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103 Office of the City Manager August 27, 1996 _u i - Ruth Ann Hoch, President Elim Water Company, Inc. 302 West Hopkins, Suite 2 San Marcos, TX 7866~ ¿b éè CL Re: Acquisition of Capital Stock of Elim Water Company, Inc. by City of San Marcos Dear Ms. Hoch: This letter, upon your countersignature, will constitute a letter of intent for the' City's . acquisition of the outstanding capital stock of Elim Water Company, Inc. While the City's intent in this purchase is to acquire Elim's assets, the City acknowledges that the Elim shareholders are selling only Elim's stock, and that the City can take whatever action it deems appropriate regarding Elim's shares after the transaction is complete. 1. The sales price will be $801,125, or $8,500/share for your 94.25 shares and $194,437.50, or $4,250/share for the 45,75 minority interest shares owned by others. The total purchase price will be $995,562.50. - I ! 2. The City will pay to you, and not to Elim, a $10,000 nonrefundable negotiation fee upon receipt of a fully executed copy of this letter. Upon your receipt of this fee, you will discontinue negotiations with any other parties regarding their purchase of the capital stock of Elim as long as the City complies with, and does not elect to cancel, this agreement. If the City proceeds with the purchase, this fee will be credited towards the purchase price. The negotiation fee will be refunded only if you are not able to secure execution of the purchase agreement by all Elim shareholders within 30 days qf the date of this letter. 3. Upon agreement with this letter and payment of the negotiation fee to you, the City will file the proper documentation with the Texas Natural Resource Conservation Commission necessary to obtain approval for the sale of Elim's capital stock to the City, 630 East Hopkins. San :\[arcos, Texas 78666 . 512/353-4444 . FA-X 512/396-4656