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Mr. W» R, Rouse 2. May 6, 1954 should be liberal enough to include the cost of the two new wells which are now being drilled and all other ez& pendltures for additions and betterments to the water system which can reasonably be expected to be made prior to July 1, 1954• In the Sale Agreement no attempt was made to allocate the amount of the purchase price of the water system as between the Railroad Companies and the Water Company, The only property which will be conveyed to the District on the sale date by the Railroad Companies will be the easements for pipe lines and power lines referred to in paragraphs 4 and 5 of Section III of the Escrow Instructions. I presume for tax or other reasons there should be an allocation of some portion of the purchase price to the Railroad Companies as consideration for. the granting of these easements. Accordingly it may be desirable to have the escrow instructions fix a certain sura to be paid to the Railroad Companies and the balance to the Water Company. I should appreciate the suggestions of Mr. Hulslzer and Mr. Sutton on this point and a statement from them of the amount of consideration which should be allocated to the Railroad Companies. I would also suggest that Mr. Stoddard authorise Mr. Reinhardt to execute all escrow instructions or supplements thereto in connection with the transfer of the water system. We are asking the attorneys for the District for an early conference to discuss the form of the various documents to be executed by the Sellers and I hope to be able to send these documents forward for execution at an early date. I would also suggest that you discuss with Mr. Burri and let me have his comments with respect to the provisions of Paragraph X of the proposed Escrow Instructions which deal with the nature of the deposit of funds in the escrow and the security therefor* It may be that these provisions are somewhat stringent. However I call your attention to the fact that Section 2*4 of the Resolution of the Board of Directors of the District providing for the issuance of its bonds, found at page 10 of Appendix "A1* to the Prospectus, provides that all deposits of funds