Document:

EX-10.2

 Exhibit 10.2 

Execution Version 
 REVENUE
SHARE AGREEMENT 
 This REVENUE SHARE AGREEMENT (this “Agreement”) is made as of December 9, 2021, and is entered
into by and among American Water Works Company, Inc., a Delaware corporation (“American Water”), American Water Resources, LLC, a Virginia limited liability company (“American Water Resources”), Pivotal Home
Solutions, LLC, a Delaware limited liability company (“Pivotal”), American Water Resources Holdings, LLC, a Delaware limited liability company (“American Water Holdings” and together with American Water Resources
and Pivotal, the “Companies”). American Water and each of the Companies may be individually referred to herein as a “Party” or collectively as the “Parties”. 

WHEREAS, American Water Enterprises, LLC, a Delaware limited liability company, American Water (USA), LLC, a Delaware limited liability
company, the Companies and Lakehouse Buyer Inc., a Delaware corporation (the “Purchaser”) are parties to that certain Membership Interest Purchase Agreement (the “Purchase Agreement”), dated as of October 28,
2021, concerning the sale of all of the issued and outstanding membership interests of the Companies, subject to the satisfaction of certain closing conditions set forth therein; 

WHEREAS, in connection with the transactions contemplated by the Purchase Agreement, American Water and the Purchaser have agreed that the
Companies shall pay, or cause to be paid to, American Water, the Revenue Share Amount (as defined below) on the terms and subject to the conditions set forth in this Agreement; 

WHEREAS, this Agreement is the “Revenue Share Agreement” referenced in the Purchase Agreement; and 

WHEREAS, each capitalized term used but not otherwise defined herein shall have the meaning ascribed to it in the Purchase Agreement. 

NOW, THEREFORE, in consideration of the mutual promises and agreements set forth herein, the Parties agree as follows: 

ARTICLE I 
 PAYMENT OF
REVENUE SHARE 
 1.1 Definitions. 

(a) “Applicable Period” means (a) for the first Applicable Period, the period beginning on the date hereof and ending on
March 31, 2022 and (b) for each subsequent Applicable Period, each 90-day period after the last day of the first Applicable Period. 

(b) “Collected Revenue” means, during any Applicable Period, the aggregate amount of revenues received by the Companies or any
of their respective Affiliates (collectively, the “Providers”) pursuant to any on-bill billing arrangements existing as of the date hereof or entered into after the date hereof (each such on-bill arrangement, together with the other terms and conditions contained in the agreement, setting forth such arrangement, a “Billing Arrangement” and, collectively, the “Billing
Arrangements”) between any of the Providers and any affiliate of American Water that owns and operates regulated water and wastewater utilities (the “AWK Subsidiaries”). For the purposes of clarity, “Collected
Revenue” shall be calculated without taking into account (a) any fees or other amounts payable by any Providers to the AWK Subsidiaries pursuant to the terms of any of the Billing Arrangements, (b) any amounts paid by customers of any
of the AWK Subsidiaries for any Taxes, (c) any revenues refunded to customers of the Providers, (d) any late fees, penalties or interest, and (e) with respect to the first Applicable Period, any revenues received with respect to any
period prior to the date hereof. 

 (c) “Revenue Share Amount” means an amount equal to ten percent (10%) of
Collected Revenue for the Billing Arrangements existing as of the date hereof, and fifteen (15%) of the Collected Revenue for any future Billing Arrangement entered into after the date hereof that reflects substantially similar terms to the Billing
Arrangements entered into as of the date hereof. 
 1.2 Revenue Share Amount. 

(a) Promptly following the end of each Applicable Period, American Water will deliver to the Companies a reasonably detailed statement (a
“Revenue Share Statement”) of the Collected Revenue for such Applicable Period and the calculation of the resulting Revenue Share Amount. The Companies may deliver a written notice to American Water no later than ten
(10) business days following receipt of a Revenue Share Statement stating whether the Companies have any good faith objections to the information or calculations contained in such Revenue Share Statement, describing in reasonable detail any
objections thereto. Failure to give a timely objection notice (or written notification from the Companies that the Companies have no objection to a Revenue Share Statement) will constitute acceptance and approval of the calculation of the Revenue
Share Amount set forth therein and such calculation will be final and binding upon the Parties. 
 (b) If the Companies notify American Water
of any objection to the Revenue Share Statement within the time period set forth in Section 1.2, American Water and the Companies will attempt in good faith to reach an agreement as to the matter in dispute. If such parties
have failed to resolve any such disputed item within fifteen (15) days after receipt of timely notice of such objection, then the Parties will follow the procedures set forth in Sections 2.4(c) and (d) of the Purchase
Agreement to resolve such disagreement. 
 (c) Once finally determined in accordance with the foregoing, the Companies, as applicable, will
pay, the Revenue Share Amount to American Water within ten (10) Business Days after the Revenue Share Amount becomes final and binding. 

(d) Following the date hereof, the Companies shall not take any actions with the primary intent of avoiding or reducing the amount of the
Revenue Share Amount otherwise payable to American Water hereunder. 
 1.3 Ranking; Absolute Obligation. Payment of the Revenue Share
Amount will at all times be pari passu with all other senior Indebtedness obligations of the Companies or any of their respective Affiliates; provided, however, that any such Indebtedness shall in all circumstances permit the payment
of the Revenue Share Amount pursuant to this Agreement. The obligations of the Companies to make payments of the Revenue Share Amount will be irrevocable and absolute and will not be subject to netting,
set-off or reduction against, or be otherwise affected by, any actual or alleged claim by the Companies pursuant to, or any actual or alleged breach by American Water or any of its Affiliates of, or any actual
or alleged invalidity or other defect of, any of (i) the Purchase Agreement, (ii) any ancillary agreements related thereto or (iii) any other agreement or arrangement. 

1.4 Regulatory Restrictions. In the event any governmental or regulatory body with jurisdiction over any of the AWK Subsidiaries
determines, pursuant to any law, statute, order, consent, decree, directive, regulation, statement of policy, ruling or requirement, that the receipt of the Revenue Share Amount by American Water is not permitted (in whole or in part), then the
Companies shall cooperate with American Water in good faith to restructure the payment of the Revenue Share Amount such that American Water may continue to receive the economic benefit of this Agreement. 

  
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 1.5 Effect of Subsequent Transactions. If the Companies or any of their respective
successors or assigns proposes to (i) consolidate with or merge into any other Person and such Company will not be the continuing or surviving entity in such consolidation or merger or (ii) transfer all or substantially all of its
properties and assets to any Person, then, in each case, proper provision will be made prior to or concurrently with the consummation of such transaction so that the successors and assigns of any Company will satisfy the obligations set forth in
this Article I. 
 1.6 Competitive Businesses. Unless required by Law, American Water will not, and will cause the Post-Closing
Seller Group not to, directly or indirectly, or as or as a stockholder, partner, member, manager, or other owner or participant in any Person, (i) engage in or assist any other Person to engage in the business of providing Warranty Services (as
defined in the Billing Arrangements entered into on the date hereof) (collectively, the “Purchaser Business”) or (ii) solicit, endeavor to entice away from or otherwise encourage to leave the Purchaser Business, endeavor to
reduce the business conducted with the Purchaser Business, or otherwise interfere with the business relationship of the Companies or the Subsidiaries with, any Person who is at the time of such solicitation, endeavor or other interference a customer
or client of, supplier, vendor or service provider to, the Purchaser Business (in each case, other than in accordance with the agreements governing any Billing Arrangements). 

ARTICLE II 
 TERMINATION

 2.1 Term; Termination. 

(a) The term of this Agreement (the “Term”) shall commence on the date of this Agreement and shall expire on the earliest to
occur of (i) the termination of this Agreement pursuant to Section 2.1(b) or (c), or (ii) the termination or expiration of the last Billing Arrangement, not including any runoff period under any such Billing Arrangement. For the
avoidance of doubt, with respect to each Billing Arrangement, in no event shall the Companies be required to pay American Water for any Revenue Share Amount with respect to such Billing Arrangement accruing after the termination of such Billing
Arrangement or with respect to any off-bill runoff period following any such termination. 
 (b) If
the Companies fail to make a payment to American Water when due, then, subject to a fifteen (15) day cure period following receipt of written notice of such failure and provided that such payment is not subject to a good faith dispute by the
Companies, American Water may terminate this Agreement effective immediately, by providing written notice of termination to the Companies. 

2.2 Survival upon Expiration or Termination. The provisions of this ARTICLE II, ARTICLE III (Notices and Demands) and
ARTICLE IV (Miscellaneous) shall survive the termination or expiration of this Agreement unless otherwise agreed to in writing by the Parties; provided, that, the provisions of ARTICLE I (Payment of Revenue Share) shall survive such
termination and the Companies shall remain liable to the Sellers for all amounts payable thereunder in respect of the Revenue Share Amount for the portion of any Applicable Period ending prior to the effective date of such termination. 

  
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 ARTICLE III 

NOTICES AND DEMANDS 
 3.1
Notices. All notices, requests and other communications hereunder shall be in writing (including wire, electronic mail or similar writing) and shall be sent, delivered or mailed, addressed, or sent by electronic mail: 

 

			
	 If to the Sellers:
 American Water
Enterprises, LLC, American Water (USA), LLC
 c/o American Water Works Company, Inc.

1 Water Street
 Camden, New Jersey 08102

Attention: Jordan S. Mersky

E-mail: Jordan.Mersky@amwater.com
	  	 With copies to:
 Schulte, Roth &
Zabel LLP
 919 Third Avenue
 New York, New York 110022

Attention: Brian C. Miner

E-mail: brian.miner@srz.com

		
	 If to the Companies:
 Apax Partners US,
LLC
 601 Lexington Avenue, 53rd Floor

New York, NY 10022
 Attention: Ashish Karandikar; Nedu Ottih

Telephone: (212) 419-2495
 E-mail: Ashish.Karandikar@apax.com;
Nedu.Ottih@apax.com
	  	 With copies to:
 Simpson Thacher
& Bartlett LLP
 425 Lexington Avenue
 New York, NY
10017
 Attention: Ryerson Symons; Ben Schaye
 Telephone: (212)
455-2813; (212) 455-7866
 E-mail: ryerson@stblaw.com; ben.schaye@stblaw.com

 Each such notice, request or other communication shall be given (a) by mail (postage prepaid, registered or certified
mail, return receipt requested), (b) by hand delivery, (c) by nationally recognized courier service, or (d) by electronic mail. Each such notice, request or communication shall be effective (x) if mailed, three (3) calendar days
after mailing at the address specified in this Section 3.1 (or in accordance with the latest unrevoked written direction from such Party), (y) if delivered by hand or by internationally recognized courier service, when
delivered at the address specified in this Section 3.1 (or in accordance with the latest unrevoked written direction from the receiving Party) and (z) if given by electronic mail, such notice will be deemed delivered
only if the Party giving the notice obtains a confirmation of receipt, which the Party receiving the notice shall be affirmatively obligated to provide (or allow to be provided, in the case of “read receipts” and other automated receipt
notification processes); provided that notices received on a day that is not a Business Day or after 5:00 p.m. Eastern Time on a Business Day will be deemed to be effective on the next Business Day. 

3.2 Change of Address. The address to which such notices, demands, requests, elections or other communications are to be given by a
Party may be changed by written notice given by such Party to the other Parties pursuant to this Section 3.2. 

ARTICLE IV 

MISCELLANEOUS 
 4.1
Severability. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof if any provision of this
Agreement, or the application thereof to any person or any circumstance, is found to be invalid or unenforceable in any jurisdiction, (a) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be
valid or enforceable, such provision and (b) the remainder of this Agreement and the application of such provision to other persons or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or
unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction. 

  
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 4.2 Third Party Beneficiaries. Nothing expressed or implied in this Agreement
confers, or is intended to confer, on any person or entity other than the Parties hereto any rights or remedies whatsoever (including, without limitation, any rights to employment or benefits for any period) under or by reason of this Agreement. The
Parties hereby expressly agree that this Agreement does not, and shall not be construed to, alter or amend in any way the rights and obligations of such Parties’ affiliates pursuant to the Purchase Agreement. 

4.3 Waiver of Jury Trial. EACH OF THE PARTIES KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR THE ACTIONS OF ANY PARTY TO THIS
AGREEMENT IN NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT OF THIS AGREEMENT. 
 4.4 Governing Law. This Agreement shall be
governed by and construed in accordance with the Laws of the State of Delaware without giving effect to any conflict or choice of law provision that would result in the application of another state’s Laws. 

4.5 Executed in Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and
all of which shall, taken together, be considered one and the same agreement. Any facsimile or electronically transmitted copies hereof or signature hereon shall, for all purposes, be deemed originals. 

4.6 Construction. The headings and numbering of articles, sections and paragraphs in this Agreement are for convenience only and shall
not be construed to define or limit any of the terms or affect the scope, meaning, or interpretation of this Agreement or the particular Article or Section to which they relate. This Agreement and the provisions contained herein shall not be
construed or interpreted for or against any Party because that Party drafted or caused its legal representative to draft any of its provisions. 

4.7 Entire Agreement. This Agreement, including all attachments, constitutes the entire Agreement between the Parties with respect to
the payment of the Revenue Share Amount, and supersedes all prior oral or written agreements, representations, statements, negotiations, understandings, proposals and undertakings, with respect to the Revenue Share Amount. 

4.8 Amendments and Waivers. This Agreement may not be amended, supplemented or modified except by an instrument in writing signed on
behalf of the Parties. Any term or condition of this Agreement may be waived at any time by the Party that is entitled to the benefit thereof, but no such waiver shall be effective, unless set forth in a written instrument duly executed by or on
behalf of the Party waiving such term or condition. No waiver by any Party of any term or condition of this Agreement, in any one or more instances, shall be deemed to be or construed as a waiver of the same or any other term or condition of this
Agreement on any future occasion. 
 4.9 Assignment; Successors and Assigns. No Party may assign this Agreement or any of its rights
or obligations hereunder, in whole or in part, without the prior written consent of the other Party; provided that the Companies may assign this Agreement or any of its rights and obligations hereunder to any such affiliate or in a sale of all or
substantially all of the business of the Companies. Subject to the foregoing, this Agreement will be binding upon, and inure to the benefit of, the Parties and their respective successors and permitted assigns. Notwithstanding the foregoing, in
connection with the assignment (whether by the sale of equity or assets, merger or otherwise) of a Billing Arrangement by a Provider, the obligations contained herein with respect to such Billing Arrangement shall be transferred to the transferee of
such Billing Arrangement and the assumption of such obligations in writing shall be a condition of any such transfer. 
 [Signature Page
Follows] 

  
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 IN WITNESS WHEREOF, the parties hereto have caused this Transition Services Agreement to be
executed by their duly authorized officers as of the date first written above. 
 AMERICAN WATER 

 

			
	American Water Works Company, Inc.
		
	By:	 	 /s/ M. Susan Hardwick

	Name:	 	 Susan Hardwick

	Title:	 	 Executive Vice President and CFO

 COMPANIES: 

 

			
	American Water Resources, LLC
		
	By:	 	 /s/ Eric Palm

	Name:	 	 Eric Palm

	Title:	 	 President

	
	Pivotal Home Solutions, LLC
		
	By:	 	 /s/ Eric Palm

	Name:	 	 Eric Palm

	Title:	 	 President

	
	American Water Resources Holdings, LLC
		
	By:	 	 /s/ Eric Palm

	Name:	 	 Eric Palm

	Title:	 	 PresidentDocument

DESCRIPTION OF COMMON STOCK

Our authorized capital stock consists of 120,000,000 shares of common stock, $0.001 par value, and 5,000,000 shares of preferred stock, $0.001 par value. The following description summarizes important terms of our common stock. Because it is only a summary, it does not contain all the information that may be important to you. For a complete description, you should refer to our certificate of incorporation and bylaws, copies of which have been filed as exhibits to the Annual Report on Form 10-K for the fiscal year ended September 30, 2021, as well as the relevant portions of the Delaware General Corporation Law (the “DGCL”).

Common Stock

General.   As of  December 6, 2021, there were 35,491,056 shares of our common stock outstanding.  As of December 3, 2021, there were approximately 6,945 beneficial holders of our common stock and 23 holders of record of our common stock.

Voting Rights.   The holders of our common stock are entitled to one vote for each share held of record on all matters submitted to a vote of the stockholders, including the election of directors, and do not have cumulative voting rights. Unless otherwise required by law, matters submitted to a vote of our stockholders require the approval of a majority of votes cast by stockholders represented in person or by proxy and entitled to vote on such matter, except that directors are elected by a plurality of votes cast. Accordingly, the holders of a majority of the shares of common stock entitled to vote in any election of directors can elect all of the directors standing for election, if they so choose.

Dividends.   Subject to preferences that may be applicable to any then outstanding preferred stock, holders of common stock are entitled to receive ratably those dividends, if any, as may be declared by the board of directors out of legally available funds.

Liquidation, Dissolution and Winding Up.   Upon our liquidation, dissolution or winding up, the holders of common stock will be entitled to share ratably in the net assets legally available for distribution to stockholders after the payment of all of our debts and other liabilities, subject to the prior rights of any preferred stock then outstanding.

Preemptive Rights.   Holders of common stock have no preemptive or conversion rights or other subscription rights and there are no redemption or sinking funds provisions applicable to the common stock.

Assessment.   All outstanding shares of common stock are fully paid and nonassessable.

Preferred Stock

The board of directors has the authority, without further action by the stockholders, to issue from time to time up to 5,000,000 undesignated shares of preferred stock in one or more series and to fix the number of shares, designations, preferences, powers, and relative, participating, optional or other special rights and the qualifications or restrictions thereof. The preferences, powers, rights and restrictions of different series of preferred stock may differ with respect to dividend rates, amounts payable on liquidation, voting rights, conversion rights, redemption provisions, sinking fund provisions, and purchase funds and other matters. The issuance of preferred stock could decrease the amount of earnings and assets available for distribution to holders of common stock or adversely affect the rights and powers, including voting rights, of the holders of common stock and may have the effect of delaying, deferring or preventing a change in control of our company.

Anti-Takeover Effects of Provisions of our Certificate of Incorporation, Bylaws and the DGCL

Some provisions of the DGCL and our certificate of incorporation and bylaws contain provisions that could make the following transactions more difficult: (1) acquisition of us by means of a tender offer; (2) acquisition of us by means of a proxy contest or otherwise; or (3) removal of our incumbent officers and directors. These provisions, summarized below, are intended to encourage persons seeking to acquire control of us to first negotiate with our board of directors. These provisions also serve to discourage hostile takeover practices and inadequate takeover bids. 

We believe that these provisions are beneficial because the negotiation they encourage could result in improved terms of any unsolicited proposal.

Undesignated Preferred Stock.   Our board of directors has the ability to authorize undesignated preferred stock, which allows the board of directors to issue preferred stock with voting or other rights or preferences that could impede the success of any unsolicited attempt to change control of our company. This ability may have the effect of deferring hostile takeovers or delaying changes in control or management of our company.

Stockholder Meetings.   Our bylaws provide that a special meeting of stockholders may be called only by our President, our Chairman of the board of directors or by a resolution adopted by a majority of our board of directors.

Requirements for Advance Notification of Stockholder Nominations and Proposals.   Our bylaws establish advance notice procedures with respect to stockholder proposals and the nomination of candidates for election as directors, other than nominations made by or at the direction of our board of directors or a committee of our board of directors.

Elimination of Stockholder Action by Written Consent.   Our certificate of incorporation eliminates the right of stockholders to act by written consent without a meeting.

Election and Removal of Directors.   Our board of directors is divided into three classes. The directors in each class will serve for a three-year term, one class being elected each year by our stockholders. Once elected, directors may be removed only for cause and only by the affirmative vote of at least 662/3% of our outstanding common stock. This system of electing and removing directors may tend to discourage a third party from making a tender offer or otherwise attempting to obtain control of us because it generally makes it more difficult for stockholders to replace a majority of the directors.

Amendment of Certain Provisions in Our Organizational Documents.   The amendment of any of the above provisions would require approval by holders of at least 662/3% of our then outstanding common stock.

The provisions of the DGCL and our certificate of incorporation and bylaws could have the effect of discouraging others from attempting hostile takeovers and, as a consequence, they may also inhibit temporary fluctuations in the market price of our common stock that often result from actual or rumored hostile takeover attempts. Such provisions may also have the effect of preventing changes in our management. It is possible that these provisions could make it more difficult to accomplish transactions which stockholders may otherwise deem to be in their best interests.

Transfer Agent and Registrar

The transfer agent and registrar for the common stock is Computershare Trust Company, N.A.

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