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HomeMy WebLinkAbout20041104Stock Acquisition Agreement.pdfTO: IDAHO PUBLIC UTILITES COMMISSION FROM: ISRAEL RA ATLANTA POWER CO. 11140 CHICKEN DINNER RD. CALDWELL, ID 83607 10 -20-04 TO WHOM IT MAY CONCERN; AS OF THIS DATE I HAVE FINALIZED THE PURCHASE OF 72 SHARES OF ATLANTA POWER REPRESENTING 50% OF ATLANTA POWER STOCK FROM THE ESTATE OF LYNN STEVENSON. PLEASE MAKE A NOTE OF THIS FOR YOUR RECORDS. ISRAEL RA :~-:"~ ""\'-;:":':'""-';"'\ ./ ,/' '" '--' \\ -; '\ -\ ." , ," J ' j '\ ""- ~ ; ! r ,; i' ! :-::"J ~ "'"\'" .~ '\ .J '" ',--'"" , t, ~ , ; J ~" """-,, I~/~ STOCK ACQUISITION AGREEMENT BETWEEN ESTATE OF LYNN STEVENSON AND ISRAEL RAY REGARDING ATLANTA POWER COMPANY, INC. II1EH ~~~~~. Boise ~ Ketchum. Pocatello . Reno www.hteh.com 01796.0011.758229. TABLE OF CONTENTS Page ARTICLE 1 TERMS OF THE STOCK SALE ................................................................................ 1 Stock Transfer ....................................................................................................... ARTICLE 2 TERMS OF THE PURCHASE ................................................................................... Purchase Price ...................................................................................................... Closing """"'"""""""""""""""""""""""""""'"................................................ 1 Costs and Expenses .............................................................................................2.4 Resignation of The Estate ..................................................................................... 2 Delivery of Corporate Records .............................................................................. Release of Claims by Ray, APC and Morton Zimmerman .................................... Release of Obligations Due The Estate by APC ...............................:.........uo....... 2 Approval of Court ............ ................................................................ ~..................... 2 ARTICLE 3 REPRESENTATIONS AND WARRANTIES .............................................................. 2 1 Estate s Warranties as of Effective Date and Closing ........................................... 2 1 Du'e Authority ....... ~...............................................................................' ...... 2 Share Transfer........................................................................................... 2 Ray s Warranties as of Effective Date and Closing. .......................................,....... 3 1 Du,e Authority. ............................................................................................ 3 Duty to Issue and Deliver Shares. ..................................................ou........ 3 ARTICLE 4 CONDITIONS TO CLOSE ......................................................................................... 3 1 Estate s Conditions to Close ................................................................................. 3 2 Ray s Conditions to Close ..................................................................................... 3 ARTICLE 5 OBLIGATIONS OF RAY ............................................................................................ 3 Due Diligence .................................................................................................,....... ARTICLE, 6 DEFAULT .......... ........................ . ... .".. ............. ........................... ......... ......... ...u........ 3 Default By Estate................................................................................................... Default by Ray ................ ... ... ""." ............... ............ .., ........... ................................. 3 Cross-Default ........................................................................................................ ARTICLE 7 GENERAL PROVISIONS ................................................................................ur....... Notices ..........................................................................................................,.,.,...... Captions and Headings ....................................................................................,..... Counterparts.. ........................ ...., ...... ............. ......................... ........ .......... ........ ..... 5 Entire Agreement; No Third Party Beneficiaries..........................................u.....'" 5 5 Severabil,ity .."......... ............... ..................... ..,........... .....,....... ..".... .......... ........ ..".. 5 Remedies Cumulative ................................................................................---........ 5 Mediation and Arbitration ...................................................................................... Governing Law ...................................................................................................... Assignment........................... ..... ...,.... ........ ................ ..,........ ........ ........................ 5 10 Rules of Construction ............................................................................................ T a bie of Contents - i 01796.0011.758229.2 ........ Specific Performance .................................................................................... Further Assurances ...................................u.......................................................... 6 Brokers..... ............... .... ..., ...... ............ ..... ..n...'" ........................................ ...". ....... Table of Contents - ii 01796.0011.758229.2 STOCK ACQUISITION AGREEMENT 11S STOCK ACQUISITION AGREEMENT ("Agreement") executed this 2S~ay of lA , 2004 ("Effective Date ), by and between the Estate of Lynn Stevenson as sJccessor in interest to Lynn Stevenson (the "Estate ) and Israel Ray ("Ray RECITALS A. The Estate is the beneficial owner of seventy-two (72) shares of common stock of Atlanta Power Company, Inc., an Idaho corporation ("APC"), representing all of the shares of APC that are issued to Lynn Stevenson ("Shares B. ,APC provides electric power to the residents of Atlanta, Idaho and its power generating facilities are located in Atlanta , Idaho ("Business C. Ray desires to purchase all of the Shares from the Estate and the Estate desires to sell all of the Shares to Rayon the terms set forth in this Agreement. NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein and for other good and valuable consideration , the receipt and adequacy of which is hereby acknowledged, the parties hereto agree as follows: ARTICLE TERMS OF THE STOCK SALE Stock Transfer. The Estate hereby agrees to sell the Shares to Ray upon the terms and conditions set forth in this Agreement as of Closing. ARTICLE 2 TERMS OF THE PURCHASE Purchase Price. The Purchase Price for the Shares is One Hundred Seven Thousand Dollars ($107 000), which amount.shall be payable by Ray as follows: , 2. certified funds. Twenty-Five Thousand Dollars ($25,000) due at Closing in cash or Promissory Note , in the form attached hereto as Exhibit "A" for Eighty-Two Thousand Dollars ($82 000), which shall be sectlred by a Stock Pledge Agreement in the form attached hereto as Exhibit " Closing. This transaction shall be consummated at the office of Hawley Troxell Ennis ' & Hawley, LLP, Boise, Idaho, a time mutually agreed upon by the parties on July 16, 2004 (the "Closing" or "Closing Date Costs and Expenses. All fees, including any transfer taxes, recording fees , and filing fees shall be born by Ray. Each party shall bear their own attorneys' fees. STOCK ACQUISITION AGREEMENT - 01796.0011.758229. 2.4 Resignation of The Estate. At Closing Gail Stevenson and any co-Personal Representative who have been elected to serve as an officer, member of the Board of Directors or has been employed by APC shall deliver to APC their resignation as a Director, Officer and/or employee of APC effective as of Closing. Delivery of Corporate Records. The Estate shall deliver to Ray all original APC records it has in its possession. Ray and APC shall maintain such business records for all applicable periods as may be required by law and provide the Estate access to all business records that were in existence prior to Closing in the event the Estate is audited or otherwise is required to obtain access to such records by a third party. Release of Claims by Ray, APC and Morton Zimmerman. The Closing of this transaction is specifically contingent on Ray, APC and Morton Zimmerman releasing their respective claims against the Estate by filing a release with the Court in Camas County, Idaho and be executing a release in the form attached hereto as Exhibit " Release of Obligations Due The Estate by APC. The Estate , APC and Ray acknowledge that the Estate is due approximately Sixty-Two Thousand Dollars ($62 000) from APC for monies due and owing Lynn Stevenson. The Estate, APC and Ray agree to waive any accounting to determine the specific amount due Stevenson. As a condition of Closing, the Estate shall execute the release in the form attached hereto as Exhibit " Approval of Court. Inasmuch as the Estate is under formal probate proceedings in Camas County, Idaho, the Closing contemplated by this Agreement and the terms hereof are subject to prior approval of the Court. Upon execution of this Agreement by all parties, the Estate shall seek judicial approval of this Agreement and the transaction contemplated herein as soon as possible. ARTICLE 3 REPRESENTATIONS AND WARRANTIES 1 Estate s Warranties as of Effective Date and Closing. The Estate hereby represents and warrants to Ray, effective as of the Effective Date and as of Closing: Due Authority. Subject to final approval of the Court having jurisdiction over the Estate, the Estate has the right, power, and authority to make and perform its obligations under this Agreement., The execution , delivery, and performance of this Agreement does not violate any contract, agreement, or commitment to which any party comprising the Estate is a party or by which any party comprising the Estate is bound. Ray title to the Shares. Share Transfer. On November 1 , 2004, the Estate shall convey to Capitalization. The Estate is and will be on the Closing Date the beneficial owner and holder of the Shares. To the best of the Estate s knowledge, there are no agreements , contracts, obligations, promises, or undertakings (whether written or oral and whether express or implied) that are legally binding relating to the issuance, sale , or transfer of the Shares. 1.4 Business. The Estate makes no representations or warranties express or implied of any kind to Ray as to how the business has been conducted during any STOCK ACQUISITION AGREEMENT - 2 01796.0011.758229.2 period, nor whether any liabilities have accrued during such period that the Estate is aware of. Ray takes the Shares "AS IS" without any representations or warranties by the Estate with regards to the same. Ray assumes all responsibility for investigating the financial condition and assets of APC, 2 Ray' s ~arranties as of Effective Date and Closing. Ray hereby represents and warrants to the Estate , effective as of the Effective Date and as of Closing: Due Authority. Ray has the right, power, and authority to make and perform his obligations under this Agreement. The execution, delivery, and performance of this Agreement does not violateahy contract, agreement, or commitment to which Ray is a party. , 3.Duty to Issue and Deliver Shares. The Shares have not been . issued to the Estate. Ray shall cause APC to issue and deliver to the Estate on or before Closing stock certificates representing the shares of APC owned by the Estate. ARTICLE 4 CONDITIONS TO CLOSE 1 Estate s Conditions to Close. The Estate s obligation to complete the sale and the Closing is subject to satisfaction of the following conditions at or prior to Closing, unless waived by the Estate in writing: approval of the Court to 'consummate the transaction contemplated by this Agreement; a release of the claims against the Estate filed by Ray, APC and Morton Zimmerman filed with the Court in Camas County, Idaho; Ray shall have caused APC to execute and deliver stock certificate( s) representing the Shares to the Estate; Ray shall have delivered to the Estate the sum of Twenty-Five Thousand Five Hundred Dorlars ($25 000); original executed Promissory Note , the original executed Stock Pledge Agreement, and the original executed Release by Atlanta Power Company, Inc., Israel Ray and Morton Zimmerman. 2 Ray s Conditions to Close. Ray s obligation to complete the sale and the Closing is subject to satisfaction of the following conditions at or prior to Closing, unless waived by Ray in writing: the original executed Release by the Estate of Lynn Stevenson.. ARTICLE- 5 OBLIGATIONS OF RAY Due Diligence. Ray is a current shareholder of APC and has ' intimate knowledge of the operations of the Business, and has had full opportunity to review the tax ~nd financial statements of the Business and assets of APC, together with such other records and information requested by Ray that may be in the possession of the Estate, this association shall serve as his due diligence. ARTICLE 6 DEFAUL T Default By Estate. If Ray timely and properly presents the necessary executed documents for Closing as identified in Section 4., and, solely by reason of the Estate s default Closing does not occur, then Ray shall be entitled to specifically enforce this Agreement. STOCK ACQUISITION AGREEMENT - 3 01796.0011.758229.2 Default by Ray. The Estate and Ray agree that it would be impracticable or extremely difficult to fix actual damages in the event of a material default on the part of Ray, and that the sum of Twenty-Five Thousand Dollars ($25 000) is the parties' reasonable estimate of the Estate s damages in the event of Ray s material default, and that in the event that Ray fails to timely purchase the Shares in accordance with the terms of this Agreement because of a material default on the part of Ray, the Estate shall be released from his obligation to sell the Shares to Ray, and shall be entitled, as their sale and exclusive remedy in law or in equity, to receive the sum of Twenty-Five Thousand Five Hundred Dollars ($25 000) from Ray. 3 Cross-Default. A default by Ray under the Stock Pledge Agreement shall be considered to be a default under this Agreement. ARTICLE 7 GENERAL PROVISIONS Notices. All notices , claims demands and other communications hereunder shall be in writing and shall be deemed given if delivered personally or by commercial delivery service , or mailed by registered or certified mail (return receipt r~quested) or sent via facsimile (with confirmation of receipt) to the parties at the following address (or at such other address for a party as shall be specified by like notice): (a)if to the Estate, to: Estate of Lynn Stevenson c/o Linda Sue Akers 2054 N. Thornton #145 Casa Grande, Arizona 85222 with a copy to: Gary D. Babbitt, Esq. Hawley Troxell Ennis & Hawley LLP PO Box 1617 Boise, Idaho 83701 (b)if to Ray, to: srael Ray 11140 Chicken Dinner Road Caldwell, Idaho 83605 with a copy to: Tony Bohner Bohner Law Office 6061 Tonkin Drive O. Box 16789 Boise, Idaho 83715-6789 STOCK ACQUISITION AGREEMENT - 4 01796.0011.758229.2 Captions and Headings. Captions and section headings used herein are for convenience only and are not a part of this Agreement and shall not be used in construing its provIsions. Counterparts. This Agreement may be executed in one or more counterparts all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties, it being understood that all parties need not sign the same counterpart. Entire Agreement; No Third Party Beneficiaries. This Agreement contains the entire agreement between the parties with respect to the option to purchase granted to Ray by the Estate, and supersedes all prior and contemporaneous agreements, representations and understandings of the parties. No modification, amendment or waiver of any of the provisions of this Agreement shall be effective unless in writing specifically referring hereto and signed by both parties. Severability. In the event that any provision of this Agreement, or the application thereof, becomes or is declared by a court of competent jurisdiction to be illegal invalid, void or unenforceable, the remainder of this Agreement will continue in full force and effect and the application of such provision to other persons or circumstances will be interpreted so as reasonably to effect the intent of the parties hereto. The parties further agree to negotiate in good faith to replace such void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the economic, business and other purposes of such void or unenforceable provision. Remedies Cumulative. Except as otherwise provided herein, any and all remedies herein expressly conferred upon a party will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon such party, and the exercise by a party of anyone remedy will not preclude the exercise of any other remedy. Mediation and Arbitration. If a dispute arises , the parties will first attempt direct discussions. If the discussions are unsuccessful, the parties shall mediate pursuant to the Commercial Mediation Rules administered by the American Arbitration Association ("AAA" ). the dispute continues, the parties shall arbitrate pursuant to the Commercial Arbitration Rules administered by the AM, with a judgment to be entered upon the arbitration award. The prevailing party shall be .entitled to recover reasonable attorneys' fees from the other party, which tees shall be set by the' arbitrator and shall be in addition to any other relief that may be awarded. Governing Law. This Agreement shall be governed by and construed under the laws of the State of Idaho. , Assignment. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto (whether by operation of law or otherwise) without the prior written consent of the other parties. , 7.10 Rules of Construction.The parties hereto agree that they have been represented by counsel during the negotiation , preparation and execution of this Agreement and , therefore, waive the application of any law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the party drafting such agreement or document. STOCK ACQUISITION AGREEMENT - 5 01796.0011.758229. 11 Specific Performance. The parties hereto agree that irreparable damage would occur in the event any provision of this Agreement was not performed in accordance with the terms hereof and that the parties shall be entitled to specific performance of the terms hereof in addition to any other remedy at law or in equity. 12 Further Assurances. Each party hereto shall execute and cause to delivered to each other party hereto such instruments and other documents, and shall take such other actions , as such other party may reasonably request (at or after the Closing) for the purpose of carrying out or evidencing any of the transactions contemplated by this Agreement. 13 Brokers. Neither party retained the services of a broker or other party to which a commission would be due for the transaction contemplated by this Agreement. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth next to their signatures below, to be effective as of the Effective Date. ESTATE Estate of Lynn Stevenson Dated: 2004 enson, co-Personal Representative Dated:2004 Jerry Lou Jaramillo, co-Personal Representative Dated:2004 Linda Sue Akers~ co.-Personal Representative RAY Dated:2004 Israel Ray STOCK ACQUISITION AGREEMENT - 6 01796.0011.758229. 11 Specific Performance. The parties hereto agree that irreparable damage would occur in the event any provision of this Agreement was not performed in accordance with the terms hereof and that the parties shall be entitled to specific performance of the terms hereof in addition to any other remedy at law or in equity. 12 Further Assurances. Each party hereto shall execute and cause to be delivered to each other party hereto such instruments and other documents , and shall take such other actions , as such other party may reasonably request (at or after the Closing) for the purpose of carrying out or evidencing any of the transactions contemplated by this Agreement. 13 Brokers. Neither party retained the services of a broker or other party to which a commission would be due for the transaction contemplated by this Agreement. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth next to their signatures below, to be effective as of the Effective Date. ESTATE Estate of Lynn Stevenson 2004Dated:William J. Stevenson, co-Personal Representative Dated: r; - c:z ;Z --, 2004 , co-Personal Representative Dated:2004 Linda Sue Akers, cb~Personal"Representative RAY Dated:2004 Israel Ray STOCK ACQUISITION AGREEMENT - 6 01796.0011.758229. 11 Specific Performance. The parties hereto agree that irreparable damage would occur in the event any provision of this Agreement was not performed in accordance with the terms hereof and that the parties shall be entitled to specific performance of the terms hereof in addition to any other remedy at law or in equity. 12 Further Assurances. Each party hereto shall execute and cause to be delivered to each other party hereto such instruments and other documents, and shall take such other actions, as such other party may reasonably request (at or after the Closing) for the purpose of carrying out or evidencing any of the transactions contemplated by this Agreement. 13 Brokers. Neither party retained the services of a broker or other party to which a commission would be due for the transaction contemplated by this Agreement. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth next to their signatures below, to be effective as of the Effective Date. ESTATE Estate of Lynn Stevenson Dated:2004 William J. Stevenson , co-Personal Representative Dated:2004 Jerry Lou Jaramillo, co-Personal Representative Dated:2004 Linda Sue Akers, co-Personal Representative RAY Israel Ray 0 ated: 7;7...., 2004 STOCK ACQUISITION AGREEMENT - 6 01796.0011.758229. ACKNOWLEDGED AND AGREED TO: The parties set forth below are either directly or indirectly related to the Agreement set forth above. By their signature below, they agree to be bound by the terms of the Agreement, as the same apply to them. ATLANTA POWER COMPANY, INC. Dated: M:2 2004 Dated:, 2004 Morton Zimmerman EXHIBIT LIST Exhibit A - Promissory Note Exhibit 8 - Stock Pledge Agreement Exhibit C - Release from Ray, APC and Morton Zimmerman Exhibit 0 - Release from the Estate to APC STOCK ACQUISITION AGREEMENT - 7 01796.0011.758229. L'-'~ ;,,'-~~' -- ~- ~,~. ~~~ ~- '. " ,,,-,~ ,- 'o.J( ~'-"-I n,., . r "-'-'V I ..."r H'-.'1L J...I-/ '- ( ACKNOWLJ:DGED AND AGREED TO: The parties set forth below are either directly or indirectly related to theAgreement set forth above. By their signature below) they agree to be b(jund by the terms of the Agreement, as the same apply to them. ATLANTA POWER COMPANY. INC. Dated:2004 Israel Ray, its President Dated:2004 -~ EXHIBIT LIST Exhibit A - Promissory Note Exhibit B - Stock Pledge Agreement Exhibit C - Release from Ray, APC and Morton ZimmermanExhibit D - Release from the Estate to APC $TOCK ACQUISITION AGREEMENT. 7 01796.0011,758229.