EXHIBIT INDEX
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2.1 Assets Purchase and Sale Agreement between Ohio Water Service
and the City of Washington, Ohio dated October 28, 1993 is
submitted herewith as Exhibit 2.1.........................
3.1 Conformed Copy of Restated Articles of Incorporation of
Consumers Water Company, as amended, incorporated by reference
to Exhibit 4.1.6 to Consumers Water Company's Registration
Statement on Form S-2 (No. 33-41113), filed with the Securities
and Exchange Commission on June 11, 1991.
3.2 Bylaws of Consumers Water Company, as amended March 2, 1994,
are submitted herewith as Exhibit 3.2.....................
4.1 Instruments defining the rights of security holders,
including Indentures. The registrant agrees to furnish copies
of instruments with respect to long-term debt to the
Commission upon request.
10.1 Noncompetition and Consulting Agreement between Consumers
Water Company and John H. Schiavi incorporated by reference
to Exhibit 10.2 of Consumers Water Company's Annual Report on
form 10-K for the year ended December 31, 1992.
10.2* Consumers Water Company 1988 Incentive Stock Option Plan is
submitted herewith as Exhibit 10.2........................
10.3* Consumers Water Company 1993 Incentive Stock Option Plan is
incorporated by reference to Appendix B to definitive proxy
statement dated April 5, 1993.
10.4* Consumers Water Company 1992 Deferred Compensation Plan for
Directors, Plan A, incorporated by reference to Exhibit 10.5.2
to Consumers Water Company's Annual Report on Form 10-K for the
year ended December 31, 1991.
10.5* Consumers Water Company 1992 Deferred Compensation Plan for
Directors, Plan B, incorporated by reference to Exhibit 10.5.3
to Consumers Water Company's Annual Report on Form 10-K for
the year ended December 31, 1991.
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* Management or compensating plan or arrangement required to be
filed as an Exhibit pursuant to Item 14(c) of Form 10-K.
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10.6 Letter Agreement between Consumers Water Company and Anjou
International Company dated February 7, 1986, incorporated
by reference to Exhibit 10.6 to Consumers Water Company's
Registration Statement on Form S-2 (No. 33-41113), filed with
the Securities and Exchange Commission on June 11, 1991.
10.7 Assignment of Rights under February 7, 1986 Agreement between
Consumers Water Company and Anjou International Company to
Compagnie Generale des Eaux, dated November 12, 1987,
incorporated by reference to Exhibit 10.7 to Consumers Water
Company's Annual Report on Form 10-K for the year ended
December 31, 1992.
10.8 Form of Indemnification Agreement entered into between
Consumers Water Company and each of its current directors and
executive officers, incorporated by reference to Exhibit 10.8
to Consumers Water Company's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1989.
10.9* Employment Agreement between Peter L. Haynes and Consumers
Water Company incorporated by reference to Exhibit 10.11
to Consumers Water Company's Annual Report on Form 10-K for
the year ended December 31, 1992.
11. Statement of Computation of Per Share Earnings is submitted
herewith as Exhibit 11....................................
22. List of Subsidiaries of the Registrant is submitted herewith
as Exhibit 22.............................................
23. Consent of Arthur Andersen & Co is submitted herewith as
Exhibit 23................................................
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* Management or compensating plan or arrangement required to be
filed as an Exhibit pursuant to Item 14(c) of Form 10-K.
Exhibit 2.1
AGREEMENT OF PURCHASE AND SALE OF ASSETS
This AGREEMENT OF PURCHASE AND SALE OF ASSETS (this
"Agreement") is dated as of October 28, 1993 by and between Ohio
Water Service Company, an Ohio corporation with its principal
office at 6650 South Avenue, Boardman, Ohio 44512 ("Seller"); and
the City of Washington, Ohio, a municipal corporation existing
under the laws of the State of Ohio, with its principal office at
215 East Market Street, Washington Court House, Ohio 43160
("Purchaser");
W I T N E S S E T H T H A T:
WHEREAS, Seller owns properties and assets constituting
water districts which provide water service to residents within
several different counties in the State of Ohio, among which are
certain properties and assets owned by Seller to provide such
water service to certain residents of the Washington Court House,
Ohio area; and
WHEREAS, Purchaser previously filed an appropriation action,
styled City of Washington vs. Ohio Water Service Company, et al.,
Case No. C.I.V. 93-0373, Fayette County, Ohio, Court of Common
Pleas (the "Condemnation Action"), in order to acquire Seller's
water district in Fayette County, Ohio, and certain citizens of
Fayette County, Ohio filed a mandamus action, styled John S.
Lago, et al. v. City of Washington, Ohio, Case No. 93-1549, which
is now before the Supreme Court of Ohio on appeal from the Court
of Appeals for the 12th Judicial District (the "Mandamus Action")
challenging certain aspects of the appropriation procedure used
by Purchaser, but the parties hereto now desire to enter into
this Agreement in order to provide for the acquisition of such
water district by Purchaser in a more amicable fashion; and
WHEREAS, Seller and Purchaser have engaged in extensive
negotiations to avoid any further time and expense in continuing
the Condemnation Action as a contested proceeding, which in the
absence of any agreement between the parties would otherwise be
necessary; and
WHEREAS, Purchaser desires to purchase such properties and
assets from Seller, and Seller desires to sell the same to
Purchaser, on the terms and conditions herein;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter set forth, the parties hereby agree as
follows:
1. PURCHASE AND SALE OF BUSINESS AND ASSETS.
1.1 Transfer of Seller's Assets. Subject to and upon the
terms and conditions set forth in this Agreement, Seller will
sell, transfer, convey, assign and deliver to Purchaser, and
Purchaser will purchase, at the Closing hereunder (as defined
herein), all of the business, assets, properties, goodwill and
rights of Seller as a going concern, of every nature, kind and
description, tangible and intangible, wheresoever located and
whether or not carried or reflected on the books and records of
Seller, directly and particularly related to the business (the
"Washington Court House Business") now or heretofore conducted by
Seller in providing water service to, within or adjacent to the
City of Washington in Fayette County, Ohio (collectively
"Seller's Assets"), including, without limitation, (i) the real
estate assets located in Fayette County, Ohio and specifically
identified on Exhibit "1.1" attached hereto (the "Real Estate
Assets"), (ii) the personalty, fixtures and other assets of
Seller referred to in Schedule 5.11 attached hereto as updated as
of the Closing Date (as hereinafter defined) pursuant to the form
of Bill of Sale attached hereto as Exhibit "2.1", (iii) Seller's
accounts receivable and unbilled accounts as required to be
identified on Schedule 5.11.2 attached hereto, and all account
information related thereto, (iv) the books, records and computer
data in Seller's possession directly and particularly relating to
or arising out of the conduct of the Washington Court House
Business, including but not limited to all plans, diagrams,
blueprints, as-built plans, specifications, inventories, capital
improvement schedules and progress reports, computer files,
environmental surveys and legal notices relating to the
Washington Court House Business (the "Washington Court House
Business Records"), (v) all rights and choses in action of
Seller, whether arising by contract or otherwise, arising out of
Seller's conduct of the Washington Court House Business, (vi) all
deposits and deposit accounts held by Seller which were paid to
Seller by Seller's customers and others relative to the
Washington Court House Business, (vii) Seller's transferable
contract rights by which Seller is licensed to use any computer
software used in the operation of the Washington Court House
Business as required to be identified on Schedule 5.11 (the
"Software Licenses"), and (viii) such other assets of Seller not
specifically referred to herein as are necessary or appropriate
for the conducting of the Washington Court House Business, with
only such dispositions of such assets and write-offs of accounts
as shall have occurred in the ordinary course of Seller's
business between the Valuation Date (as hereafter defined) and
the Closing Date and which are permitted by the terms hereof.
The transfer of Seller's Assets to Purchaser shall exclude (a)
Seller's cash on hand, bank account balances and bank accounts,
(b) Seller's insurance policies, (c) the computer equipment and
software not listed on Schedule 5.21 attached hereto which is
part of Seller's central computer system, (d) all other business
assets of Seller not specifically related to the Washington Court
House Business, and (e) the corporate name, minute books,
corporate seal and stock records of Seller.
1.2 Liabilities and Encumbrances. Seller's Assets shall
be conveyed to the Purchaser free and clear of all liabilities,
obligations, liens and encumbrances excepting only those
liabilities and obligations which are expressly to be assumed by
Purchaser hereunder and those liens and encumbrances securing the
same which are expressly permitted by the terms hereof.
2. PURCHASE PRICE.
2.1 Assets Purchase Price. In consideration of the sale,
transfer, conveyance, assignment and delivery of Seller's Assets
existing as of September 16, 1993 (the "Valuation Date") by
Seller to Purchaser, and in reliance upon the representations and
warranties made herein by Seller and the delivery of the Bill of
Sale in the form attached hereto as Exhibit "2.1", Purchaser
will, in full payment thereof, pay to Seller at the Closing a
total purchase price of Ten Million Four Hundred and Fifty
Thousand Dollars ($10,450,000.00) (the "Assets Purchase Price").
2.2 Additional Assets Purchase Price. In consideration of
the sale, transfer, conveyance, assignment and delivery of
Seller's Assets which were acquired by Seller between the
Valuation Date and the Closing Date, (which together with
Seller's Assets as of the Valuation Date are as set forth in
Schedule 5.11 attached hereto, as updated and delivered at the
Closing), by Seller to Purchaser, and in reliance upon the
representations and warranties made herein by Seller, Purchaser
will, in full payment thereof, pay to Seller at the Closing a
purchase price equal to Seller's actual cost thereof (as
reflected upon Seller's invoices therefor), less any retired
assets and the amount of any increase in depreciation thereupon
as reflected on the books of Seller from the Valuation Date
through such date (the "Additional Assets Purchase Price").
2.3 Supplies Purchase Price. In consideration of the sale,
transfer, conveyance, assignment and delivery of all materials
and supplies of Seller relating to the Washington Court House
Business on hand at the Closing Date (as set forth in Schedule
5.11 attached hereto as updated and delivered at the Closing), by
Seller to Purchaser, and in reliance upon the representations and
warranties made herein by Seller, Purchaser will, in full payment
thereof, pay to Seller at the Closing a purchase price equal to
the book value of such materials and supplies as reflected on the
books of Seller as of the end of the calendar month preceding the
Closing Date (the "Supplies Purchase Price").
2.4 Accounts Purchase Price. In consideration of the sale,
transfer, conveyance, assignment and delivery of all accounts
receivable and unbilled accounts of Seller relating to the
Washington Court House Business as of the Closing Date (the
"Accounts"), as set forth on Schedule 5.11 attached hereto as
updated and delivered at Closing, by Seller to Purchaser, and in
reliance upon the representations and warranties made herein by
Seller, Purchaser will, in full payment thereof, pay to Seller a
purchase price equal to $239,875 (the "Accounts Purchase Price").
2.5 Aggregate Purchase Price. The Assets Purchase Price,
the Additional Assets Purchase Price, the Accounts Purchase Price
and the Supplies Purchase Price are collectively referred to
herein as the "Aggregate Purchase Price". The Aggregate Purchase
Price shall be payable by Purchaser to Seller as of the Closing
by the wire transfer of immediately available funds to bank
accounts as per written instructions of Seller given to Purchaser
at least 24 hours prior to the Closing.
2.6 Liabilities Undertaking. In addition to the foregoing,
Purchaser and Seller will execute at the Closing a Liabilities
Undertaking in the form of Exhibit "2.6" attached hereto relating
to the contractual obligations of Seller identified on Annex A
attached thereto.
3. CLOSING AND PRECLOSING.
3.1 Closing. The purchase and sale and other transactions
contemplated by this Agreement shall be consummated at a closing
(the "Closing") which shall take place at 8:30 a.m., local time,
on December 16, 1993, or such other date which is at least two
business days after all conditions to Closing set forth in
Articles 11 and 12 hereof shall have been satisfied or waived by
the appropriate parties, at the offices of Bricker & Eckler, 100
South Third Street, Columbus, Ohio 43215, or at such other time
and place as the parties may agree. The day on which the Closing
shall occur is herein sometimes referred to as the "Closing
Date". All parties shall use their best efforts to cause the
Closing to happen as quickly as possible, but in no event earlier
than December 16, 1993 or later than December 31, 1993.
3.2 Preclosing. On November __, 1993, or another date not
later than ten business days prior to the date on which the
parties expect the Closing to occur, the parties shall hold a
preclosing relating to the transactions contemplated by this
Agreement (the "Preclosing"), at the offices of Bricker & Eckler,
100 South Third Street, Columbus, Ohio 43215, or at such other
time and place as the parties may agree. At the Preclosing, the
parties shall review and agree upon the forms of all documents to
be delivered at the Closing pursuant to Article 4 and Sections 11
and 12 of this Agreement, and shall execute a Preclosing
Agreement in the form attached hereto as Exhibit 3.2 to the
effect that the specific conditions to Closing referenced therein
have been satisfied or waived to the satisfaction of the parties,
and that the only conditions remaining to be satisfied as of the
Closing Date are those specifically referenced therein.
4. SELLER'S OBLIGATIONS AT CLOSING; FURTHER ASSURANCES.
4.1 Deliveries at Closing. At the Closing, Seller will
deliver to Purchaser:
4.1.1 A Bill of Sale duly executed by Seller in the
form of Exhibit "2.1" attached hereto conveying all of
Seller's Assets to Purchaser (other than the Real Estate
Assets);
4.1.2 Limited warranty deeds conveying all of the
Real Estate Assets to Purchaser, in form and substance
satisfactory to Purchaser, duly executed by Seller, together
with the affidavits contemplated by Sections 7.4.2 and 11.9
hereof, with real estate taxes on the Real Estate Assets to
be prorated between Purchaser and Seller through the Closing
Date, and with Seller to pay (or prorate) all charges for
gas, electricity, telephone, water, sewer, trash removal and
street cleaning through the Closing Date (it being
understood that Seller shall have paid any delinquent real
estate taxes and assessments);
4.1.3 Such other good and sufficient instruments of
conveyance, assignment and transfer (including certificates
of title for all motor vehicle transfers), in form and
substance satisfactory to Purchaser's counsel, as shall be
effective to vest in Purchaser good and marketable title to
Seller's Assets;
4.1.4 All contracts, files and other data and
documents directly and particularly pertaining to the
Washington Court House Business, including but not limited
to the Washington Court House Business Records (which may be
delivered at the Washington Court House, Ohio offices of
Seller), except Seller may elect to retain originals of any
such records if true and correct copies thereof certified by
the Secretary of Seller are delivered to Purchaser at the
Closing; and
4.1.5 All updated Schedules, closing certificates and
other documents required to be delivered to Purchaser under
the provisions of this Agreement.
4.2 Further Assurances. At any time and from time to time
after the Closing, at Purchaser's request without further
consideration, Seller will execute and deliver such other
instruments of sale, transfer, conveyance, assignment and
confirmation and take such action as Purchaser may reasonably
deem necessary or desirable in order to more effectively
transfer, convey and assign to Purchaser, and to confirm
Purchaser's title to, all of Seller's Assets, to put Purchaser in
actual possession and operating control thereof and to assist
Purchaser in exercising all rights with respect thereto. After
the Closing, at reasonable times and on reasonable notice Seller
shall have access to the books and records pertaining to its
operations of Seller which have been transferred to Purchaser,
and Purchaser shall retain such books and records for a period of
eight years after the Closing. With respect to any original
records retained by Seller pursuant to Section 4.1.4 of this
Agreement, at reasonable times and on reasonable notice Seller
shall make such original records available to Purchaser for any
proper purpose after the Closing.
4.3 Collection of Accounts and Other Items. Purchaser
shall have the right and authority to bill, re-bill and collect
for its own account all Accounts which shall be transferred to
Purchaser as provided herein and to endorse with the name of
Seller any checks received on account of any such Accounts.
Seller will promptly transfer and deliver to Purchaser any cash
or other property which Seller may receive after the Closing in
respect of any such Accounts or other items relative to the
Washington Court House Business, it being understood that
Purchaser shall be the owner of such Accounts (and all rights to
collection and proceeds thereof), and that Seller shall have no
further interest therein. Purchaser shall be entitled to use all
legal means available to collect and enforce payment of all
Accounts for its own account following the Closing as owner
thereof.
5. REPRESENTATIONS AND WARRANTIES BY SELLER. Seller
represents and warrants to Purchaser, which representations and
warranties shall be true and correct as of the date hereof and
again as of the Closing Date, as follows:
5.1 Organization, Standing and Qualification. Seller is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Ohio; it has all requisite
corporate power and authority and is entitled to carry on its
business as now being conducted, and to own, lease or operate its
properties in connection with the Washington Court House Business
as and in the places where such business is now conducted and
such properties are now owned, leased or operated. Seller has
delivered to Purchaser true and complete copies of Seller's
certificate of incorporation and all amendments thereto,
certified by the Secretary of State of the State of Ohio, and the
bylaws (or other similar governing documents) of Seller as
presently in effect, certified as true and correct by Seller's
Secretary.
5.2 Parents and Subsidiaries. Consumers Water Company is
the sole shareholder of Seller. Seller has no subsidiaries. The
Washington Court House Business carried on by Seller has not been
conducted through any other direct or indirect subsidiary or
affiliate of a shareholder of Seller or any other person.
5.3 Execution, Delivery and Performance of Agreement;
Authority. Seller has the full corporate power and authority to
enter into this Agreement and to carry out the transactions
contemplated hereby. This Agreement is duly executed and
delivered by Seller. All corporate and other proceedings
required to be taken by Seller or its shareholder to authorize
the execution, delivery and performance of this Agreement and the
agreements relating hereto have been properly taken, and this
Agreement and each other agreement contemplated to be executed
and delivered by Seller hereby constitutes a valid and binding
obligation of Seller enforceable against it in accordance with
its terms.
5.4 Financial Statements. Seller has delivered or will
deliver to Purchaser copies of the following financial statements
(hereinafter collectively referred to as the "Financial
Statements"), all of which are or will be as of the Closing
complete and correct, have been or will be prepared from the
books and records of Seller in accordance with generally accepted
accounting principles consistently applied and maintained
throughout the periods indicated and fairly present the financial
condition of Seller's Washington Court House Business as at their
respective dates and the results of its operations for the
periods covered thereby:
5.4.1 The unaudited balance sheets and statements of
income relating to the Washington Court House Business for
each of the twelve months ended December 31, 1989, 1990,
1991, and 1992, and an unaudited balance sheet and statement
of income for each month thereafter through the month ended
August 30, 1993, and
5.4.2 unaudited statements of income relating to the
Washington Court House Business for each calendar month
after August, 1993 prior to the Closing Date (it being
understood that such interim income statements shall not be
available until at least twenty-five (25) days following the
end of each calendar month).
Such statements of income do not contain any material items of
special or nonrecurring income or any other material income not
earned in the ordinary course of business except as expressly
specified therein, and such interim financial statements include
all adjustments, which consist only of normal recurring accruals,
necessary for such fair presentation.
5.5 Absence of Undisclosed Liabilities. Except as and to
the extent reflected or reserved against on the face of the
Financial Statements (excluding the notes thereto) or expressly
disclosed in the Schedules attached hereto, as of the last day of
the calendar month prior to the Valuation Date Seller had (and as
of the Closing Date Seller shall have) no debts, liabilities or
obligations (whether absolute, accrued, contingent or otherwise)
in any way affecting Seller's Assets or the Washington Court
House Business of any nature whatsoever, including, without
limitation, any foreign or domestic tax liabilities or deferred
tax liabilities incurred in respect of or measured by Seller's
income, or its period prior to the close of business on the last
day of the calendar month prior to the Valuation Date or any
other debts, liabilities or obligations relating to or arising
out of any act, omission, transaction, circumstance, sale of
goods or services, state of facts or other condition which
occurred or existed on or before such date, whether or not then
known, due or payable, which relate to or could become a lien
upon Seller's Assets or the Washington Court House Business.
5.6 Taxes. All taxes which after the Closing could become
a lien upon Seller's Assets or result in any liability to the
Purchaser, including, without limitation, income, property,
sales, use, franchise, added value, employees' income withholding
and social security taxes, imposed by the United States or by any
foreign country or by any state, municipality, subdivision or
instrumentality of the United States or of any foreign country,
or by any other taxing authority, which are or will be due and
payable by Seller, and all interest and penalties thereon,
whether disputed or not, have been or will be paid in full, all
tax returns required to be filed in connection therewith have
been or will be accurately prepared and duly and timely filed and
all deposits required by law to be made by Seller with respect to
employees' withholding taxes have been or will be duly made.
5.7 Absence of Changes or Events. Except as set forth on
Schedule 5.7 attached hereto, since the Valuation Date Seller has
conducted the Washington Court House Business only in the
ordinary course and has not:
5.7.1 incurred any obligation or liability related to
the Washington Court House Business or Seller's Assets,
absolute, accrued, contingent or otherwise, whether due or
to become due, except current liabilities for trade or
business obligations incurred in connection with the
purchase of goods and services in the ordinary course of
business and consistent with its prior practice, none of
which liabilities, in any case or in the aggregate,
materially and adversely affects the business, liabilities
or financial condition of the Washington Court House
Business or Seller's Assets;
5.7.2 discharged or satisfied any lien, charge or
encumbrance related to the Washington Court House Business
or Seller's Assets, other than those then required to be
discharged or satisfied, or paid any obligation or
liability, absolute, accrued, contingent or otherwise,
whether due or to become due, other than current liabilities
shown on the Financial Statements and current liabilities
incurred since the Valuation Date in the ordinary course of
business and consistent with its prior practice in
conducting the Washington Court House Business;
5.7.3 mortgaged, pledged or subjected to lien,
charge, security interest or any other encumbrance or
restriction any of Seller's Assets, tangible or intangible;
5.7.4 sold, transferred, leased to others or
otherwise disposed of any of Seller's Assets, except for
inventory sold in the ordinary course of business, or
canceled or compromised any debt or claim, or waived or
released any right of substantial value;
5.7.5 received any notice of termination of any
contract, lease or other agreement or suffered any damage,
destruction or loss (whether or not covered by insurance)
related to the Washington Court House Business or Seller's
Assets which, in any case or in the aggregate, has had a
materially adverse effect on the assets, operations or
prospects of the Washington Court House Business;
5.7.6 in connection with or affecting the Washington
Court House Business, encountered any labor union organizing
activity, had any actual or threatened employee strikes,
work stoppages, slow-downs or lock-outs, or had any material
change in its relations with its employees, agents,
customers or suppliers;
5.7.7 made any change in the rate of compensation,
commission, bonus or other direct or indirect remuneration
payable, or paid or agreed or orally promised to pay,
conditionally or otherwise, any bonus, extra compensation,
pension or severance or vacation pay, to any employee or
agent of Seller related to the Washington Court House
Business except as previously disclosed to Purchaser in
writing prior to the date hereof;
5.7.8 instituted, settled or agreed to settle any
litigation, action or proceeding before any court or
governmental body relating to the Washington Court House
Business or Seller's Assets, other than the Condemnation
Action, with any counter-claims of Seller therein to be
dismissed with prejudice at or prior to the Closing;
5.7.9 failed to replenish its inventories and
supplies relative to the Washington Court House Business in
a normal and customary manner consistent with its prior
practice and prudent business practices prevailing in the
industry, or made any purchase commitment affecting the
Washington Court House Business in excess of the normal,
ordinary and usual requirements of its business or at any
price in excess of the then current market price or upon
terms and conditions more onerous than those usual and
customary in the industry, or made any change in its
service, selling, pricing, advertising or personnel
practices inconsistent with its prior practice and prudent
business practices prevailing in the industry;
5.7.10 suffered any change, event or condition which,
in any case or in the aggregate, has had or may have a
materially adverse effect on Seller's Assets or the
Washington Court House Business (financial or otherwise), or
the operations or prospects of the Washington Court House
Business, including, without limitation, any material change
in the Washington Court House Business' revenues, costs or
relations with its employees, agents, customers or
suppliers;
5.7.11 entered into any transaction, contract or
commitment affecting the Washington Court House Business
other than in the ordinary course of business or paid or
agreed to pay any brokerage or finder's fee, taxes or other
expenses in connection with this Agreement or the
transactions contemplated hereby;
5.7.12 removed (or permitted to be removed) any
Washington Court House Business Records from the premises of
the Washington Court House Business, or removed or destroyed
(or permitted to be removed or destroyed) any computer files
relating to the Washington Court House Business, except for
those records and files being retained by Seller pursuant to
Section 4.1.4, and excepting any records and files which are
not Washington Court House Business Records, or
5.7.13 entered into any agreement or made any
commitment to take any of the types of action described in
subparagraphs 5.7.1 through 5.7.12 above.
5.8 Litigation. Except as set forth in Schedule 5.8
attached hereto, there is no claim, legal action, suit,
arbitration, governmental investigation or other legal or
administrative proceeding, nor any order, decree or judgment in
progress, pending or in effect, or to the knowledge of Seller or
the Shareholder threatened, against or relating to the Washington
Court House Business, its employees, Seller's Assets, or the
transactions contemplated by this Agreement, and Seller does not
know, and has no reason to be aware, of any basis for the same.
Schedule 5.8 also identifies each civil, criminal or
administrative proceeding or investigation to which Seller has
been a party during the five year period prior to the date hereof
which sought (i) payment of any criminal or administrative fines
or penalties by Seller in connection with the operation of the
Washington Court House Business, (ii) civil damages in excess of
$5,000.00 in connection with the operations of the Washington
Court House Business, or (iii) injunctive relief of any type or
nature against Seller as a result of or connected with the
Washington Court House Business.
5.9 Regulatory Matters; Compliance with Laws and Other
Instruments. Except as set forth on Schedule 5.9 attached
hereto, to the best of Seller's knowledge and belief, after due
investigation, neither the ownership nor use of Seller's Assets
nor the conduct of the Washington Court House Business nor the
transfer of Seller's Assets to Purchaser pursuant hereto
conflicts with the rights of any other person, firm or entity or
violates, or with or without the giving of notice or the passage
of time, or both, will violate, conflict with or result in a
default, right to accelerate or loss of rights under, any terms
or provisions of its articles of incorporation or bylaws (or
similar organization document) as presently in effect, or any
lien, encumbrance, mortgage, deed of trust, lease, license,
agreement, understanding, law, ordinance, rule or regulation, or
any order, judgment or decree to which Seller is a party or by
which it may be bound or affected.
5.10 Title to Properties; Encumbrances.
5.10.1 Seller has (or shall cause Purchaser to have,
as of the Closing Date) good, marketable and insurable title
to all the properties and assets it owns in connection with
the Washington Court House Business or purports to own,
including, without limitation, those reflected in its books
and records and in the Financial Statements as of the last
day of the calendar month prior to the Valuation Date.
Those certain properties relating to the Washington Court
House Business owned by the Ohio Water Development Authority
(the "OWDA Properties"), which are specifically identified
as being the OWDA Properties on Exhibit "1", shall either
(i) be transferred to Seller by the Ohio Water Development
Authority prior to the Closing, and then transferred by
Seller to Purchaser with the other Real Estate Assets at the
Closing, or (ii) be transferred directly to Purchaser by the
Ohio Water Development Authority on the Closing Date, by
means of a limited warranty deed, at no cost to Purchaser.
All Real Estate Assets of Seller, including the OWDA
Properties, are listed on Exhibit "1" attached hereto. All
personal property of Seller included in Seller's Assets,
including inventory and supplies, is listed on Schedule 5.10
attached hereto.
5.10.2 None of Seller's Assets or the OWDA Properties
are subject to any mortgage, pledge, lien, charge, security
interest, encumbrance, restriction, lease, license,
easement, liability or adverse claim of any nature
whatsoever, direct or indirect, whether accrued, absolute,
contingent or otherwise, except (i) as disclosed on Schedule
5.10 attached hereto, (ii) as expressly set forth in the
Financial Statements as securing specific liabilities or as
otherwise expressly permitted by the terms hereof, or (iii)
those imperfections of title and encumbrances, if any, which
(A) are not substantial in character, amount or extent and
do not materially detract from the value of the properties
subject thereto, (B) do not interfere with either the
present and continued use of such property or the conduct of
the normal operations of the Washington Court House
Business, and (C) have arisen only in the ordinary course of
business.
5.10.3 With respect to each of the buildings,
structures or appurtenances included within the Real Estate
Assets, Seller has adequate rights of ingress and egress
thereto for operation of the Washington Court House
Business, and none of such buildings, structures or
appurtenances (or any equipment therein), nor the operation
or maintenance thereof, violates any restrictive covenant
binding upon Seller or encroaches on any property owned by
others. With respect to the personal property and equipment
included among Seller's Assets, Seller knows of no latent or
hidden defects or conditions therein. Seller has provided
to Purchaser complete copies of the most recent owner's
title insurance policies, binders and certificates or
opinions of title heretofore issued to Seller with respect
to each parcel of owned real estate included in the Real
Estate Assets.
5.11 Schedules. Attached hereto as Schedule 5.11 is a
separate schedule containing an accurate and complete list and
description of:
5.11.1 Other than the Real Estate Assets, all real
property owned by Seller or in which Seller has a leasehold
or other interest which is used by Seller in connection with
the operation of the Washington Court House Business,
together with a description of each lease, sublease,
license, or any other instrument under which Seller claims
or holds such leasehold or other interest or right to the
use thereof or pursuant to which Seller has assigned, sublet
or granted any rights therein, identifying the parties
thereto, the rental or other payment terms, expiration date
and cancellation and renewal terms thereof;
5.11.2 All of Seller's receivables related to the
Washington Court House Business (which shall include all
Accounts as the end of the most recent calendar month, all
loans receivable and any advances made by Seller), together
with detailed information as to each such listed receivable
which has been outstanding for more than 30 days;
5.11.3 Other than those items of personal property
owned by Seller and listed on Schedule 5.11, all machinery,
tools, equipment, motor vehicles, rolling stock and other
tangible personal property (other than inventory and
supplies), leased or used by Seller, except for individual
items having a value of less than $500.00 which do not, in
the aggregate, have a total value of more than $5,000.00,
setting forth with respect to all such listed property a
summary description of all leases, liens, claims,
encumbrances, charges, restrictions, covenants and
conditions relating thereto, identifying the parties
thereto, the rental or other payment terms, expiration date
and cancellation and renewal terms thereof;
5.11.4 All agreements or arrangements providing for
the services of any independent contractor performing
services for Seller with respect to Seller's Assets and to
which Seller is a party or by which it is bound;
5.11.5 All individual contracts, agreements and
commitments or other understandings or arrangements to which
Seller is or has been a party since January 1, 1992, which
relate to the Washington Court House Business and which call
for (i) payments or receipts of more than $5,000, and (ii)
all water treatment chemical purchases aggregating more than
$5,000;
5.11.6 The classifications and current annual or
hourly salary rates (by class) of all non-management persons
directly employed by Seller in any way relating to the
Washington Court House Business (including independent
agents) and showing separately for each such classification
the amounts paid or payable as salary, bonus payments and
any indirect compensation for the year ended December 31,
1992;
5.11.7 A listing of all of Seller's Assets relating
to the Washington Court House Business acquired by Seller
since the Valuation Date;
5.11.8 A listing of all supplies on hand (as referred
to in Section 2.3) included among Seller's Assets; and
5.11.9 A listing of all Software Licenses for
software directly and particularly used in the Washington
Court House Business.
All of the contracts, agreements, leases, licenses and
commitments required to be listed on Schedule 5.11 (other than
those which have been fully performed) are valid and binding,
enforceable in accordance with their respective terms, in full
force and effect. Except as disclosed in Schedule 5.11, none of
the payments required to be made under any such contract,
agreement, lease, license and commitment has been prepaid more
than 30 days prior to the due date of such payment thereunder,
and there is not thereunder any existing default, or event which,
after notice or lapse of time, or both, would constitute a
default or result in a right to accelerate or loss of rights, and
none of such contracts, agreements, leases, licenses and
commitments is, either when considered singly or in the aggregate
with others, unduly burdensome, onerous or materially adverse to
the Washington Court House Business or Seller's Assets, or
likely, either before or after the Closing, to result in any
material loss or liability. None of Seller's existing or
completed contracts relating to or affecting the Washington Court
House Business is subject to renegotiation with any governmental
body, except as otherwise set forth on the face of any such
underlying document. True and complete copies of all such
contracts, agreements, leases, licenses and other documents
required to be listed on Schedule 5.11 (together with any and all
amendments thereto) have been delivered to Purchaser and
identified with a reference to this Section of this Agreement.
5.12 No Guaranties. Except as set forth on Schedule 5.12
attached hereto, none of the obligations or liabilities of Seller
relating to the Washington Court House Business is guaranteed by
any other person, firm or corporation.
5.13 Inventory. Seller's Assets include inventory and
supplies necessary to meet the normal requirements of the
Washington Court House Business and its operations. Since the
Valuation Date, Seller has added to its inventory and supplies
only in the ordinary course of business, replenishing such
inventory and supplies only with items of like quality and cost
as those existing at the Valuation Date.
5.14 Receivables. All receivables of Seller relating to
the Washington Court House Business (including the Accounts,
other accounts receivable, loans receivable and advances), and
all unbilled accounts relating to the Washington Court House
Business, have arisen only from bona fide transactions in the
ordinary course of Seller's business and to the best knowledge of
Seller shall be (or have been) fully collected when due, or in
the case of each account receivable within 90 days after it
arose, without resort to litigation and without offset or
counterclaim, in the aggregate face amounts thereof except to the
extent of the normal allowance for doubtful accounts with respect
to accounts receivable computed as a percentage of sales
consistent with Seller's prior practices as reflected on the
Balance Sheet. Since the Valuation Date, Seller has not
materially altered or accelerated its collection efforts or
practices with respect to its accounts receivable.
5.15 Records. The books of account relative to the
Washington Court House Business are complete and correct in all
material respects, and there have been no transactions involving
the Washington Court House Business which properly should have
been set forth therein and which have not been accurately so set
forth.
5.16 Employee Benefit Plans. Schedule 5.16 attached
hereto contains a true and complete list of all employee benefit
plans ("Employee Benefit Plans") within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), whether or not any such plans are otherwise
exempt from the provisions of ERISA, established, maintained,
sponsored or contributed to by Seller and all other employers,
whether or not incorporated, which by reason of a control group,
a group under common control or an affiliated service group are
treated together with Seller and/or the Shareholder as a single
employer within the meaning of Section 414(b), (c) or (m) of the
Code. No activities of, or failure to act by, Seller in
connection with any Employee Benefit Plan shall result in any
liability to Purchaser following the Closing, and Purchaser shall
not be obligated to assume any liabilities of Seller pursuant to
any Employee Benefit Plan. There has not been any (i)
termination of any "defined benefit plan" within the meaning of
ERISA maintained by Seller or any person, firm or entity
("Affiliate") which is under "common control" (within the meaning
of Section 4001(b) of ERISA) with Seller, or (ii) commencement of
any proceeding to terminate any such plan pursuant to ERISA, or
otherwise, or (iii) written notice given to Seller or any
Affiliate of the intention to commence or seek the commencement
of any such proceeding. Except as set forth in the Schedules
attached to this Agreement, Seller has no knowledge or
information of any planned or required increase in the level of
contributions or benefits under any Employee Benefit Plan, or of
any circumstances which would suggest that such an increase may
be required. In the case of each Employee Benefit Plan to which
Seller makes contributions on behalf of employees who are to be
offered employment by Purchaser after the Closing ("Transferred
Employees") under which contributions are fixed pursuant to a
collective bargaining agreement, such Employee Benefit Plan
satisfies all relevant provisions of the applicable collective
bargaining agreement currently in effect, and the level of
contributions currently provided for in the applicable collective
bargaining agreement is sufficient to meet the funding
requirements of ERISA applicable to such plan, based on
acceptable actuarial assumptions. Each funded Employee Benefit
Plan maintained by Seller for one or more Transferred Employees
constitutes a qualified plan under Section 401(a) of the Code and
meets all applicable requirements of ERISA. Seller has not
incurred any withdrawal liability within the meaning of Section
4201 and 4204 of ERISA to any pension plan which is a
Multiemployer Plan (as defined in Section 4001 of ERISA), and no
event has occurred, and there exists no condition or set of
circumstances (as a result of the execution, delivery and
performance of this Agreement or otherwise) which presents any
risk of the occurrence of any withdrawal from or the partition,
termination, reorganization or insolvency of any Multiemployer
Plan which could result in any liability to Purchaser.
5.17 Environmental Matters.
5.17.1 Except as set forth on Schedule 5.17 attached
hereto, (i) no "Hazardous Substance" (as hereinafter
defined) has been disposed of on, generated on, treated on,
buried beneath, or percolated beneath, (ii) no such
disposal, generation, treatment, burial or percolation has
been threatened, and (iii) there has been no "Release" (as
hereafter defined) thereof on or (to the best knowledge of
Seller) near, any real estate owned or leased by Seller in
connection with the Washington Court House Business, or any
improvements thereon (collectively the "Real Property").
Except as set forth on Schedule 5.17, Seller and (to the
best knowledge of Seller) all owners and users of the Real
Property are and have been in compliance with all applicable
federal, state and local laws, administrative rulings and
regulations of any court, administrative agency or other
governmental or quasi-governmental authority, relating to
the protection of the environment (including but not limited
to laws prohibiting the creation of a public nuisance).
Attached to Schedule 5.17 are copies of all correspondence
between Seller and either the United States Environmental
Protection Agency or the Ohio Environmental Protection
Agency relating to Seller's Assets or the Washington Court
House Business since January 1, 1990. Neither Seller nor
(to the best knowledge of Seller) any past or present owner
or user of the Real Property is a potentially responsible
party under Section 107 of the Comprehensive Environmental
Response Compensation and Liability Act of 1980, as amended
("CERCLA"), or is or has been subject to an action under
Section 7003 of the Resource Conservation and Recovery Act
of 1976, as amended ("RCRA"), and neither Seller nor (to the
best knowledge of Seller) any past or present owner of the
Real Property has received notification from any federal,
state or local government, agency or regulatory body, of a
violation under any federal, state or local law regulating
the Release, disposal or discharge of any toxic, explosive
or other Hazardous Substance. No Environmental Condition
(as hereafter defined) exists in or (to the best knowledge
of Seller) near the Real Property.
5.17.2 Except as set forth on Schedule 5.17, the Real
Property is free from the harmful effects of asbestos or
asbestos-containing materials.
5.17.3 Except as set forth on Schedule 5.17, no
Underground Storage Tanks (as hereafter defined) are now
present on or beneath the premises of the Real Estate
Assets.
5.17.4 For purposes of this Agreement: (i)
"Hazardous Substance" means any one or more of (A) any
substance defined as a hazardous substance under Section
101(14) of CERCLA, (B) any other substance deemed hazardous
by the United States Environmental Protection Agency
pursuant to Section 102(a) of CERCLA, (C) petroleum
(including crude oil or any fraction thereof), (D) any
substance deemed hazardous pursuant to Section 1004(5) of
RCRA, (E) any substance regulated under the Toxic Substance
Control Act, as amended, or (F) any other hazardous or toxic
substance, materials, compound, mixture, solution, element,
pollutant or waste regulated under any federal, state or
local statute, ordinance or regulation; (ii) "Release" shall
have the meaning given to such term in Section 101(22) of
CERCLA; (iii) "Underground Storage Tanks" shall be as
defined in Ohio Administrative Code 1301:7-9-02(B)(52) and
shall further include all other underground storage tanks
not included in the foregoing definition because of size,
content or purpose thereof; and (iv) "Environmental
Condition" shall mean conditions of the environment,
including natural resources (including flora and fauna),
soil, surface water, groundwater, any present or potential
drinking water supply, subsurface strata or the ambient air,
relating to or arising out of the use, handling, storage,
treatment, recycling, generation, transportation, spilling,
leaking, pumping, pouring, emptying, discharging, injecting,
escaping, leaching, disposal, dumping, Release or threatened
Release of Hazardous Substances upon or near the Real
Property by Seller or Seller's agents, lessees,
representatives, employees, independent contractors or (to
the best of Seller's knowledge) predecessors in interest.
5.18 Mechanics and Other Liens. No labor, services or
material has been made or furnished to Seller by any person or
entity, including, without limitation, contractors,
subcontractors, mechanics or materialmen, which to the knowledge
and belief of Seller could rise to any lien upon Seller's Assets
as provided under the laws of the State of Ohio.
5.19 Permits and Licenses. Schedule 5.19 attached hereto
sets forth all licenses and permits issued by applicable
governmental authorities presently held by Seller with respect to
the Washington Court House Business, excluding all licenses and
certificates of authority or public convenience and necessity
issued by the Public Utilities Commission of Ohio or the City of
Washington relating to the Washington Court House Business. Such
licenses and permits constitute all of the licenses and permits
necessary or appropriate to operate the Washington Court House
Business in the manner in which the same is operated as of the
date hereof.
5.20 Data Processing Matters.
5.20.1 Except as set forth in Schedule 5.20 attached
hereto, Seller does not have any of its respective records,
systems, controls, data or information relating to the
Washington Court House Business recorded, stored,
maintained, operated or otherwise wholly or partly dependent
upon or held by any means (including any electronic,
mechanical or photographic process, whether computerized or
not) which (including all means of access thereto and
therefrom) are not under the exclusive ownership and control
of Seller.
5.20.2 Seller owns, leases or licenses certain
computer equipment, associated peripheral devices, and
related operating and application systems and other software
utilized in connection with the Washington Court House
Business and operations (the "Data Processing Systems").
All Data Processing Systems assets listed on Schedule 5.20
will be transferred to Purchaser as part of Seller's Assets.
Seller's billing system and any facilities, computers,
software and data processing systems not located in Fayette
County, Ohio shall be excluded from such transfer. All
agreements and licenses relating to leased or licensed Data
Processing Systems which are being transferred are
identified on Schedule 5.11. Purchaser shall pay any
licensor charges or fees necessary to transfer such Data
Processing Systems.
5.21 Finder's Fees. Neither Seller nor any person acting
on behalf of Seller is a party to any contract, arrangement or
understanding pursuant to which any third person or entity is
entitled to any brokerage commission, finder's fee or similar
compensation from any party in connection with the execution and
delivery of this Agreement or the consummation of the
transactions herein contemplated.
5.23 Disclosure. No representation or warranty by Seller
contained in this Agreement nor any statement or certificate
furnished or to be furnished by Seller to Purchaser or its
representatives in connection herewith or pursuant hereto
contains or will contain any untrue statement of a material fact,
or omits or will omit to state any material fact required to make
the statements herein or therein contained not misleading. The
representations and warranties contained in this Article 5 or
elsewhere in this Agreement or any document delivered pursuant
hereto shall not be affected or deemed waived by reason of the
fact that Purchaser and/or its representatives knew or should
have known that any such representation or warranty is or might
be inaccurate in any respect.
6. REPRESENTATIONS AND WARRANTIES BY PURCHASER. Purchaser
represents and warrants to Seller, which representations and
warranties shall be true and correct as of the date hereof and as
of the Closing Date, as follows:
6.1 Organization. Purchaser is a municipal corporation
and political subdivision in and of the State of Ohio, duly
organized and validly existing under the laws of the State of
Ohio and has full municipal power and authority to enter into
this Agreement and the related agreements referred to herein and
to carry out the transactions contemplated by this Agreement.
6.2 Authorization and Approval of Agreement. All
municipal governmental action required to be taken by Purchaser
relating to the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby shall have
been taken at or prior to the Closing. Such action includes a
municipal ordinance authorizing Purchaser's authorized officials
to enter into and perform the obligations contemplated by this
Agreement for the Aggregate Purchase Price set forth in Article 2
hereof. Said legislation shall provide that the Closing (as
defined herein) shall not occur prior to December 16, 1993.
Purchaser has provided Seller with a certified copy of said
legislation prior to the execution hereof.
6.3 Execution, Delivery and Performance of Agreement.
Neither the execution, delivery nor performance of this Agreement
by Purchaser will, with or without the giving of notice or the
passage of time, or both, conflict with, result in a default,
right to accelerate or loss of rights under, or result in the
creation of any lien, charge or encumbrance pursuant to, any
franchise, mortgage, deed of trust, lease, license, agreement,
understanding, law, ordinance, rule or regulation or any order,
judgment or decree to which Purchaser is a party or by which it
may be bound. Purchaser has full municipal power and authority
to enter into this Agreement and to carry out the transactions
contemplated hereby, and as of the Closing Date all municipal
governmental proceedings required to be taken by Purchaser to
authorize the execution, delivery and performance of this
Agreement and the agreements relating hereto shall have been
properly taken and this Agreement shall constitute a valid and
binding obligation of Purchaser enforceable against it in
accordance with its terms.
6.4 Litigation. Except for the Mandamus Action and the
Condemnation Action, there is no legal action, suit, arbitration,
governmental investigation or other legal or administrative
proceeding, nor any order, decree or judgment in progress,
pending or in effect, or to the knowledge of Purchaser
threatened, against or relating to Purchaser in connection with
or relating to the transactions contemplated by this Agreement,
and Purchaser does not know or have any reason to be aware of any
basis for the same.
6.5 Finder's Fees. Neither Purchaser nor any person
acting on behalf of Purchaser is a party to any contract,
arrangement or understanding pursuant to which any third person
or entity is entitled to any brokerage commission, finder's fee
or similar compensation from any party in connection with the
execution and delivery of this Agreement or the consummation of
the transactions herein contemplated.
7. OTHER OBLIGATIONS OF THE PARTIES.
7.1 Conduct of Business. Prior to the Closing, Seller
shall conduct its business and affairs related to the Washington
Court House Business only in the ordinary course and consistent
with its prior practice and shall maintain, keep and preserve
Seller's Assets in good condition and repair and maintain
insurance thereon in accordance with present practices, and
Seller will use its best efforts (i) to preserve the Washington
Court House Business intact, (ii) to keep available to Purchaser
the services of Seller's present employees, agents and
independent contractors related to the Washington Court House
Business, (iii) to preserve for the benefit of Purchaser the
goodwill of Seller's suppliers, customers, landlords and others
having business relations with the Washington Court House
Business, (iv) to cooperate with Purchaser and use reasonable
efforts to assist Purchaser in obtaining the consent of any
landlord or other party to any lease or contract with Seller
related to the Washington Court House Business (including but not
limited to those identified on Schedule 5.11) where the consent
of such landlord or other party may be required by reason of the
transactions contemplated hereby and (v) to cooperate with
Purchaser in its efforts to obtain the financing of the purchase
price by the sale of the Bonds (as defined in Section 11.8 below)
in accordance with the provisions of Section 11.8 hereof.
Without limiting the generality of the foregoing, prior to the
Closing Seller will not without Purchaser's prior written
approval:
7.1.1 enter into any contract, agreement, commitment
or other understanding or arrangement related to or
affecting Seller's Assets or the Washington Court House
Business except for those of the type which would not have
to be listed and described under Section 5.11 above;
7.1.2 remove (or permit to be removed) any Washington
Court House Business Records from the premises of the
Washington Court House Business, or remove or destroy (or
permit to be removed or destroyed) any computer files
directly and particularly relating to the Washington Court
House Business, except as specifically agreed to in writing
by Seller; or
7.1.3 perform, take any action or incur or permit to
exist any of the acts, transactions, events or occurrences
of the type described in Section 5.7 of the Agreement which
are inconsistent with the representations and warranties set
forth therein.
At or prior to the Closing, Seller shall cause all contracts,
licenses and leases which relate to the Washington Court House
Business to which Seller is a party and which are to be assigned
to Purchaser hereunder (including the advance contracts disclosed
on the Schedules attached to this Agreement), which by their
terms will require future payments by Seller (or by Purchaser
following the assignment thereof) to a third party, to be paid in
full through the Closing Date or prorated through the Closing
Date. If Seller elects to have such payment amounts thereunder
prorated, Seller shall notify Purchaser in writing at or prior to
the Closing such that the Aggregate Purchaser Price may be
adjusted with a credit to Purchaser reflecting the amounts which
shall be owed thereunder through the Closing Date.
7.2 Changes in Information. Seller shall give Purchaser
prompt written notice of any change in any of the information
contained in the representations and warranties made in Article 5
or elsewhere in this Agreement or the Schedules referred to
herein which occurs prior to the Closing.
7.3 Consultation with Purchaser. Seller shall consult
with and follow the recommendations of Purchaser with respect to
(i) the cancellation of contracts, agreements, commitments or
other understandings or arrangements to which Seller is a party
and which relate to the Washington Court House Business,
including, without limitation, purchase orders and commitments
for capital expenditures or improvements, (ii) the discontinuance
of any Washington Court House Business operations, and (iii)
purchasing, pricing or selling policies with respect to the
Washington Court House Business; provided, however, that nothing
contained in this Section 7.3 shall require Seller to take or
fail to take any action that, in Seller's reasonable judgment, is
likely to give rise to any penalty or a claim for damages by any
third party against Seller, or is likely to result in material
losses to Seller, or is otherwise likely to prejudice in any
material respect or unduly interfere with the conduct of the
Washington Court House Business in the ordinary course consistent
with prior practice, or is likely to result in a breach by Seller
of any of its representations, warranties or covenants contained
in this Agreement (unless any such breach is first waived in
writing by Purchaser).
7.4 Certain Matters Affecting the Real Estate Assets.
7.4.1 Within thirty (30) days after the date of this
Agreement, Purchaser shall obtain and pay for (and provide a
copy to Seller upon request) from Lawyers Title Insurance
Corporation (or another nationally known title insurance
company selected by and acceptable to Purchaser) a Lender's
Title Insurance Commitment, for the benefit of the trustee
bank (the "Trustee") under the Indenture of Mortgage
securing the Bonds (as defined below), together with copies
of all documents referred to therein (the "Commitment"), for
those Real Estate Assets which Seller owns in fee as well
the OWDA Properties, and those upon which Seller has above-
ground improvements pursuant to an easement, in an aggregate
dollar amount determined appropriate by Purchaser, showing
that Seller has (or, with respect to the OWDA Properties,
upon transfer in accordance with this Agreement, Purchaser
will acquire) good and marketable title in fee simple to
each of such properties, subject to no liens or encumbrances
other than current taxes and assessments not yet due and
payable and utility easements of record which, in
Purchaser's opinion, do not materially affect the operation
of the Washington Court House Business, other than those
liens which shall be released at Closing. Seller will
cooperate with Purchaser and such title company to the
extent reasonably necessary to cause the Commitment to be
issued within such thirty (30) day period, to enable the
surveys described in Section 7.4.3 to be prepared at
Purchaser's expense, and to cause the Policy (as defined
below) to be issued by the aforesaid title insurance company
at and as of the Closing. Seller shall have no financial or
other obligations with respect to the Commitment, the Policy
and such surveys, except as set forth in this Section 7.4.
7.4.2 At the Closing Purchaser shall obtain and pay
for and deliver a Lender's Title Insurance Policy (the
"Policy") in an amount determined appropriate by Purchaser,
insuring the Trustee and such title as shown in the
Commitment with respect to the Real Estate Assets. The
Policy shall not contain a survey exception as to parcels
for which surveys are obtained by Purchaser prior to
Closing, or an exception for unfiled mechanics' liens. At
the Closing Seller shall execute and deliver to Purchaser
and the foregoing title insurance company an affidavit as to
each Real Estate Asset certifying that (i) there are no
mortgages, judgment liens or other encumbrances of record
affecting such property except as set forth in the Policy,
(ii) there are no rights of possession, use or otherwise,
outstanding in third parties by reasons of unrecorded
leases, land contracts, sale contracts, options or other
documents, and (iii) no unpaid-for improvements have been
made, or materials, machinery or fuel delivered to such
property within the sixty (60) days immediately preceding
the Closing which might form the basis for a mechanics' lien
thereon.
7.4.3 Purchaser shall obtain at its expense currently
certified "as built" surveys and legal descriptions of the
Real Estate Assets for which the Commitment is to be
obtained pursuant to Section 7.4.1, prepared by a surveyor
registered in the State of Ohio, prepared in accordance with
ALTA standards. Such surveys shall include the locations of
all improvements, encroachments, easements and rights of
way, and shall be delivered to Purchaser and the title
company at or prior to the Preclosing. Seller shall have no
obligation to pay for or otherwise obtain surveys for any
Real Estate Assets, but shall provide to Purchaser copies of
all existing surveys (if any) in its possession relating to
the Real Estate Assets.
7.4.4 The obligations of Purchaser set forth in this
Section 7.4 are for the sole benefit of Purchaser, and not
of Seller, and Purchaser may alter or waive such obligations
relating to the Commitment, the Policy or the aforesaid
surveys at or prior to the Closing if Purchaser determines
that waiving or altering its obligations to obtain the same
is appropriate.
7.5 Certain Legal Proceedings. Seller and Purchaser filed
with the Fayette County Common Pleas Court a standstill motion
which the court has granted with respect to, and prior to Closing
shall cooperate in attempting to obtain any further extensions
necessary in order to delay the need for either party to incur
any additional professional fees and other costs and expenses
after the date hereof in connection with, the Condemnation
Action. As of the Closing, Purchaser and Seller shall submit to
such court a final agreed judgment entry in substantially the
form of Exhibit 7.5 attached hereto (the "Agreed Entry")
providing for the transfer of Seller's Assets to Purchaser (in
consideration of the completion of Seller's and Purchaser's
obligations to be performed at Closing) as an "agreed take" of
Seller's Assets by Purchaser pursuant to the Condemnation Action,
and Seller shall dismiss all counter-claims thereunder with
prejudice. All court costs relating to the Condemnation Action
shall be paid by Purchaser. Seller shall provide no further
cooperation or support to the plaintiffs in the Mandamus Action
and shall use its best efforts to cause the Mandamus Action to be
dismissed with prejudice on or prior to November 1, 1993.
7.6 Transferred Employees. Immediately prior to the
Closing, Purchaser shall offer employment (conditioned upon the
occurrence of the Closing and commencing as of the Closing Date)
to all Seller's hourly employees employed in connection with the
Washington Court House Business in Fayette County, Ohio.
7.7 Certain Records. If at any time after the date hereof
but before the expiration of the period ending one (1) year after
the Closing Date, Purchaser discovers any breach of the
representations and warranties set forth in Section 5.7.12, or
the covenant set forth in Section 7.1.2 , Purchaser shall notify
Seller in writing and Seller shall immediately upon receipt
thereof provide Seller with complete and accurate backup copies
(if available) of any computer files or other Washington Court
House Business Records. If such backup copies of computer files
or other records do not exist, Seller shall immediately provide
such support and information to Purchaser from Seller's existing
files and records as may be necessary to recreate such files or
records for Purchaser, but in such case Purchaser shall agree to
reimburse Seller's reasonable costs associated with providing
such support and information.
7.8 Transition of Data Processing. Purchaser intends to
use its own data processing systems to operate the Washington
Court House Business after the Closing. Seller shall cooperate
with Purchaser to provide an orderly transition to Purchaser's
data processing system, which shall include (without limitation)
providing access to Seller's information and systems prior to
Closing and consultation to Purchaser with respect to data
processing matters both prior to the Closing and for a reasonable
period thereafter.
7.9 Best Efforts Covenant. Purchaser and Seller shall use
their respective best efforts to cause all conditions to Closing
set forth in Article 11 and Article 12 of this Agreement to be
satisfied at or prior to Closing.
8. ACCESS TO SELLER'S ASSETS, INFORMATION AND DOCUMENTS.
Upon reasonable notice and during regular business hours, Seller
will give Purchaser and Purchaser's attorneys, accountants and
other representatives full access to Seller's personnel and all
properties, documents, contracts, books and records of Seller and
will furnish Purchaser with copies of such documents (certified
by Seller's officers if so requested) and with such information
with respect to the affairs of Seller pertaining directly and
particularly to the Washington Court House Business as Purchaser
may from time to time request, and Purchaser will not improperly
disclose the same prior to the Closing. Upon reasonable notice
and during regular business hours, Purchaser may conduct or cause
to be conducted inspections of the Real Estate Assets (and all
improvements thereon) as to insect infestation, engineering,
structural, roofing, heating, plumbing, electrical, mechanical
and similar matters at Purchaser's sole expense, and reasonable
inspections of all other Seller's Assets.
9. DIRECTORS' AND SHAREHOLDERS' AUTHORIZATION. At or
prior to the Closing, Seller will deliver to Purchaser a copy of
the resolutions of the Board of Directors and sole shareholder of
Seller approving the execution and delivery of this Agreement and
the consummation of all of the transactions contemplated hereby,
duly certified by an officer of Seller.
10. BULK SALES COMPLIANCE. Purchaser hereby waives
compliance by Seller with the provisions of the Ohio Bulk Sales
Law, Chapter 1306, Ohio Revised Code.
11. CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATIONS. All
obligations of Purchaser hereunder are subject, at the option of
Purchaser, to the fulfillment of each of the following conditions
at or prior to the Closing, and Seller shall use best efforts to
cause each such condition to be so fulfilled:
11.1 Representations and Warranties. All representations
and warranties of Seller contained herein or in any document
delivered pursuant hereto shall be true and correct in all
material respects when made and shall be deemed to have been made
again at and as of the Closing Date, and shall then be true and
correct in all material respects except for changes in the
ordinary course of business after the date hereof in conformity
with the covenants and agreements contained herein. Updated
disclosure schedules which are true and correct shall be
delivered by Seller to Purchaser as of the Closing Date.
11.2 Covenants. All covenants, agreements and obligations
required by the terms of this Agreement to be performed by Seller
at or before the Closing shall have been duly and properly
performed in all material respects.
11.3 No Material Adverse Change. Since the date of this
Agreement there shall not have occurred any material adverse
change in the condition of Seller's Assets or the Washington
Court House Business.
11.4 Closing Certificate. There shall be delivered to
Purchaser a certificate duly executed by the President and
Secretary of Seller, individually, dated the Closing Date,
certifying that the conditions set forth in Sections 11.1, 11.2
and 11.3 have been fulfilled.
11.5 Schedules and Other Documents. All documents,
schedules, reports and consents required to be delivered to
Purchaser at or prior to the Closing shall have been so
delivered, including the schedules referred to in Article 5 which
shall have been updated as of the Closing Date.
11.6 Opinion of Counsel. Purchaser shall have received an
opinion of Seller's counsel, Harrington, Huxley, Smith, Mitchell
& Reed, dated the Closing Date, substantially in accordance with
Exhibit 11.6 attached hereto.
11.7 Written Consents. Purchaser shall have obtained
written consents to the transfer or assignment to Purchaser of
all consignment agreements, licenses (including without
limitation the Software Licenses), leases and other material
contracts of Seller related to the Washington Court House
Business or Seller's Assets as Purchaser may deem necessary or
appropriate, where the consent of any other party to any such
contract may, in the opinion of Purchaser's counsel, be required
for such assignment or transfer.
11.8 Financing. Purchaser shall have obtained financing
for the Aggregate Purchase Price referred to in Article 2 of this
Agreement by the issue of Purchaser's Water System First Mortgage
Revenue Bonds, in an aggregate principal amount of up to
$16,500,000 (the "Bonds"), with an average coupon rate on such
bonds not to exceed six-and-one-quarter percent (6.25%) per
annum, and on such other terms and conditions satisfactory to
Purchaser.
11.9 Title Insurance. The Policy with respect to the Real
Estate Assets, insuring title and the Trustee subject to no other
exceptions, liens or encumbrances other than as permitted by
Section 7.4 hereof, shall have been issued at Purchaser's cost by
the title insurance company selected by Purchaser pursuant to the
Commitment obtained in accordance with Section 7.4.1 hereof, the
surveys contemplated by Section 7.4.3 shall have been obtained by
Purchaser in form and substance satisfactory to Purchaser, and
the affidavits required by Sections 7.4.2 shall have been
executed and delivered by Seller.
11.10 Evidence of Liens. Seller shall have delivered to
Purchaser copies of Forms UCC-11, certified by the County
Recorder, Fayette County, Ohio, and the Secretary of State of
Ohio, identifying all financing statements showing Seller as
"debtor" thereon and describing any lien or security interest
with respect to Seller's Assets which are on file with such
offices as of the business day immediately prior to the Closing
Date, as well as evidence satisfactory to Purchaser that such
liens and/or security interests shown thereon shall be released
as to Seller's Assets by the secured party upon Closing (with the
costs of obtaining such releases to be borne by Seller).
11.11 Transfer of OWDA Properties. The OWDA Properties
shall either (i) have been transferred to Seller by limited
warranty deed, such that title thereto may be transferred to
Purchaser by Seller as of the Closing, or (ii) have been
transferred by the fee owner to Purchaser as of the Closing Date,
and all representations and warranties set forth herein with
respect to the Real Estate Assets shall be true as to the OWDA
Properties as of the Closing Date.
11.12 Consent of and Release by Fayette County
Commissioners. The Board of Commissioners of Fayette County,
Ohio (the "County Commissioners") shall have consented in writing
to the assignment by Seller to Purchaser as of the Closing Date
of that certain Agreement dated November 23, 1987 between the
Board of Commissioners and Seller relating to the YUSA, Inc.
water storage tank. Such consent shall have been obtained by
Purchaser, with any costs to be borne by Purchaser. Such consent
shall include a release of Seller by the County Commissioners
from any ongoing obligations under said agreement, as well as a
release from all prospective service obligations, contractual or
otherwise, arising from agreements or arrangements between Seller
and the County Commissioners relating to the providing of water
service to residents of Fayette County, Ohio, with said releases
to be in form and substance reasonably satisfactory to Seller.
11.13 Consent to Transfer of Software Licenses and Other
Agreements. The other parties to all agreements to which Seller
is a party relating to the Washington Court House Business which
Purchaser, in its sole discretion, shall deem material, shall
have consented in writing to the transfer of such agreements by
Seller to Purchaser as of the Closing, or shall have entered into
replacement agreements or licenses with Purchaser on terms
satisfactory to Purchaser.
11.14 Dismissal of Mandamus Action. The Mandamus Action
shall have been dismissed with prejudice by all parties plaintiff
thereto, and all cross-claims and counterclaims shall have been
dismissed with prejudice by all other parties thereto, or the
Mandamus Action shall otherwise have been dismissed by the Ohio
Supreme Court with prejudice, with court costs to be paid by
plaintiffs (or by Seller).
11.15 Expiration of Notice Period. A period of at least
sixty (60) days shall have elapsed following the giving of notice
by Seller to Seller's employees associated with the Washington
Court House Business, as required by Seller's collective
bargaining agreement with employees.
12. CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS. All
obligations of Seller at the Closing are subject, at the option
of Seller, to the fulfillment of each of the following conditions
at or prior to the Closing, and Purchaser shall exert its best
efforts to cause each such condition to be so fulfilled:
12.1 Representations and Warranties. All representations
and warranties of Purchaser contained herein or in any document
delivered pursuant hereto shall be true and correct in all
material respects when made and as of the Closing.
12.2 Covenants. All obligations required by the terms of
this Agreement to be performed by Purchaser at or before the
Closing shall have been duly and properly performed in all
material respects.
12.3 Closing Certificate. There shall be delivered to
Seller a certificate executed by the City Manager and the Auditor
of Purchaser, dated the Closing Date, certifying that the
conditions set forth in Sections 12.1 and 12.2 have been
fulfilled.
12.4 Opinion of Counsel. Seller shall have received the
opinion of Bricker & Eckler, Purchaser's special counsel, dated
the Closing Date, substantially in accordance with Exhibit 12.4
attached hereto.
12.5 Release of County Commissioners. The County
Commissioners shall have executed documents evidencing the
consent and releases contemplated by Section 11.12, in form and
substance reasonably satisfactory to Seller.
12.6 CP Utility Agreement. Purchaser shall have entered
into (or committed to enter into) an agreement with CP Utility
Services Company, an affiliate of Seller pursuant to which CP
Utility Services Company shall provide certain inspection and
water conservation services to Purchaser in connection with the
Washington Court House Business through 1995 (minimum two years)
at a rate of $50.00 per hour, with aggregate compensation to be
not less than $16,000 per year.
12.7 PUCO Order. Purchaser shall have obtained and
delivered to Seller an order of the Public Utilities Commission
of Ohio (the "PUCO"), in form and substance reasonably
satisfactory to Seller, acknowledging that after the Closing Date
Seller shall have no further obligation to the PUCO to provide
water service to the residents of Purchaser or of Fayette County,
Ohio, and consenting to the discontinuance of such service by
Seller as of the Closing Date. Although Purchaser is willing to
include the issuance of such order as a condition to Seller's
obligations to close the transactions contemplated by this
Agreement, Seller acknowledges that Purchaser does not agree the
issuance of such order is required by Ohio law.
12.8 Expiration of Notice Period. A period of at least
sixty (60) days shall have elapsed following the giving of notice
by Seller to Seller's employees associated with the Washington
Court House Business, as required by Seller's collective
bargaining agreement with employees.
13. INDEMNIFICATION.
13.1 Indemnification by Seller. Seller hereby indemnifies
and agrees to hold Purchaser harmless from, against and in
respect of (and shall on demand reimburse Purchaser for):
13.1.1 any and all loss, liability or damage suffered
or incurred by Purchaser by reason of any untrue
representation, breach of warranty or nonfulfillment of any
covenant by Seller contained herein or in any certificate,
document or instrument delivered to Purchaser pursuant
hereto or in connection herewith;
13.1.2 any and all loss, liability or damage suffered
or incurred by Purchaser in respect of or in connection with
any liabilities of Seller not expressly assumed by Purchaser
pursuant to the terms of the Liabilities Undertaking;
13.1.3 any and all debts, liabilities or obligations
of Seller, direct or indirect, fixed, contingent or
otherwise, which exist at or as of the Closing Date or which
arise after the Closing Date but which are based upon or
arise from any act, omission, transaction, circumstance,
sale of goods or services, state of facts or other condition
which occurred or existed on or before the Closing Date,
whether or not then known, due or payable, except to the
extent expressly assumed by Purchaser pursuant to the terms
of the Liabilities Undertaking;
13.1.4 any and all loss, liability or damage suffered
or incurred by Purchaser by reason of or in connection with
any claim for finder's fee or brokerage or other commission
arising by reason of any services alleged to have been
rendered to or at the instance of Seller or the Shareholder
with respect to this Agreement or any of the transactions
contemplated hereby; and
13.1.5 any and all actions, suits, proceedings,
claims, demands, assessments, judgments, costs and expenses,
including, without limitation, legal, accounting and other
professional fees and expenses, incident to any of the
foregoing or incurred in investigating or attempting to
avoid the same or to oppose the imposition thereof, or in
enforcing this indemnity.
13.2 Indemnification by Purchaser. Purchaser hereby
indemnifies and shall hold Seller harmless from, against and in
respect of (and shall on demand reimburse Seller for):
13.2.1 any and all loss, liability or damage
resulting from an untrue representation, breach of warranty
or non-fulfillment of any covenant or agreement by Purchaser
contained herein or in any certificate, document or
instrument delivered to Seller hereunder;
13.2.2 any and all liabilities or obligations of
Seller specifically assumed by Purchaser pursuant to this
Agreement;
13.1.3 any and all debts, liabilities or obligations
of Purchaser, direct or indirect, fixed, contingent or
otherwise, which relate to the operation of the Washington
Court House Business by Purchaser after the Closing Date,
based upon or arising from any act, omission, transaction,
circumstance, sale of goods or services, state of facts or
other condition which occurs after the Closing Date;
13.1.4 any and all loss, liability or damage suffered
or incurred by Seller by reason of or in connection with any
claim for finder's fee or brokerage or other commission
arising by reason of any services alleged to have been
rendered to or at the instance of Purchaser with respect to
this Agreement or any of the transactions contemplated
hereby; and
13.2.5 any and all actions, suits, proceedings,
claims, demands, assessments, judgments, costs and expenses,
including, without limitation, legal fees and expenses,
incident to any of the foregoing or incurred in
investigating or attempting to avoid the same or to oppose
the imposition thereof, or in enforcing this indemnity.
13.3 Certain Limitations on Claims. Any claim or cause of
action arising out of this Agreement must be instituted within
three years of the Closing Date, except for claims under the
representations and warranties set forth in Sections 5.17 hereof
(the "Excepted Claims"), as to which any claim or cause of action
must be instituted within five years of the Closing Date. The
failure to institute a claim or cause of action within such
period shall constitute an absolute bar to the institution of any
proceedings or actions based upon, and will constitute a waiver
of, all the claims and/or causes of action not so asserted.
14. NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All statements, representations, warranties, indemnities,
covenants and agreements made by each party hereto shall survive
the Closing.
15. NOTICES. Any and all notices or other communications
required or permitted to be given under any of the provisions of
this Agreement shall be in writing and shall be deemed to have
been duly given when personally delivered or mailed by first
class mail, return receipt requested, addressed (i) if to Seller,
to Walter J. Pishkur, President, Ohio Water Service Company, 6650
South Avenue, Boardman, Ohio 44512, with a copy to Alan D.
Wenger, Esq., Harrington, Huxley, Smith, Mitchell & Reed, Suite
1200, Mahoning Bank Building, Youngstown, Ohio 44503-1769, and
(ii) if to Purchaser, to the City of Washington, City Hall, 215
East Market Street, Washington Court House, Ohio 43160,
Attention: R. Mark Rohr, City Manager, with a copy to Richard C.
Simpson, Esq., Bricker & Eckler, 100 South Third Street,
Columbus, Ohio 43215-4291. If any party desires to change the
address at which it is to receive notice, such party may change
the address at which it is to receive notice under this Agreement
by written notice to each other party set forth herein given as
aforesaid.
16. MISCELLANEOUS.
16.1 Entire Agreement. This Agreement (including the
exhibits hereto and the schedules, annexes and other documents
delivered pursuant hereto, which are a part hereof) constitutes
the entire agreement of the parties with respect to the subject
matter hereof, and supersedes any and all prior understandings,
written or oral, among the parties, including without limitation
that certain Memorandum of Understanding between Purchaser and
Seller dated September 16, 1993. This Agreement may not be
modified, amended or terminated except by a written agreement
specifically referring to this Agreement signed by all of the
parties hereto.
16.2 Waivers. No waiver of any breach or default
hereunder shall be considered valid unless in writing and signed
by the party giving such waiver, and no such waiver shall be
deemed a waiver of any subsequent breach or default of the same
or similar nature.
16.3 Supplementing of Schedules. Seller shall have the
right to supplement the disclosure schedules attached to this
Agreement at any time prior to the Preclosing, without liability
for failing to have provided a complete disclosure schedule as of
the date hereof. If any schedule which is so updated by Seller
after the date hereof but prior to the Preclosing contains any
new information which, in Purchaser's opinion, is materially
adverse, Purchaser may terminate this Agreement without liability
as of the Preclosing by delivery of a writing to Seller referring
to this Section.
16.4 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of each corporate party
hereto, its successors and assigns.
16.5 Headings. The paragraph headings contained herein
are for the purposes of convenience only and are not intended to
define or limit the contents of said paragraphs.
16.6 Further Actions. Each party hereto shall cooperate,
shall take such further action and shall execute and deliver such
further documents as may be reasonably requested by any other
party in order to carry out the provisions and purposes of this
Agreement.
16.7 Transfer Taxes. Notwithstanding any other provision
hereof to the contrary, Purchaser will pay any sales, transfer
and documentary taxes payable in connection with the sale,
conveyance, assignments and transfers to be made to Purchaser
hereunder.
16.8 Counterparts. This Agreement may be executed in one
or more counterparts, all of which taken together shall be deemed
one original.
16.9 Governing Law. This Agreement and all amendments
hereto shall be governed by and construed in accordance with the
laws of the State of Ohio applicable to contracts made and to be
performed therein.
IN WITNESS WHEREOF, the parties have caused this Agreement
to be duly executed as of the day and year first above written.
OHIO WATER SERVICE COMPANY
By /s/ Walter J. Pishkur
------------------------
ATTEST: President
/s/ Stanley M. Massarelli
- ----------------------------
Secretary
THE CITY OF WASHINGTON
By /s/ R. Mark Rohr
-------------------------
ATTEST: City Manager
/s/ Tom L. Riley
- ----------------------------
Clerk of Council
APPROVED:
/s/ Robert Hammond
____________________________
City Law Director
CERTIFICATE OF AVAILABLE FUNDS
The undersigned fiscal officer of the City of Washington, Ohio
hereby certifies that the moneys required to meet the obligations
of the City under the aforesaid Agreement of Purchase and Sale of
Assets have been lawfully appropriated by the Council of the City
for such purpose and are in the treasury of the city or in the
process of collection to the credit of an appropriate fund, free
from any previous encumbrances. This certificate is given in
compliance with Sections 5705.41 and 5705.44, Ohio Revised Code.
/s/ Tom L. Riley
______________________________
Tom L. Riley
City Auditor/City Clerk
As amended March 2, 1994
The following documents will be furnished upon request.
Index to Documents
Closing Statement
Bill of Sale (with Exhibit A)
Liabilities Undertaking (with Annex A)
Closing Escrow Letters
Limited Warranty Deed of OWDA to Seller
Limited Warranty Deed of Seller to Purchaser
Seller's Affidavit Concerning Real Estate Assets
Entity certification of Seller regarding non-foreign status
Agreement for Assignment of Assignor's Rights Under Easements
Title Commitment of Title Agency and Title Policy Issued by Title Agency
UCC-1 Financing Statements (Bond Trustee/Purchaser's Bonds)
UCC Partial Release Statements (Indenture Trustee & Mahoning Bank)
UCC Termination Statements
Releases of Part of Premises from Lien of Mortgage (Indenture Trustee and
Mahoning Bank)
Transfer Applications for FCC License (Seller and Purchaser)
Transfer Application for NPDES permit (Ohio EPA)
Assignments of License Agreements (eight licenses), and consents of Grand
Trunk and CSX
Waiver and Revision Agreement
Side letter regarding FCC License and Chrysler Capital Corp. lien
CP Utility Letter Agreement
Certified copies of Seller's Articles of Incorporation and Code of
Regulations
Seller's good standing certificate
Certified Resolutions of Seller's shareholder and Board of Directors
authorizing Agreement for Purchase and Sale of Assets
Certified Ordinance of Purchaser authorizing Agreement for Purchase and
Sale of Assets
Motor Vehicels Titles (10)
Seller's Closing Certificate
Purchaser's Closing Certificate
Opinion Letter of Seller's Legal Counsel, Harrington, Huxley, Smith,
Mitchell & Reed
Opinion Letter of Purchaser's Legal Counsel, Bricker & Ecklerr
Opinion Certificate Provided to Bricker & Eckler by Purchaser
Copy of Public Utilities Commission Order
Copy of Resolution of County Commissioners
Dismissal Entry of Condemnation Action
Dismissal Entry of Mandamus Action
Exhibit 3.2
BYLAWS
OF
CONSUMERS WATER COMPANY
ARTICLE I. Name.
The name of the Company shall be Consumers Water Company.
ARTICLE II. Shareholders' Meetings.
All meetings of the shareholders shall be held at the
principal office of the Company in Portland, Maine, or at such
other place as is stated in the notice, except that a special
meeting of shareholders called by the holder or holders of less
than 50% of the shares entitled to vote shall be held in
Portland, Maine.
ARTICLE III. Annual Meeting.
The Annual Meeting of the Shareholders of the Company shall
be held on the first Wednesday of May in each year, if not a
legal holiday, and if a legal holiday, then on the first business
day thereafter. In the event that such annual meeting is omitted
by oversight, or otherwise, on the date herein provided for, a
substitute annual meeting may be held in place thereof, and any
business transacted or elections held at such meeting shall be as
valid as if transacted or held at the annual meeting. Such
substitute annual meeting shall be called in the same manner as
prescribed for special shareholders' meeting.
ARTICLE IV. Special Meetings.
Special meetings of the shareholders of the Company shall be
held whenever called by the Chairman of the Board, the President,
or a majority of the Board of Directors, or whenever the holder
or holders of ten percent of the shares entitled to vote, issued
and outstanding shall make application therefor to the Clerk,
stating the time, place and purposes of the meeting applied for.
ARTICLE V. Notice of Shareholders' Meetings.
Notice of all annual shareholders' meetings, stating the
time and place, shall be given by the Clerk by mail to each
shareholder of record, entitled to vote, at his or her registered
address not less than ten (10) nor more than sixty (60) days
prior to the date of the meeting, and the person giving such
notice shall make affidavit in relation thereto.
Notice of all special shareholders' meetings, stating the
time and place, and the purposes for which such meetings are
called, shall be given by the Clerk by mail to each shareholder
of record, entitled to vote, at his or her registered address not
less than ten (10) nor more than sixty (60) days prior to the
date of the meeting, and the person giving such notice shall make
affidavit in relation thereto.
ARTICLE VI. Quorum, Proxy and Voting.
At any meeting of the shareholders a majority of the shares,
entitled to vote, issued and outstanding, represented by
shareholders of record, in person or by proxy, shall constitute a
quorum, but a less number may adjourn any meeting from time to
time, and the meeting may be held as adjourned with such notice
as is required by law. When a quorum is present at any meeting,
a majority of the shares, entitled to vote, represented thereat
shall decide any question brought before such meeting, except
that, in the election of directors, those candidates receiving
the greatest number of votes cast, though not a majority, shall
be deemed elected.
Shareholders of record, entitled to vote, may vote at any
meeting either in person or by proxy in writing which shall be
filed with the Clerk of the meeting before being voted. Except
as otherwise provided herein or by law, each shareholder present
in person or by proxy at a meeting of the shareholders shall be
entitled to one vote for each share of the Company registered in
the name of such shareholder on the books of the Company and
entitled to vote at such meeting.
ARTICLE VII. Board of Directors.
A Board of not less than five nor more than seventeen
Directors shall be chosen from the holders of any class of shares
of the Company at the annual meeting of the shareholders.
Vacancies occurring between annual meetings, whether by reason of
an increase in the number of Directors or otherwise, may be
filled by resolution of the Board of Directors. The number of
Directors shall be fixed from time to time by a vote of the
shareholders at an annual or a special meeting or by resolution
of the Directors. No decrease in the number of Directors shall
have the effect of shortening the term of any incumbent Director.
Each Director shall hold office until the next annual meeting of
shareholders and until his successor is elected and qualified,
but any Director ceasing to be the holder of at least one share
of the Company shall be deemed to have vacated his office as a
Director.
ARTICLE VIII. Powers of Directors.
The Board of Directors shall have the entire management of
the business of the Company. In the management and control of
the property, business and affairs of the Company, the Board of
Directors is hereby vested with all the powers possessed by the
Company itself, so far as this delegation of authority is not
inconsistent with the laws of the State of Maine, with the
Articles of Incorporation or with these bylaws.
ARTICLE IX. Meetings of Directors.
Regular meetings of the Board of Directors shall be held in
such place within or without the State of Maine and at such times
as the Board may by vote from time to time determine, and if so
determined no notice thereof need be given. Special meetings of
the Board of Directors may be held at any time or place, whenever
called by the Chairman of the Board, the President or two or more
Directors, upon not less than 72 hours' notice thereof being
given by the Officer or Directors calling the meeting to each
Director, or at any time without formal notice, provided all the
Directors are present or those not present sign a waiver of
notice, either before or after the meeting. Such special
meetings shall be held at such times and places within or without
the State of Maine as the notice thereof or waiver shall specify.
ARTICLE X. Quorum of Directors.
A majority of the Board of Directors then in office shall
constitute a quorum for the transaction of business, but a less
number may adjourn any meeting from time to time, and the same
may be held as adjourned without further notice. When a quorum
is present at any meeting, a majority of the members present
thereat shall decide any question brought before such meeting.
ARTICLE XI. Unanimous Action.
Unless otherwise provided by the Articles of Incorporation
or bylaws, any action required to be taken at a meeting of the
Directors of the Company, or any action which may be taken at a
meeting of the Directors or of a committee of the Directors, may
be taken without a meeting if all of the Directors, or all of the
members of the committee as the case may be, sign written
consents setting forth the action taken or to be taken, at any
time before or after the intended effective date of such action.
Such consents shall be filed with the minutes of directors'
meetings or committee meetings, as the case may be, and shall
have the same effect as a unanimous vote.
ARTICLE XII. Committees.
The Board of Directors may, by resolution or resolutions,
adopted by a majority of the whole Board, designate one or more
committees, each committee to consist of two or more of the
Directors of the Company, which shall have and may exercise such
of the powers of the Board of Directors in the management of the
business and affairs of the Company as it may deem advisable but
only to the extent provided in said resolution or resolutions or
in these bylaws and permitted by law, and, if so provided in such
resolution or resolutions, may have power to authorize the seal
of the Company to be affixed to all papers which may require it.
Such committee or committees shall have such name or names as may
be stated in these bylaws or as may be determined from time to
time by resolution adopted by the Board of Directors.
The committees shall keep regular minutes of their
proceedings and report the same to the Board when required.
ARTICLE XIII. Compensation of Directors and Others.
Directors may be paid as compensation for their services a
periodic fee or retainer, or a fixed fee for attendance at each
regular or special meeting of the Board, or both, and may be paid
their expenses, if any, of attendance at Board meetings, as the
Board may from time to time determine. Nothing herein contained
shall be construed to preclude any Director from serving this
Company in any other capacity and receiving compensation for such
services. Members of special or standing committees may be
allowed compensation for attending committee meetings and their
reasonable expenses, if any, of attendance, as the Board from
time to time may determine. In addition, the Board may from time
to time fix the compensation of Directors for services which are
not covered by the foregoing.
ARTICLE XIV. Indemnification of Directors, Officers
and Employees.
(a) To the maximum extent permitted by law, the Company
shall hold harmless and indemnify any person who was or is a
party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact
that he is or was a Director or executive officer of the Company,
or is or was a Director, officer, trustee, partner, fiduciary,
employee or agent of any other corporation, partnership, joint
venture, trust, pension or other employee benefit plan or other
enterprise which such Director or executive officer serves or
served as such at the request of the Company against any and all
expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by
him in connection with such action, suit or proceeding; provided,
however, that no indemnification shall be provided for any person
with respect to any matter as to which he shall have been finally
adjudicated (i) not to have acted honestly or in the reasonable
belief that his action was in or not opposed to the best
interests of the Company or its shareholders or, in the case of a
person serving as a fiduciary of any employee benefit plan or
trust, in or not opposed to the best interests of such plan or
trust or its participants or beneficiaries; or (ii) with respect
to any criminal action or proceeding, to have had reasonable
cause to believe that his conduct was unlawful. The termination
of any action, suit or proceeding, by judgment, order or
conviction adverse to such person, or by settlement or plea of
nolo contendere, or its equivalent, shall not of itself create a
presumption that such person did not meet the standards of
conduct set forth in the above proviso of this paragraph (a).
(b) For the purposes of this Article XIV, "executive
officer" shall mean any of the President or any Vice President of
the Company.
(c) Notwithstanding any provision of paragraph (a) hereof
to the contrary, the Company shall not indemnify or hold harmless
any person with respect to any claim, issue or matter asserted by
or in the right of the Company as to which such person is finally
adjudicated to be liable to the Company unless the court in which
the action, suit or proceeding was brought shall determine that,
in view of all the circumstances of the case, such person is
fairly and reasonably entitled to be indemnified or held harmless
for such amounts as the court shall deem reasonable.
(d) Expenses incurred with respect to any action, suit or
proceeding of the character described in paragraph (a) of this
Article XIV shall be paid by the Company in advance of the final
disposition thereof upon receipt of a written affirmation by or
on behalf of the Director or executive officer that he has met
the standard of conduct necessary for indemnification under
paragraph (a) above together with a written commitment by or on
behalf of such Director or executive officer to repay such amount
if it shall ultimately be determined that he is not entitled to
indemnification under this Article XIV.
(e) The rights of indemnification and entitlement to
advances of expenses provided in this Article XIV shall not be
deemed exclusive of any other rights to which a Director or
executive officer of the Company may otherwise be entitled by
contract, vote of shareholders or disinterested Directors or
otherwise; and in the event of such person's death, such rights
shall continue and extend to his heirs, executors and
administrators. The foregoing rights shall be available whether
or not such person continues to be a Director or executive
officer at the time of incurring or becoming subject to such
liability and expenses, and whether or not the claim asserted
against him is based on matters which antedate the adoption of
this Article XIV.
(f) The Company may purchase and maintain insurance on
behalf of any person who is or was a Director, officer, employee
or agent of the Company, or is or was serving at the request of
the Company as a Director, officer, trustee, partner, fiduciary,
employee or agent of another corporation, partnership, joint
venture, trust, pension or other employee benefit plan or other
enterprise against any liability asserted against him and
incurred by him in any such capacity, or arising out of his
status as such, whether or not the Company would have the power
to indemnify him against such liability under Section 719 of the
Maine Business Corporation Act, as currently in effect or as
hereafter amended or any successor to such statutory provision.
(g) If any word, clause or provision of this Article XIV or
any award made hereunder shall for any reason be determined to be
invalid, the other provisions hereof shall not otherwise be
affected thereby but shall remain in full force and effect.
ARTICLE XV. Officers.
At its first meeting held after each annual meeting of the
Shareholders, the Board of Directors shall elect, as the officers
of the Company, to serve until their successors are elected and
qualify, a Chairman of the Board and Vice-Chairman of the Board
(when deemed appropriate by the Board of Directors), a President,
a Secretary, a Treasurer and a Clerk, and may elect or appoint
one or more Vice Presidents, with or without designated areas of
responsibility (one or more of whom may be designated Executive
Vice Presidents or Senior Vice Presidents by the Board), such
Assistant Treasurers, Assistant Secretaries and other officers or
agents as it deems advisable, and may specify the powers and
duties thereof in addition to the powers and duties required by
these bylaws or permitted by law. If any such officers or agents
are not elected or appointed at such first meeting, they may be
elected or appointed, if desired, at any subsequent meeting of
the Board of Directors.
ARTICLE XVI. Eligibility of Officers.
The Chairman of the Board, Vice-Chairman of the Board, and
the President shall be shareholders and Directors of the Company.
The other officers of the Company, whether elected or appointed,
may be, but need not be, shareholders or Directors of the
Company. The Clerk shall be a resident of the State of Maine.
Except as otherwise provided by law, two or more offices may be
held by the same officer.
ARTICLE XVII. Chairman of the Board, Vice-Chairman of the
Board, and President.
(a) Chairman of the Board. If specifically designated by
the Board of Directors, the Chairman of the Board shall be the
chief executive officer of the Company and shall have the general
and active management of the business of the Company and general
and
active supervision and direction over the other officers, agents
and employees, and shall see that their duties are properly
performed. He shall, if present, preside at each meeting of the
shareholders and of the Board of Directors of the Company. He
shall perform all the duties incident to the office of Chairman
of the Board and chief executive officer, and such other duties
as may be assigned to him by the Board from time to time. If a
Chairman of the Board has not been elected, or if elected, has
not specifically been designated chief executive officer, then
the President shall be the chief executive officer and shall
have, in addition to his other duties and responsibilities, the
duties and responsibilities established pursuant to this
paragraph.
Notwithstanding the foregoing paragraph, the Chairman of the
Board shall preside at all meetings of the shareholders and Board
of Directors when present, or shall delegate to the President the
duty of presiding at all or some of such meetings.
(b) Vice-Chairman of the Board. In the absence or
disability of the Chairman of the Board, Article XVIII
notwithstanding, the Vice-Chairman of the Board shall chair
meetings of the Board of Directors, unless that duty has been
delegated to the President or unless otherwise determined by vote
of the Board, and shall perform such other duties and have such
other powers as the Board of Directors shall, from time to time,
designate.
(c) President. Unless the Chairman of the Board has been
so designated, the President shall be chief executive officer of
the Company. Unless otherwise delegated, the President shall
also be the chief operating officer of the Company and shall have
the general management of the business of the Company, subject to
the direction of the chief executive officer and the control of
the Board of Directors. He shall also perform such other duties
and have such other powers as are commonly incident to his office
and as the Board of Directors may designate from time to time.
In the absence or disability of the Chairman of the Board or
Vice-Chairman of the Board, the President may act in their stead.
ARTICLE XVIII. Executive Vice Presidents, Senior Vice
Presidents and Vice Presidents.
Unless otherwise provided by vote of the Board of Directors,
the most senior Executive Vice President present shall, in the
absence or disability of the Chairman of the Board and the
President, or in the absence or disability of the Chairman of the
Board, the President and any Executive Vice President, the most
senior Senior Vice President present shall, exercise the powers
and perform the duties of the Chairman of the Board and the
President. In the absence or disability of all of the above
named officers, the most senior Vice President present shall
exercise the powers and perform the duties of the Chairman of the
Board and the President. The Executive Vice Presidents, the
Senior Vice President and the Vice Presidents shall perform such
other duties and have such other powers as the Board of Directors
shall, from time to time, designate.
ARTICLE XIX. Treasurer and Assistant Treasurers.
The Treasurer shall have the care and custody of the money,
funds, valuable papers, and documents of the Company and shall
have and exercise under the supervision of the Board of
Directors, all the powers and duties commonly incident to his
office. He shall deposit all funds of the Company in such bank
or banks, trust company or trust companies, or with such firm or
firms doing a banking business as the Directors shall designate.
He may endorse for deposit or collection all notes, checks, et
cetera, payable to the Company or its order and may accept drafts
on behalf of the Company. He shall keep accurate books of
account of the Company's transactions, which shall be the
property of the Company, and together with all its property in
his possession, shall be subject at all times to the inspection
and control of the Board of Directors. All checks, drafts, notes
or other obligations for the payment of money shall be signed by
such officer or officers of the Company as the Directors shall
from time to time by resolution direct.
The Assistant Treasurers shall perform such duties and have
such powers as the Board of Directors shall from time to time
designate.
ARTICLE XX. Secretary.
The Secretary shall keep accurate minutes of all meetings of
the Board of Directors and shall perform such other duties and
have such other powers as are required or permitted by law and as
the Board of Directors shall from time to time designate. In his
absence an Assistant Secretary or a Secretary pro tempore shall
perform his duties and the Assistant Secretaries shall have such
other powers and duties as the Board of Directors shall from time
to time designate.
ARTICLE XXI. Clerk.
The Clerk of the Company shall be present at all meetings of
the shareholders and shall keep accurate records of the
proceedings of such meetings in books provided for that purpose,
which books shall be open at all reasonable times to the
inspection of any shareholder and shall perform such other duties
and have such other powers as are required or permitted by law or
as the Board of Directors shall from time to time designate.
ARTICLE XXII. Removals.
The shareholders may at any meeting called for the purpose,
by vote of a majority of the shares, entitled to vote, issued and
outstanding, remove from office any Director or officer elected
by the shareholders or by the Board of Directors, and elect his
successor. The Board of Directors may, by vote of not less than
a majority of the entire Board, remove from office any officer or
agent or member of a committee elected or appointed by it.
ARTICLE XXIII. Vacancies.
If the office of any Director or officer or agent, one or
more, becomes vacant by reason of death, resignation, removal,
disqualification, or otherwise, and the vacancy, if in the office
of a Director, shall not have been filled by the shareholders,
the remaining Directors, though less than a quorum, may, by a
majority vote, choose a successor or successors who shall hold
office for the unexpired term. Vacancies in the Board of
Directors may also be filled for the unexpired term by the
shareholders, entitled to vote, at a meeting called for that
purpose.
ARTICLE XXIV. Share Certificates.
Every shareholder shall be entitled to a certificate or
certificates of the shares of the Company in such form as the
Board of Directors may from time to time prescribe and signed by
the President or a Vice President and by the Treasurer or an
Assistant Treasurer of the Company, and shall have the Company
seal or a facsimile thereof affixed thereto.
The Board of Directors may also appoint one or more Transfer
Agents or Transfer Clerks and/or Registrars for its shares of any
class and may require share certificates to be countersigned
and/or registered by one or more such Transfer Agents or Transfer
Clerks and/or Registrars. If certificates of shares of the
Company are signed by a Transfer Agent or Transfer Clerk or
Registrar, the signature of any officer thereon may be a
facsimile, engraved or printed. In case any officer who has
signed, or whose facsimile signature has been placed upon any
share certificate, shall have ceased to be such officer because
of death, resignation or otherwise, before the certificate is
issued, it may be issued by the Company with the same effect as
if the officer had not ceased to be such at the time of its
issue.
ARTICLE XXV. Transfers of Shares.
Shares of the Company may be transferred only by delivery of
the certificate endorsed, either in blank or to a specified
person, by the person appearing by the certificate to be the
owner of the shares represented thereby, or by delivery of the
certificate and a separate document containing a written
assignment of the certificate or a power of attorney to sell,
assign, or transfer the same or the shares represented thereby
signed by the person appearing by the certificate to be the owner
of the shares represented thereby. Such assignment or power of
attorney may be either in blank or to a specified person. No
transfer shall be construed to forbid the Company to recognize
the exclusive right of a person registered upon its books as the
owner of shares to receive dividends and to vote as such owner,
until such transfer is recorded on the books of the Company or a
new certificate is issued to the person to whom it has been so
transferred.
ARTICLE XXVI. Record Date.
(a) For the purpose of determining shareholders entitled to
notice of or to vote at any meeting of shareholders or any
adjournment thereof, or entitled to receive payment of a dividend
or other distribution, or in order to make a determination of
shareholders for any other proper purpose, the Board of Directors
may fix in advance a record date for any such determination of
shareholders. Such date shall not be more than sixty (60) days
and, in the case of a meeting of shareholders not less than ten
(10) full days prior to the date on which the particular action,
requiring such determination of shareholders, is to be taken.
(b) If no record date is fixed for determination of
shareholders entitled to notice of or to vote at a meeting of
shareholders or shareholders entitled to receive payment of a
dividend or other distribution, the day next preceding the date
on which notice of the meeting is mailed, or the day next
preceding the date on which the resolution of the Board of
Directors declaring such dividend is adopted, as the case may be
shall be the record date for determination of shareholders.
(c) The Directors may, in lieu of fixing a record date as
provided in paragraph (a), close the stock transfer books for a
stated period. Such period shall not in any case exceed sixty
(60) days and, in case of a meeting of shareholders the books
shall be closed not less than ten (10) full days immediately
preceding the date of such meeting.
(d) When a meeting of the shareholders is adjourned for
less than 30 days, the determination of shareholders entitled to
vote at the original meeting, made as provided in this Article,
shall apply to the adjourned meeting unless the Directors fix a
new record date for such adjourned meeting to be given as for an
original meeting. When a meeting of the shareholders is
adjourned for 30 days or more, a new record date shall be fixed
for the adjourned meeting in accordance with paragraph (a).
ARTICLE XXVII. Loss of Certificate.
In case of the loss, mutilation or destruction of a
share certificate, a duplicate certificate may be issued upon
such terms as the Directors may prescribe.
ARTICLE XXVIII. Seal.
The Seal of the Company shall consist of a flat-faced
circular die, with the words, "CONSUMERS WATER COMPANY - MAINE -
CORPORATE SEAL 1926" cut or engraved thereon and such other words
or devices, if any, as the Directors may order.
ARTICLE XXIX. Amendments.
Except as otherwise required by law, these bylaws may be
amended, added to or repealed at any annual or special meeting of
the shareholders entitled to vote by vote of a majority of the
shares issued and outstanding and entitled to vote provided that
notice of the proposed amendment, addition or repeal is given in
the notice of said meeting. Except for an amendment, addition or
repeal which is required by law to be made by shareholders, these
bylaws may be amended, added to or repealed at any regular or
special meeting of the Board of Directors by vote of a majority
of the Board of Directors provided that notice of the proposed
amendment, addition or repeal is given in the notice of said
meeting.
Exhibit 10.2
CONSUMERS WATER COMPANY
1988 INCENTIVE STOCK OPTION PLAN
1. PURPOSE OF PLAN. The general purpose of this 1988
Incentive Stock Option Plan (the "Plan") is to authorize the
grant to eligible employees of Consumers Water Company (the
"Company") or any present or future subsidiary thereof as
hereinafter defined of options to purchase the Company's common
shares and thus benefit the Company by giving such employees a
greater personal interest in the success of the enterprise and an
added incentive to continue to advance their employment.
2. SHARES AVAILABLE FOR OPTIONS. Subject to the
provisions of Section 11 hereof, the maximum number of shares
which will be the subject of options granted under the Plan will
not exceed 150,000 common shares, par value $1.00 per share, of
the Company. If options granted under the Plan shall expire or
terminate without being wholly exercised, new options may be
granted under the Plan covering the number of shares to which
such termination or expiration relates. The shares to be offered
under the Plan will be common shares of the Company which are
authorized but unissued, or common shares of the Company
heretofore or hereafter reacquired by the Company.
3. ADMINISTRATION. The Plan shall be administered by a
Compensation Committee (the "Committee"), to consist of at least
three persons to be appointed by the Board of Directors of the
Company (the "Board") from the members of the Board who are not
eligible to participate in the Plan. The Company shall grant
options under the Plan, in accordance with determinations made by
the Committee pursuant to the provisions of the Plan, by
execution of instruments in writing in form approved by the
Committee. The Committee is authorized, subject to the
provisions of the Plan and any orders or votes issued or adopted
by the Board, from time to time, to interpret the Plan and to
establish such rules and regulations as it deems necessary for
the proper administration of the Plan, and to make such
determinations and to take such action in connection therewith as
it deems necessary or advisable. All determinations by the
Committee shall be made by the affirmative vote of a majority of
its members, but any determination reduced to writing and signed
by a majority of the members shall be fully as effective as if it
had been made by a majority vote at a meeting duly called and
held.
4. ELIGIBILITY. Options shall be granted only to
employees who, in the judgment of the Committee, are regular,
full-time salaried officers or other key management and
administrative employees of the Company or its present or future
subsidiaries, who are under 65 years of age, and who, at the time
of the grant, are employees of the Company or any subsidiary.
Members of the Board of Directors of the Company who are not
employed as regular, full-time salaried officers or employees of
the Company or any subsidiary may not participate in the Plan.
The term "subsidiary" as used in the Plan shall mean any
corporation in which the Company owns, directly or indirectly,
shares possessing 50% or more of the total combined voting power
of all classes of stock.
Subject to the provisions of Section 11 hereof, the
aggregate number of shares as to which an option or options may
be granted hereunder to any one individual shall not exceed
15,000 common shares; provided, however, that in the event any
shares covered by any option granted to any employee under the
Plan remain unpurchased upon expiration of the time permitted for
exercise of the option, then the number of such unpurchased
shares shall not be counted in the computation of the maximum
15,000 shares as to which such employee may be granted an option
or options.
The aggregate fair market value (determined at the time an
option is granted) of the stock with respect to which options
granted after December 31, 1986 are exercisable for the first
time by any employee during any calendar year (under all such
plans of his employer corporation and its parent and subsidiary
corporations) shall not exceed $100,000. No option shall be
granted to any employee who owns, at the time the grant would
otherwise be made, directly or indirectly, more than 10 percent
of the total combined voting power of all classes of stock of the
Company or any subsidiary.
Subject to the limitations of the Plan, the Committee shall
select the employees to be granted options, determine the number
of shares subject to each option, the option price and the times
when each option shall be granted. More than one option may be
granted to the same employee.
No options shall be granted under the Plan after June 30,
1993.
5. OPTION PRICES. The purchase price of the common shares
under each option will be determined by the Committee but will
not be less than the fair market value of the common shares on
the date of granting the option, as determined by the Committee
in accordance with the relevant provisions of the Internal
Revenue Code of 1986, as amended (the "Code") and the regulations
promulgated pursuant thereto and from time to time in effect. In
no event shall the purchase price be less than the par value of
the common shares.
6. EXERCISE OF OPTIONS. Except as provided in Sections 9
and 10 hereof, an option granted under the Plan shall become
exercisable in installments as follows: to the extent of not
more than 50% of the number of shares originally covered thereby
within the first year of the term of the option; and to the
extent of not more than an additional 25% within each of the
second and third years of the term of the option; and such
installments shall be cumulative. Within such limits an option
may be exercised, at any time or from time to time during the
term of the option, as to any or all shares which have become
purchasable under the provisions of the option. The term of each
option shall be five years from the date of granting thereof.
Except as provided in Sections 9 and 10 hereof, no option may be
exercised at any time unless the holder thereof has been
continuously an employee, within the meaning of the Code, of the
Company or any of its subsidiaries from the date of granting of
the option until the day three months before the exercise
thereof, except that in the case of any employee who is disabled
(within the meaning of Section 22(e)(3) of the Code) the three-
month period shall be one year. The holder of an option shall
not have any of the rights of a shareholder with respect to the
shares subject to option until such shares shall be issued to him
upon the due exercise of his option. Options shall be exercised
by notice to the corporation in writing in the manner prescribed
by the Committee.
7. PAYMENT FOR SHARES AND INVESTMENT REPRESENTATIONS.
Shares shall be issued upon exercise of an option only upon
payment in full, in cash, of the option price and, if the shares
reserved for issue upon the exercise of any options granted under
the Plan are not registered under the Securities Act of 1933, as
amended, only upon the agreement by the optionee that he is
purchasing the shares for investment only and not with a view to
distribution or resale thereof, and that he will not sell any of
such shares in violation of any laws, rules or regulations
governing resales of restricted securities.
8. NON-TRANSFERABILITY OF OPTIONS. No option granted
under the Plan shall be transferable otherwise than by will or
the laws of descent and distribution, and an option may be
exercised, during the lifetime of the holder thereof, only by
him.
9. DEATH OF AN EMPLOYEE. If any employee to whom an
option has been granted under the Plan, who has been continuously
an employee, within the meaning of the Code, of the Company or
any of its subsidiaries since the date of granting thereof, shall
die while he is employed by the Company or a subsidiary, such
option may be exercised to the extent provided in this Section 9
by his executor or administrator or any other person at the time
entitled by law to such employee's rights under the option, at
anytime within a period of one year after his death, provided
that in no event shall an option be exercised more than five
years after the date of granting thereof. Such option may be
exercised with respect to the number of shares, if any, which the
employee could have purchased upon exercise thereof if he had
exercised the option on the date of his death, plus an additional
25% of the number of shares originally covered thereby if such
option has not become fully exercisable by the date of the
employee's death.
10. TERMINATION OF EMPLOYMENT. In the event that the
employment of any employee to whom an option has been granted
under the Plan shall be terminated by reason of retirement prior
to age 65 or for any other reason (except by reason of death or
retirement at or after age 65 under a pension plan of the Company
or a subsidiary), such option may be exercised at any time within
three months after such termination with respect to the number of
shares, if any, which the employee could have purchased upon
exercise thereof if he had exercised the option on the date of
termination of his employment, or, in the event of the death of
the employee after such termination and within such three month
period, such option may be exercised at any time within a period
of one year after his death by his executor, administrator or any
other person at the time entitled by law to such employee's
rights under such option, with respect to the same number of
shares as hereinabove in this paragraph of Section 10 provided;
except that in no event shall an option be exercised more than
five years after the date of granting thereof.
Any optionee retiring at or after age 65 under any pension
plan of the Company or a subsidiary may exercise, within three
months after such retirement, his options with respect to all
shares then subject to such options, his right to exercise not
being limited by the installments referred to in Section 6, or in
the event of death of the employee after such retirement and
within such three month period, such option may be exercised at
any time within a period of one year after his death by his
personal representative, executor, administrator or any other
person at the time entitled by law to such employee's rights
under such option, with respect to the same number of shares as
hereinabove in this paragraph of Section 10 provided; except that
in no event shall an option be exercised more than five years
after the date of granting thereof.
The options may contain such provisions as the Committee
shall approve with respect to the effect of approved leaves of
absence. Nothing in the Plan or in any option granted pursuant
to the Plan shall confer upon any employee any right to continue
in the employ of the Company or of any subsidiary or interfere in
any way with the right of the Company or any subsidiary to
terminate his employment at any time.
An optionee who enters the Armed Forces of the United States
or who, with the approval of the Board of Directors, temporarily
enters the service of the United States Government in a civilian
capacity, shall not be deemed thereby to have ceased to be
employed by the Company or a subsidiary, as the case may be,
provided that if he shall fail to return to active employment by
the Company or some subsidiary of the Company within ninety days
after his separation from the Armed Forces or from such civilian
Government service, his option shall terminate at the expiration
of said ninety day period if it has not theretofore terminated.
11. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. In the
event of a reorganization, recapitalization, stock split, stock
dividend, combination of shares, merger, consolidation, rights
offering, or any other change in the corporate structure or
shares of the Company that becomes effective after the approval
of the Plan by the holders of the Company's voting shares, the
Committee may make such adjustments as it may deem appropriate in
the number and class of shares which may be the subject of
options under the Plan, in the maximum number and class of shares
for which options may be granted to any one employee and in the
number, class and prices of shares subject to outstanding
options.
12. AMENDMENT AND TERMINATION OF THE PLAN. The Board of
Directors shall have the power to terminate the Plan or to make
such modifications or amendments thereof as it shall deem
advisable; provided, however, that the Board of Directors may
not, without further approval by the holders of a majority of the
outstanding shares of the Company having general voting power,
(a) increase the maximum number of shares for which options may
be granted under the Plan either in the aggregate or to any
individual employee (except adjustments by the Committee as
hereinabove in Section 11 provided), (b) change the manner of
determining the minimum option prices, other than to change
prospectively the manner of determining the fair market value of
the common shares, as set forth in Section 5 above, to conform to
any practice or procedure meeting the requirements of the then
applicable provisions of the Internal Revenue Code or regulations
or rulings thereunder, (c) change the period during which options
may be exercised, or (d) change the class of employees eligible
to receive options. No termination, modification or amendment of
the Plan may, without the consent of the employee to whom any
option shall theretofore have been granted, adversely affect the
rights of such employee under such option.
13. SHAREHOLDER APPROVAL. The Plan shall not become
effective unless approved by the holders of a majority of the
issued and outstanding voting shares of the Company.
14. MISCELLANEOUS. The Board of Directors may, in its
discretion, require as conditions to the exercise of any options
granted under the Plan that (a) the common shares reserved for
issue upon the exercise of options granted under the Plan shall
have been duly listed, upon official notice of issuance, upon any
national securities exchange, or (b) a Registration Statement
under the Securities Act of 1933, as amended, with respect to
such shares shall have become effective.
Exhibit 11
Statement of Computation of Per Share Earnings
(Amounts in Thousands
except per share data) 1993 1992 1991
PRIMARY
Weighted average number of
shares outstanding 7,314 7,003 6,428
Net effect of dilutive common
stock equivalents 6 4 1
--------------------------------------
Weighted average primary shares 7,320 7,007 6,429
======================================
Net income (loss) $5,919 $8,022 $11,218
Preferred dividends ( 56) ( 57) ( 57)
--------------------------------------
Earnings applicable to common
shares $5,863 $7,965 $11,161
======================================
Primary earnings (loss) per
common share $0.80 $1.14 $1.74
======================================
FULLY DILUTED
Weighted average number of
shares outstanding 7,321 7,003 6,428
Net effect of dilutive common
stock equivalents 6 5 1
Weighted average fully diluted --------------------------------------
shares 7,327 7,008 6,429
======================================
Earnings (loss) applicable to
common shares $5,863 $7,965 $11,161
--------------------------------------
Fully diluted earnings (loss)
per common share $0.80 $1.14 $1.74
======================================
Exhibit 22
Subsidiaries of Registrant
December 31, 1993
Percentage
Voting
State in Which Year Acquired Securities
Name of Subsidiary Incorporated or Formed Owned
Burlington Homes of New England, Maine 1983 100.00%
Inc. (and its wholly-owned
subsidiary Burlington International,
Inc.)
Camden & Rockland Water Company Maine 1959 97.0%
Consumers Illinois Water Company Illinois 1926 100.0%
C/P Utility Services Company, Inc. Maine 1984 100.0%
(and its wholly owned subsidiary
EnviroAudit)
Consumers Land Management Co. Maine 1984 100.0%
The Dartmouth Company Maine 1940 100.0%
Garden State Water Company New Jersey 1969 96.5%
(and its 93.2% owned subsidiary,
Califon Water Company)
Inter-State Water Company Illinois 1986 100.0%
Maine Water Company Maine 1973 99.6%
Ohio Water Service Company Ohio 1973 100.0%
Pennsylvania Water Company Pennsylvania 1971 94.6%
Roaring Creek Water Company Pennsylvania 1985 100.0%
Shenango Valley Water Company Pennsylvania 1926 100.0%
(and its wholly-
owned subisidiary, Masury Ohio 1926 100.0%
Water Company)
Southern New Hampshire New Hampshire 1930 100.0%
Water Company, Inc.
Wanakah Water Company Maine 1965 100.0%
d/b/a Greenville Water Company,
Millinocket Water Company and
Skowhegan Water Company
Exhibit 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of
our report dated February 9, 1994, included in this Form 10-K, into the
Company's previously filed Registration Statement (Forms, S-3 No. 33-55584
and Forms S-8 Nos. 33-68858, 33-20994, 33-22032 and 33-57618).
s/Arthur Andersen & Co.
--------------------------
Arthur Andersen & Co.
Boston, Massachusetts
March 21, 1994