City of Fairfax, Virginia City Council Meeting

Transcription

1 City of Fairfax, Virginia City Council Meeting Agenda Item City Council Meeting: TO: FROM: SUB.JECT: ISSUE(S): Honorable Mayor and Members of City Council Robert L. Sisson, City Manager Public hearing and Council action on an ordinance approving and authorizing the execution of an asset purchase agreement with Loudoun County Sanitation Authority d/b/a Loudoun Water. Whether to enaet an ordinance authorizing an asset purchase agreement conveying the City water system assets within Loudoun County to the Loudoun County Sanitation Authority ("Loudoun Water"). SUMMARY: On April 9, 2013, the City Council, by resolution, approved the terms of a mediated settlement under which all current City water customers would become retail customers of the Fairfax County Water Authority ("Fairfax Water"). On October 22, 2013, the City Council, by ordinance, approved the form of asset purchase agreement to implement the sale of the City water system assets located in the City and in Fairfax County to Fairfax Water. Closing under that agreement is scheduled to occur on January 3, As previously discussed, the City has been negotiating the terms of a corollary agreement with Loudoun Water with regard to the remaining City water system assets, located in Loudoun County (the raw water reservoirs and treatment assets, and the transmission line and appurtenances) (the "Assets"). The attached asset purchase agreement implements successful negotiations between the parties, most notably a $30 million purchase price paid by Loudoun Water to the City for the Assets and reemployment for current employees. The proposed agreement also addresses the financial aspects and responsibilities of the transfer and provides certain protections and expanded career opportunities for existing City employees at the water treatment plant. If the agreement is approved by the City Council and the Loudoun Water Board, as well as a necessary approval by the Loudoun County Board of Supervisors to discontinue the 1959 Agreement among the Town of Fairfax, Loudoun County Sanitation Authority, and County of Loudoun for water supply, closing is anticipated to occur by the end of January, FISCAL IMPACT: Significant and financially attractive, both for the City and for its water customers, as discussed in previous public hearings and public outreach and written materials distributed to City residents and water customers relating to the underlying exit from the water business by the City in favor oflower water rates and higher reliability of supply. RECOMMENDATIONS: ALTERNATIVE COURSE OF ACTION: RESPONSIBLE STAFF: COORDINATION: ATTACHMENTS: Conduct the public hearing and enact the ordinance. Do not enact the ordinance. City Attorney; Director of Utilities; Finance Director City Manager; City Personnel Director Proposed Ordinance; Draft Agreement, Sample Motion

2 ORDINANCE NO ~-~-~ AN ORDINANCE APPROVING AN ASSET PURCHASE AGREEMENT \VITH THE LOUDOUN COUNTY SANITATION AUTHORITY D/B/A LOUDOUN \VATER FOR \VATER SYSTEM ASSETS LOCATED WITHIN LOUDOUN COUNTY. WHEREAS, the City and the Loudoun County Sanitation Authority d/b/a Loudoun Water ("Loudoun Water") have negotiated the terms of an asset purchase agreement (the ' Agreement") under which Loudoun Water will purchase certain water system assets, as identified in the Agreement, located in Loudoun County, Virginia. NOW, THEREFORE, BE IT ORDAINED, by the City Council of the City of Fairfax, Virginia, that the form of the Agreement substantially of the form attached to this ordinance as Exhibit "A", is hereby approved in its entirety, specifically including, but not limited to. the sale and transfer of all City water system assets located within Loudoun County (including the water treatment plant, reservoirs and other real property and easements owned by the City) and the transfer of certain City water system licensed operators and employees to Loudoun Water. BE IT FURTHER ORDAINED, by the City Council of the City of Fairfax, Virginia, that the City Manager is hereby authorized and directed to finalize and execute the Agreement on behalf of the City, subject to the concurrence of the City Attorney. BE IT FURTHER ORDAINED, by the City Council of the City of Fairfax, Virginia, that the City Manager is hereby authorized and directed to finalize, execute and deliver any and all agreements, affidavits and other documentation necessary and proper to implement the terms of the Agreement and to consummate the transactions contemplated thereby, subject to the concurrence of the City Attorney. This ordinance shall become effective as provided by law. INTRODUCED: November 12,2013 PUBLIC HEARING: December 10,2013 ENACTED: ATTEST: Date: Mayor City Clerk Vote M. DeMarco D. Drummond J. Greenfield D. Meyer E. Schmidt S. Stombres

3 ASSET PURCHASE AGREEMENT by and between THE CITY OF FAIRFAX, VIRGINIA as Seller, and LOUDOUN COUNTY SANITATION AUTHORITY d/b/a LOUDOUN WATER as Buyer dated as of ' 2013

4 TABLE OF CONTENTS Page 1. PURCHASE AND SALE OF ASSETS Purchased i\ssets Excluded Assets Assumed Liabilities; Excluded Liabilities Prorations Non-Assignable Contracts and Rights Purchase Price and Payment REPRESENTATIONS AND WARRANTIES Representations and Warranties of the Seller Representations and Warranties of the Buyer Survival of Representations COVENANTS "'<\ccess to Inforn1ation Conduct of Business Further Actions Notification ADDITIONAL AGREEMENTS Tax Matters Employee Matters Post-Closing Access to Information Transition of Operations Closing Costs Futiher Assurances Northern Virginia Regional Park Authority CONDITIONS PRECEDENT TO THE BUYER'S OBLIGATIONS Representations and Warranties Performance of Obligations No Material Adverse Effect No Injunction Delivery of Documents Government Consents; Permits Required Consents Legislation Lien Releases Due Diligence CONDITIONS PRECEDENT TO THE SELLER'S OBLIGATIONS... 23

5 TABLE OF CONTENTS (continued) Page 6.1 Representations and Warranties Performance of Obligations No Injunction Delivery of Documents CLOSING Closing Date Seller's Closing Deliverables Buyer's Closing Deliverables DEF AUL 1' Purchaser's Default 8.2 Seller's Default 9. TERMINATION General Effect oftennination MISCELLANEOUS I 0.1 Publicity Assignment I 0.3 Entire Agreement Amendment Waiver I0.6 Notice Expenses Section Headings; Table of Contents Severability No Strict Construction Governing Law; Jurisdiction; Venue; Waiver of Jury Trial I2 Counterparts Definitions... 32

6 TABLE OF CONTENTS (continued) EXHIBITS Exhibit A Exhibit B Exhibit C Exhibit D Exhibit E Bill of Sale Assignment and Assumption Agreement IP Assignment Agreement General Warranty Deed Waterline Easement Assignment SCHEDULES Schedule 1.1(a) Schedule 1.1 (b) Schedule 1.1 (c) Schedule 1.1 (d) Schedule 1.1 (e) Schedule 1.1 (f) Schedule 1.1 (i) Schedule 1.6(a) Schedule 2.1 (c) Schedule 2.1(d) Schedule 2.1 (f) Schedule 2.1 (i) Schedule 2.1G) Schedule 2.1(1) Schedule 2.1 (m) Schedule 2.1 (n) Schedule 2.1 ( q) Schedule 2.1 (s) Real Property Personal Prope1iy Owned and Leased Vehicles Assumed Contracts Intellectual Property Rights Permits Prepaids and Deposits Purchase Price Calculation No Violation Title to and Sufficiency of Assets Absence of Certain Changes Intentionally Deleted Absence of Undisclosed Liabilities Environmental Matters Material Contracts Employee Matters Insurance Required Consents -Ill-

7 ASSET PURCHASE AGREEMENT THIS ASSET PURCHASE AGREEMENT (this "Agreement") is entered into as of the day of 2013 (the "Effective Date") by and between the CITY OF FAIRFAX, VIRGINIA, a Virginia municipal corporation ("Seller"), and LOUDOUN COUNTY SANITATION AUTHORITY d/b/a LOUDOUN WATER ("Buver," and together with Seller, the "Parties" and, each individually, a "Party"). RECITALS WHEREAS, the Seller owns and operates raw water storage and water treatment facilities, real property and easements, water pipelines and appurtenances thereunder located in Loudoun County, Virginia (the "County") for the purpose of treating and supplying potable water (the ''Business"); WHEREAS, subject to the terms and conditions hereof, the Seller desires to sell to the Buyer substantially all of the properties, assets, rights and claims of, or related to, the Business owned or held by the Seller for the consideration specified herein (the "Transaction"); WHEREAS, the Buyer and the Seller have each authorized the Transaction, this Agreement and the transactions contemplated hereby; and WHEREAS, capitalized terms used but not defined in the context of the Sections in which such terms first appear shall have the meanings ascribed thereto in Section NOW, THEREFORE, in consideration of the mutual promises hereinafter set forth and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound, the parties hereby agree as follows: l. PURCHASE AND SALE OF ASSETS 1.1 Purchased Assets. The "Purchased Assets" are all of the rights, titles and interests, if any, that the Seller possesses in and to all of its assets that are related to or used in connection with the operation of the Business (other than the Excluded Assets) free and clear of all Liens (other than Permitted Liens) or indebtedness (except as expressly set forth in Section 1.5), as the same may exist at Closing, including, without limitation, the following: (a) Real Property. All right, title and interest of the Seller in the real property, buildings, improvements and fixtures used in the Business, together with all rights, easements, and appmienances belonging and appertaining thereto, including, without limitation, all right, title and interest of the Seller in that certain water transmission pipeline and easement granted to Seller in those certain easement agreements recorded among the land records of Loudoun County, Virginia (the "Waterline Easement"), all as more particularly described on Schedule 1.1 (a) (collectively, the "Real Property").

8 (b) Personal Propertv. Except as otherwise provided in this Agreement, all equipment, machinery, supplies, furniture, materials, chemicals, raw materials and other tangible personal property of the Seller used in the operation of the Business, whether held by the Seller or third parties (collectively, the "Personal Property"), being specifically, the items listed on Schedule 1.1 (b) and all rights to the warranties received from the manufacturers and distributors of all such personal property and fixtures, if any, and any related claims, credits, rights of recovery and setoffs with respect to such personal property and fixtures, if any. All of the Seller's right, title and interest in, to and under the leases and rental agreements, if any, in respect of Personal Property employed by the Seller in the operation of the Business, including, without limitation, those leases and agreements listed on Schedule 1.1 (b); (c) Vehicles. Except as otherwise provided in this Agreement, the vehicles owned by the Seller and used exclusively in connection with the Business and all rights in, to and under vehicle leases to which the Seller is a party in connection with, and used exclusively for, the operation of the Business (collectively, the "Owned and Leased Vehicles"), being specifically the Owned and Leased Vehicles listed on Schedule 1.1 (c); (d) Assumed Contracts. The Contracts to which the Seller is a party relating to the Purchased Assets and/or the Business including, (i) any leases related to the Real Property, if any; (ii) to the extent assignable, the contracts, leases of personal property, other leases and other agreements which the Buyer agrees to assume and which are listed on Schedule 1.1 (d) (the "Assumed Contracts"); (e) Intellectual Property. The Intellectual Property Rights used m the Business and listed on Schedule 1.1 (e), if any. (f) Permits. All of the Seller's Permits used by Seller in the conduct of the Business by the Buyer from and after the Closing Date, including, without limitation, the Permits listed on Schedule 1.1 (f), to the extent assignable; (g) Records. All current records and documentation of the Seller in Seller's possession (including, without limitation, all discs, tapes and other media-storage data and information) relating to distributors and suppliers of the Business including, without limitation, distributor and supplier lists, and all other business records of the Seller with respect to the Business (collectively, the "Books and Records"); (h) Goodwill. All of the Seller's goodwill associated with the Business, including, without limitation, goodwill associated with all vendor, distributor, service provider and contractor relationships; and (i) Prepaids and Deposits. All prepaid items and deposits paid by the Seller with respect to the Business, if any, including lease deposits and the prepaids and deposits listed on Schedule 1.1(i). 1.2 Excluded Assets. Notwithstanding anything to the contrary in Section 1.1 or elsewhere in this Agreement, the Seller shall not convey, assign, transfer or deliver to

9 the Buyer, and the Buyer shall not acquire from the Seller, any of its assets or properties which are not used in connection with the Business in the County, including without limitation, the following property which shall remain the property of the Seller after the Closing (collectively, the "Excluded Assets"): (a) Any assets of the Seller that are not related to or used exclusively in connection with Seller's ownership and/or operation of the Business; and (b) Other than the Purchased Assets described in Section 1.1 (i), any and all cash, cash equivalents, uncollected checks, accounts receivable, deposits, bank deposits and accounts, certificates of deposit, governmental obligations, marketable securities, and all other securities and monies of the Seller. 1.3 Assumed Liabilities; Excluded Liabilities. (a) Upon the transfer and delivery of the Purchased Assets at the Closing, the Buyer shall assume and agree to pay or discharge when due in accordance with their respective terms only the following Liabilities arising out of the conduct of the Business prior to or on the Closing Date (the "Assumed Liabilities"): (i) The obligations of the Seller under the Assumed Contracts, to the extent such Liabilities are not required to be performed on or prior to the Closing Date, are disclosed on the face of such Assumed Contract, relate to the operations of the Business subsequent to the Closing Date, and do not relate to any prior act, omission, or default by the Seller thereunder; and (ii) Accrued employee vacation and sick leave (the value for which is paid by Seller to Buyer on the Closing Date and which accrued balances are transferred to Buyer on the Closing Date) for each Continuing Employee, as identified in Schedule 2.1 (n). (b) The Buyer shall not assume or be obligated to pay, perform or otherwise discharge, in connection with the Transaction, any Liability of the Seller that are not expressly identified as Assumed Liabilities in Section 1.3(a) above (collectively, the "Excluded Liabilities"), and the Seller shall retain responsibility for all Excluded Liabilities, whether or not accrued and whether or not disclosed, as of or on the Closing Date, including without limitation: (i) All of the Seller's accounts payables; (ii) Liabilities incurred by the Seller in connection with this Agreement and the transactions provided for herein, including, without limitation, any broker, counsel and accountant's fees or expenses, and any expenses pertaining to the performance by the Seller of its obligations hereunder; (iii) All Taxes of the Seller, if any, (whether relating to periods before or after the transactions contemplated in this Agreement or incurred by the Seller in connection with this Agreement and the transactions provided for herein), and

10 any Liability, pursuant to a Tax allocation agreement or otherwise for Taxes arising out of the inclusion of the Seller in any group tiling consolidated, combined or unitary Tax Returns or arising out of any transferee or successor Liability: (iv) Liabilities for customer disputes, complaints, Claims and credits arising from the provision of any service by the Business prior to or on the Closing Date; (v) indebtedness, lender; Liabilities of the Seller for any mortgages, pledges, loans or bank including, without limitation, Liabilities for interest due to any 11.(4); (vi) Liabilities of the Seller under any Contract not listed on Schedule (vii) Liabilities with respect to events, acts, circumstances, omissions, conditions or any other state of facts (including, without limitation, any Claim relating to or associated with employee and benefits matters and any failure to comply with applicable Laws) to the extent the same relate to the property, assets or business of the Seller and occurs prior to or on the Closing Date; (viii) Any and all Liabilities relating to the Excluded Assets; (ix) Any Claim, judgment, penalty, settlement agreement or other obligation that resulted in, or could result in, a Liability (for payment or otherwise) by the Seller in respect of any claim, proceeding or investigation that is pending or threatened against the Seller prior to or on the Closing Date; (x) Any severance obligations or other costs of terminating employees wherever located resulting from any termination or cessation (or deemed termination or cessation) of employment occurring prior to or on the Closing Date (including, without limitation, any such termination or cessation occurring in connection with the transactions contemplated by this Agreement), from whatever source such obligations and costs arise, including, without limitation, contractual obligations, notices to employees, employment manuals, course of dealings, past practices, obligations arising under Section 280G or 4999 of the Code, or obligations mandated by law, or otherwise; and (xi) Any Liabilities or obligations with respect to any Benefit Plans (other than the Assumed Plans), any Employee Agreements, and any Liabilities with respect to accrued payroll, workers compensation liability, fringe benefits and other employee benefits with respect to or that relate to periods of employment by the Seller prior to or on the Closing Date. The Seller shall retain and be responsible for and pay, as the same are incurred, and the Buyer shall have no obligations or Liabilities whatsoever with respect to, any and all Losses, damages, obligations, Liens, as~sments, judgments, fines, costs and expenses,

11 Liabilities and claims, including, without limitation, interest, penalties and reasonable fees of counsel and experts of every kind or nature whatsoever, made by or owed to any Person arising out of or in connection with the Excluded Liabilities and Excluded Assets. (c) The assumption of any Liabilities by any party hereunder shall not enlarge any rights of third parties under Contracts with the Buyer or the Seller and nothing herein shall prevent any party from contesting in good faith any of said Liabilities as against any third party. 1.4 Prorations. The prepaid items listed on Schedule 1.1 (i) are included as Purchased Assets that convey to Buyer as part of this transaction, and all such items shall be prorated at Closing as of the Closing Date. All taxes, bills, rent, insurance payments, utility charges, governmental assessments, and all other fees, costs, charges, and expenses relating to the Business will be apportioned by the parties after Closing upon receipt of bills, invoices, demands, or notices for same, it being the intent of the parties that the operation of the Business and the income and expenses attributable thereto up to the Closing Date shall be for the account of the Seller and thereafter for the account of Buyer. Notwithstanding the foregoing, nothing in this Section will be deemed as an assumption by Buyer of, or to impose any obligation on Buyer for, any liabilities associated with the Business other than the Assumed Liabilities. 1.5 Non-Assignable Contracts and Rights. Notwithstanding anything to the contrary in this Agreement, no Assumed Contract of the Seller shall be deemed transferred or assigned to the Buyer pursuant to this Agreement if (a) the attempted transfer or assignment thereof to the Buyer without the consent or approval of another Person would be ineffective or would constitute a breach of such Assumed Contract or a violation of any Law or would in any other way materially adversely affect the rights of the Seller (or the Buyer as transferee or assignee) and (b) such consent or approval is not obtained on or prior to the Closing Date and the Buyer has waived the assignment of such Assumed Contract as a condition to the Closing. In such case, to the extent possible: (a) the beneficial interest in or to such Assumed Contract, (collectively, the "Beneficial Rights") shall in any event pass as of the Closing Date to the Buyer under this Agreement); and (b) pending such consent or approval, the Buyer shall assume or discharge the Liabilities of the Seller under such Beneficial Rights (to the extent such obligations are Assumed Liabilities) as agent for the Seller, and the Seller shall act as the Buyer's agent in the receipt of any benefits, rights or interest received from the Beneficial Rights. Notwithstanding the foregoing, before and after the Closing, the Buyer and the Seller shall use their respective best efforts (and bear their respective costs of such efforts), to obtain and secure any and all consents and approvals that may be necessary to effect the legal and valid transfer or assignment of the Assumed Contracts underlying the Beneficial Rights, including their formal assignment or novation, if advisable. The Buyer and the Seller shall make or complete such transfers as soon as reasonably possible and cooperate with each other in any other reasonable arrangement designed to provide the Beneficial Rights to the Buyer and to provide for the discharge of any Liability arising under such Assumed Contracts, to the extent such Liability constitutes an Assumed Liability.

12 1.6 Purchase Price and Payment. (a) Purchase Price and Payment. Subject to the other terms and conditions set forth in this Agreement, as consideration for the sale, transfer, assignment and delivery of the Purchased Assets to the Buyer, the Buyer shall purchase and acquire all right, title and interest in and to the Purchased Assets for Thirty Million Dollars ($30,000,000.00), payable in immediately available federal funds at Closing (the "Base Price"), less (ii) the Adjustment Amount pursuant to Section 1.6(b) (as so adjusted, the "Purchase Price"). The Purchase Priee calculation is set forth in Schedule 1.6(a), which shall be updated by Seller no later than one (1) day prior to the Closing Date. (b) Adjustment Amount. No later than one ( 1) day prior to the Closing Date, Seller shall prepare and deliver to Buyer, an updated Schedule 1.6(a) confirmed to Buyer's reasonable satisfaction identifying the value of accrued vacation and sick leave for each Continuing Employee (the "Adjustment Amount") as listed on Schedule 2.l(n). Seller will respond promptly to Buyer's request for additional information for Buyer to review and verify the accuracy of the Adjustment Amount Earnest Money. Buyer has deposited with the Title Company One Hundred Thousand Dollars ($1 00,000.00) of earnest money (the "Earnest Money") upon the execution of this Agreement. The Earnest Money shall be applied by the Title Company toward the Purchase Price at Closing and shall be refundable to the Buyer unless all conditions to Closing have been satisfied and the Buyer nevertheless refuses to close, or Buyer otherwise materially defaults hereunder and fails to cure the default to the reasonable satisfaction of the Seller within ten (1 0) days after receiving written notice of the alleged default. 2. REPRESENTATIONS AND WARRANTIES 2.1 Representations and Wananties of the Seller. Seller represents and wanants to Buyer that as of the date hereof and as of the Closing Date: (a) Organization and Qualification. Seller is a municipal corporation duly organized, validly existing and in good standing under the laws of the Commonwealth of Virginia. Seller has all requisite power and authority to own, lease, operate and use its properties and assets, and to cany on the Business as it is now being conducted. Seller is duly qualified to do business in each jurisdiction in which the property owned, leased or operated by it or the nature of the Business makes such qualification necessary except where the failure to obtain any such qualification would not, individually or in the aggregate, result in a Material Adverse Effect. (b) Authority. The execution and delivery by the Seller of this Agreement and the other documents and instruments to be executed and delivered by the Seller pursuant hereto and the consummation by the Seller of the transactions contemplated hereby and thereby have been duly authorized. No other act or proceeding on the part of the Seller is necessary to authorize this Agreement or the other documents and instruments to be executed and delivered by the Seller pursuant hereto or the

13 consummation of the transactions contemplated hereby and thereby. This Agreement constitutes, and when executed and delivered, the other documents and instruments to be executed and delivered by the Seller pursuant hereto will constitute, valid and binding agreements of the Seller, enforceable in accordance with their respective terms, except as such may be limited by bankruptcy, insolvency, reorganization or other Laws affecting creditors' rights generally, and by general equitable principles. (c) No Violation. Except as set forth in Schedule 2.1 (c), neither the execution and delivery by the Seller of this Agreement or the other documents and instruments to be executed and delivered by the Seller pursuant hereto nor the consummation by the Seller of the transactions contemplated hereby and thereby (i) will violate any Law or Order applicable to the Seller, (ii) will require any authorization, consent or approval by, filing with or notice to any Governmental Entity, or (iii), will violate or conflict with, or constitute a default (or an event that, with notice or lapse of time, or both, would constitute a default) under, or will result in the termination of, or accelerate the performance required by, or result in the creation of any Liens (other than Permitted Liens) upon any of the Purchased Assets under, (A) any term or provision of the organizational documents of the Seller or (B) any of the express terms of any Material Contract to which the Seller is a party with respect to the Business or by which the Business, or any of its assets or properties are bound or affected. (d) Title to and Sufficiency of Assets. To Seller's Knowledge, the Seller has good and marketable title to all of the Purchased Assets, free and clear of all Liens other than those listed on Schedule 2.1 (d), which Liens will be removed by the Seller prior to or contemporaneously with the Closing. The Purchased Assets constitute all of the tangible physical assets required to operate the Business in the manner presently operated by Seller, excluding only the Excluded Assets. Except for assets and properties that are subject to Assumed Contracts or owned by Buyer or its affiliates, no person or entity other than the Seller owns any assets or properties used in the operation of the Business. (e) Tax Matters. (i) The Purchased Assets currently are and have been treated as exempt from real estate taxes in the County and any other jurisdiction in which the Purchased Assets are or have been located. Seller is, and at all times in which it has owned the Purchased Assets has been, a political subdivision of the Commonwealth of Virginia and an organization described in Sections 115 and 170(c)(l) ofthe Code. (ii) All Tax Returns required to be filed by Seller with all applicable Governmental Entity have been duly and timely filed, and all Taxes required to be paid by Seller to sueh Governmental Entity have been duly and timely paid for all outstanding tax years and periods. All Tax Returns with respect to the Purchased Assets have been duly and timely filed, and each such Tax Return correctly and completely reflects all Taxes and all other information required to be reported thereon.

14 (iii) As of the date of this Agreement, (A) there is no audit examination, deficiency or proposed adjustment pending or, to the Knowledge of the Seller, threatened with respect to any Taxes due and owing, and (B) there are no outstanding Contracts or waivers extending the statutory period of limitations for a Tax assessment applicable to any Tax Returns relating to the Purchased Assets with respect to a taxable period for which such statute of limitations is still open. (iv) The Seller has not (A) applied for any Tax ruling, (B) entered into a closing agreement with any taxing authority, (C) made any payments, or been a party to an agreement (including this Agreement) that under any circumstances could obligate it to make payments, that will not be deductible because of Section 280G or 162(m) of the Code, or (D) been a party to any Tax allocation or Tax sharing agreement. (v) There is no dispute or outstanding claim concerning any Taxes with respect to the Purchased Assets for which notice has been provided, which is asserted or threatened, or which otherwise is known to Seller. (f) Absence of Certain Changes. Except as set forth in Schedule 2.1 (f), there has not been: (i) any Material Adverse Effect in the financial condition, Purchased Assets, Liabilities or results of operations of the Business taken as a whole; (ii) any material increase in the compensation, salaries or wages payable or to become payable to any Transferred Employee, except in the ordinary course of the Business; (iii) any entry by the Seller into any employment, severance or termination Contract with any Transferred Employee, or any amendment thereto; (iv) any sale, lease or other transfer or disposition of any material properties or assets of the Business; (v) any indebtedness for boitowed money incuited or guaranteed by the Seller; (vi) any extension or delay of payment with respect to accounts payable of the Business outside of the ordinary course of the Business; (vii) any grant of a license or sublicense to any properties, assets or rights utilized by the Business; (viii) any fire, damage, destruction, or other loss to any of the Purchased Assets; or (ix) any acceleration of the term of, or modification of, any Contract pertaining to the Business; or (x) any agreement to do any of the foregoing. (g) No Litigation. There are no Claims or Proceedings pending or, to the Knowledge of the Seller, threatened against Seller or with respect to the Business or affecting the Purchased Assets, and there are no outstanding Orders against or adversely affecting the Business or the Purchased Assets. (h) Compliance with Laws. The operation of the Business by Seller and Seller's use and ownership of the Purchased Assets, and perforn1ance under the Contracts does not violate or conflict with, and has not violated or conflicted with, in any material respect any applicable Laws or Orders. Seller has not received any notice or other communication from any Governmental Entity or any other Person regarding any actual, alleged, possible or potential violation of, or failure to comply in any material respects with, any Law or Order which in any case, relates to the Business or Seller's operation of the Business.

15 (i) Permits. The Seller has all Permits required for the conduct of the Business as currently conducted by the Seller, and has all Permits required for the operation of the facilities located at the Real Property owned or leased by the Seller with respect to the Business. All of such Permits are listed on Schedule 1.1 ([). The Seller is in compliance with all such Permits. U) Absence of Undisclosed Liabilities. Except as set forth on Schedule U(i}, Seller and the Business have no Indebtedness and no Liabilities with respect to the Business or affecting the Purchased Assets, and, to Seller's Knowledge, there is no basis for any present or future action, suit, proceeding, hearing, investigation, charge, complaint, claim or demand against Seller or the Business giving rise to any Liability with respect to the Business or affecting the Purchased Assets. (k) Real Property. (i) Schedule l.l(a) describes all Real Property owned by Seller in connection with the Business. Title to the Real Property and the Waterline Easement as conveyed to Buyer shall be good and marketable. To Seller's Knowledge, Seller has valid interests in all of the Real Property free and clear of any Liens (or such Liens shall be removed as of the Closing Date), and Seller has the right to assign its interest in the Waterline Easement to Buyer at Closing. Seller is not involved in any litigation affecting the Real Property or Seller's ability to convey clear title to it. To Seller's Knowledge, there are no pending condemnation, expropriation, eminent domain or similar proceedings affecting all or any portion of the Real Property and, to Seller's Knowledge, no such proceedings are contemplated. (ii) To the best of Seller's Knowledge, Real Property and all plants, buildings, improvements and fixtures located thereon conform to all applicable building, zoning and other Laws, including, without limitation, health and safety ordinances and zoning and building ordinances. All material Permits necessary to the current use of the Real Property have been obtained, and are in full force and effect and, there exists no violation of any covenant, condition, restriction, easement, agreement or order affecting any portion of the Real Property. The Real Property is zoned for the purposes for which it is presently being used. (iii) Seller will not, from and after the Effective Date through Closing or earlier termination of this Agreement, without the prior written consent of Buyer, which consent may be withheld in Buyer's sole, but reasonable, discretion: (i) enter into any lease or occupancy or license arrangement or otherwise encumber the Real Property; (ii) enter into any agreements which would be binding on Buyer after its acquisition of the Real Property or which would affect Buyer's title to or right to possession of the Real Property; or (iii) perform any act which would materially and adversely affect Seller's right or ability to convey the Real Property to Buyer or Buyer's right to use the Real Property pursuant to this Agreement. The Real Property shall be conveyed to Buyer at Closing free of all leases, licenses and occupancy agreements, and except as otherwise provided in

16 the Permitted Exceptions, Buyer shall receive actual possession of the Real Property at Closing. (l) Environmental Matters. Except as set forth in Schedule 2.1 (k)(iii): (i) Except in compliance with Environmental Laws, no Hazardous Materials are present on or under any Real Property, or were present on or under any other real property at the time it ceased to be owned, operated or leased by the Seller to the extent it was used in the Business or any predecessor for which the Seller could have liability under any Environmental Law, in concentrations that exceed any applicable industrial or use-restricted cleanup levels where such use restrictions have been lawfully adopted. (ii) Seller has no Knowledge of any Person for whose conduct they are or may be held responsible, having permitted or conducted, except in compliance with Environmental Laws, the distribution, generation, handling, importing, management, manufacturing, processing, production, refinement, Release, storage, transfer, transportation, treatment, disposal or use of Hazardous Materials at the Real Propetiy, in which the Seller with respect to the Business has or had an interest, or in connection with operation of the Business. (iii) During the time that the Seller or any predecessor could have Liability under any Environmental Law has owned, operated or leased any real property, no Hazardous Materials have been transported from the real property to any site or facility now listed or proposed for listing on the National Priorities List, 40 C.F.R. Part 300, or on any list with a similar scope or purpose published by any state authority, and no such listing has been proposed in the Federal Register or a comparable state publication. (iv) There is no outstanding litigation, proceeding or administrative action and, there has been no litigation, proceeding or administrative action brought or, to the Knowledge of the Seller, threatened against the Seller, by any party or parties alleging the Disposal, Release or Threat of Release of any Hazardous Materials on, from or under any Real Property, or alleging a violation of any Environmental Law. To the Knowledge of the Seller, (A) there is no outstanding litigation, proceeding or administrative action and (B) there has been no litigation, proceeding or administrative action brought or threatened against any predecessor of the Seller relating to the Business for which the Seller could have liability under any Environmental Law, by any party or parties alleging the Disposal, Release or Threat of Release of any Hazardous Materials on, from or under any Real Property, or alleging a violation of any Environmental Law. ( v) Seller does not have Knowledge of any Disposals, Releases or Threatened Releases of Hazardous Materials on, from or under the Real Property that have occurred prior to the Seller or any predecessor of the Seller having taken possession of any of such Real Property, for which the Seller could have liability under any Environmental Law.

17 (vi) Seller has delivered to the Buyer true and complete copies and results of all reports, studies, analyses, tests, or monitoring information (the "Information") pertaining to Hazardous Materials in, on, or under the Real Property and, in each case, relating to potential compliance with, or Liability or standards arising under, any Environmental Laws where the Infonnation was prepared or initiated and received within the three (3) year period preceding the date of this Agreement by (a) the Seller or (b) any predecessor of the Seller. (vii) The operations of the Seller in, on or at the Real Property comply with all applicable Environmental Laws, and all permits, licenses, registrations and other authorizations required to be obtained by the Seller under applicable Environmental Laws to operate the Real Property as it is currently operated have been so obtained. (viii) Seller with respect to the Business has not received any written or oral notice from any Governmental Entity which provides that any real property, or any other real property at the time it ceased to be owned, operated or leased by the Business is or was in violation or allegedly in violation of, out of compliance with or allegedly out of compliance with any applicable Environmental Law, or that the Seller with respect to the Business is or was liable, or allegedly or potentially liable under any Environmental Law. (m) Material Contracts. (i) Schedule 2.1 (m) sets forth a list, of each of the following types of Assumed Contracts to which the Seller is a party with respect to the Business (each, a "Material Contract"): (A) any Contract having an aggregate value, or involve payments of an amount in excess of Ten Thousand Dollars ($1 0,000); (B) any Contract that is material to the Business or necessary to operate the Business as currently conducted; (C) any collective bargaining Contract or other Contract to or with any labor union or other employee representative of a group of employees; (D) any employment Contract with any Continuing Employee or Former Employee involving future Liability for payment of wages or salaries, including severance benefits, which may be outstanding on the date of this Agreement; (E) any joint venture or partnership Contract; (F) any Contract containing covenants that materially restrict the future business activity ofthe Business;

18 (G) any Contract relating to the borrowing of money; (H) any Contract for the Personal Property involving future Liability for rental payments in excess of Ten Thousand Dollars ($1 0,000); (I) any Contract involving the licensing of Intellectual Property Rights to any person or entity and any Contract involving the licensing by any person or entity of Intellectual Property Rights to the Business, except for "shrink-wrap" licenses and similar licenses associated with computer software; (J) all Contracts for leases, subleases, rental agreements, contracts of sale tenancies or licenses of real property; and (K) all other Contracts that both (A) are not cancelable by the Seller on notice of sixty (60) calendar days or less without liability and (B) are otherwise material to the Business, taken as a whole. (ii) Seller has made available to Buyer true and complete copies of all of the Material Contracts, including copies of all agreements, documents, and easements (including all amendments or modifications thereto). No condition exists (including the execution, delivery and performance by Seller of this Agreement and the other documents and instruments contemplated herein) which constitutes or, with notice or lapse of time, or both, would constitute a material default thereunder on the part of Seller, or give any other Person any material right of termination, amendment, modification, acceleration, suspension, revocation, cancellation, first offer or first refusal under any of the agreements, documents, easements, rights of way or other instruments constituting the Water Rights. Without limiting the foregoing, the execution, delivery and performance by Seller of this Agreement and the other documents and instruments contemplated herein do not and will not require the consent or approval of, or any notice to, any party to any agreements, documents, easements, rights of way or other instruments constituting the Water Rights other than the Required Consents. (iii) Except as set forth in Schedule 2.1 (m), each Material Contract is in full force and effect and is valid and enforceable against the Seller, and, to the Knowledge of the Seller, the other party or parties thereto in accordance with its terms, except as such may be limited by bankruptcy, insolvency, reorganization or other Laws affecting creditors' rights generally, and by general equitable principles. Except as set forth in Schedule 2.1 (m), the Seller is in compliance in all material respects with all terms and requirements of each Material Contract and no material breach or default by the Seller of any provision thereof, nor any condition or event that, with notice or lapse of time or both, would constitute such a breach or default, has occurred. To the Knowledge of the Seller, and except as set forth in Schedule 2.1 (m), no material breach or default by any other party to any such Material Contract of any provision thereof, nor any condition or event

19 that, with notice or lapse of time or both, would constitute such a breach or default, has occurred. Except as set forth in Schedule 2.1 (m), the Seller has not received any notice of any materially adverse modification, termination, cancellation or non-renewal (but excluding expiration in accordance with its terms) of any such Material Contract and knows of no intent to effect the same. Except as set forth in Schedule 2.1 (m), there is no current dispute with any party under any such Material Contract that, if decided in a manner adverse to the Seller, would have a Material Adverse Effect. Seller has delivered to the Buyer true, correct and complete copies of each written Material Contract. None of the Material Contracts contain an "anti-assignment" or similar provision which would be triggered by the Transaction. Seller shall terminate all Material Contracts, except for the Assumed Contracts, as of the Closing Date. (n) Employee Matters. (i) Schedule 2.1 (n) contains a complete and accurate list of the employees whose work is presently dedicated to the Business, including each employee on leave of absence or layoff status: employer; employee name; job title; date of hire or engagement; date of commencement of employment or engagement; current compensation paid or payable and any change in compensation since January 1, 2013; sick and vacation leave that is accrued but unused; and service credited for purposes of vesting and eligibility to participate under any employee or director benefit plan. (ii) Except as set forth on Schedule 2.1 (n), no officer, director, agent, employee, consultant, or contractor of any of the Seller are bound by any agreement or contract (each an "Employee Agreement") that purports to limit the ability of such officer, director, agent, employee, consultant or contractor (i) to engage in or continue or perform any conduct, activity, duties or practice relating to the Business or (ii) to assign to Seller or to any other Person any rights to any invention, improvement, or discovery created during such Person's employment with Seller. No former or current employee of any of the Seller is a party to, or is otherwise bound by, any Employee Agreement that in any way materially and adversely affected, affects, or will affect the ability of Seller or Buyer to conduct the Business as heretofore carried on by Seller. (iii) Seller has operated the Business in material compliance with all Laws and Orders affecting employment and employment practices applicable to Seller, including the payment of wages. Upon Closing, Seller will have no liability or obligation to any of its current or former employees, officers or directors (including unaccrued year-end bonuses) other than for the payment of salaries and other benefits to be paid in the ordinary course of business, including final pay consistent with federal and state law. (iv) None of Seller nor any of Seller has any Liability and there are no facts or circumstances that might give rise to any Liability, and the transactions contemplated hereby will not result in any Liability, (i) for the termination or

20 withdrawal from any Employee Plan under Sections 4062, 4063 or 4064 of ERISA, (ii) for any Liens imposed under Section 302(f) of ERISA (or Section 303(k) of ERISA for Employee Plan years beginning after 2007) or Section 4068 of ERISA or Section 412(n) of the Code (or Section 430(k) of the Code for Employee Plan years beginning after 2007), (iii) for any interest payments required under Section 302(e) of ERISA or Section 412(m) of the Code (or any required installments under Section 303(j) of ERISA or Section 4300) of the Code for Employee Plan years beginning after 2007), (iv) for any excise tax imposed by Section 4971 of the Code, (v) for any minimum funding contributions under Section 302( c )(11) of ERISA or Section 412( c )(11) of the Code (or Section 302(b) of ERISA or Section 412(b) of the Code for Employee Plan years beginning after 2007), or (vi) for withdrawal from any Multiemployer Plan under Section 4201 of ERISA. (v) There are no Benefit Plans, as defined below, contributed to, maintained by, or sponsored by the Seller, to which the Seller is obligated to contribute, or with respect to which the Seller have any liability or potential liability, whether direct or indirect, including all Plans contributed to, maintained by, or sponsored by each member of the controlled group of companies, within the meaning of Sections 414(b ), 414( c), and 414(m) of the Internal Revenue Code, of which the Seller is a member to the extent the Seller has any potential liability with respect to such Plans. For purposes of this Agreement, the term means: (a) employee benefit plans as defined in Section 3(3) of ERISA, whether or not funded and whether or not terminated; (b) employment agreements; and (c) personnel policies or fringe benefit plans, policies, programs, and arrangements, whether or not subject to ERISA, whether or not funded, and whether or not terminated, including, without limitation, stock bonus, deferred compensation, pension, severance, bonus, vacation, travel, incentive, health, disability, and welfare plans. (vi) To the best of Seller's Knowledge, no employees ofthe Seller who work or have worked in the Business have been or are represented by a union or other labor organization or covered by any collective bargaining agreement in connection with the Business. There is no unfair labor practice complaint, labor organizational effort, strike, slowdown, or similar labor matter pending or, to the knowledge of the Seller, threatened against or affecting the Seller or the Business. ( o) Intellectual Property Rights. Schedule 1.1 (e) sets forth a complete and accurate list, of all Intellectual Property Rights (i) owned by Seller and (ii) licensed by Seller for use in the Business. Schedule l.l(e) also sets forth any and all material ongoing obligations of Seller relating to any licensed Software, including but not limited to royalties or other ongoing payments. (i) No Intellectual Property Rights or product or service used by Seller related to the Business is subject to any proceeding or outstanding decree, order, judgment, agreement or stipulation (i) restricting in any manner the use, transfer or licensing thereof by Seller or (ii) that may affect the validity, use or

21 enforceability of the Intellectual Property Rights. The validity of the Intellectual Property Rights (i) has not been questioned in any prior litigation and (ii) are not the subject(s) of any proposed or threatened litigation. Except as set forth on Schedule l.l(e), each Intellectual Property Right that has been registered is valid and subsisting. Except as set forth on Schedule 1.1 (e), all registration, maintenance and renewal fees currently due in connection with registered Intellectual Property Rights have been made and all necessary documents, assignments, recordations, and certifications in connection with the registered Intellectual Property Rights have been filed with the relevant Patent, Copyright, Marks or other authorities in the United States or foreign jurisdictions, as the case may be, for the purpose of maintaining such registrations. (ii) Seller owns and has good and exclusive title to each Intellectual Property Right, free and clear of any Liens, and no item of Intellectual Property Rights infringes or misappropriates the Intellectual Property Rights of any third party. Seller has licenses sufficient for the conduct of the Business as currently conducted and to all the Intellectual Prope1iy Rights used in connection with the Business. Nothing in this Agreement or the transactions contemplated hereby will affect or impede the rights of Buyer following the Closing with respect to the owned or licensed Intellectual Property Rights, nor will the continuing obligations under those licenses or grants, if any, change after execution of this Agreement and consummation of the transactions contemplated hereby. (iii) Seller's ownership and us of the Purchased Assets does not and has not infringed on, misappropriated, or otherwise violated the rights of any Person in any material respect with regard to any Intellectual Property Rights, and Seller has not received any notice regarding any of the foregoing. (iv) No Person has or is infringing on or misappropriating any of Seller's Intellectual Property Rights. (p) No finder, broker, agent, or other intermediary has acted for or on behalf of the Seller in connection with the transactions contemplated by this Agreement, and there are no claims for any brokerage commission, finder's fee, or similar payment due from Seller. ( q) Insurance. Set forth in Schedule 2.1 (q) is a complete and accurate list of all policies of property, casualty, fire, liability, product liability, workers compensation, health and other forms of insurance presently in effect with respect to the properties of the Business, true and correct copies of which have heretofore been delivered to the Buyer. Schedule 2.1 (q) includes, for each policy listed, without limitation, the carrier, the policy number, the description of coverage, the limits of coverage, retention or deductible amounts, amount of annual premiums, date of expiration and any pending claims in excess of Twenty Thousand Dollars ($20,000). All such polices currently in efiect are valid, outstanding and enforceable policies and provide insurance coverage for the properties, assets and operations of the Seller with respect to the Business, and no such policy provides for or is subject to any currently enforceable retroactive rate or

22 premium adjustment, loss sharing arrangement or other actual or contingent liability arising wholly or partially out of events arising prior to the date hereof. No notice of cancellation or termination has been received by the Seller with respect to any such policy, and the Seller does not have any Knowledge of any act or omission which could reasonably be expected to result in cancellation of any such policy prior to its scheduled expiration date. To the Knowledge of the Seller, the Business has duly and timely made all claims it has been entitled to make under each policy of insurance during the last three (3) years. Since January 1, 2010, all general liability policies maintained by or for the benefit of the Business have been "occurrence" policies and not "claims made" policies. To the Knowledge of the Seller, there are no claims by the Seller with respect to the Business pending under any such policies as to which coverage has been questioned, denied or disputed by the underwriters of such policies, and the Seller does not have Knowledge of any basis that could reasonably be expected to result in a denial of any claim under any such policy. Except as disclosed in Schedule 2.1(q), the reserves established by the Seller for the Business are adequate to dispose of any Liability under such self-insurance arrangements. (r) Disclosures. Nothing contained in this Agreement, any exhibit or Schedule hereto, or any report, certificate or instrument furnished or to be furnished by the Seller to the Buyer or its counsel in connection with the transactions contemplated hereby, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained therein, in light of the circumstances in which they were made, not misleading. (s) Consents and Approvals. Except as set forth on Schedule 2.1(s) (all consents, approvals, authorizations, registrations, filings, notices, and other actions set forth on Schedule 2.1(s) collectively, the "Required Consents"), and with the exception of the approval of the City Council of Seller, none of the following are required in connection with the valid execution and delivery by the Seller of this Agreement or the consummation by the Seller of the transactions contemplated by this Agreement: (i) consent, approval, authorization, registration, or filing with any federal, state, or local judicial or governmental authority or administrative agency. 2.2 Representations and Warranties of the Buyer. Buyer represents and warrants to Seller as of the date hereof and the Closing Date: (a) Organization of Buyer. Buyer is a public body duly organized, validly existing and in good standing under the laws of the Commonwealth of Virginia. (b) Authority. The Buyer has full authority and power to enter into this Agreement and each agreement, document and instrument to be executed and delivered by the Buyer pursuant to this Agreement and to perform its obligations hereunder. The execution, delivery and due performance by the Buyer of this Agreement and each such other agreement, document and instrument has been duly authorized by all necessary actions of the Buyer and no other action on the part of the Buyer is required in connection herewith. This Agreement and each other agreement, document and instrument executed and delivered by the Buyer pursuant to this Agreement constitutes, or when executed and

23 delivered will constitute, valid and binding obligations of the Buyer enforceable in accordance with their terms, except to the extent that their enforceability may be subject to applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and to general equitable principles. (c) Brokers. No finder, broker, agent, or other intermediary has acted for or on behalf of any of the Buyer in connection with the transactions contemplated by this Agreement, and there are no claims for any brokerage commission, finder's fee, or similar payment due from Buyer. 2.3 Survival of Representations. All representations and warranties of the Parties contained in this Agreement shall survive the execution and delivery of this Agreement and the Closing for a period of eighteen (18) months following the Closing Date. Any covenant which by its terms is to be performed after the Closing shall survive until such covenant has been fully performed in accordance with the terms of this Agreement. 3. COVENANTS 3.1 Access to Information. To the extent not previously provided to Buyer by Seller, or otherwise in Buyer's possession, but in any event no later than five (5) business days following the Effective Date, the Seller shall furnish to the Buyer, copies of all documentation in the Seller's possession relating to the Purchased Assets, including, without limitation, existing appraisals, title policies, surveys, engineering reports, environmental reports, assessments and soil reports. The Seller shall, during the Diligence Period, furnish or cause to be furnished to the Buyer and its employees, agents, representatives, agents and contractors, at reasonable times and upon reasonable notice, (a) such access, during normal business hours, to the Real Property as the Buyer from time to time reasonably requests with due regard to minimizing disruption of the conduct of the Business and (b) such access to the books, records and other information and data of the Business as the Buyer from time to time reasonably requests. 3.2 Conduct of Business. From the date of this Agreement until the Closing Date, except as required or contemplated by the transactions contemplated by this Agreement or otherwise consented to by the Buyer in writing, the Seller shall (i) maintain the Purchased Assets and conduct the Business in the ordinary course of business consistent with past practices and standards; and (ii) use commercially reasonable efforts to preserve intact the present business organization and operations of the Business, to keep available the services of all contractors and employees that provide services in connection with the Business and to preserve all relationships with material licensors, suppliers, dealers, customers and others having business relationships with Seller relating to the Business.

24 3.3 Further Actions. (a) General. Seller shall use commercially reasonable efforts to take, or cause to be taken, all action and to do, or cause to be done, all things necessary, proper or advisable to consummate and make effective the transactions contemplated hereby, including using all best efforts to obtain prior to the Closing Date all licenses, Permits, consents, approvals, authorizations, qualifications and orders of Governmental Entities and parties to Contracts with the Seller with respect to the Business that are necessary for the consummation ofthe transactions contemplated hereby. (b) Certain Filings. Each of the Buyer and the Seller shall make or cause to be made, as promptly as practicable, all filings with Governmental Entities that are necessary to obtain all authorizations, consents, orders and approvals for the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby. 3.4 Notification. Prior to the Closing, the Seller shall promptly notify the Buyer (in writing after the Seller has notice thereof), and the Buyer shall promptly notify the Seller (in writing after the Buyer has notice thereof), and keep each other advised, (i) as to any material adverse development which causes or is reasonably likely to cause a breach of a representation, wananty or covenant made or given by such notifying Party hereunder, or (ii) as to any litigation or administrative proceeding pending and known to such Party or, to their Knowledge, threatened against such Party that challenges the transactions contemplated hereby or that affects or relates to the Purchased Assets in any manner; provided, however, that no such notification will, in and of itself, be deemed (A) an exception to the representations and warranties made by the disclosing Party pursuant to Section 2.1 or Section 2.2 hereof, or (B) a waiver by the Party receiving such notice of any right such receiving Party may have hereunder with respect to the matter as to which notice is given, including, without limitation, the rights of such receiving Party under Sections 4.8(a), Section 6, and/or Section 8 hereof. 4. ADDITIONAL AGREEMENTS 4.1 Tax Matters. (a) All sales, use and transfer Taxes and other non-income Taxes and any filing fees or fees relating to consents, approvals or waivers sought by Seller and incurred in connection with this Agreement and the transactions contemplated hereby, and all Taxes (including income Taxes) relating to or accruing with respect to the Business or the Purchase Assets as conducted or owned by Seller prior to Closing, shall be borne and paid by Seller, as applicable. (b) Seller shall prepare or cause to be prepared and file or cause to be filed all Tax Returns in respect of or attributable to the Business and the Purchased Assets for all Tax periods ending on or prior to the Closing Date regardless of when they are to be filed, as applicable. Buyer shall prepare or cause to be prepared and tile or cause to be

25 filed any Tax Returns in respect of or attributable to the Purchased Assets for Tax periods ending after the Closing Date, as applicable. (c) Any refund of Taxes paid or payable by or with respect to the Business or the Purchased Assets shall be promptly paid as follows (or to the extent payable but not paid due to offset against other Taxes shall be promptly paid by the Pa1iy receiving the benefit of the offset as follows): (i) to Seller if attributable to any Tax period or portion thereof ending on or before the Closing Date, or for any Tax period beginning before and ending after the Closing Date to the extent allocable to the portion of such Tax period beginning before and ending on or before the Closing Date in accordance with the allocation provisions of Section 4.l(b); and (ii) to Buyer if attributable to any Tax period or portion thereof beginning after the Closing Date, or for any Tax period beginning before and ending after the Closing Date to the extent allocable to the portion of such Tax period beginning immediately after the Closing Date in accordance with the allocation provisions of Section 4.l(b). 4.2 Employee Matters. (a) General. Subject to standard background checks and confirmation of employment eligibility, the Buyer shall offer regular, full-time employment (37.5 hour work week) with the Buyer, such employment to be effective as of the Closing Date, to current employees of the Seller involved in the operations of the Business, as listed on Schedule 2.l(n). All such employees of the Seller who are offered employment, in connection with the transaction contemplated by this Agreement, and who accept employment with the Buyer on or after the Closing Date shall cease their employment status with the Seller as of the Closing Date (or subsequent date on which the employee accepts an offer of employment with the Buyer, if applicable) and simultaneously therewith shall become a "Continuing Employee." The Seller shall not induce or encourage any such employee to decline such offer of employment. All Continuing Employees shall cease to be eligible to participate in the Benefit Plans as of the Closing Date (or subsequent date on which the Continuing Employee accepts an offer of employment with the Buyer, if applicable), and the Seller shall take whatever action is necessary or appropriate to terminate, as of the Closing Date (or subsequent date on which the Continuing Employee accepts an offer of employment with the Buyer, if applicable), the employment of the Continuing Employees and the participation of Continuing Employees in all of the Benefit Plans or Employee Agreements. All Continuing Employees will be paid initially the same base pay as paid to them by Seller as of the Closing Date, and all Continuing Employees will be given length of service credit with the Buyer equal to the length of service earned with the Seller (''Cumulative Length of Service"). Continuing Employees will be eligible for pay adjustments in accordance with procedures applicable to all other Loudoun Water employees. Continuing Employees shall receive the same benefits as other Loudoun Water employees consistent with such employee's Cumulative Length of Service. Buyer agrees that it shall not, for a period of thirty-six (36) months after the Closing Date, terminate the employment of any Continuing Employee who accepts his or her offer of employment, excluding voluntary terminations and terminations for cause, which shall be determined by Buyer in its reasonable discretion in accordance with its current personnel "pr

26 policies and regulations. However, Buyer may reassign Continuing Employees to other duties and/or to other facilities operated by Buyer. (a) None of the Benefit Plans or the Employee Agreements shall be transferred to the Buyer and the Buyer shall not assume any Benefit Plans or any Employee Agreements or any liabilities thereunder, except as may be agreed upon between the Seller and the Buyer. (b) Seller shall be liable for any and all costs or expenses incurred under a Benefit Plan by any employees of the Seller (including any Continuing Employee) before the Closing (including expenses incurred but unpaid as ofthe Closing). (c) COBRA. Seller shall be responsible for obligations under COBRA with respect to any employee of the Business or qualified beneficiary thereof whose "qualifying event" for COBRA purposes has occurred on, prior to or subsequent to the Closing, and with respect to any employee or any qualified beneficiary thereof, who is not a Continuing Employee or does not accept the Buyer's offer of employment. (d) Benefit Plans for Emplovees. The Buyer shall not be liable for or obligated to provide any benefits for any employee of the Seller, including Continuing Employees, under any benefit plan maintained by Seller for its employees. Seller shall indemnify the Buyer and relieve the Buyer of any and all Liabilities with respect to any claim by any of the Seller's employees or Continuing Employee under a benefit plan maintained by Seller. Continuing Employees shall be offered equal retirement, health and leave benefits as those offered to current and future employees of the Buyer, without discrimination, and without any probation period for such benefits. (e) No Third Party Beneficiaries. Nothing herein, express or implied, is intended to confer on any active or retired employee of the Seller or his or her legal or other representatives or beneficiaries any rights or remedies of any nature or kind whatsoever under or by reason of this Agreement including, without limitation, any right to continued employment or to any severance or other benefits from the Seller or the Buyer. 4.3 Post-Closing Access to Information. For a period of seven (7) years after the Closing Date, the Seller shall provide, and shall cause its appropriate personnel to provide, when reasonably requested to do so by the Buyer, access to all Tax, financial and accounting records of or relating to the Purchased Assets, the Assumed Liabilities, or the Business and the right to make copies or extracts therefrom at its expense. During such seven (7) year period, the Seller shall not, nor shall it permit its Affiliates to, intentionally dispose of, alter or destroy any such books, records and other data without giving thirty (30) calendar days' prior written notice to the Buyer and permitting the Buyer, at its expense, to examine, duplicate or repossess such records, files, documents and correspondence. 4.4 Transition of Operations. Seller shall continue operating the Purchased Assets, including the Goose Creek Water Treatment Plant, until the Closing Date.

27 Following the Closing Date, Buyer intends, but is not required, to continue operation of the Goose Creek Water Treatment Plant to supply Buyer's need for potable water. After the Closing Date, Buyer shall not be obligated to supply water to Seller or Seller's customers. The Parties shall cooperate to accomplish a successful transition of operations without interruption. (a) Closing Costs. Seller shall pay all costs and expenses incurred in connection with preparation of the Special Warranty Deed, removal of all Liens on the Purchased Assets, and legal representation of Seller with respect to the Transaction. Buyer shall pay all costs and expenses incurred in connection with the recordation of the Special Warranty Deed, as applicable, appraisals, studies, tests, evaluations and inspections of the Purchased Assets, including the Title Evidence, title insurance premiums, and legal representation of Buyer with respect to the Transaction. The Parties hereby acknowledge that Buyer, as a political subdivision of the Commonwealth of Virginia, is exempt from Virginia's recordation tax, and that Seller, as a political subdivision of the Commonwealth, is exempt from Virginia's Grantor tax. Any escrow or closing fees imposed by the Title Company shall be shared equally by the Parties. Real estate taxes and assessments, if any, and any other costs and expenses normally and customarily prorated between Seller and Buyer in real estate transactions in the Commonwealth of Virginia shall be prorated between Seller and Buyer as of the Closing Date. 4.5 Water Supply Agreements. Seller and Buyer shall terminate any and all existing water supply agreements between Seller and Buyer, and any amendments thereto (the "Water Supply Agreements"), effective as of the Closing Date. The Parties shall cooperate to obtain any required signatures and approvals, if any, including, without limitation, the Board of Supervisors of Loudoun County, to effectively terminate the Water Supply Agreements on or prior to the Closing. 4.6 Further Assurances. From time to time after the Closing Date, upon request of the other Party and without further consideration, each Party shall execute and deliver to the requesting Party such documents and take such action as the requesting Party reasonably requests to consummate more effectively the intent and purpose of the Parties under this Agreement and the transactions contemplated hereby. 4.7 Recreational Use of Beaverdam Reservoir. Buyer has, prior to execution of this Agreement, commenced discussions with the Northern Virginia Regional Park Authority ("NVRP A") regarding the recreational use of the Beaverdam Reservoir. Buyer will continue good faith discussions with NVRP A and the Loudoun County Department of Parks, Recreation & Community Services to allow recreational use consistent with the primary purpose of drinking water supply. 4.8 Environmental. (a) Hazardous Materials. A construction and demolition debris disposal area, dredged spoils area, a lagoon and a septic system and drain field are present on the Real Property that may require further assessment and possible remediation and monitoring

28 due to the release or potential presence of Hazardous Materials (the "Environmental Areas"). Buyer intends to apply for acceptance of the demolition debris disposal area and the dredged spoils area, and possibly the lagoon, and septic system and drain field based upon sampling to be performed by Buyer, into the Virginia Voluntary Remediation Program ("VRP"), enroll such areas into the VRP if eligible and complete the VRP for each Environmental Area and possibly enter into a remediation consent order with the Virginia Department of Environmental Quality ("DEQ") if necessary for or recommended by DEQ for VRP participation. Seller shall promptly reimburse Buyer upon receipt of an invoice and reasonable supporting documentation for any costs and expenses incurred for any remediation, including implementation of any institutional controls and governmental fees, under the VRP or any associated remediation consent order or under another federal or state law, rule or regulation for and if any Environmental Area is not deemed eligible for the VRP. Remediation of the Environmental Areas shall be limited to commercial, industrial and recreational standards to the extent permitted by DEQ or the U.S. Environmental Protection Agency, as applicable. Buyer shall be permitted to apply to the VRP for the Environmental Areas prior to Closing and Seller agrees to cooperate in the submission of the applications. Buyer will provide a draft of any proposed remediation and supporting assessment information for any Environmental Area to the Seller for review and comment for a period of thirty (30) days prior to submission to DEQ or any other governmental entity for approval. Buyer will give reasonable consideration to any comments of Seller on any proposed remediation plan. (b) Removal of Chemicals and Containers. Prior to or within ten (1 0) days after Closing, Seller at its sole cost and expense shall remove from the Purchased Assets the Chemicals and Containers and recycle, reuse or dispose of them off of the Real Property in compliance with Laws. Seller rather than Buyer shall be listed as the generator and owner of the Chemicals and Containers on any manifests, bills of lading, contracts, purchase orders or any other transfer or disposal documentation. (c) Survival. Seller's obligations under this Section 4.8 shall expressly survive Closing or earlier termination of this Agreement. 5. CONDITIONS PRECEDENT TO THE BUYER'S OBLIGATIONS The obligation of the Buyer to consummate the transactions contemplated by this Agreement is subject to the satisfaction (or written waiver by the Buyer) of each of the following conditions on or before the Closing Date: 5.1 Representations and Warranties. Each of the representations and warranties of the Seller contained in this Agreement that are qualified with respect to materiality shall be true and correct in all respects when made and as of the Closing Date, and the representations and warranties of Seller set forth in this Agreement that are not so qualified shall be true and correct in all material respects when made and as of the Closing Date.

29 Seller shall have in all respects performed and complied with its respective agreements and obligations under this Agreement that are to be performed or complied with by the Seller prior to or on the Closing Date. 5.3 There shall not have occurred any event which has caused, or which could reasonably be expected to cause, a Material Adverse Effect in connection with the Business and/or the Purchased Assets. 5.4 No Injunction. No preliminary or pern1anent injunction or other Order issued by any Governmental Entity or other legal restraint or prohibition that restrains, enjoins or otherwise prohibits the transactions contemplated hereby shall be in effect. 5.5 Deliverv of Documents. Seller shall have delivered, or caused to have been delivered, to the Buyer the documents described in Section Government Consents; Permits. There shall have been obtained at or prior to the Closing Date transfers of such Permits required for the conduct of the Business as currently conducted by the Seller, or if necessary, the Buyer shall have obtained such material licenses or permits on a de novo basis. 5.7 Required Consents. All of the Required Consents of third parties and Governmental Entities set forth on Schedule 2.l(s) shall have been obtained. 5.8 Legislation. No Law shall have been enacted which prohibits or restricts the consummation of the transactions contemplated hereby. 5.9 Lien Releases. Seller shall have obtained a release reasonably satisfactory to the Buyer with respect to any and all Liens on the Purchased Assets other than Permitted Liens, and shall convey good and marketable, fee simple title to the Purchased Assets to Buyer Due Diligence. Buyer and Seller acknowledge that Buyer is currently in the process of performing due diligence. Buyer shall be satisfied, in its sole discretion, with the results of its legal, corporate and financial due diligence. To the extent that Buyer has not already performed the following, Buyer shall have the right to conduct the following due diligence with respect to the Real Property during the Diligence Period: (i) Buyer has the right during the Diligence Period to order a survey of the Real Property prepared at Buyer's request and expense (the "Survey") and a title insurance commitment with respect to the Real Property (the "Title Commitment", and together with the Survey, the "Title Evidence"). Buyer shall have the right to obtain any and all title policy endorsements which Buyer desires to obtain in connection with this transaction, but the obligations of the parties are not conditioned on Buyer's obtaining such endorsements, except in the event that Buyer is unable to obtain an endorsement based on a breach of Seller's representations, warranties or obligations set forth in this Agreement which is not cured within the applicable cure period. Buyer shall review the Title Evidence and, within five (5) days of the Effective Date, shall give Seller notice (the "Title

30 Objection Notice") of any matters in the Title Evidence to which Buyer objects (the "Title Defects" or singularly a "Title Defect"). In the event Buyer shall timely and properly object to any Title Defects, Seller shall have the right (but without any obligation to do so, other than as set forth below as to Monetary Defects) to attempt to cure such matter objected to by Buyer as soon as reasonably possible, but in any event within the fifteen (15) day period following the timely receipt by Seller of the Title Objection Notice (the "Cure Period"). In the event that Seller has not cured such Title Defect prior to the end of the Cure Period, and Seller has not agreed in writing to cure such Title Defect on or before Closing, then Buyer shall have, at Buyer's sole discretion and as Buyer's sole options hereunder as to the uncured Title Defects (or uncured Title Defect), the right to (i) accept title to the Real Property subject to the Title Defects without any adjustment to the Purchase Price (in which event the remaining Title Defects shall be deemed "Permitted Exceptions"); or (ii) terminate this Agreement by written notice thereof to Seller within five (5) days after the expiration ofthe Cure Period, whereupon this Agreement shall be terminated, the Earnest Money shall immediately be refunded to Buyer and both parties shall thereafter be released from all further obligations hereunder, except that Buyer shall not be released from the surviving obligations set forth herein. In the event Buyer fails to timely and properly terminate this Agreement as set forth in subsection (ii) above, Buyer shall be deemed to have selected subsection (i) above. Notwithstanding the foregoing, Seller shall be obligated to cure prior to Closing all Title Defects which are mechanics' or materialmen's liens, judgment liens, tax liens or assessments, mortgages, deeds of trust, or other monetary defects encumbering the Real Property ("Monetary Defects"). (ii) Prior to the expiration of the Diligence Period, Buyer, its agents, employees, representatives and contractors may, during normal business hours, inspect, test, and survey the Real Property and any and all portions thereof, including physical and mechanical inspections. Seller shall cooperate in good faith with Buyer, Buyer's agents, employees, representatives and contractors in connection with all such inspections, tests and surveys. Any tests, examinations or inspections of the Real Property by Buyer and all costs and expenses in connection with Buyer's testing, examination and inspection of the Real Property shall be at the sole cost of Buyer and shall be performed at a time and in a manner not to unreasonably interfere with Seller's ownership ofthe Real Property. Buyer shall immediately cause to be released to Seller's sole satisfaction any lien of any type which attaches to the Property by virtue of any of Buyer's inspections, examination or testing or other activities with respect to the Real Property. Upon completion of any such inspection, examination or test, Buyer shall promptly restore any damage to the Real Property caused by such inspection, examination or test or by Buyer's or its agents' actions or other activities. Prior to any entry onto the Real Property by Buyer or any of its agents, Buyer shall obtain, and shall cause each of its Buyer's agents, consultants or representatives entering onto the Real Property to obtain, general liability insurance in the amount of One Million

31 Dollars ($1,000,000.00) per occurrence and a general aggregate of Two Million Dollars ($2,000,000.00), and naming Seller as an additional named insured. (iii) If Buyer determines, in its sole and absolute discretion, that Buyer does not desire to purchase the Real Property for any reason or no reason, then Buyer shall have the right to give written notice to Seller electing to terminate this Agreement, provided such notice is delivered to Seller on or prior to the expiration of the Diligence Period. In the event such notice oftermination is timely delivered, then the Parties shall be released from all further obligations each to the other under this Agreement, except Buyer shall not be released from the surviving obligations set forth in this Agreement, and the Earnest Money, together with any interest earned thereon, shall be immediately returned to Buyer. In the event that Buyer does not timely tern1inate this Agreement as set forth in this Section, the contingency set forth in this Section shall be deemed satisfied or waived by Buyer. 6. CONDITIONS PRECEDENT TO THE SELLER'S OBLIGATIONS The obligation of the Seller to consummate the transactions contemplated by this Agreement is subject to the satisfaction (or written waiver by the Seller) of each of the following conditions on or before the Closing Date: 6.1 Representations and Warranties. Each of the representations and warranties of the Buyer contained in this Agreement that are qualified with respect to materiality shall be true and correct in all respects when made and as of the Closing Date, and the representations and warranties of the Buyer set forth in this Agreement that are not so qualified shall be true and correct in all material respects when made and as of the Closing Date. 6.2 Performance of Obligations. Buyer shall have in all respects performed and complied with its respective agreements and obligations under this Agreement that are to be performed or complied with by the Buyer prior to or on the Closing Date. 6.3 No Injunction. No preliminary or permanent injunction or other Order issued by any Governmental Entity or other legal restraint or prohibition that restrains, enjoins or otherwise prohibits the transactions contemplated hereby shall be in effect. 6.4 Delivery of Documents. The Buyer shall have delivered the documents described in Section Closing of Fairfax Water Transaction. Closing shall have occurred under that certain Asset Purchase Agreement between the Seller and Fairfax Water dated and effective as of, 2013 as provided in Section 7.1.

32 7. CLOSING 7.1 Closing Date. Unless this Agreement is terminated and the transactions contemplated hereby abandoned pursuant to Section 9.1, and provided that the conditions to the Closing set forth in Article 4.8(a) and Atiicle 6 are satisfied or waived, the closing with respect to the Transaction contemplated hereby (the "Closing") shall occur on a date and time mutually acceptable to the Seller and the Buyer, which is anticipated to be on or prior to January 21, The date on which the Closing occurs is referred to in this Agreement as the "Closing Date." The Closing shall be effective as of II :59pm Eastern Standard Time on the Closing Date. The Closing shall be an escrow closing where all closing documents and proceeds required to be paid or provided by each Party pursuant to this Agreement will be delivered to the Title Company in escrow on or before the Closing Date and upon receipt of the respective money and documentation of the Parties, the Title Company shall disburse the escrow, whereby the Purchase Price and other consideration shall be disbursed to Seller and Title Company shall be authorized to release the closing documents to Purchaser and record the closing documents as applicable. 7.2 Seller's Closing Deliverables. At the Closing, the Seller shall deliver to the Title Company the following documents, in each case duly executed or otherwise in form and substance satisfactory to the Title Company and Buyer: (a) The Purchased Assets; (b) A bill of sale in the form attached hereto as Exhibit A (the "Bill of Sale"), with respect to the Purchased Assets; (c) An assignment and assumption agreement in the form attached hereto as Exhibit B (the "Assignment and Assumption Agreement"), with respect to the Assumed Contracts and Assumed Liabilities; (d) An intellectual property assignment agreement in the form attached hereto as Exhibit C (the "IP Assignment Agreement"), if applicable; (e) A special warranty deed in the form attached hereto as Exhibit D (the "Special Warranty Deed"), with respect to the Real Property; (f) An assignment of Seller's interest in the Waterline Easement in the form attached hereto as Exhibit E (the "Waterline Easement Assignment"); (g) Vehicle titles and assignments sufficient to transfer title to the Owned and Leased Vehicles; (h) Evidence satisfactory to the Title Company and Buyer that all Liens affecting the Purchased Assets, other than Permitted Liens, have been or will be fully released contemporaneously with Closing, which evidence may include payoff letters in form and substance satisfactory to Buyer;

33 U) A certificate of Seller in a form satisfactory to the Title Company and Buyer, dated as of the Closing Date, which shall certify (i) all necessary resolutions authorizing the execution, delivery and performance of this Agreement by Seller and the consummation by Seller of the Transactions contemplated hereby (including the sale of the Purchased Assets), (ii) that the conditions set forth in Section 5.1, 5.2, and 5.3 have been satist1ed, and (iii) the names of the officers of the Seller authorized to sign this Agreement and the other documents, instruments or certificates to be delivered pursuant to this Agreement by the Seller or any of its officers, together with the true signatures of such officers; (k) The Books and Records of the Seller; (l) An owner's affidavit in form reasonably acceptable to Title Company, non-foreign affidavit in form reasonably acceptable to Title Company, and such other documents as may reasonably be required by the Title Company; and (m) Closing statement. 7.3 Buyer's Closing Deliverables. At the Closing, the Buyer shall deliver the Purchase Price to the Title Company and shall deliver the following documents to the Title Company, in each case duly executed or otherwise in proper form: (a) (b) (c) (d) (e) Bill of Sale; Assignment and Assumption Agreement; IP Assignment Agreement; Special Warranty Deed; Waterline Easement Assignment; (f) A cetiificate of Buyer dated as of the Closing Date, which shall certify (i) all necessary resolutions authorizing the execution, delivery and performance of this Agreement by Buyer and the consummation by Buyer of the Transactions contemplated hereby (including the acquisition of the Purchased Assets), and (ii) the names of the officers of the Buyer authorized to sign this Agreement and the other documents, instruments or certificates to be delivered pursuant to this Agreement by the Buyer or any of its officers, together with the true signatures of such officers; and (g) Counterpart closing statement. 8. DEFAULT. 8.1 Purchaser's Default. In the event of a default by Purchaser under this Agreement for failure to close the transaction contemplated by this Agreement on the Closing Date, which

34 default is not cured by Purchaser within five (5) business days after written notice thereof to Purchaser, this Agreement shall terminate, whereupon the pmiies shall be relieved of all further obligations hereunder; provided, however, that Purchaser shall not be released from and shall remain liable for the surviving obligations. In the event of a default by Purchaser for failure to close the transaction, the Earnest Money shall be paid to Seller as complete and liquidated damages and as Seller's sole remedy for such breach or default. Seller and Purchaser acknowledge that it would be impractical and difficult to ascertain the actual damages which would be suffered by Seller if Purchaser fails to consummate the purchase of the Purchased Assets as and when contemplated by this Agreement and the Parties have determined that the amount of the Earnest Money is a fair and reasonable estimate of the damages. 8.2 Seller's Default. In the event of a default by Seller under this Agreement for failure to close the transaction contemplated by this Agreement, failure to cure all Monetary Defects or satisfy any of Seller's material, pre-closing obligations under this Agreement, which default is not cured by Seller within five (5) business days after written notice thereof to Seller, Purchaser, at its option and as its sole remedy for such breach or default, may elect in writing made within ten (1 0) days following notice and cure period: (i) to terminate this Agreement, whereupon Purchaser shall receive a refund of the Earnest Money, and the Parties shall be relieved of all further obligations hereunder, except Purchaser shall not be released from and shall remain liable for the surviving obligations, (ii) sue Seller for specific performance, or (iii) waive the default and proceed to Closing in accordance with the provisions of this Agreement. In the event of a default by Seller which consists of a breach of any of Seller's representations or warranties contained in this Agreement which breach is unknown to Purchaser at the time of Closing, Purchaser shall have the right to seek damages against Seller in the amount of Purchaser's actual damages. In the event of any such claim Seller's liability shall be limited to actual damages incurred by Purchaser, and in no event shall Seller be liable for, speculative, consequential or punitive damages, Purchaser hereby waiving any right to seek or collect any such, speculative, consequential or punitive damages. 9. TERMINATION 9.1 General. This Agreement terminates automatically, and the transactions contemplated hereby abandoned if Closing has not occurred by the date that is one hundred and twenty (120) calendar days following the Effective Date, unless otherwise mutually agreed to by the Parties in writing. This Agreement may be terminated, and the transactions contemplated hereby may be abandoned at any time prior to the Closing: (a) by mutual written consent of the Parties hereto; (b) by Buyer or Seller, if there has been a breach in any respect on the part of the other or their respective Affiliates of a representation, warranty, covenant or agreement contained herein, which breach remains uncured for ten (I 0) days after notice of such breach is received; (c) by Buyer on or prior to the expiration of the Diligence Period;

35 (d) by Buyer or Seller, if any condition to Closing set forth in Section 4.8(a) or~' respectively, cannot be met after reasonable efforts to meet such condition precedent or has not otherwise been waived by Buyer in writing; or (e) by Buyer or Seller in the event of a default by the other Party pursuant to Article 8 of this Agreement; or (f) by Buyer or Seller if any Governmental Entity shall have enacted, issued, promulgated, enforced or entered any Law or Order, or refused to grant any required consent or approval, that has the effect of making the consummation of the transactions contemplated hereby illegal or that otherwise prohibits consummation of such transactions. 9.2 Effect of Termination. If this Agreement is terminated pursuant to this Article 9, this Agreement shall become null and void and of no fwiher force and effect and there shall be no further Liability on the part of any Party hereto except to pay such expenses as are required of it. No such termination shall relieve any Party of any Liability to the other for any breach of this Agreement prior to the date of termination. Without limiting the foregoing, in the event of termination, Buyer shall immediately return all documents provided by Seller, and Buyer and its employees and agents that were involved in the review of the Business and/or the negotiation of this Agreement shall keep all such information relating to the Business and the Purchased Assets confidential as if such information was owned by them. 10. MISCELLANEOUS 10.1 Publicity. The Parties agree that, from and after the Effective Date, no public release, written statement or announcement concerning the transactions contemplated hereby shall be issued or made without the prior written consent of both Parties, except for the content of any such release or announcement that is required by Law, which release or announcement shall be made available to the other Party for its review as soon as reasonably practicable prior to such disclosure. Notwithstanding the foregoing, any Party may issue a press release on the Closing Date, provided that such Party shall allow the other Party reasonable time to comment on such release in advance of, and approve, such issuance (which approval shall not be unreasonably withheld, delayed or conditioned) Assignment. Except to the extent otherwise expressly set forth in this Agreement, no Party shall assign, transfer or encumber this Agreement, or its rights or obligations hereunder, in whole or in part, voluntarily or by operation of Law, without the prior written consent of the other Party, and any attempted assignment, transfer or encumbrance without such consent shall be void and without effect. This Agreement shall be binding upon, inure to the benefit of, and be enforceable by the Parties and their respective permitted successors and permitted assigns Entire Agreement. This Agreement, together with the Schedules and Exhibits hereto and thereto constitute the entire agreement between the Parties, and

36 supersede all prior agreements and understandings, oral and written, between the Parties, with respect to the subject matter hereof; there are no conditions to this Agreement that are not expressly stated in this Agreement Amendment. No modifications, amendments or supplements to this Agreement shall be valid and binding unless set forth in a written agreement executed and delivered by the Parties Waiver. No waiver by any Party of any of the provisions of this Agreement shall be etfective unless set forth in a written instrument executed and delivered by the Party so waiving. Except as provided in the preceding sentence, no action taken pursuant to this Agreement shall be deemed to constitute a waiver by the Party taking such action of compliance with any representations, warranties, covenants or agreements contained in this Agreement and in any documents delivered or to be delivered pursuant to this Agreement and in connection with the Closing under this Agreement. The waiver by any Party of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach Notice. All notices, requests, demands and other communications under this Agreement shall be given in writing and shall be personally delivered, or sent to the Parties at their respective addresses indicated below by registered or ce1iified U.S. mail, return receipt requested and postage prepaid, or by private overnight mail courier service, as follows: TO THE BUYER: With a copy (which shall not constitute notice) to: TO THE SELLER: Loudoun County Sanitation Authority d/b/a Loudoun Water Loudoun Water Way Ashburn, Virginia Attention: General Manager GMO@loudounwater.org McGuire Woods LLP 1750 Tysons Boulevard Suite 1800 Tysons Corner, Virginia Attention: Jonathan P. Rak, Esq. jrak!aj,mcguirewoods.com The City of Fairfax, Virginia City Hall Room Armstrong Street Fairfax, Virginia Attention: Robert L. Sisson, City Manager robert.sisson@fairfaxva.gov With a copy (which shall not

37 constitute notice) to: The City of Fairfax, Virginia City Hall Room Armstrong Street Fairfax, Virginia Attention: Brian J. Lubkeman, City Attorney brian.lubkeman~fairtaxva.gov or to such other person or address as any Party shall have specified by notice in writing to the other Party. If personally delivered, then such communication shall be deemed delivered upon actual receipt; if sent by overnight courier, then such communication shall be deemed delivered upon receipt; and if sent by U.S. mail, then such communication shall be deemed delivered as of the date of delivery indicated on the receipt issued by the relevant postal service or, if the addressee fails or refuses to accept delivery, as of the date of such failure or refusal Expenses. Regardless of whether or not the transactions contemplated hereby are consummated and except to the extent otherwise expressly set forth in this Agreement, all expenses incurred by the Parties shall be borne solely and entirely by the Party that has incurred such expenses Section Headings; Table of Contents. The Section headings contained in this Agreement and the Table of Contents to this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement Severability. If any provision of this Agreement shall be declared by any com1 of competent jurisdiction to be illegal, void or unenforceable, then such provisions shall be construed so that the remaining provisions of this Agreement shall not be affected, but shall remain in full force and effect, and any such illegal, void or unenforceable provisions shall be deemed, without further action on the part of any person or entity, to be modified, amended and/or limited, but only to the extent necessary to render the same valid and enforceable in the applicable jurisdiction No Strict Construction. Notwithstanding the fact that this Agreement has been drafted or prepared by one of the Parties, each Party confirms that both it and its counsel have reviewed, negotiated and adopted this Agreement as the joint agreement and understanding of the Parties. The language used in this Agreement shall be deemed to be the language chosen by the Parties to express their mutual intent, and no rule of strict construction shall be applied against any Party Governing Law; Jurisdiction; Venue; Waiver of Jury Trial. This Agreement and any and all disputes between the Parties in any way related to this Agreement shall be governed by the Laws of the Commonwealth of Virginia. The Parties hereto irrevocably and unconditionally submit to the exclusive jurisdiction of the state and federal courts located in Loudoun County, Virginia, in any action or proceeding arising out of or relating to this Agreement, and each of the Parties hereto irrevocably and

38 unconditionally agrees that all Claims in respect of any such action or proceeding may be heard and determined in such state court or, to the fullest extent permitted by applicable Law, in such federal court. Without limitation of other means of service, the Parties hereto agree that service of any process, summons, notice or document with respect to any action, suit or proceeding may be served on it in accordance with the notice provisions set forth in Section The Parties hereto irrevocably and unconditionally waive any objection to the laying of venue of any such suit, action or proceeding brought in any such court and any claim that such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. The Parties hereto each agrees that a final judgment in any such suit, action or proceeding brought in an appropriate court pursuant to this Section shall be conclusive and binding upon the Parties hereto, as the case may be, and may be enforced in any other courts to whose jurisdiction the Parties hereto, as the case may be, is or may be subject, by suit upon such judgment. The Parties hereto hereby waive their respective rights to a trial by jury of any claim or cause of action arising out of or relating to the Buyer's investigation of the Business, the Purchased Assets, this Agreement, the negotiation and execution of this Agreement or any Contract entered into pursuant hereto (except to the extent otherwise expressly set forth therein) or the performance by the Parties of its or their terms in any suit, action or proceeding of any type brought by one Party against the other, regardless of the basis of the claim or cause of action Counterparts. This Agreement may be executed in two or more counterparts and it shall not be necessary that the signatures of all parties hereto be contained on any one counterpart. Each counterpart shall be deemed an original, but all such counterparts taken together shall constitute one and the same instrument. Facsimile copies or electronic image printouts of signatures may be assembled and appended to one counterpart ofthis Agreement, which shall be deemed effective as an original instrument Definitions. As used herein, the following terms have the following meanmgs: "Adjustment Amount" shall have the meaning set forth in Section 1.6(b). "Affiliate" means any Person that directly or indirectly through one of more intermediaries, controls or is controlled by or is under common control with the Person specified. For purposes of this definition, control of a Person means the power, direct or indirect, to direct or cause the direction of the management and policies of such Person whether by Contract or otherwise and, in any event and without limitation of the previous sentence, any Person owning 20% or more of the voting securities of another Person shall be deemed to control that Person. "Agreement" shall have the meaning set forth in the preamble of this Agreement. 7.2(c). "Assignment and Assumption Agreement" shall have the meaning set forth in Section "Assumed Contracts" shall have the meaning set forth in Section 1.1 (d).

39 shall have the meaning set forth in Section 1.3(a). shall have the meaning set forth in Section 1.6(a). shall have the meaning set forth in Section 1.5. "Benefit Plan'' shall have the meaning set forth in Section 2.l(n)(v). "Bill of Sale" shall have the meaning set forth in Section 7.2(b). "Books and Records" shall have the meaning set forth in Section 1.1 (g). "Business" shall have the meaning set forth in the recitals ofthis Agreement. "Business Day" means any day other than Saturday, Sunday or other day on which commercial banks in the State of New York are authorized or required by Law to be closed. "Buyer" shall have the meaning set fmih in the preamble of this Agreement. "CERCLA" means the federal Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C et seq., as amended. "Chemicals and Containers" means the all gaseous Chlorine (empty and full) cylinders, all Potassium Permanganate cans (empty and full).and all bags of Hexametaphosphate empty and full). "Claims" means any claim, cause of action, demand, litigation, action, suit, arbitration, proceeding, or right in action. "Closing" shall have the meaning set forth in Section 7.1. "Closing Date" shall have the meaning set forth in Section 7.1. "COBRA" means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended. "Code" means the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder. "Continuing Employee(s)" shall have the meaning set forth in Section 4.2(a). "Contract" means any indenture, mortgage, deed of trust, lease, licensing agreement, contract, instrument or other agreement (whether written or oral, and whether express or implied), that is legally binding. "County" means Loudoun County, Virginia. "Cumulative Length of Service" shall have the meaning set forth in Section 4.2(a).

40 "Cure Period" shall have the meaning set forth in Section 5.1 O(i). "DEQ" shall have the meaning set forth in Section 7.1 "Diligence Period" means the period of time commencing on the Effective Date and ending thirty (30) days thereafter. "Disposal" shall have the meaning as set fmih in CERCLA. "Effective Date" shall have the meaning set forth in the recital. "Employee Agreement" shall have the meaning set forth in Section?.1 (n)(ii). "Environmental Areas" shall have the meaning set forth in Section 7.1. "Environmental Law" means any Laws existing as of the date hereof related to the protection of human health, safety or the environment. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended. "Excluded Assets" shall have the meaning set forth in Section 1.2. "Excluded Liabilities" shall have the meaning set forth in Section 1.3(b). "Former Employee" means an individual, other than a Continuing Employee, who has worked for the Seller in connection with the operations of the Business at any time before the Closing Date. "GAAP" means generally accepted accounting principles in the United States, except that the Financial Statements have no footnote disclosures, and no line items regarding equity, debt, interest or taxes on an annual basis. "Governmental Entity" means any court, arbitrator, department, comm1ss1on, board, bureau, agency, authority, instrumentality or other body, whether federal, state, local, foreign or other. "Hazardous Material" means any pollutant, contaminant, toxic substance, hazardous waste, hazardous material, or hazardous substance, or any oil, petroleum, or petroleum product, which is or becomes prior to the Closing regulated under, or defined as a "hazardous substance," "pollutant," "contaminant," "toxic chemical," "hazardous material," "toxic substance" or "hazardous chemical" under any Environmental Law, including (i) CERCLA, (ii) the Emergency Planning and Community Right-to-Know Act, 42 U.S.C. Section et seq., (iii) the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., (iv) the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq., (v) the Solid Waste Disposal Act, 42 U.S.C. Section 6901 et seq., (vi) regulations promulgated under any of the above statutes, or (vii) any other federal, state or local statute, ordinance, rule or regulation that has a scope or purpose similar to those identified above, as amended, or any other Environmental Law existing as of the date hereof.

41 "Indebtedness" means, for any Person at any date, without duplication: (i) all liabilities of such Person for borrowed money or in respect of loans or advances, (ii) all liabilities of such Person evidenced by bonds, debentures, notes or other similar instruments or debt securities, (iii) all liabilities tor letters of credit and bankers' acceptances issued for the account of such Person, (iv) all liabilities arising from cash/book overdrafts (including any negative cash amounts on the balance sheet), (v) all capital lease liabilities, (vi) all liabilities for the deferred purchase price of property or services for which a Person is liable, contingently or otherwise, as obligor or otherwise (other than trade payables), and (vii) all guaranties of such Person in connection with any of the foregoing. "Information" shall have the meaning set forth in Section 2.l(l)(vi). "Intellectual Property Rights" means any and all rights in any jurisdiction throughout the world in (i) trademarks, service marks, trade dress, logos, slogans, and trade names used in the Business, together with all translations, adaptations, derivations, and combinations thereof and including all goodwill associated therewith, and all applications, registrations, and renewals in connection therewith (collectively, "Marks"); (ii) all inventions (whether patentable or unpatentable and whether or not reduced to practice), all improvements thereto, and all patents, patent applications, and patent disclosures used in the Business, together with all reissuances, continuations, continuations-in-part, revisions, extensions, and reexaminations thereof (collectively, "Patents"); (iii) all copyrightable works and copyrights in both published works and unpublished works used in the Business, including related registrations and applications (collectively, "Copvrights"); (iv) all trade secrets and confidential business information used in the Business (including ideas, research and development, know-how, business and marketing plans and proposals, formulae, compositions, assembly processes and techniques, manufacturing processes and techniques, production processes and techniques, technical data, designs, drawings, specifications, customer and supplier information, including customer and supplier identities, contact information, pricing and cost information); (v) all software versions and releases, and current ongoing or incomplete unreleased products) and all source code, executable code, data, databases, and related documentation) (collectively, "Software"); (vi) all material advertising and promotional materials used in the Business; (vii) all rights of Seller in and to all names, titles, slogans, phrases or logos used in the Business; (viii) all goodwill associated therewith and with the Purchased Assets; (ix) all other proprietary rights used in the Business; and (x) all copies and tangible embodiments thereof (in whatever form or medium). "IP Assignment" shall have the meaning set forth in Section 7.2(d). "IRS" means the United States Internal Revenue Service. "Knowledge" means, when used in regard to the Seller, the knowledge of the following persons, after reasonable investigation: Richard Thoesen and David Hodgkins, and when used in regard to the Buyer, the knowledge of the following additional persons, after reasonable investigation: Dale Hammes. "Laws" mean any federal, state, local, foreign or other statute, law, ordinance, treaty, rule or regulation.