20070828EAG to Staff 1.pdf

BI~~I!lS..0JNf &. (i)PE.~"1f: PLLCATTORNEYS AT LAW
RECEiVEDMolly 0' Leary
Tel: [phone] Fax: [phone] 'I'
mollytiPrichardsonandoleary.com LU I
O. Box 7218 Boise, 10 83707 - 515 N. 27th 51. Boise, ID 83702
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28 August 28, 2007
Ms. Jean Jewell
Commission Secretary
Idaho Public Utilities Commission
POBox 83720
Boise ID 83720-0074
Hand Delivered
RE: Case No. EAG-07-
Dear Ms. Jewell:
I am enclosing an original and two (2) copies of the EAGLE WATER
COMPANY, INC.S RESPONSE TO STAFF'S FIRST PRODUCTION REQUEST.
Also enclosed is a copy to be date stamped and retumed for our files.
Sincerely,
CuJ1 ~~
Nina Curtis
Richardson & O'Leary, PLLC
Molly O'Leary (ISB # 4996)
Richardson & O'Leary, P.LLC.
O. Box 7218
Boise, ID 83707
Tel: [phone]
Fax: [phone]
Molly~richardsonandoleary. com
Attorneys for Eagle Water Company, Inc.
RECEIVED
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BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF EAGLE WATER COMPANY FOR AN
EXTENSION OF THE CAPITAL
IMPROVEMENTS SURCHARGE
CASE NO. EAG-07-
EAGLE WATER COMPANY, INC.
RESPONSE TO STAFF'S FIRST
PRODUCTION REQUEST
COMES NOW, Eagle Water Company, Inc. and in response to the First
Production Request of the Commission to Eagle Water Company dated August 24
2007, herewith submits the following information:
EAGLE WATER COMPANY, INC.
RESPONSE TO STAFF'S FIRST
PRODUCTION REQUEST-
Response for Request #1:Please provide a copy of the Asset Purchase Agreement
and any and all other rel~ted agreements between the Company and the City of Eagle.
Reference Application ~ 21.
PLEASE SEE ATTACHED. This response is made by Robert DeShazo, President
Eagle Water Company, in consultation with attorney.
EAGLE WATER COMPANY, INC.
RESPONSE TO STAFF'S FIRST
PRODUCTION REQUEST - 2
0,0(6
ASSET PURCHASE AGREEMENT
------
This Asset Purchase Agreement ("Agreement"), dated as Of 'P .2007, is by
and among Eagle Water Company, Inc., an Idaho corporation ("Seller ), Robert DeShazo,
majority shareholder of Seller ("Shareholder ), and the City of Eagle, Idaho, an Idaho
municipal corporation ("Buyer").
RECITALS
A. Seller conducts a water utility supply and distribution business in Eagle
Idaho ("Seller s Utility Business
B. The City of Eagle is a municipal corporation formed pursuant to the laws
of the ' State of Idaho and has the authority to establish, and has established, a public domestic
water system pursuant to Idaho Code 50-323.
C. Based on the foregoing, Seller wishes to sell, and Buyer wishes to
purchase, certain assets used in the conduct of Seller s Utility Business on the terms and subject
to the conditions contained in this Agreement.
D. Shareholder owns a majority of the outstanding capital stock of Seller, and
will obtain substantial benefit nom Buyer s performance under this Agreement.
The parties agree as follows:
AGREEMENT
Purchase of Sale of Assets and Real Property.
1.1 Purchase and Sale of Assets. On the terms and subject to the conditions set
forth in this Agreement, Seller agrees to sell, transfer, assign, convey and delive;l' to Buyer, and
Buyer agrees to purchase, acquire and accept from Seller, all of the properties, assets and rights
owned by Seller and used in the conduct of Seller s Utility Business (collectively, the "Assets"
specifically excluding the Excluded Assets. All of the Assets will be delivered to Buyer free and
clear of any liens, charges, security interests or other encumbrances pursuant to a Bill of Sale
substantially in the form of Exhibit A to. this Agreement. The Assets shall include without
limitation the following:
(a) All items of tangible personal property of Seller used in Seller s Utility
Business, including all reservoirs, storage tanks, pumps, distribution lines, hydrants, valves
meters, equipment, furniture, inventory, fixtures, materials, supplies, motor vehicles, and spareand replacement items therefor, including, without limitation, all such items listed on
Schedule I.I(a), and all improvements ("System Improvements") thereto detailed on Schedule
I(a);
Boisc-I972S3.5 0063595- 000011
(b) All wells, water rights, and water rights applications, including Seller
interest in any real property associated therewith, including, without limitation, all such items
listed on Schedule 1.1(b);
(c) All leases of personal property and real property associated with the
Utility Business to which Seller is a party, whether Seller is lessor or lessee (collectively, theLeases), and all rights, benefits and interests of Seller under the con-1racts, agreementscommitments, understandings, purchase orders, sales orders, documents and instnunents(collectively, the "Contracts"), in each case solely as approved by Buyer in its sole discretion
and listed on Schedule I.I(c);
(d) All deposits or down payments, if any, made by Seller s customers or
prospective customers relating to the purchase of goods or the performance of Utility Business
services (including but not limited to construction of water system inftastructure or facilities) not
completed in full conformance With all customer requirements and specifications and accepted
by the customer on or before the Closing ("Development Fees
(e) All proprietaty rights, intellectual property and intangible property ofSeller that is used in the conduct of Seller s Utility Business, including customer lists, customer
relationships, customer agreements, customer understandings, technology, know-how, processesand operating rights;
(f) To the extent transferable, all approvals, authorizations, consents, licensespermits, franchises, tariffs, orders and other registrations of any federal, state or local court or
other governmental department, commission, board, bureau, agency or instrumentality(collectively, the "Permits ) held by Seller and required for the conduct of Seller s Utility
Business, including, without limitation, all such items listed on Schedule 1.I(f);
(g)
All operating data and records, including, without limitation, financial
accounting and credit records, correspondence, budgets, engineering and plant records and other
similar documents and records related to Seller s Utility Business;
1.2 Assets Excluded From Sale. The following assets are excluded from sale (the
Excluded Assets ) and are not included within the definition of "Assets"
(a) Non-Utility Assets. Seller s Horseshoe Bend shop and yard (other than
the "Pump Parcel" as defined on Schedule 1.3), the office located in Jackson Square, and all
equipment or other assets of Seller that are not used in or related to the supply, storage,distribution or sale of water, to the extent listed on Schedule 1.2(a).
(b)
(c)
Cash. All of Seller s cash.
Accounts Receivable. All of Seller s accounts receivable.
Boise-197253.5 0063595- 000012
(d) Prepaid Items. All prepaid and defelTed items of Seller, including
prepaid rent, insurance, taxes and unbilled charges and deposits, other than the Development
Fees;
(e) Name and Phone Numbers. The rights to the trade name "Eagle WaterCompany, and all telecommunication lines, telecommunication numbers, and Internet domains.
1.3 Purchase and Sale of Real Property. On the terms and subject to the conditions
of this Agreement, Seller agrees to grant, bargain, sell and release to Buyer, and Buyer agrees to
purchase, acquire and accept from Seller, the parcel(s) of real property as more particularly
described on Schedule 1.3 (the "Real Property
Assumption of Liabilities.
Lea$es and Contracts. Buyer agrees to assume, p~t to the term,s of an
Assumption Agreement in substantially the f01'l,ll attached hereto as Exhibit B, all liabilities of
Seller under all Leases and Contracts, but only to the extent such liabilities relate to periods after
the Closing Date. The parties acknowlqe that Buyer s counsel will review all proposed Leases
and Contracts prior to Closing to con:fi;rm that they m~y lawfully beasS1.UD.ed by :i3uyer; anyLeases or Contracts that may not be lawfully assumed by Buyer shall be retained by Seller.
No . Other Liabilities. Except for the liabilities and obligations to be assumed by
Buyer pursuant to Section 2.1, Buyer will not assume and will not be liable for any liabilities of
Seller or Shareholder, known or unknown, contingent or absolute, accrued or otherwise, and the
Assets shall be free of all liabilities, obligations, liens and encumbrances.
Purchase Price.
Amount. The total purchase price for the Assets (the "Purchase Price ) shall be
Six Million Three Hundred Thousand Dollars ($6 300,000).
Payment of the Purchase Price. Buyer shall pay t1;1e Purchase Price as follows:
(a) Down Paymen,t. Buyer agrees to pay up to Four Hundred Thousand
Dollars ($400,000) after the date of this Agreement and prior to Closing, as and when needed
Seller to reimburse Seller for costs incurred in completing the System Improvements. The
amount actually paid by Buyer under this Section 3.2(a) shall be referred to as the "DownPayment'. The Down Payment shall be admirtistered by Buyer s City Engineer and Holladay
Engineering, and Seller and Shareholder agree to cooperate with the ' City s representa1ives inmakingthird party purchases of goods and services on the best available terms, providingreceipts and other documentatio:ll for reimbursemeIlt or direct payment of third party costs and
appropriate invoices for any direct labor, and otherwise as needed for the orderly and efficientcompletion of the System Improvements and payment of the Down Payment.
Boise-197253.5 0063595- 000013
(b) Closing Payment. At Closing Buyer shall pay an amount equal to Irinety
percent (90%) of the Purchase Price, less the Down Payment (the "Closing Amounf') to Seller
in immediately available funds; and
(c) Holdback Amount. At Closing, Buyer shall withhold an amount equal to
ten percent (10%) of the Purchase Price (the "Holdback Amounf'), which amount shall be
deposited into an interest-bearing account under the con1rol of Alliance Title Escrow
Corporation ("Escrow Agenf') to be established jointly by Seller and Buyer and shall be
disbursed as provided in Section 3.2( d) below.
(d) Disbursement of Holdback Amount. The Holdback Amount plus all
accrued interest thereon shall be paid to Seller on the date that is six months after the Closing
Date, subject to any claims Buyer may have against Seller or Shareholder for breach of any
representation, warranty or covenant under this Agreement. No disbursements shall be made by
Escrow Holder from said account except with the prior written approval of both Seller and
Buyer, or pursuant to a final, unappealable judgment of a court of competent jurisdiction.
3.3 Allocation of Purchase Price. The Purchase Price shall be allocated among the
Assets and the Real Property as set forth on Schedule 3.3. Buyer and Seller shall be bound by
. the allocation set forth on Schedule 3.3 in reporting the 1ransactions contemplated by this
Agreement to any governmental authority (including without limitation the Internal Revenue
Service).
Closing.
Generally. The closing hereunder ("Closing ) shall occur after the expiration of
the Final Diligence Period and within ten business days after Buyer notifies Seller that Buyer has
completed the steps required to finance the transacticns contemplated in this Agreement, which
the parties expect to occur in approximately November 2007, at the offices of Buyer (except to
the extent set forth in Section 4., or at such time and place as Seller and Buyer may agree. The
date upon which Closing occurs shall be the "Closing Date." The Seller, Shareholder and Buyer
agree to do any and all things necessary to implement the intent of this Agreement and to sign
and deliver such documents, bills of sale, assignments, and corporate resolutions as may be
necessary or appropriate to effect the agreements contemplated hereby, including any additional
instruments or documents as may reasonably be requested by the parties following the closing
hereof.
Real Property Closing. Closing of the purchase and sale of the Real Property
will occur as follows:
(a) Manner and Place of Closing. The purchase and sale of the Real
Property shall be closed by the Title Company on the Closing Date. Closing shall take place in
accordance with the procedures described in the attached Exhibit C.
Boise-197253.5 0063595- 000014
(b) Prorations, Adj1lStments. All real property taxes for the Real Property
shall be prorated and adjusted between Buyer and Seller as of Closing, based upon the millagerates and assessed values set forth in the most recent property tax statements.
(c) Closing. Costs. &:~ept for title insurance premiums (which are separately
covered hereunder), costs incurred toel~ title of the Real Property (which shall be the expense
of Seller), and expen$e8 of C()unse:l (which shall be far the account of each party), all expenses
related to the plD'Ghase and sale ofthe.Rea1 Property shall be paid one-half by Buyer and one-half
by Seller including, without limitation, all state or 10eaJ. real estate excise, recording fees, transfer
or conveyance taxes, and escrow fees.
(d) Title Insurance. Within twenty (20) days after mutual execution of this
Agreement, Seller, at its expense, shall:furnish to Buyer a preliminary title report fi:om the TItle
Company showing its wiHi-ngness to is~etitle insurance on the Real Property, together with full
copies of all exceptions shown in such report. Buyer shall have :fifteen (15) days after receipt of
the preliminary title report andexceptioIlS within which to notify Seller in writing of Buyer
disapproval of any exceptions shoWn in the report. All other exceptions on such report Shall
constitute "Permitted Encumbrances . If Buyer disapproves any exception, Seller shall haveuntil the Closing Date to eliminate such exception. At Closing, Seller shall furnish Buyer, at
Seller s expense, a commitment for a standard coverage owner s policy of title insurance with
respect to the Real Property in the amount of the portion of the Purchase Price to be allocated
the Real Property, insuring fee" simple title vested in Buyer subject only to the PermittedEn~brances, and as soon as possible after Closing, Seller shall furnish Buyer, at Seller
expense, with the actual policy of title insurance.5. Representations and Warranties of Seller and Shareholder. Seller and Shareholder
jointly and severally, warrant to Buyer as follows, effective as of the 4ate hereof and as of the
Closing Date:
Existence of the Company. Seller is a corporation duly organized and validly
existing under the laws of the State ofIdaho.
52 Ownership of SeBer. Sharehelder owns more than sixty percent (60%) of the
outstanding shares of capital stock of Seller. Each of the shareholders and the number of shares
owned by each of them are set forth on Schedule 5.
Authority of Seller. Seller and Shareholder have full right, power and authority
to enter into this Agreement, to sell, assign, transfer and deliver the Assets to be sold by Sellerpursuant to this Agreement and to carry out the terms hereof. All corporate acts and otherproceedings required to be taken by or on the part of Seller, including all appropriate shareholder
action, to authorize Seller to carry out this Agreement have been taken.
Enforceability. This Agreement has been duly and validly executed and
delivered by Seller and Shareholder and is binding upon and enforceable against Seller and
Shareholder in accordance with its terms, except as enforceability may be limited or affected by
applicable bankruptcy, insolvency, reorganization or other laws of general application relating to
Boise-197253.5 0063595- 000015
or affecting the rights of creditors and except as enforceability may be limited by rules of law
governing specific performance, injunctiv~ relief or other equitable remedies.
5.5 Taxes. The tax returns provided or to be provided by Seller to Buyer with respect
to tax years 2003, 2004, 2005, and 2006 (the "Tax Returns ) are photocopies of the returns filed
with the In~ Revenue Service. The Tax Returns are complete and accurate in all material
respects. All taxes shown to be due on such Tax Returns have been paid in full. All other taxes
(ad valorem, sales, payroll, income or otherwise) due and payable with respect to the Assets and
relating to. any period prior to the Closing Date have been paid or will be paid by. Seller on or
before the Closing Date.
PUCReports. Seller has previously delivered to Buyer the reports filed with the
Idaho Public Utility Commission for the calendar years 2003, 2004, 2005, and 2006
(collectively, the "PUC Reports"), copies of which are attached to this Agreement in Schedule
6. The PUC Reports are complete;. have been prepared in accordance with the rules of the
Idaho Public Utilities Commission and applicable industry standards, are in accordance with the
books and records of Seller, and fairly and accurately reflect the assets, liabilities and financial
condition and results of operations indicated thereby.
CustoJIler Deposits. All deposits or other advance payments received by Seller
for goods, infrastructure expansion or improvements, or services that have not been completely
performed and delivered by Seller as of the date of this Agreement are completely and accurately
identified on Schedule 5.7. Seller agrees to provide Buyer with an updated Schedule 5.7 on the
Closing Date.
Accounts Payable. All amounts owed by Seller as of the date of this Agreement
to vendors and other trade creditors from whom Seller obtained products or services used in the
conduct of Seller s Utility Business (the "Accounts Payable ) are completely and accurately
identified on Schedule 5.8. Seller agrees to provide Buyer with an updated Schedule 5.8 on the
Closing Date.
Title to and Condition of Assets. Seller holds good and marketable title to the
Assets, free and clear of restrictions on or conditions to transfer or assignment and free and clear
of all liens, pledges, security interests, charges, encumbrances, equities, or claims as a fraudulenttransfer or otherwise. At the Closing Date Buyer will acquire good title to the Assets, free and
clear of all liens, pledges, security interests, charges, encumbrances, equities, claims or
limitations of whatever nature. No litigation, governmental action or other proceedings has been
commenced against Seller or Shareholder or is, to the knowledge of Seller or Shareholder
threatened against Seller or Shareholder which would impose any material limitation on the
ability of Seller effectively to transfer ownership of the Assets to Buyer. All of the Assets are in
good operating condition and repair, ordinary wear and tear excepted. The Assets constitute all
assets used in the conduct of Seller s Utility Business. The Assets are sufficient for the
continued conduct of Seller s Utility Business after the Closing in substantially the same manner
as conducted prior to the Closing.
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10 No Adverse Consequences. Neither the execution and delivery of this
Agreement by Seller or Shareholder nor the consummation of the transactions contemplated
hereby will (i) violate any provision of the Articles of Incorporation or Bylaws of Seller,
(Ii) violate any law, judgment, order, injunction, decree, rule, regulation or ruling of any
governmental authority applicable to the Seller, or (Hi) either alone or with the giving of notice
or the passage of time or both, conflict with, constitute grounds for termination or acceleration
, result in the breach of the terms, conditions or provisions of, result in the loss of any benefit
to Seller under or constitute a default under any agreement, instrument, license or permit to
which Seller is a party or by which Seller or the Assets are bound.
11 Absence of Certain Events. Between December 31, 2006 and the Closing, there
has not been, and (except with the prior written consent of Buyer) will not be:
(a) Any purchase, sale or encumbrance of any assets or properties by Seller
except in the ordinary course of business;
(b) Any waiver by Seller of any right or rights of substantial value affecting
the Assets, except in the ordinary course of business;
(c) Any material change in any of the operating policies of Seller, including
without limitation, purchasing, personnel, sales, budget or product acquisition except in the
ordinary course of business;
(d) Any termination or failure to renew any contract or other agreement that is
or was material to the condition of Seller;
(e) Any new adverse litigation or regulatory matter of the type that would be
required to be listed on Schedule 5.13; or
(f) Any other material transaction by Seller, event or circumstance that would
not be in the ordinary course of busineSs and would materially and adversely affect the Assets or
Seller.
Leases and Contracts.
(a) The Leases set forth on Section 1 of Schedule 1.1(c) represent a complete
and accurate list of those Assets which are leases of real or personal property to which Seller is a
party and involving annual rental expense in excess of $2 500 or not terminable at will on 30
days or less notice.
(b) The Contracts set forth on Section 2 of Schedule 1.1 (c) represent acomplete and accurate list of those Assets which are contracts, plans, undertakings, or other
commitments, whether written or. oral, to which Seller is a party and involving aggregateexpenditures or liabilities in excess of $2,500 or not terminable at will on 30 days or less notice.
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(c) The Contracts constituting sales orders or other commitments to deliver
goods or services, including but not limited to the construction of any water system plant or
inftastructure, after the Closing Date are identified on Section 3 of Schedule 1.1 (b).
(d) The Contracts constituting purchase orders or other commitments to
purchase goods or services after the Closing Date are identified on Section 4 of Schedule 1.I(b).
No party to any Lease or Contract is in default under such Lease or Contract.Buyer has paid or performed all obligations which are due or accrued under any Lease or
Contract as of the Closing Date. All other parties to the Leases and Contracts have consented, or
prior to the Closing will have consented (where such consent is necessary), to the consummation
of the transactions contemplated by this Agreement without requiring modification of Seller
rights or obligations under any Lease or Contract. True and COITect copies of the Leases and
Contracts (including all amendments thereto) we be delivered or made available to Buyer withintwo weeks following the date of this Agreement.
13 Litigation and Regulatory Matters. Except as set forth on Schedule 5., thereis no claim, litigation, proceeding or investigation of any kind pending or threatened in any court
or administrative or regulatory agency by or against Seller, or by or against Shareholder, and, tothe best knowledge of Seller and Shareholder there is no basis for any such claim, litigation
proceeding or investigation. Without limiting the foregoing, Schedule 5.13 contains a complete
and accurate list of all regulatory complaints, notices of violation, notices of deficiency, or other
orders made by or before the Idaho Department of Environmental Quality or the Idaho Public
Utilities Commission with respect to Seller that have been pending at any time from January I
2003 through the date of this Agreement.
14 Insurance. Schedule 5.14 contains a complete and accurate list of all policies of
fire, liability, product liability, worker s compensation and other forms of insurance insuring
Seller or Seller s assets or operations (the "Ins1ll"aD.ce Policies ), setting forth the applicable
deductible amounts. All the Insurance Policies are valid, enforceable and in full force and effect,
all premiums with respect to the Insurance Policies covering all periods up to and including the
date as of which this representation is being made have been paid and no notice of cancellation
or termination has been received with respect to any Insurance Policy. There have been no
claims made for insurance payment under any of the Insurance Policies. Seller has not been
refused any insurance coverage and no insurance coverage has been canceled during the three
years preceding the date of this Agreement.
15 Permits. Schedule 1.I(f) contains a complete and COITect list of all Permits held
by Seller. Seller holds, and at all times has held, all Permits necessary for the lawful conduct of
the Business pursuant to all applicable statutes, laws, ordinances, rules and regulations of all
governmental bodies, agencies and other authorities having jurisdiction over it or any part of itsoperations. Seller is in compliance with all the terms of each Permit, and there are no claims ofviolation by Seller of any Permit. Complete and accurate copies of all Permits held by Seller
will be delivered to Buyer within two weeks after the date of this Agreement. All applicablegovernmental entities and agencies that have issued any Permits have consented or prior to the
Boise-197253.5 0063595- 000018
Closing will have consented (where such consent is necessary) to the consummation of the
transactions contemplated by this Agreement without requiring modification of Seller s rights or
obligations under such Permjts.
16 Wells and Water Rights. Schedule 1.1(b) contains a complete and accurate list
of all of Seller s water rights, water right applications, and wells. All such water rights are valid,
the information with respect to such water rights contained in the records of the Idaho
Department of Water Resour~ is accurate, and th~ transfer of such water rights to Buyer at
Closing will be valid and effective. Seller s operations, including the sources and ~es of allwater sold or distributed to its customers, is consistent with its water rights as described in therecords of the Idaho Department of Water Resources. Seller has received no notice of protest or
challenge concernjng any of the water rights set forth on Schedule 1.1(b). All construction and
testing on all wells listed on Schedule 1.1 (b), incl1.lding but not limited to "Well #7", b.a$ beenfully and properly completed and the wens are fully operational in accordance with all applicable
regulatory standards. All costs associated with the deyelopment an4 construction of Well #7
have been paid by Seller prior to the date of this Agreement.
17 Environmental Conditions. Seller and its Assets and Utility Business, as well as
the Real Property, and have been in co~pJ.jance with all applicable federal, state or local .
statutes, ordinances and regulations perbiinine to the protection of human health or the
environment and any applicable orders, judgments, decrees, permits, licenses or other
authorizations or IIJ.aIldates under such statutes, ordinances or regulations ("Environmental
Laws ). No hamdous, toxic, radioactive or infectio~ suQstance n:urteri~ or waste as defined,listed or regulated under any Enviromnental Law, inc1uGing, without limitation, petroleum oil
and its fractions, is present in, on or under the Real Property or any structure or improvement in a
manner or concentration such that any investigatory, remedial, removal, reporting or otherresponse action is required or legally could be required by a governmental authority under any
Environmental Law with respect to such presence, or if such response action otherwise is
reasonable or appropriate under the circumstances.
I .18 Brolters and Finders. Seller has not employed any broker, finder or agent or
dealt with anyone pw:porting to act in such capacity or agreed to pay any brokerage cOJIlIllission,finder s fee or other like payment with respect to the transaction contemplated by this
Agre(ment, and Seller has taken no action that would give rise to a valid claim against any partyfor a brokerage commission, finder s fee or other like payment.
19 Personnel Seller is in material compliance with all applicable laws respectingemployment practices, terms and conditions of employment and wages and hours and is not
engaged in any unfair labor practice. Seller has not entered into any severance or similar
arrangement in respect of any present or former personnel that will result in any obligation(absolute or contingent) of Buyer to make any payment to any present or former personnelfollowing termination of employment. The Company does not have any "employee benefit planwithin the meaning of the Employee Retirement Income Security Act of 1974, as amended.
Boi~197253.5 0063595. 000019
20 No Liabilities. Buyer will incur no liabilities or obligations of Seller or
Shareholder as a result of the sale and transfer of the Assets to it in accordance with this
Agreement and the consummation of the transactions contemplated by this Agreement, other
than liabilities and obligations specifically assumed or incurred by Buyer in accordance with the
terms and conditions of this Agreement.
21 Related Assets. Other than the Assets being conveyed to Buyer under this
Agreement, neither Seller nor Shareholder owns, or owns a direct or indirect interest in an entity
that owns, any assets that are related to or suitable for use in the supply, storage, distribution, or
sale of water.
22 Accuracy of Representations and Warranties. None of the representations or
warranties of Seller or Shareholder set forth in this Agreement contain or will contain any untrue
statement of a material fact or omit or misstate a material fact necessary to make the statements
contained in this Agreement not misleading. Neither Seller nor Shareholder have current actual
knowledge of any fact that has resulted, or that, in the reasonable judgment of Seller or
Shareholder will result, in a material adverse change in the condition or value of the Assets.
6. Representations and Warranties of Buyer. Buyer represents and warrants to Seller as
follows:
Existence and Authority. Buyer is a municipal corporation validly existing
under the laws of the State of Idaho and has full right, power and authority to enter into this
Agreement, subject to obtaining legal authority to incur the indebtedness associated with
payment of the Purchase Price and funding of the Interconnection and Capital Costs.
Authorization and VaJidity of Agreement. This Agreement has been duly and
validly executed and delivered by Buyer and is binding upon and enforceable against Buyer in
accordance with its terms, except as enforceability may be limited or affected by applicable
bankruptcy, insolvency, reorganization or other laws of general application relating to oraffecting the rights of creditors and except as enforceability may be limited by rules of law
governing specific performance, injunctive relief or other equitable remedies.
6.3 Brokers and Finders. Buyer has not employed any broker, finder or agent or
dealt with anyone purporting to act in such capacity or agreed to pay any brokerage commission
finder s fee or other like payment with respect to the transaction contemplated by this
Agreement, and Buyer has taken no action that would give rise to a valid claim against any party
for a brokerage commission, finder s fee or other like payment.
Covenants.
Completion of Due Diligence. Promptly after the execution oftQis Agreement,
Buyer will commence its final due diligence investigation of the Assets and the Real Property.
The parties 'anticipate that this due diligence review may take approximately four to eight weeks
(the "Final Diligence Period"), although Buyer agrees to conduct its investigation as
expeditiously as practical. The scope of the :final due diligence investigation will be determined
Boise-197253.5 0063595- 0000110
by Buyer, and will include without limitation a field investigation and full "system calibrationof the WaterCAD~ software model, and a w..geneI'~tion aIld eva1~tion of model QUtput byBuyeI'. Seller ~es tQ reasonably coo~rate inaUYer s investigation and that Buyer shall have
full access to the As~ and its employ~es and customers in conducting tbi~ due diligence. In
addition, Seller and Shareholder acknQwledge and agree that Buyer and its ~ent$ shall be
permitted to discuss the stafqs of Seller s water system and the proposed connection with
Buyer s own s~em with potential financipg , parties and. with all applicable regglatory
authorities, including but not necessarily limited to the Idaho Department of Environmental
Quality and the Idaho Public U~ties Commission. In tl1at reg~~ the "Confidentiality and Due
Diligence Agreement" dated. on or about October 6, 2005 among Seller, Buyer, and certain of
their respective agents is hereby terminated as of the date of this Agreement.
Accounts Payable. Seller agrees to pay all of the Accounts Payable as of the
Closing Date within ten (10) busjness days following the Closing.
7.3 TraD$ition Services. SeJler, Sljareholder and Buyer ~ee to enter into a
Transition Services AgreeIl1eIlt at Closing purspant to which Seller would agree to op.era1;e theUtility Business on behalf of Buyer for a. period of ~p to six months following the Closing in
order to provide a smooth transition of the Utility Business to Buyer. Buyer would cODlpensate
Seller at mutually agreed upon fair market rates for such services.
7.4 Financing. The parties acknowledge that Buyer will 'need to obtain lawful public
financing e'Financing ) in order to complete the ~ctions contemplated hi this Agr~ent,
that Buyer is analyzing several potential methods, including but not limited to the possible
fonnation of a "l.o~ ~ovement di$trict", to fiD,ance all or a portion of the Purchase Price, and
that such Financing may have to be approved "y t,he c~~m~ to . be beIlefl:ted by the water
system and/or the residents of the City of ~e. Seller and S~hold.er agree to r~oI:18.blycooperate witl1.Buy~r in its efforts to obtain such fiD.ancing and to not take any actions, including
the malcing of public statements, that are inconsistent with Buyer s fin,ancing efforts.
7.5 Restructuring. The parties acknowledge that subject to additio:nal due d.iligence
Buyer may desire to structure the purchase of the Utility Business as a purchase of 100% of the
outstanding capital stock of Seller, or an acquisition by merger, as 9PPOSed to. the purchase of the
Assets of .seller as contemplated in this Agreement. Upon written notice from Buyer to Seller
sent at any time prior to 90 days the date of this Ayeement, the pries agree to use their
best efforts to amend a,nd restate this Agreement to effect the ~action structtIre selected byBuyer. The amended and restated acquisition agreement shall preserve the economic benefits toeach party and contain terms and conditions that mirror the terms and conditions of this
Agreement as closely as possible after giving effect to the revised transaction structure, subject
to the following:
(a) The Purchase Price shall be reduced by an amount equal to ninety percent
(90%) of the After-Tax Differential. For purposes of this Agreement, "After-Tax Differential"
means the difference between (i) the portion of the Purchase Price that would be available to the
shareholders of Seller after (A) satisfaction of all outstanding liabilities of Seller, including the
Boise-197253.5 0063595- 0000111
payment by Seller of all taxes due as a result of the asset purchase transaction described in thisAgreement, (B) distribution of the remaining proceeds to the shareholders of Seller in liquidation
of Seller, . and (C) payment by such shareholders of all federal and Idaho state taxes due with
respect to such distributions, and (ii) the portion of the Purchase Price that would be available to
the shareholders of Seller on an after-tax basis under the revised transaction structure. The
ro::Jining ten percent (10%) of the After-Tax Differential shall be for the benefit of the
shareholders of Seller. Seller and Shareholder agree to provide Buyer with all information intheir possession that would be required to calculate theA:fter- Tax Differential and after-taxcalculations of the two alternate structures shall be made using consistent assumptions and
methodology.
(b) The Purchase Price will also be based upon the assumption that Seller will
have no outstanding liabilities as of the closing date. To the extent this assumption is not true
the revised transaction agreement will include a purchase price adjustment clause by which the
amount of any outstanding liabilities as of the closing date will be subtracted from the Purchase
Price, with such liabilities to then be satisfied by Buyer promptly after the closing. Such
adjusted Purchase Price would also be used in Section 7.5(a)(ii) for purposes of calculating the
after-tax proceeds to be received by the shareholders of Seller under the revised transactionstructure.
(c) The Holdback Amount would be increased to fifteen percent (15%) of the
Purchase Price, with one-half of such amount to be released at six months after closing and the
balance to be released at one year following closing.
Schedules. The parties acknowledge that the schedules and exhibits to this
Agreement (the "Schedules ) are not complete as of1he date of this Agreement. Buyer agrees
prepare the first draft of the Schedules and provide them to Seller on or before three weeks
following the date of this Agreement. Seller shall then have two weeks in which to deliver
Buyer any proposed changes to the Schedules. When the Schedules have been agreed upon and
accepted by Seller and Buyer in their respective reasonable discretion, they shall be initialed byeach party and attached to this Agreement Seller and Shareholder agree to provide Buyer with
all requested information and to otherwise use commercially reasonable efforts to assist Buyer in
its preparation of the Schedules.
System Improvements. Seller and Shareholder agree to use their commercially
reasonable efforts to accomplish the System Improvements on a time table to be agreed upon by
Seller and Buyer.
Regulatory Matters. Commencing promptly after the execution of this
Agreement, Seller, Shareholder, and Buyer agree to use all commercially reasonable efforts to
cooperate in satisfying the requirements of the Idaho Department of Environmental Quality
that the current moratorium upon new customer connections in Seller s service territory are
lifted.
Boise.197253.5 0063595- 0000112
Conditions to Obligation to Close.
Conditions to Obligations of the Buyer. The obligations of the Buyer toconsummate the transactions to be perf1Jrmed by it in connection with this Agreement are subjectto satisfaction or written waiver of the following conditions:
(a) Buyer shall be satisfied in its sole discretion with the results of its finaldue diligence d~cribed in Section 7.
(b) Buyer shall have obtained the required authorization to incur indebtedness
and the Financing on terms acceptable to Buyer in its sole discretion;
(c) the representations and warranties set forth in. Section 5 above shall be true
and correct in all material respects at and as of the Closing Date;
(d)Buyer shall have approved the Schedules in its reasonable discretion;
(e) there shall not be any injunction, judgment, order, decree, ruling, or chargein effect preventing consummation of any of the transactions contemplated by this Agreement;and
(f) all actions to be tak~ by the Seller in connection with consummation of
the . transactions contemplated hereby and all in$tru.tn~ts ~d other documents required to effect
the transactions contemplated hereby wiJJ be reasonably satisfactOIyin form and substance to the
Buyer.
Conditions to Ottlig41tions of the Seller. The obligations of the Seller toconsummate the transactions to be performed by it in connection with this Agreement are subject
to satisfaction or written waiver of the following conditions:
(a) the representations and warranties set forth in Section 6 above shall be true
and correct in all material respects at and as of the Closing Date;
(b)Seller shall have approved the Schedules in its reasonable discretion;
(c) there shall not be any injunction, judgm~t, order, decree, ruling, or chargein effect preventing consummation of any of the transactions contemplated by this Agreement;
(d) all actions to be taken by the Buyer in connection with cons1)mm~on ofthe 1:ran$actions contemplated hereby and all certi:fi~es, instruments, and other doc1JD).entsrequired to effect the transactions contemplated hereby will be satisfactOIy in form and substanceto the Seller.
Termination.
Right of Parties to Terminate. This Agreement may be terminated:
Boisc-197253.5 0063595- 0000113
(a) by Buyer if any of the conditions in Section 8.1 has not been satisfied as of
March 31 , 2008 or if satisfaction of such a condition is or becomes impossible before such date
(other than through the failure of Buyer to comply with its obligations under this Agreement) and
Buyer has not waived such condition on or before such date;
(b) by Seller if any of the conditions in Section 8.2 has not been satisfied as of
March 31 , 2008 or if satisfaction of such a condition is or becomes impossible before such date
(other than through the failure of the Seller to comply with its obligations under this Agreement)
and Seller has not waived such condition on or before such date;
(c) by Buyer, if Seller shall have breached any of its obligations hereunder in
any material respect, which breach has not been cured within 30 days after written notice from
Buyer to Seller; or
(d) by Seller, if Buyer shall have breached any of its obligations hereunder in
any material respect, which breach has not been cured within 30 days after written notice from
Seller to Buyer.
9.2 Effect of Termination. If any party decides to terminate this Agreement
pursuant to Section 9., such party shall promptly give written notice to the other parties to this
Agreement of such decision. In . the event of a termination pursuant to Section 9., the parties
hereto shall be released from all liabilities and obligations arising under this Agreement with
respect to the matters contemplated by this Agreement, other than (a) for damages arising from a
breach of this Agreement, and (b) repayment of the Down Payment by Seller to Buyer. In the
event of a termination of this Agreement, Seller agrees to use its best efforts to repay the Down
Payment to Buyer as expeditiously as possible, and in all events shall repay the full amount of
the Down Payment, without interest, on or before two years following the date of tennination.
10.Indemnification.
10.Indemnification by Seller and Shareholder. On and after the Closing Date
Seller and Shareholder shall jointly and severally indemnify, hold harmless and defend Buyer, its
elected officials, employees and agents (collectively, IIBuyer s Indemnified Persons ) for, from
and against any loss, damage, claim, action, suit, proceeding, deficiency, expense and any and all
out-of-pocket co~, including, without limitation, all reasonable attorneys' fees, arising' out of (i)
any breach or inaccuracy of any representation or warranty, or any failure to perform a covenant,
of Seller made in this Agreement, (ii) the assertion of a third-party claim against Buyer inconnection with Seller's or its affiliates ' use, operation or ownership of the Assets or Seller
Utility Business at any time prior to the Closing Date, including without limitation any claims by
employees or customers, or (ill) the termination of the employees of Seller s Utility Business on
or before the Closing Date.
10.Indemnification by Buyer. On and after the Closing Date, Buyer shall
indemnify, hold harmless and defend Seller and its directors, officers, shareholders, employees
and agents (collectively, "Seller s Indemnified Persons ) for, from and against any loss,
damage, claim, action, suit, proceeding, deficiency, expense and any and all out-of-pocket costs,
Boise-197253.5 0063595- 0000114
including, without limitation, all reasonal:)le attorneys' fees, arising from (i) any breach or
inaccuracy of any representation or warranty, or any failure to perf~rm a covenant, of Buyer
made in this Agreement, or (ii) the assertion of a third-party claim. against Seller and/or
Shareholder in connection with Buyer's use, operation or ownership of the Assets following the
Closing Date.
10.3 Procedure for IndeDinification.
(a) Notiee. The
p~
entitled to be ip.demnified under this Section 10 (theIndeJ!lnifi~d :Pa.rty") sbaJl promptly ~ve notice to 1;b.einde.mnifying party after obta;n;nf actual
knowledge of any c- as to which ~ov~ I11a.y' be $ough.t hereun4er. If such in~ty arises
from a third-party claim, the In~~ Partysluill pe.J:mitthe indemnifying party to asswne the
defeI1$e of that . cl:~irn and any litigatiop. r~tipg therEirom. Notwith$1:anding the Ioreg-oing, the
right to indemnification hereunder shall not be affected by the Indemnified party's failure to give
or delay in giving such notice unless, and then only to the extent that, the indemnifying party'
rights C!Ild remedies shall have been prejudiced by such failure or delay. Failure by an
indenmifying party to notify an Indemnified Party of its election to defend any tbird-partyclaim
or action within ten (10)~ys after receiving J1l(;)tice thereof shall be deemed a waiver by the
indemnifying party of its right to .defeD.(i the claim or action. If the indetm.:lifying party elects to
assume the defense of any such claim., the Indemnified Party shall have no further
indemnification right hereunder with respect to claims consisting of its legal fees and expenses,
so long as the indemnifying party is continuing to defend such claim in good faith. With respect
to any third-party claim, upon written request by the indemnifying party, the Indemnified Party
shall make availahle to the indemnifying party all relevant information in the Indemnified Party'
possession that may be material to that el::dm. If theindenmifying party shall not undertake the
defense of that claim, as provided herein, then the' Indemnified Party's obligation to furnish such
information shall cease.
(b) Defense of Claims. If the indemnifying party assumes the defense of a
third-party claim or litigation resulting therefro~ the indemnifying party's obligations hereundershall include taking all steps reasonably necessary in the defense or settlement of such claim or
litigation and holding the Indemnified" PartY ha:rml~s from and again$t any and all damages
caused by or arising out of any settlement approved' by the indemnifying party or any judgment
in conn~on with such claim or litigation. The indeIl'lDifying party shall not, in the defense of
such claim or any litigation resulting therefto~ consent to entry of any jud~ent (other than a
judgment of dismissal on the merits without costs)' except with the Indenm.ified Party's written
consent or enter into any settlement (except with the Indemnified Party's written consent) which
does not include as an unconditional term thereof the giving by the claimant or the plaintiff to the
Indemnified Party of a release from all liability in respect of such claim or litigation. If the
Indemnified Party reje,cts a settiementor compron1ise proposed by the indem.nifying party, where
the clahn Qrcause of action can be resolved. sol~ly by the payment of mone1ary ~es, the
iilde1I1Difying party shall have no fmtheroblig~tion to defend the cl~ and 1i?e ind~nmifying
party's indemnifiCation liability with respect to such claim shall be no more the big11est bona
fide offer by the indemnifying party to settle or compromise any claim where the claimant states
in writing that such offer of settlement or compromise is unconditionally acceptable to it, but the
Boise-1972S3.5 0063595- 0000115
settlement or compromise is prevented from occurring by any action or withholding of consent
or approval by the Indemnified Party.
(c) Failure to Defend. If the indemnifying party shall not assume the defense
of any third-party claim or litigation resulting therefrom after receipt of notice from the
Indemnified Party, the Indemnified Party may defend against such claim or litigation in such
manner as it deems appropriate and, unless the indemnifying party shall deposit with the
Indemnified Party a sum equivalent to the total amount deemed by the Indemnified Party'
counsel to be reasonable, including such counsel's estimate of the fees and costs of defending the
same, the Indemnified Party may settle such claim or litigation on such terms as it may
reasonably deem appropriate and the indemnifying party shall promptly reimbmse the
Indemnified Party for the amount of such settlement and for all damage incurred by the
Indemnified Party in connection with the defense against or settlement of such chum or
litigation.
(d) Reilnbursement. The indenmifying party shall promptly reimburse the
Indemnified Party. for the amount of any judgment rendered with respect to any third..,party claim
in such litigation and for all damage inemred by the Indemnified Party in connection with the
defense of such claim or litigation, whether or not resulting from, arising out of or incurred with
respect to, the act of a third party.
11.General.
11.Amendment. This Agreement may be amended or modified and the terms
covenants or conditions hereof may be waived only by written agreement signed by Buyer and
Seller or, in the case of a waiver, by the party waiving compliance.
11.Succession. This Agreement shall be binding upon and shall inure to the benefit
of the parties, and their respective successors and permitted assigns.
11.3 Waiver. No delay or omission on the part of any party in exercising any right
hereunder shall operate as a waiver of any such right or any otb.er right. A waiver by any party
of a breach of a provision of this Agreement must be in writing and a waiver in one instance
shall not constitute a waiver of or prejudice the party's right otherwise in any other instance.
11.4 Severability. If any provisions of this Agreement are found to be unenforceable
the rem::linlne provisions shall nevertheless be enforceable and shall be construed as if the
unenforceable provisions were deleted.
11.5 Attorneys' Fees. If any arbitral or legal action or other proceeding is brought for
the enforcement of this Agreement, the prevailing party or parties shall be entitled to recover
reasonable attorneys' fees or other costs incmred in connection with such action or proceeding
and in any petition for appeal or appeal therefrom, in addition to any other relief to which it or
they may be entitled.
Boise-197253.5 0063595- 0000116
11.Notices. All notices required or pennitt~ to be given under this Agreement shallbe in writing. Notices may be served by certified or registered mail, postage paid with return
receipt requested; by private courier, prepaid; by telex, facsimile, or other telecommunication
device capable oftransn1itting or creating a written reeord;or personally. Mailed notices shall'
deemed delivered five days after ma,iling, . properly addressed and return receipt requested.
Couriered notices sh:ill be deem.eddeiivered when delivered as addressed, or if the addresseerefuses delivery, when delivery is refused. Telex or tel~mmunic.ated notices shall be deemeddeJiv.ered when receipt is either confirmed by contimrlng mm~issio equipment or
acknowledged by the addressee or its office. Pe~nal delivery shall be effective when
accomplished. Unless a party changes its address by giving notice to the other party as provided
herein, notices shall be delivered to the parties at the following addresses:
If to Seller or Shareholder:
With a copy to:
If to Buyer:
With a copies to:
Mr. Robert DeShazo
O Box 71
Eagle, Idaho 83616
Facsimile:
Richardson & O'Leary, PLLC
515N.27thStreet
Boise, ID 83707
Attention: Molly O'Leary
Facsimile: [phone]
City of Eagle
PO Box 1520
Eagle, ID 83616
Attention: Mayor
FaCsimile: [phone]
Moore Smith Buxton and Turcke, Chartered
950 West Bannock
Suite 520
Boise, ID 83702
Attention: Susan Buxton
Facsimile: [phone]
Stool Rives LLP
, 101 South Capitol Boulevard, Suite 1900
Boise, ID 83702
Attention: Kris Ormseth
Facsimile: [phone]
11.Governing Law. The parties intend that this contract shall be governed by andconstrued in accordance with the laws of the State of I~o, without regard to choice of law
rules.
Boise-197253.5 0063595- 0000117
11.Construction. All references herein to this "Agreement" include all schedules
hereto, which are incorporated herein by reference.
11.Counterpart and Facsimile Signatures. This Agreement may be signed in any
number of counterparts with the same effect as if the signatures to each counterpart were upon a
single instrument, and all such counterparts shall be deemed a single original of this Agreement.
A facsimile transmission by one party to another party of an executed signature page of this
Agreement shall be deemed to be equivalent to delivery of an original signature page, and the
transmitting party shall forward the original signature page upon request of the receiving party.
11.10 Entire Agreement. This Agreement and Real Property Purchase Agreement
contain the entire understanding of, and supersedes all prior or contemporaneous agreements
among the parties with respect to the subject matter hereof.
11.11 Captions. The section headings of this Agreement are inserted for convenience
only, and shall not constitute a part of this Agreement in construing or interpreting any provision
hereof.
11.12 Expenses of Transactions. Seller, Shareholder and Buyer shall each pay all
costs and expenses incurred by them, respectively, in connection with the transactions
contemplated by this Agreement, including without limitation the fees and expenses of their
respective attorneys and appraisers.
IN WI1NESS WHEREOF, the parties have executed this Agreement as of the date first
written above.
Seller:EAGLE WATER COMPANY
an Idaho corporation
Shareholder:
Buyer:CITY OF EAGLE, IDAHO
an Idaho corporation
Boise-197253.5 0063595- 0000118
Schedule I(a)
Scheduled Assets
Part A: Listed Assets
(Attach list of specified assets)
Part B: System Improvements
at well #7.
Add flow and recording meters at all wells.
Add standby power, complete the well housing structure, and redrill the well core
Add two pressure-reducing valves, one on Floating Feather and one on Edgewood
Add a second pump to booster station
Boise-197253.5 0063595-00001
Schedule 1.1(b)
Wells and Water Rights
Wells
(Buyer to complete first draft; Seller to review
Water Rights,
(Buyer to complete first draft; Seller to review)
Boise-l 97253.5 0063595-00001
Schedule 1.1(c)
Leases and Contracts
Section 1: Leases
(Buyer to complete first draft; Seller to review)
Section 2: Contracts
(Buyer to complete first draft; Seller to review)
Section 3: Sales Orders
(Buyer to complete first draft; Seller to review)
Section 4: Purchase Orders
(Buyer to complete first draft; Seller to review)
Boise-1972S3.S 0063595-00001
Schedule 1.1(t)
Permits
(Buyer to complete first draft; Seller to ,review)
Boise-197253.5 0063595-00001
Sch~1de l.2(e)
Telephone Numbers, Etc.
(Buyer to complete first draft; Seller to review)
Boise--197253.50063595-o0001
Schedule 1.2(a)
Excluded Assets
(Buyer to complete first draft; Seller to review)
Boise-197253.5 0063595-00001
Schedule 1.3
Real Prop~rty
(Buyer to complete first draft; Seller to review J
Boise-197253.0063595-00001
Schedule 3.
Purchase Price Allocation
(TBD)
Boise-197253.5 0063595-00001
Sched11l.e
Shareholders
Buyer to complete first draft; Seller to review)
Boise-197253.5 0063595-00001
Schedule 5.
PUC Reports
(Buyer to complete first draft; Seller to review)
Boise-197253.5 0063595-00001
Schedule 5.
Customer Deposits
(Buyer to complete first draft; Seller to review
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Schedule 5.
Accounts Payable
(Buyer to complete first draft; Seller to review)
Boise-197253.5oo63595-00001
Schedule 5.
Litigation and Regulatory Matters
(Buyer to complete :first draft; Seller to review J
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Schedule 5.
Insurance
(Buyer to complete first draft; Seller to review)
Boise-1972S3.5 0063595..00001
Exhibit A
Bill of Sale
Boise-197253.50063595-oo001
Exhibit B
Assumption'Agreement
Boise-197253.50063595-oo001
Exhibit C
Real Property Clo$ing. Procedures
The purchase and sale of the Real Property shall be closed substantially as describedbelow. Capitalized terms used and not otherwise defined have their respective meanings set
forth in the Asset Purchase Agreement (the "Agreemenf'1. Deliveries to Escrow. Documents shall be delivered and funds shall be wired to the Title
Company, and the physical presence of the parties shan not be required at Closing
2. Events of Closing. Provided the Title Company is in a position to cause the title
insurance policy described in the Agreement to be issued, conveyance of the Real Property shall
be closed as follows:
The Title Company shall perform the prorations and adjustments described in the
Agreement and the parties shall be charged and credited accordingly. The Title Company shall
provide each party with estimated closing statements in advance of the closing.
Each party shall deposit with the Title Company an amount equal to the fees and
costs to be charged to such party as set forth on the estimated closing statements.
2.3 Any liens or other items Seller are required to pay at Closing shall be paid and
satisfied of record at Seller' expense by the Title Company.
Seller shall deliver or cause to be delivered to the Title Company duly executed
and acknowledged by all parties thereto, a deed in insurable and recordable fo~ in substantially
the form attached to ,the Agreement as Exhibit C, subject only to the encumbrances accepted by
Buyer pursuant to the Agreement, which encumbrances shall be specifically described in such
deed.
2.5 Seller shall deliver a Certification ofNonforeign Status.
Seller shall deliver to Title Company such affidavits as Title Company shall
reasonably require.
To the extent requested by Buyer, Seller shall assign to Buyer all warranties
guarantees and bonds held by Seller applicable to the Real Property and improvements orinftastructure located thereon. The assignment document shall provide that Seller shall cooperate
with Buyer to secure performance by any warrantor or guarantor for any work that Buyerbelieves should be performed pursuant to such warranties or guarantees.
Boisc-I97253.5 0063595-00001
The Title Company shall record the deed, pay all costs and expenses of the
escrow out of funds deposited by the parties, and thereafter shall disburse any excess funds to the
party entitled thereto. The Title Company shall disburse the funds due Seller and Seller in
accordance with separate instructions concerning Seller s and Seller' intended 1031 exchanges.
Boise-197253.5 0063595-00001