Stock Purchase Agreement-joint Escrow Instructions

Exhibit 10.7
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Stock Purchase Agreement and Joint Escrow Instructions
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This STOCK PURCHASE AGREEMENT AND JOINT ESCROW INSTRUCTIONS ("Agreement") is made and entered into effective the 14/th/ day of November, 2000, by and between KAISER VENTURES INC., a Delaware corporation ("Kaiser") and Cucamonga County Water District, a California county water district (the "District"). Kaiser and the District are sometimes individually referred to in this Agreement as a "Party" or collectively as "Parties".


Recitals


A. Kaiser owns or will own as of the Closing Date 8,057.025 shares of the common stock of Fontana Union Water Company, a California mutual water company, (the "Shares"), of which 7,632.625 are leased to pursuant to that certain Lease of Corporate Shares Coupled With Irrevocable Proxy dated as of July 1, 1993, between Kaiser (then called Kaiser Steel Resources Inc.) and the District (the "CCWD Lease").


B. The Parties desire to enter this Agreement and to pursue the transaction contemplated hereby pursuant to which the District will purchase the Shares from Kaiser (the "Stock Transaction").


C. In connection with Stock Transaction, the Parties also desire to fully settle and release all claims arising of the CCWD Lease including all claims a part of or relating to that certain case in San Bernardino Superior Court, Case No. RCV 21135, entitled Fontana Water Resources, Inc., a corporation, Plaintiff, vs. Cucamonga County Water District, Defendant, and the reference proceeding, which constitutes a part of said case (collectively the "CCWD Lease Litigation").


NOW, THEREFORE, for and in consideration of the mutual promises and covenants contained herein, and for other good and valuable consideration, the parties hereto agree as follows:


SECTION 1. Purchase and Sale of Shares. Subject to the terms and conditions of this Agreement, on the Closing Date as defined below, the District shall purchase from Kaiser, and Kaiser shall sell to the District, the Shares.


SECTION 2. Purchase Price and Payment Terms. The net purchase price payable by the District to Kaiser for the Shares shall be $10,860.088 for each of the Shares for a total purchase price of $87,500,000 (the "Purchase Price"). The Purchase Price shall be paid to Kaiser by wire transfer on the Closing Date.


SECTION 3. Payments Under the CCWD Lease. In addition to payment of the Purchase Price, the District shall make the following payments under the CCWD Lease: (i) the fourth quarter 2000 CCWD Lease payment totaling $1,177,127.19; (ii) the 1999-2000 agricultural pool transfer payment totaling $1,008,882.69; and (iii) the agricultural pool transfer payment for the first six months of 2000- 2001 totaling $263,892.60. All the payments required pursuant to this Section 3 shall be made within ten days following the District's receipt of an invoice for such payment, but in no event shall payment be later than the Closing Date. Payments made by the District pursuant to this Paragraph 3 shall not be paid through escrow unless any payment has not been paid prior to the Closing Date.


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SECTION 4. Settlement of CCWD Lease Litigation. Kaiser shall execute and deliver into Escrow as provided herein, a dismissal with prejudice of the CCWD Lease Litigation in the form attached hereto as Exhibit "A" (the "Dismissal").
=== Kaiser and the District shall execute and deliver into Escrow as provided herein, a settlement agreement in the form attached hereto as Exhibit "B" (the
==== "Settlement Agreement").


SECTION 5. Mid-Valley Settlement. To the extent that the Company has any transferable rights pursuant to that certain Settlement Agreement between Fontana Water Resources, Inc. and the County of San Bernardino ("Mid-Valley Settlement"), at the closing the Company shall assign and transfer any such rights to the District.


SECTION 6. Conditions Precedent to the Obligations of Kaiser. All of the obligations of Kaiser under this Agreement are subject to fulfillment prior to or on the Closing Date of each of the following conditions, which may be waived by Kaiser in writing:


6.1 The District's Representations and Warranties Remain True. The representations and warranties by the District contained in this Agreement shall be true in all material respects on the Closing Date as though made as of such time and Kaiser shall receive a certificate from the District at Closing to that effect.


6.2 Payment of the Purchase Price. The District shall have delivered the Purchase Price to Kaiser through the Escrow Agent.


6.3 Payment of CCWD Lease Payments. The District shall have paid to Kaiser the payments specified in Section 3, or if not previously paid, deposit the funds necessary to make payment with the Escrow Agent.


6.4 Litigation. There shall be no third party claim or litigation pending or threatened regarding the transactions contemplated herein on the Closing Date which the Kaiser's Board of Directors reasonably believes is likely to have a material adverse impact on Kaiser, its shareholders, officers or directors. No preliminary or permanent injunction that restricts, prevents or prohibits the delivery of the Shares to the District or execution and delivery of the Settlement Agreement and Dismissal shall be outstanding.


6.5 Settlement Agreement. The District shall have executed and delivered into Escrow two originals of the Settlement Agreement.


6.6 Certified Board Resolutions. The District shall have delivered certified resolutions of the District's Board of Directors approving the Stock Purchase Transaction, the Settlement Agreement, and payment of the Purchase Price to Kaiser for the Shares.


6.7 Receipt of Shareholder Approval. Kaiser shall have received any necessary approval by its shareholders of the Stock Transaction.


SECTION 7. Conditions Precedent to the Obligations of the District. All of the obligations of the District under this Agreement are subject to fulfillment prior to or on the Closing Date of each of the following conditions, which may be waived by the District in writing:


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7.1 Kaiser's Representatives and Warranties Remain True. The representations and warranties of Kaiser contained in this Agreement shall be true in all material respects on the Closing Date as through made as of such time and the District shall receive a certificate from Kaiser at Closing to that effect.


7.2 Delivery of Shares. Kaiser shall have delivered into Escrow the Shares and the Stock Assignment into Escrow.


7.3 Litigation. There shall be no third party claim or litigation pending or threatened regarding the transactions contemplated herein on the Closing Date which the District's Board of Directors reasonably believes is likely to have a material adverse impact on the District, its, officers or directors. No preliminary or permanent injunction that restricts, prevents or prohibits the delivery of the Shares to the District shall be outstanding.


7.4 Settlement Agreement. Kaiser shall have executed and delivered into Escrow two originals of the Settlement Agreement.


7.5 Dismissal. Kaiser shall have executed and delivered into Escrow two originals of the Dismissal.


7.6 Certified Board Resolutions. Kaiser shall have delivered certified resolutions of Kaiser's Board of Directors approving the Stock Transaction, the Settlement Agreement and the Dismissal.


7.7 Kaiser Shareholder Approval. Kaiser shall have obtained any requisite approval by its shareholders of the Stock Transaction and shall deposit into Escrow a certificate executed by Kaiser's certifying that any requisite shareholder approval has been obtained.


7.8 Financing. The District shall have obtained financing for the Purchase Price amortized over at least 31 years.


7.9 Cancellation of Lease. If requested by the District, Kaiser shall have executed and delivered into Escrow the Lease Cancellation document in the form attached hereto as Exhibit "C" (the "Lease Cancellation").
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7.10 Assignment of Mid-Valley Settlement. Kaiser shall have executed and delivered into Escrow an assignment transferring any rights Kaiser may have in the Mid-Valley Settlement to the District.


SECTION 8. Escrow and Closing


8.1 Opening of Escrow. Within two business days of the date of this Agreement, Kaiser and the District shall open an escrow account ("Escrow") with Chicago Title Insurance Company, San Bernardino office ("Escrow Agent") by depositing a fully executed original of this Agreement for use as escrow instructions and Escrow Agent shall execute the consent of Escrow Agent and deliver a fully executed consent to Kaiser and the District. In addition, District, Kaiser and Escrow Agent agree to the general provisions attached here to as Attachment "1",
============== and incorporated hereby this reference. If there is any conflict between the provisions of this Agreement and any additional or supplementary escrow instructions, the terms of this Agreement shall control. The Closing shall be conducted through Escrow unless Kaiser and the District shall otherwise agree in writing or as expressly set forth in this Agreement.


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8.2 District's Deliveries Into Escrow. On or before the Close of Escrow (or sooner if so specified in this Section 8.2), the District shall deposit into Escrow with the Escrow Agent:


(a) the Purchase Price by wire transfer;


(b) if the payments specified in Section 3 have not been paid by the District, the funds necessary to pay any unpaid payment;


(c) a certified copy of the resolutions of the Board of Directors of the District authorizing the Stock Transaction, the payment of the Purchase Price and the transfer of funds for the Purchase Price and the Settlement Agreement;


(d) two original executed copies of the Settlement Agreement The executed Settlement Agreement together with the District's resolutions authorizing the Settlement Agreement shall be delivered into Escrow on or before ten (10) days following the opening of Escrow;


(e) a certificate executing by the District stating that the District's representations and warranties set forth in this Agreement are true and correct as of the Closing Date; and


(f) Any other document reasonably requested by Escrow Agent to complete the Stock Transactions contemplated by this Agreement and the Settlement Agent.


8.3 Kaiser's Deliveries Into Escrow. On or before the Close of Escrow (or sooner if so specified in this Section 8.3), Kaiser shall deposit in Escrow:


(a) Kaiser's executed Assignment of Stock Separate from Certificate or other mutually acceptable form of stock assignment transferring the Shares to District, or its designee (the "Stock Assignment"), with the signatures of Kaiser guaranteed by Kaiser's bank;


(b) the stock certificates representing the Shares;


(c) a certified copy of Kaiser's Board of Directors resolutions authorizing the Stock Transaction, execution and delivery of the stock assignment, the Settlement Agreement, and the Dismissal;

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