Common use of EMINENT DOMAIN PROCEEDING Clause in Contracts

EMINENT DOMAIN PROCEEDING. In November 2002, the Board of ▇▇▇▇▇▇▇▇ of the City of Nashua, New Hampshire (the "City") called for a referendum to authorize the City to pursue acquisition, by eminent domain proceeding or otherwise, of all or a portion of the water system currently serving the inhabitants of the City and "others." The City's voters passed the referendum in January 2003, and the City officially notified Pennichuck East Utility, Inc. ("PEU") of the City's intention to acquire all or a portion of PEU's plant and property in February 2003. The City filed a petition with the NHPUC in March 2004 asking the NHPUC to make a finding that it is in the public interest for the City to take all or a portion of PEU's assets, all of which are located outside the City, and requesting that the NHPUC determine what would constitute just compensation for the taking of such assets. The City filed an identical petition against Pennichuck Water Works, Inc. ("PWW"), which has substantial property located within the City, and against Pittsfield Aqueduct Company ("Pittsfield"), which has no property located within the City. PEU challenged the City's statutory authority to take its property, arguing that the City does not have the authority to take assets of the PEU located outside of the City that are not necessary to provide service within the City. No portion of the PEU's system is located within the City. On January 21, 2005, the NHPUC ruled that the City did not have the legal authority to take the assets of Pittsfield or PEU, but that all of the assets of PWW were potentially subject to a taking by the City if such a taking were ultimately found by the NHPUC to be in the public interest. <PAGE> 3/1999 Little Pond Bedford Little Pond of Bedford LLC ▇/▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇ 1/2000 Wesco Hooksett Riverview Land Corporation 3/2000 Cabot Preserve Bedford Prescott Investment Corporation ▇/▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Realty Trust ▇/▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ NH Corporation 1/2004 ▇▇▇▇▇▇▇▇ Commons Amherst Prescott Investments

EMINENT DOMAIN PROCEEDING. In November 2002, the Board of ▇▇▇▇▇▇▇▇ of the City of Nashua, New Hampshire (the "City") called for a referendum to authorize the City to pursue acquisition, by eminent domain proceeding or otherwise, of all or a portion of the water system currently serving the inhabitants of the City and "others." The City's voters passed the referendum in January 2003, and the City officially notified Pennichuck East Utility, Inc. ("PEU") the Guarantors of the City's intention to acquire all or a portion of PEU's the Guarantors' plant and property in February 2003. The City filed a petition with the NHPUC in March 2004 asking the NHPUC to make a finding that it is in the public interest for the City to take all or a portion of PEU's assets, all of which are located outside the City, Guarantors' assets and requesting that the NHPUC determine what would constitute just compensation for the taking of such assets. The In addition, the City filed an identical petition against Pennichuck Water Works, Inc. ("PWW"), which has substantial property located within similar petitions to take the City, and against assets of Pittsfield Aqueduct Company ("Pittsfield"), which has no property located within the CityCompany. PEU The Guarantors challenged the City's statutory authority extent of the assets that the City is seeking to take its propertytake, arguing that the City does not have the authority to take those assets of the PEU located outside of the City Guarantors that are not necessary to provide service within in the City. No portion of the PEU's system is located within the City. On January 21, 2005In December 2004, the NHPUC ruled in public deliberations that the property of PEU and Pittsfield Aqueduct Company may not, as a matter of law, be taken by the City did not have of Nashua. The NHPUC also stated that while the legal authority to take City may pursue a taking against PWW, the assets of Pittsfield or PEU, but that all extent of the Company's assets of PWW were potentially that may be subject to a taking is a question of fact that will be determined by the NHPUC. The NHPUC released the text of its deliberations but has not yet issued its order, which, once issued, may be appealed. Moreover, the schedule for NHPUC hearings on this factual issue, on the public interest question, and on just compensation has not been set. If the City is successful in obtaining a determination by the NHPUC that it should be allowed to take some or all of the Company's assets, the City is not required under New Hampshire law to complete the taking and could ultimately choose not to proceed with the purchase of the assets. The Company cannot predict the ultimate outcome of these matters. It is possible that, if the acquisition efforts of the City are successful, PWW's financial position would be materially impacted. Prior to the City's filing of its eminent domain case at the NHPUC, PWW filed a Petition for Declaratory Judgment in New Hampshire Superior Court seeking a determination that the City had waited too long to seek condemnation authority from the NHPUC after obtaining a public vote in November 2002 regarding municipalization of water utility assets, a determination that the statute relied upon by the City if such was unconstitutional on a number of grounds and, that the assets that the City sought to take in the NHPUC proceeding exceeded the assets that may properly the subject of an attempted taking were ultimately found by the City. The Superior Court ruled adversely to PWW on a number of these issues, deferred to the NHPUC as to be in the public interest. assets that City could seek <PAGE> 3/1999 Little Pond Bedford Little Pond of Bedford LLC ▇/▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇ 1/2000 Wesco Hooksett Riverview Land Corporation 3/2000 Cabot Preserve Bedford Prescott Investment Corporation ▇/▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Realty Trust ▇/▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ NH Corporation 1/2004 ▇▇▇▇▇▇▇▇ Commons Amherst Prescott Investments>