i. Constitute a breach or a violation of the
Corporation's Certificate of Incorporation,
By-Laws or of any law, agreement, indenture, deed of
trust, mortgage, loan agreement or other instrument to
which it is a party, or by which it is bound;
ii. constitute a violation of any order, judgement or
decree to which it is a party or by which its assets or
properties are bound or affected; or
iii. result in the creation of any lien, charge or
encumbrance upon its assets or properties, except as
stated herein.
f. Financial Statements. Seller is furnishing financial
statements to the Corporation which illustrates pricing of
water shares in the immediate area as an inducement to
Purchaser to purchase the Corporation's Accounts and
accordingly.
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Seller warrants and represents the operational (operating)
history or condition of the pump xxxxx as indicated by the
operating statements turned over to Purchaser. Moreover,
Seller warrants and represents that at closing the Corporation
and the Corporation's accounts will not be subject to any
liability save and except those specifically enumerated in
Exhibit "B" attached hereto and made a part hereof.
To the extent that liabilities are discovered by Purchaser, after
closing which relate to events prior to closing, Seller shall be
responsible to forthwith pay such liabilities, including income
tax liabilities in cash within fifteen (15) days thereof, or
alternatively, if Seller objects to such liabilities in good
faith, litigate the issue and indemnify and save harmless
Purchaser from any claim for such income tax liability. This
indemnification as it relates to income tax liabilities of
the Corporation shall terminate on-the tenth (10th) day after the
expiration of the applicable period of limitations on assessments
and collections applicable to such taxes under the Internal
Revenue Code. Moreover, the aforementioned indemnity shall not
apply to any tax liability which may occur by reasons of actions
taken by the Purchaser including, but not limited to, the
liquidation of the Corporation.
g. Tax Matters. The Corporation has timely prepared and filed all
federal, state and local tax returns and reports as are and have
been required to be filed and all taxes shown thereon to be due
have been paid in full.
h. Litigation. The Corporation is not a party to any litigation,
proceeding or administrative investigation and to the best
knowledge of the Seller none is pending against the Corporation
or its properties.
i. Properties. The Seller has good and sellable title to all of
its properties and assets which are those properties and assets
set out in Exhibit "C" attached hereto and made a part hereof. At
closing, such properties and assets will be subject to no
mortgage, pledge, lien, conditional sales agreement, security
agreement, encumbrance or charge, secured or unsecured, except
for real estate mortgages or taxes and tangible personal
properety taxes which shall be prorated as of the date of
closing, or those specifically set out in Exhibit "B".
j. compliance with Applicable Law. None of the Corporation's
Actions are prohibited by or have violated or will violate any
law in effect on the date of this Agreement or on the date of
closing. None of the actions of the
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k. Documents for Review. The Corporation's documents
enumerated in Exhibit "D", attached hereto and made a
part hereof, are true, authentic, and correct copies of
the originals, or, if appropriate, the originals
themselves, and no alterations or modifications thereof
have been made.
4. REPRESENTATIONS AND WARRANTIES OF SELLER AND PURCHASER.
Seller and Purchaser hereby represent and warrant that there has
been no act or omission by Seller, Purchaser or the Corporation
which would give rise to any valid claim against any of the
parties hereto for a brokerage commission, finders fee or other
like payment in connection with the transaction contemplated
hereby.
5. TRANSACTIONS PRIOR TO THE CLOSING. Seller hereby covenants the
following:
a. Conduct of Corporations Business Until Closing. Except
as Purchaser may otherwise consent in writing prior to the
Closing Date, Seller will not enter into any transaction,
take any action or fail to take any action which would
result in, or could be reasonably expected to result in or
cause, any of the representations and warranties of Seller
contained in this Agreement, to be not true on the Closing
Date, but may continue to provide water to any agricultural
demand under present or negotiated contracts for such
purposes.
b. Resignations. Seller will deliver to Purchaser prior to
the Closing Date the registration statements of each well as
registered from the Department of Water Resources, State of
Arizona, each such registration being duly affixed with file
numbers.
c . Satisfactions. Seller will deliver to Purchaser prior
to the Closing Date a satisfaction of any mortgage and lien
holder of the Corporation's Property, satisfactory in form
and substance to the Purchaser and his counsel indicating
that the then outstanding unpaid principal balance of any
promissory note secured thereby has been paid in full prior
to or simultaneously with the Closing (if any), except
mortgages for real property, which the purchaser shall
assume.
d. Advice of Changes. Between the date hereof and the
Closing Date, Seller will promptly advise Purchaser in
writing of any fact which, if existing or known at the date
hereof, would have been required to be set forth herein or
disclosed pursuant to this Agreement, or which would
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represent a material fact the disclosure of which would be
relevant to the Purchaser.
6. EXPENSES. Each of the parties hereto shall pay its own
expense in connection with this Agreement and the transactions
contemplated hereby, including the fees and expenses of its
counsel and its certified public accountants and other experts.
7. GENERAL.
a. Survival of Representations and Warranties. Each of
parties to this Agreement covenants and agrees that Seller's
representations, warranties, covenants statements and
agreements contained in this Agreement the exhibits heretof,
and in any documents delivered Seller to Purchaser in
connection herewith, shall survive the Closing Date and
terminate on the Second anniversary of such date, except, as
set forth in this Agreement, the exhibits hereto or in the
documents and papers delivered by Seller to Purchaser in
connection herewith, there are no other agreements,
representations, warranties or covenants -by or among the
parties hereto with respect to the subject matter hereof.
b. Waivers. No action taken pursuant to this Agreement,
including any investigation by or on behalf of any party
shall be deemed to constitute a waiver by the party taking
such action or compliance with any representation, warranty,
covenant or agreement contained herein, therein and in any
documents delivered in connection herewith or therewith. The
waiver by any party hereto of a breach of any provisions of
this agreement shall not operate or be construed as a waiver
of any subsequent breach.
C. Notices. All notices, requests, demands and other
communications which are required or may be given under this
Agreement shall be in writing and shall be deemed to have
been duly given if delivered or mailed, first class mail,
postage prepaid.
To Seller
Xxxxxx Xxxxxx
Xxxx Xxxxxx Xxx 000
Xxxxxxxx, Xxxxxx, 00000
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To Purchaser
The Great Basin Water Company
Xxxx Xxxxxx Xxx 0000
Xxxxxxxx, Xxxxxx, 00000
or to such other address as such party shall have specified
by notice in writing to the other party.
d. Entire Agreement. This Agreement (including the exhibits
hereto and all documents and papers delivered by Seller
pursuant hereto and any written amendments hereof executed
by the parties hereto) constitutes the entire Agreement and
supersedes all prior agreements and understandings, oral and
written, between the
parties hereto with respect to the subject matter hereof.
e. Sections and Other Headings. The Section and other
headings contained in this Agreement are for reference
purposes only and shall not affect the meaning or
interpretation of this Agreement.
f. Governing Law. This agreement, and all transactions
contemplated hereby, shall be governed by, construed and
enforced in accordance with the laws of the State of Nevada.
The parties herein waive trail by jury and agree to submit
to the personal jurisdiction and venue of a court of subject
matter jurisdiction located in Xxxxx County, State of
Nevada. In the event that litigation results from or arises
out of this Agreement or the performance thereof, the
parties agree to reimburse the prevailing party's reasonable
attorney's fees,
court costs, and all other expenses whether or not taxable
by the court as costs, in addition to any other relief to
which the prevailing party may be entitled. In such event,
no action shall be entertained by said court or any court of
competent jurisdiction if filed more than one year
subsequent to the date the cause(s) of action actually
accrued regardless of whether damages were otherwise as of
said time calculable.
g. Conditions Precedent. The Conditions Precedent to the
enforcability of this Agreement are outlined in Exhibit "E"
attached hereto-and made a part hereof. In the event that
said Conditions Precent are not fulfilled by the appropriate
dates thereof, this Agreement shall be deemed null and void
to the Purchaser forthwith.
h. Treasury Stock. It is understood and agreed by the
Purchaser that none of the consideration furnished by
Purchaser hereunder, shall be for any other pump well water
shares other than such listed and such well equipment
applied thereon.
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consideration, subject to the terms hereof, shall be the
sole property of the Seller.
i. Contractual Procedures. Unless specifically disallowed by
law, should litigation arise hereunder, service of process
therefor may be obtained through certified mail, return
receipt requested; the parties hereto waiving any and all
rights they may have to object to the method by which
service was perfected
.
IN WITNESS WHEREOF, this Agreement has been executed by each of
the individual parties hereto and signed by an officer thereuntc
duly authorized and attested under the Corporate seal by the
Secretary of the corporate party hereto, all on the date first
above written.
Signed, sealed and delivered in the presence of:
(Corporate Seal)
Purchaser
Witness By: /s/ SIGNATURE OF CHAIRMAN
It's Chairman of the Board of Directors
Attest:
Witness It's Secretary
Seller
Witness
By:/s/ SIGNATURE
/s/SIGNATURE
Witness
Attest:
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EXHIBIT "A"
AMOUNT AND PAYMENT OF PURCHASE PRICE
A. Consideration. As total consideration for the purchase and
sale of the "pump well water", pursuant to this Agreement, the
Purchaser shall pay to the Seller, Seven Thousand Five Hundred
(7,500) Shares of Preferred Series "B" Stock (Preferred) valued
at $100.00 a share which shall pay interest-in the amount of
Eight Percent per annum, ($60,000.00 in United States Dollars)
due and payable on the First Day of November of each year
commencing in the year 2,000, for the total shares of pump well
water (2,733.35 acre feet) received from the Seller (the Sum),
such total consideration to be referred to in this Agreement as
the "Purchase Price".
b Payment. The Purchase Price shall be paid as follows:
i. Seven Thousand Five Hundred shares of Stock (Preferred
Series "B") of the Great Basin Water Company valued at One
Hundred Dollars per share, or total value of Seven Hundred
Fifty Thousand Dollars ($750,000.00) to be delivered to the
Seller within Sixty Days from the final execution of this
agreement.
ii. A check to the Purchaser in the amount of $607000.00
(dividends) to be paid pior to the First day of November
each year and on which the first payment shall be due and
payable on or before One November, 2,000, and thereafter.
iii. Check of Purchaser accounts payable to be days of the
final closing and upon Purchasers further in the sum of the
equal amount delivered to Seller within of thirty Board of
Directors Acceptance of the books and records of the
Corporation, which payment by the Purchaser shall address
the closing held on the thirty days after the final closing
which is adequate time for the receipt of any bills and to
insure that the Corporations liabilities have been fully
satisfied and Liquidated by the Seller.
C. In the event that the Purchaser, after a complete review of
the Water Recorded books, records, financial statements, sales
tax receipts, bank statements, check books, and any other
document required by Purchaser to verify the standing, status of
performance of the water shares, does not approve said purchase,
then, in that event, all deposits paid to that date shall be
returned to Purchaser with no further liability, responsibility
or obligation.
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EXHIBIT "B"
LIABILITIES OF WATER SHARES
See attached financial statement.
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EXHIBIT "C"
PROPERTIES AND RECORDS OF THE WATER SHARES
See attached statement.
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