HomeMy WebLinkAboutD-1554-02 Hamilton Western PurchaseSponsor: Councilor Snyder
ORDINANCE NO. D-1554-02
AS AMENDED
AN ORDINANCE OF THE COMMON COUNCIL OF THE
CITY OF CARMEL, INDIANA,
APPROVING THE PURCHASE AGREEMENT BY AND BETWEEN
THE CITY OF CARMEL, INDIANA AND HAMILTON WESTERN UTILITIES, INC.
WHEREAS, pursuant to Ind. Code art. 8-1.5 (the "Act"), the City of Carmel (the "City")
owns, operates, manages and controls waterworks; and
WHEREAS, the City is in the process of acquiring certain assets owned by Hamilton
Western Utilities, Inc. (the "Hamilton Western Assets"); and
WHEREAS, the purchase of the Hamilton Westem Assets will be documented by the
execution of a certain pumhase agreement, by and between Hamilton Western Utilities, Inc., an
Indiana corporation, and the City (the "Purchase Agreement"), in the substantially final form
attached hereto as Exhibit A; and
WHEREAS, this Council desires to authorize the execution of such form of the Purchase
Agreement and related actions thereto in order to permit the City to purchase the Newly
Acquired Works.
NOW, THEREFORE, BE IT ORDAINED by the Common Council of the City of
Carmel, Indiana, as follows:
Section 1. The Purchase Agreement, in the substantially final form attached hereto as
Exhibit A, is hereby authorized and approved. The Mayor is authorized to approve non-
substantial changes in form or substance to the Purchase Agreement as may be necessary or
appropriate to accomplish the purposes of this Ordinance, with any such approval to be
conclusively evidenced by the authorized execution of such Pumhase Agreement.
Section 2. Each of the Mayor, the Council President and the Clerk-Treasurer, and
any other previously legally authorized officer, employee or agent of the City is hereby
authorized and directed, for and on behalf of the City, to execute and deliver any certificate,
instrument or other document and to take any action as such person determines to be necessary
or appropriate to accomplish the purchase of the Hamilton Western Assets, such determination to
be conclusively evidenced by such person's execution of such certificate, instrument or other
document or such person's taking of such action.
Section 3. This Ordinance shall be in full force and effect from and after its passage
and signing by the Mayor.
~ PASSED by the Common Council of the City of Carmel, Indiana this/~'#~ day of
("/4-'/£tZt'('~,: .~ 2002, byavoteof , 7 ayesand C~ nays.
COMMON COUNC~ FOR THE CITY OF CARMEL
' ' g ' ' ~ ~/--$st-~_~ --
x$/ayne Wttson, PresideVnt Pro Tempore J~
//~%~ald g. ~t~er
Presented by me to the Mayor of the City of Carmel, Indiana this{~- day of_~
2002, at __/~.'/~y~ i~ ~.~,,~ 1~}~ ~y./a~_~.
Diana L.~Cordray, IAMC,
/
Approved byme, Mayor of the City of Carmel, Indiana, this /~"~ day of /~/>,4 /r /
2002, at /'/ l~vl. / ' /
J~(~hes Brainard, Mayor
Diana L. Cordray, IAMC, Clerk~surer
Prepared by:
Richard C. Starkey, Esq.
Barnes & Thomburg
11. S. Meridian Stxeet
IncYmnapolis, Indiana 46204
[NDS01 RCS 484167vl
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ASSET pURCHASE AGREEMENT
BE~EEN
~AMILTON WESTERN UTILITIES, INC.
AND
CITY OF CARMEL, INDIANA
This Asset Purchase Agreement ("Agreement") is made and effective this
day of April, 2002 by and between Hamilton Western Utilities, Inc., an
Indiana corporation (the "Seller"), and City of Carmel, Indiana, an Indiana
municipality (the "Buyer").
WHEREAS, Seller owns and operates a water utility and sewer utility
located in Hamilton County, Indiana (the "utility");
WHEREAS, Seller has decided to sell certain of its water related assets
of utility to Buyer;
WHEREAS, Buyer desires to purchase such assets upon the below described
terms and conditions.
NOW, THEREFORE, in consideration of the mutual covena~=s and conditions
herein contained and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged and confessed, the parties hereto
do hereby agree as follows:
1. Purchase and Sale of Assets.
1.1 Assets. Subject to this Agreement's terms and conditions,
Seller does hereby agree to sell to Buyer and Buyer does hereby agree to
purchase from Seller the assets described below and used by Seller in
connection with the operation of the water utility located south of 146=h
Street in Clay Township, Hamilton County, Indiana [except that included in
the assets is a pipeline lying South of 146th Street but located in Washington
Town, ship, Hamilton County, Indiana]. Attached hereto as Schedule 1 and
incorporated herein is a map of the geographic territory presently being
served by Seller in Clay Township Hamilton County, Indiana ("Territory").
Such assets are:
(a) all water lines, water meters, water pumps, fire hydrants,
water valves and appurtenances thereto located in the Territory;
(b) all easements, appurtenances, licenses or any other related
legal real property rights of Seller in the Territory, to the extent
assignable which are used to provide service in the Territory;
(c) one (1) 1996 Chevrolet 4 x 4 ~ ton truck and one (1) 1998
Chevrolet ~ ton pickup truck;
(d) all of Seller's water customers in the Territory including
customer lists, computer records relating to such customers, billing records,
correspondence, repair records and any other miscellaneous records relating
to such customers. At a minimum, all such billing records shall include the
prior 12 months records;
(e) all governmental permits, licenses or other approvals used
or obtained by Seller in connection with its operation of the utility in the
Territory to the extent transferable;
(f) to the extent assignable all contracts and written
agreements relating to the operation of the utility in the Territory
including but not limited to any executory contracts with developers for
commercial or residential projects in the Territory, but such contracts shall
not include the service territory agreement dated March 31, 2000 among
Seller,.Harbour Water Corporation, and Indianapolis Water Company;
(g) to the extent transferable and subject to the provisions of
subparagraph 9.7, Seller's telephone numbers used in connection with the
Territory.
All of the foregoing assets to be sold are hereinafter referred to as
the "Assets."
1.2 Assumption of Liabilities. Except with respect to the
contracts and written agreements set forth in Section 1.1(f) which are to be
assigned to Buyer at Closing, and for which Buyer will assu~e all obligations
of Seller with respect thereto at Closing, it is specifically agreed and
understood that Buyer shall assume none of Seller's current or long term
liabilities, including but not necessarily limited to the following
liabilities arising out of Seller's operation of the Utility, unless
otherwise specified herein:
(a) all withholding taxes including, but not limited to, FICA,
all state, city, local and area withholding income taxes, federal and state
income taxes, federal and state unemployment taxes and all sales and use
taxes relating to Seller's operation of the utility prior to the date of
Closing;
(b) any liabilities of Seller with respect to any of its
pension plans, health and welfare plans, prior pension, prior retirement or
profit sharing plans, whether the same are or have been trusted or not and
whether applicable to salaried or hourly employees of the Seller;
(c) all real or personal property taxes (and penalties and
interest) and personal and real property assessments, and inventory taxes
which are a lien on the Assets as of the date of Closing hereinafter defined,
except that real and/or personal property taxes relating to the Assets
assessed for 2002 shall be prorated at Closing between Buyer and Seller as of
the Closing Date and shall be paid as provided in Section 5.5;
(d) accounts payable which relate to goods or services received
by Seller up to the date of the Closing, whether or not the Seller has
received an invoice for the same on or prior to the date of Closing;
(e) any liability of Seller through the date of Closing for
earned or accrued vacations for hourly or salaried employees and earned or
accrued sick pay of such employees of the utility;
(f) any lien, encumbrance, mortgage, assignment of rents,
security interest or other interest in the Assets;
(g) any liability of Seller relating to a Service Territory
Agreement dated March 31, 2000 among Seller, Harbor Water Corporation and
Indianapolis Water Company;
1.3 Excluded Assets. The sale of Assets contemplated hereby
shall not include, and there is expressly excluded from the term ,,Assets"
Seller's cash on hand and in banks, accounts receivable, including, without
limitation, accounts receivable (whether Seller has billed for such
receivables or not) for services rendered prior to the Closing, together with
the general accounting records of Seller which evidence such accounts, tax
refunds, choses in action, and all property, assets, rights or interests not
specifically included within the Assets or otherwise specifically transferred
to Buyer hereunder or pursuant hereto.
1.4 Collective Bargaining Agreements and Labor Matters- Buyer
expressly does not assume any obligations or responsibilities Seller may have
with respect to collective bargaining with Seller's employees or collective
bargaining agreements that may be in effect with Seller's employees. Buyer
will offer employment with the City of Carmel to the four employees
identified on Schedule 1.4 attached hereto. Buyer will have no further
obligation to such employees resulting from any agreement. Seller may have
with its employees or with respect to Seller's responsibilities and
obligations to Seller's employees related to their employment by Seller.
Seller acknowledges that Buyer will not be obligated to offer Seller's
employees a similar position.
2. Purchase Price. The Purchase Price shall be Three Million Four
Hundred and Two Thousand Dollars ($3,402,000.00). The Purchase Price shall be
payable in cash at Closing.
Seller and Buyer agree to allocate the purchase price for returns or
information reports filed with Federal, state and local taxing authorities as
set forth on Schedule 2.
3. Warranties and Representations of the Seller. The Seller does
hereby make the following warranties and representations to Buyer, which
warranties and representations shall survive any investigation by Buyer and
the Closing.
3.1 Authority. Seller has taken all necessary actions to approve
this Agreement and the performance of its obligations hereunder. This
Agreement constitutes the valid and legally binding obligation of the Seller.
3.2 Organization; Good Standing. Seller is an Indiana
corporation duly organized and validly existing under the laws of the State
of Indiana with all requisite power and authority to own, operate and lease
its properties, to carry on its business as now being conducted, and to enter
into this Agreement and perform its obligations hereunder.
3.3 Title to Assets. Except for current real and personal
property assessments and real and personal property taxes not yet delinquent
and except with respect to easements, the Seller has (or will have at
Closing) good title to the Assets free and clear of any mortgages, liens,
pledges, security interests, leases, charges, claims, encumbrances, or
conditional sale or title retention agreements, taxation charges, or any
other type of restrictions. Seller will pay off any existing conditional
sales contracts, mortgages, or security interests at or prior to Closing.
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With respect to easements, Seller represents and warrants as follows:
(a) that it has no knowledge of any facts or claims placing
Seller on notice that Seller may not have good and merchantable title to all
private easements and that, to Seller's knowledge, Seller possesses good and
merchantable title to all private easements necessary to operate the utility
in the Territory where the Assets are presently located. The substance of
this representation and warranty shall be made in the form of the Vendor's
Affidavit as published by the Indianapolis Bar Association;
(b) that it has not sold, assigned, transferred, encumbered, or
otherwise conveyed any of the private easements to be assigned to Buyer
pursuant to this Agreement;
(c) that, to Seller's knowledge, all water lines and related
equipment are physically located within the boundaries of private easements
to be assigned to Buyer pursuant to this Agreement, of public rights-of-way,
or of dedicated utility easements which Buyer may occupy for purposes of
providing water; and
(d) that Seller has good and marketable tit~ to all private
easements necessary to operate the Utility in the Territory where the utility
is presently located; provided, however, that Seller's liability under this
subparagraph (d) shall be limited to two years from the Closing and a maximum
aggregate liability of $50,000.00; provided, also, that before Seller shall
have any liability under this subparagraph 3.3(d), Seller shall be provided
45 days receipt of notice of claim to negotiate on behalf of Buyer (subject
to Buyer's reasonable approval of any final terms and conditions) to acquire
the necessary private easement rights before Buyer negotiates for such
acquisition or otherwise initiates condemnation proceedings. The limitations
on liability for easements set forth herein shall only apply to Seller's
representations set forth in this subparagraph 3.3(d), and shall not apply to
any other representations and warranties in this paragraph or this Agreement.
3.4 violation of Other Instruments. Neither the execution of,
nor the consummation of the transactions contemplated by, this Agreement does
or will constitute a breach or default (or an occurrence which by notice or
lapse of time or both, would constitute a breach or default) under any
contract or commitment to which the Seller is a party or by which the Seller
or its properties or assets are bound, or does or will result in the creation
or imposition of any lien, encumbrance, charge, equity or restriction of any
nature whatsoever in favor of any third party upon any of the Assets, or does
or will result in a breach of any term or provision of the articles of
incorporation of the Seller.
3.5 Water Line Extensions Before Closing. Except as set forth
in Schedule 3.5 attached hereto, Seller represents and warrants to Buyer that
it is not a party to any water line extension agreements relating to the
Territory involving refundable advances by developers, customers, prospective
customers or other persons for some or all of the cost of constructing any
main extensions relating to the utility in the Territory.
3.6 Adverse Jud m?q~q~. The seller is not a party to any
judgment, order, writ, injunction, decree, rule or regulation which
materially and adversely affects or, may in the future materially and
adversely affect the business operations, prospects, properties, assets or
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condition, financial or otherwise, of the Seller as related to the operation
of the utility.
3.7 Disputes and Litigation. There is no claim, litigation,
proceeding or governmental investigation pending, or to the best of the
Seller's knowledge, threatened against or affecting the Seller, the outcome
of which, individually or in the aggregate, if adversely determined, would
have a material adverse effect upon the financial condition of the Seller or
upon the utility or would interfere with the consummation of the transactions
contemplated hereby; the Seller is not subject to any injunction, Order or
decree restricting the conduct of its business nor has any governmental
agency investigated or questioned its method of operating the utility. To
the best of the Seller's knowledge, no claim has been made that the Seller
currently violates any federal, state or local law, ordinance, rule or
regulation which might materially affect the business, properties or assets
of the Seller as related to utility. To the best of the Seller's knowledge,
no valid basis for any successful action or claim of the nature referred to
above exists.
3.8. Mechanic's Liens. Except as set forth in attached schedule
3.8, Seller represents that no services, material or work have been supplied
to the utility in the Territory for which payment has not ~een made in full.
If, subsequent to the Closing Date, any mechanic's or other lien, charge or
order for the payment of money shall be filed against any or all of the
utility in the territory or against the Buyer based upon any act or omission,
or alleged act or omission before or after the Closing Date, of the Seller,
its agents, servants or employees, or any contractor, subcontractor or
material man connected with the construction of improvements on any or all of
the utility in the Territory at the direction of Seller, or repairs made to
any or all of the utility in the Territory at the direction of Seller,
whether or not such lien, charge or order shall be valid or enforceable,
within ten (10) days after notice to the Seller of the filing thereof, the
Seller shall take such action, by bonding, deposit, payment or otherwise, as
will remove or satisfy such lien of record against the utility in the
Territory.
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operated its
.9 Compliance with Law. The Seller has conducted and/or
properties and the utility in accordance with all applicable
laws and other requirements of governmental authorities, including but not
limited to, all environmental/ public health laws.
3.10 Governmental and Other Consents. Except as set forth in
attached Schedule 3.10 and with respect to the approval required by the
Indiana Utility Regulatory Commission which is a condition precedent to the
consummation of this transaction, no consent, approval, or authorization of,
or designation, declaration or filing with any governmental authority or
other person or entity is required on the part of the Seller in connection
with the execution or delivery of this Agreement or the consummation of the
transactions contemplated hereby.
3.11 Permits and Licenses. Seller has all permits, licenses
and registrations required in connection with the utility as presently
conducted.
3.12 ERISA. The Seller does not sponsor or contribute to, or
have a contract or other obligation to contribute to (nor has the Seller in
the preceding 60 calendar months sponsored or contributed to, or contracted
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to or otherwise contributed to) (a) any defined benefit pension plan, as
defined in and subject to Title IV of the Employee Retirement Income Security
Act of 1984, as amended, or (b) any multi-employer pension plan, as defined
in the Multi-employer Employee Pension Plan Amendment Act of 1980, as
amended, which is subject to the withdrawal and partial withdrawal liability
provisions thereof with respect to the utility.
3.13 Full Disclosure. The representations and warranties made
by the Seller in this Agreement including the foregoing referenced Schedules
and the certifications furnished or to be furnished to Buyer, pursuant to
this Agreement, do not contain or will not contain any untrue statement of a
material fact, and do not omit, or will not omit, to state a material fact
necessary to make the statements contained herein or therein not misleading;
further, as of the Closing date, Seller will have disclosed to Buyer all
events, conditions, and facts materially affecting the Assets and the
business of the operation of the utility in the Territory.
4. Warranties and Representations of Buyer. Buyer does hereby make
the following warranties and representations to the Seller, which warranties
and representations shall survive any investigation by the Seller and the
Closing.
4.1 Organization; Good Standing. Buyer is an Indiana
municipality duly organized and validly existing under the laws of the State
of Indiana with all requisite power and authority to own, operate and lease
its properties, to carry on its business as now being conducted, and to enter
into this Agreement and perform its obligations hereunder.
4.2 Authority. Buyer has or will have within thirty (30) days
of the execution date taken all necessary action to approve this Agreement
and the performance of its obligations hereunder, whereupon this Agreement
will constitute the valid and legally binding obligation of Buyer.
4.3 Violation of other Instruments. 'Neither the execution of,
nor the consummation of the transactions contemplated by this Agreement does
or will constitute a breach or default (or an occurrence which by notice or
lapse of time or both, would constitute a breach or default) under any
contract or commitment to which Buyer is a party or by which it or its
properties or assets are bound, or does or will result in the creation or
imposition of any lien, encumbrance, charge, equity or restriction of any
nature whatsoever in favor of any third party upon any of the properties of
Buyer, or does or will result in a breach of any term or provision of its
operating agreements.
4.4 Governmental and Other Consents. Except as provide herein
as a condition to Closing, no consent, approval or authorization of or
designation or declaration with any governmental authority or other persons
or entities on the part of Buyer is required in connection with the execution
or delivery of this Agreement or the consummation of the transactions
contemplated hereby.
4.5 Disputes and Liti~atioq. There is no claim, litigation,
proceeding or governmental investigation pending, or to the best of the
Buyer's knowledge, threatened against or affecting Buyer, the outcome of
which, individually or in the aggregate, if adversely determined, would have
a material adverse affect upon the financial condition of Buyer or upon the
conduct of its business or would interfere with the consummation of the
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transactions contemplated hereby. Buyer is not subject to any injunction,
order or decree restricting the conduct of its business nor has any
governmental agency, to the best or Buyer's knowledge, investigated or
questioned its methods of business. To the best of Buyer's knowledge, no
claim has been made that it currently violates any federal, state or local
law, ordinance, rule or regulation which might materially affect the
business, properties or assets of it. To the best of Buyer's knowledge, no
valid basis for any successful action or claim of the nature referred to in
this Section exists.
4.6 Adverse Judgments. Buyer is not a party to any judgment,
order, writ, injunction, decree, rule or regulation which materially and
adversely affects or, so far as Buyer can now foresee, may in the future
materially and adversely affect the business operations, prospects,
properties, assets or condition, financial or otherwise, of it.
4.7 Full Disclosure. The representations and warranties made by
Buyer in this Agreement and the certifications furnished or to be furnished
to the Seller, pursuant to this Agreement, do not contain or will not contain
any untrue statement of a material fact, or does not omit, or will not omit,
to state a material fact necessary to make the statements cqntained herein or
therein not misleading.
5. The Closing.
5.1 Time and Place. The consummation of the transactions
contemplated by this Agreement shall occur at 1:00 p.m. local time on or
before May 31, 2002 (the "Closing") at Seller's office, 1549 Greyhound Pass,
Carmel, Indiana or at such other time, date and place as the parties hereto
may agree.
5.2 Seller's Deliveries at the Closing. At the Closing, the
Seller shall execute and deliver to Buyer: (a) bill of sale, vendor's
affidavit; and (b) such other certificates, documents and instruments
including instruments of assignment and conveyance, as Buyer shall reasonably
deem necessary or appropriate to vest title to the Assets in Buyer and to
consummate the transactions contemplated hereby.
5.3 Buyer's Deliveries at the Closing. At the Closing, Buyer
shall deliver to Seller the Purchase Price in c=sh via wire transfer or
certified check and an assumption agreement pertaining to the assigned
contracts and other agreements.
5.4 Operations on the Closing Date. The revenues generated from
the operation of the Utility on and after the date of Closing shall belong to
Buyer. Buyer shall be responsible for all expenses including salaries, on or
after the Closing date relating to the operation of the utility in the
Territory.
5.5 Pro-Rated Taxes. The installments of any personal or real
property taxes, personal and real property assessments, both general and
special, for the tax year 2002, shall be pro-rated between the parties to the
date of Closing. Seller shall be responsible for the payment of all such
taxes for the tax year 2001 and all previous tax periods, which Seller shall
pay as such taxes become due and payable. In the event such taxes include
penalty or interest, Seller shall pay for the entire amount of such penalty
or interest. Seller agrees that its current President will provide Buyer with
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a personal guaranty that the year 2001 and prior year taxes, penalties and
interest shall be fully paid.
In estimating (at Closing) the calculation of the pro-ration of the
real and personal property taxes for the tax year 2002, the parties shall
utilize the calculation of real and personal property taxes relating the
Assets on attached Schedule 5.5 at the Closing. Seller shall credit Buyer
the appropriate pro rated amount of the $21,718.00 at Closing. Buyer 'will pay
all such taxes in the year 2003. When Seller receives the 2002 property tax
assessment from the State Board of Tax Commissioners, Seller shall forward a
copy of such assessment to Buyer. If the amount of tax relating to the
Assets exceeds $21,718.00, Seller shall pay its proportionate share of the
difference to Buyer. If the amount of the assessment relating to the Assets
is less than $21,718.00, Buyer shall refund Seller's share of the difference
to Seller.
6. Conditions Precedent to Obligation of Buyer to Close. The
obligation of Buyer to pay the Purchase Price hereunder shall be subject to
the following conditions precedent, the nonoccurrence of any one or more of
which, unless waived by it, shall relieve it from all performance under this
Agreement:
6.1 Closing Documents.
(a) Seller shall deliver bills of sale, vendor's affidavit,
assignment, certificates, consents or other transfers of instruments, closing
statements;
(b) Seller shall at Seller's sole expense assign to and/or
obtain for Buyer, any and all easements necessary for the use and operation
of all water lines and other facilities which are a part of the utility in
the Territory and not located in public rights-of-way or dedicated utility
easements. Seller shall obtain any consents which may be required for the
assignment of Seller's easements to Buyer. If such easements are not
acquired and provided to Buyer's satisfaction, this Agreement may be
terminated by either party without further obligation.
6.2 Financing. Buyer shall have obtained municipal bond
proceeds of Four Million Dollars ($4,000,000.00) upon terms and conditions
that are acceptable to it;
6.3 General Obli~_tions.
(a) Seller shall have performed all of this Agreement's
obligations to be performed by each of them at or prior to the Closing
including, without limitation, all obligations imposed by the covenants in
Section 7 to be performed or observed by each at or prior to the Closing;
(b) No action or proceeding shall have been brought or
threatened to prevent, or to seek damages by reason of, the execution and
delivery of this Agreement or the consummation of any of the transactions
contemplated hereby; no governmental authority shall have claimed that any
transaction contemplated hereby constitutes a violation of any law, rule or
regulation, or gives rise to liability on the part of Buyer;
(c) The consent or approval of each person, entity and
governmental authority whose consent or approval is required in connection
8
with this Agreement and/or the
been obtained which consent or approval, shall have
thirty ($0) days of the date of execution hereof;
(d) Buyer shall be satisfied that the
compliance with all applicable federal and state laws.
transactions contemplated thereby shall have
been obtained within
Closing shall be in
6.4
Common Council
Agreement.
6.5
May 31, 2002.
Common Council Approval. Prior to Closing, ' Buyer's
shall have approved the terms and conditions Of this
Deadline For Closing. The deadline for Closing shall be
Seller and Buyer agree to cooperate and use their respective
best efforts to accomplish the foregoing conditions and to do all things
necessary or required by law to consummate the acquisition of the utility in
the Territory by Buyer before this deadline. If the Closing has not occurred
on or before May 31, 2002, then this Agreement may be terminated by either
party giving written notice to the other party.
7. Post Closing Covenants.
7.1 Indemnification. Without conferring any t~rd party rights,
Seller agrees to indemnify and hold the Buyer, its successors and assigns,
harmless from and against any loss, claim, damage, liability, or expense
(including court costs, expert witness fees, interest, and counsel's fees)
resulting to the Buyer from any breach of the representations, warranties,
covenants, agreements, or undertakings of the Seller contained in this
Agreement, provided, however, that seller shall have no liability to Buyer
under and pursuant to the terms of this Agreement unless and until the
aggregated amount of all claims for indemnification under this Agreement is
equal to or greater than $12,500.00 (the ,~indemnification Basket"). Once the
aggregate amount of all claims for indemnification equals or exceeds the
amount of the Indemnification Basket, in the aggregate, all claims for
indemnification in excess thereof shall be subject to indemnification
pursuant to the terms hereof. Without limiting the generality of the
foregoing, Seller agrees to indemnify and hold Buyer, its successors and
assigns, harmless from the following:
(a) those liabilities not assumed by Buyer, including those
described in Section 1.2, Clauses (a) through (f) inclusive;
(b) any liability for medical, disability, life insurance or
workmen's compensation claims which arose prior to the date of Closing and in
addition to such claims any premiums payable on the date of Closing or prior
thereto, or any liability with respect to such premiums; and
(c) any claims emanating from Seller's ownership of the Assets
which arise from seller's actions or inactions taken prior to the date of
closing;
(d) the failure of Seller to
regulations, codes or ordinances (including,
environmental or public health laws).
comply with applicable statutes,
but not limited to, any and all
Notwithstanding any provision herein to the contrary,
of Seller to Buyer, in the aggregate, arising out of,
the maximum liability
resulting from or in
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any connected with this Agreement or any of the transactions contemplated
herein shall be Two Million Dollars ($2,000,000.00).
7.2 Buyer's Indemnification. Without conferring any third party
rights, Buyer agrees to indemnify and hold the Seller, its successors and
assigns, harmless from and against any loss due it resulting to the Seller
from a suit being filed by any party to enforce the terms and conditions of
the service territory agreement referred to in section 1.2(f) .hereof.
Provided, however, Buyer's indemnity obligation shall cease upon either of
the occurrence of the following conditions:
(a) no party to the service territory agreement files suit
against Seller seeking to enforce the terms of the service territory
agreement within two (2) years of the date of Closing; or
(b) if suit is filed, Buyer's financial obligation under this
indemnity shall not exceed $50,000.00. Such $50,000.00 cap shall apply to
all expenses Buyer incurs in connection with such indemnity (e.g. attorney
fees or court costs or deposition costs or settlement payments, etc.).
7.3 Brokerage. Neither Seller nor Buyer ~ave retained or
otherwise obligated themselves to pay any finder's fee or commission in
connection with this Agreement.
7.4 Post Closing Availability of Books and Records. The Seller
will make available its books and records relating to the op=ration of the
Utility to Buyer and its accountants at reasonable times, upon reasonable
notice and for cause to assist Buyer in the operation of its business and in
the preparation of financial statements of Buyer. In the event that Buyer
shall require the services of the Seller's accountants pursuant to this
paragraph, Buyer shall obtain a firm quote of the cost for such services from
such accountants and shall be responsible for the payment of such costs.
7.5 Cooperation. The Seller will cooperate with Buyer in the
transition of ownership of the Assets and the Seller's utility. Such
cooperation shall include but shall not be limited to encourage suppliers,
employees, and customers to transact business with Buyer.
7.6 Purchase As-Is. Buyer understands that it is being
provided the opportunity to inspect the utility in the Territory and Seller's
evidence of easements as conditions to Closing. Buyer acknowledges that it
will acquire the Assets of the Utility in the Territory as is and where is,
and without express or implied warranty of any kind as to the physical
condition of the Utility in the Territory, specifically including but not
limited to express or implied warranties of fitness for a particular purpose,
and with no warranties as to title except as specifically provided herein or
in the documents delivered by Seller to Buyer at Closing.
7.7 Customer Deposits. Within a reasonable time after the
Closing, Seller shall refund customer deposits held by it directly to the
customers who paid such deposits. It is expressly understood and agreed that
any customer deposits collected by Seller prior to the Closing are a matter
solely between Seller and the depositors. Buyer shall have not
responsibility or obligations with respect to such customer deposits. Seller
agrees to indemnify and hold Buyer harmless from any claims against Buyer for
damage, injury, expense, liability or lost revenues incurred by Buyer
relating to such customer deposits.
10
8. Covenants of Buyer. Buyer agrees to observe the following
covenants between the date hereof and the Closing:
8.1 Further Assurances. Buyer shall do and perform such further
acts and deeds and shall execute and deliver such other documents,
instruments and certificates as the Seller shall reasonably require to
consummate the transactions contemplated by this Agreement;
8.2 Examination of Books. Buyer and/or its certified public
accountants shall promptly examine Seller's books and records relating to the
utility in the Territory.
9. Covenants of the Seller. The Seller agrees to observe the
following covenants between the date hereof and the Closing:
9.1 Cooperation. The Seller shall use its best efforts to cause
the sale contemplated by this Agreement to be consummated, and, without
limiting the generality of the foregoing, to obtain all consents and
authorizations of third parties and to make all filings with and give all
notices to third parties which may be necessary or reasonably required in
order to complete the trans-actions contemplated hereby. The Seller will use
its best efforts to preserve and to keep available the services of its
employees and to preserve the goodwill of its employees, customers, suppliers
and others having business relations with it. The Seller will keep Buyer
reasonably informed with respect to the operation of the utility in the
Territory prior to the Closing.
9.2 Transactions out of Ordinary Course of Business. Except
with the prior written consent of Buyer, the Seller will not enter into any
transaction in the operation of the utility out of the ordinary course of
such business as heretofore conducted by the Seller. Seller acknowledges
that it will not enter into any water line extension contracts or agreements
after the date of execution and approval of this Agreement unless:
(a) it has sent Buyer copies of all such agreements,
proposals, etc.;
contracts,
(b) Buyer consents to such new water line extensions. Buyer shall
use good faith and commercial reasonableness in evaluating all such new
proposals.
9.3 Maintenance of Properties. The Seller will maintain all of
its properties used in the Utility in the Territory in customary repair,
order and condition, reasonable wear excepted, and will maintain insurance
upon all of such properties in such amounts and of such kinds comparable to
that in effect on the date of this Agreement.
9.4 Insurance.
current insurance coverage
including the Closing Date,
the obligation of Buyer.
Seller shall continue to maintain its
on the utility in the Territory through and
after which time all insurance coverage shall be
9.5 Access to Books and Properties. Subject to Buyer's
agreement to preserve the confidentiality of the information, the Seller will
give to Buyer and to its counsel, accountants, and other representatives
reasonable access during normal business hours to all of its properties,
11
books, sales tax returns, contracts, commitments and records relating to
Utility and will furnish to Buyer all such documents, and information with
respect to its affairs from now through the Closing as Buyer may from time to
time need in order to consummate the transactions contemplated by this
Agreement.
9.6 Employment A~reements. The Seller will not enter into any
employment, consulting, bonus, incentive, profit-sharing, retirement,
pension, group insurance, death benefit or other fringe benefit, deferred
compensation, post-termination or employee trust agreement or obligation
which requires payments for longer than a regular pay period with respect to
Seller's employees in the Territory. Notwithstanding the foregoing, Buyer
acknowledges that Seller expects to pay severance and/or "thank-you" bonuses
to its employees upon or following Closing.
9.7 Further Assurances. The Seller shall do and perform such
further acts and deeds and shall execute and deliver such other documents,
instruments and certificates as Buyer shall reasonably require to consummate
the transactions contemplated by this Agreement. seller shall place a
recording on its telephone numbers offering incoming callers the option of
being connected to Carmel, Westfield or Seller depending uR9n the purpose of
such call. The message shall be acceptable to Buyer in its discretion and
shall remain in place for a period of six (6) months. Seller shall maintain
its Carmel post office box for a period of ninety (90) days following Closing
and shall distribute any mail received therein which should properly be
received by Carmel to Carmel. Seller shall also forward any e-mail messages
received to the appropriate party for sixty (60) days following Closing.
9.8 Customer Accounts. Buyer is not purchasing Seller's
accounts receivable. Buyer and Seller shall jointly obtain water meter
readings and any other billing related information for all of Seller's
customers served in the Territory on a date or dates mutually agreeable but
within ten (10) days prior to the Closing Date. -Amounts billed for service
prior to such joint meter reading shall be and remain the property of seller.
Amounts billed for service subsequent to the joint meter reading shall be and
remain the property of Buyer. If after Closing, either party receives
payment of accounts receivable which are the property of the other party
under this Paragraph, the party receiving such payment shall promptly forward
such payment to the other party.
10. Miscellaneous.
10.1 Assignment. Neither party shall assign, convey, sell,
pledge, encumber, or otherwise transfer its interests under this Agreement
without the express written consent of the other party hereto.
10.2 Notices. All notices, consents, demands, requests, waivers,
approvals and other communications which are required or may be given
hereunder shall be in writing and shall be deemed to have been duly given if
delivered in person or if mailed certified first class mail, postage prepaid;
If to the Seller, to:
Hamilton Western Utilities, Inc.
P.O. Box 1009
Carmel, Indiana 46032
12
With copy to:
Kathryn M. Kunz, Esq.
KUNZ & OPPERMAN, P.C.
135 North Pennsylvania Street,
Indianapolis, IN 46204-1959
Suite # 1750
If to the Buyer, to:
City of Carmel
ATTN: Mayor James C. Brainard
city Hall
One civic Square
Carmel, IN 46032
with a Copy to:
Michael S. Walsh
MIC~L~L S. WALSH, P.C.
11350 North Meridian Street, Suite 420
Carmel, IN 46032
or to such other person or persons at such other address or addresses as a
party hereto may designate by written notice to the other party hereto.
10.3 Force Majeure. In the event that the seller or the Buyer
shall be delayed, hindered in or prevented from the performance of any act
required under this Agreement by reason of strikes, lock-outs, labor trouble,
inability to procure materials, failure of power, unforeseen governmental
laws or regulations, riots, insurrections, war, adverse weather conditions,
the act or failure to act or default of the other party to this Agreement, or
other reason beyond such party's reasonable control (~force majeure event"),
the period for the performance of any such act shall be extended for a period
equivalent to the period of such delay, provided such party exercises its
best efforts to meet the performance obligation. "Best efforts" shall
include such party's use of best efforts to anticipate any potential force
majeure event and best efforts to address the effects of any potential force
majeure event: (1) as it is occurring; and (2) following the potential force
majeure event, such that delay is minimized to the greatest extent possible.
"Force majeure" does not include financial inability of either party to pay
the expenses or complete the work required by this Agreement or increases in
the costs thereof.
10.4 Entire Agreement. This Agreement, together with the other
writings delivered in connection herewith, embodies the entire agreement and
understandings of the parties hereto with respect to the subject matter
hereof and superseded any prior agreements and understandings between the
parties hereto. The Agreement may be amended or terminated at any time only
by a writing executed by all of the parties hereto.
10.5 Applicable Law. This Agreement has been substantially
negotiated in the State of Indiana. The law of the State of Indiana shall
govern the validity, interpretation and due performance of this Agreement-
10.6 Parties Bound. This Agreement shall be binding on and shall
inure to the benefit of the parties hereto and its respective successors and
assigns.
13
10.7 Headings. The headings of the Sections herein are inserted
for the convenience of reference only and are not intended to be a part of or
to affect the meaning or interpretation of this Agreement.
10.8 Default. If Seller breaches this Agreement, Buyer may seek
specific performance or any other remedy provided by law or equity. In the
event Buyer breaches this Agreement, Seller may seek any remedy provided by
law or equity.
10.9 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, with the same effect
as if all parties had signed the same document. All counterparts shall be
construed together and shall constitute one agreement binding on the parties
hereto, notwithstanding that all the parties have not signed the same
counterpart.
10.10 Attorney's Fees. In any action brought by any party to
enforce the obligations of another party hereto, the prevailing party shall
be entitled to collect such party's reasonable attorney's fees (as the court
having jurisdiction shall allow), court costs and expenses i9 such action.
10.11 Expenses. Each party hereto shall pay its respective
expenses in connection with the negotiation, preparation, execution and
performance of this Agreement.
IN WITNESS WHEREOF, the parties hereto have entered into this Asset
Purchase Agreement effective the date first written above.
SELLER: BUYER:
HAMILTON WESTERNUTILITIES, CITY OF CARMEL, INDIANA
INC.
By:
Ralph L. Wilfong, II
President
By:
James C. Brainard, Mayor
APA-Carmell 3-MSW
04/09/02
14
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