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EXHIBIT 99.2
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger dated as of October 4, 2000 (the
"Agreement") by and among Connecticut Water Service, Inc., a Connecticut
corporation (together with its subsidiaries and affiliates or successors in
business, hereinafter individually and collectively "CWS"), CWS Barnstable
Acquisition Corp., a Connecticut corporation and a wholly-owned subsidiary of
CWS ("Newco") and Barnstable Holding Company, a Delaware corporation
("Barnstable").
WHEREAS, Barnstable presently owns 716 of the 750 issued and outstanding
shares of the common stock of Barnstable Water Company ("Water Company") and 716
of the 758 issued and outstanding shares of common stock of BARLACO, a land
xxxxxxx company ("BAR") (Water Company and BAR being sometimes referred to
herein as the Subsidiaries and, together with Barnstable, being sometimes
collectively referred to herein as the "Companies");
WHEREAS, Barnstable desires to merge with Newco, with the shareholders
of Barnstable receiving shares of Common Stock of CWS in exchange for all of the
outstanding shares of the common stock of Barnstable, all on the terms and
subject to the conditions hereinafter set forth;
WHEREAS, Barnstable and CWS desire that the transaction set forth herein
qualify as a tax-free Reorganization within the
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meaning of section 368 of the Internal Revenue Code of 1986, as amended (the
"Code"), and the corresponding provisions of applicable state income tax law of
Connecticut and that this Agreement be interpreted accordingly;
WHEREAS, the Water Company owns and operates a water system located in
the town of Barnstable, Massachusetts (the "System"), and is subject to the
jurisdiction of the Massachusetts Department of Telecommunications and Energy
("DTE"), the Massachusetts Department of Environmental Protection ("DEP") and
the Massachusetts Department of Public Health "DPH".
NOW, THEREFORE, in consideration of these premises and the mutual
agreements, representations and warranties set forth in, and subject to the
terms and conditions of, this Agreement, the parties agree as follows:
1. THE MERGER
1.1 Surviving Corporation.
Subject to the conditions contained herein and in accordance with the
provisions of this Agreement, the Connecticut Business Corporation Act and the
Delaware General Corporation Law, at the Effective Time (as defined in Section
1.9 hereof), Barnstable shall be merged with and into Newco, which, as the
corporation surviving in the Merger (the "Surviving Corporation"), shall
continue unaffected and unimpaired by the Merger to exist under and be governed
by the laws of the State of Connecticut. Upon the effectiveness of the Merger,
the separate existence of Barnstable shall cease.
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1.2 Effects of the Merger.
Upon and after the Effective Time of the Merger, the Surviving
Corporation shall possess all the rights, privileges, powers and franchises,
both of a public as well as a private nature, and be subject to all the
restrictions, disabilities and duties of Newco and Barnstable (collectively, the
"Constituent Corporations"); and all property, real, personal and mixed, and all
debts due to either of the Constituent Corporations on whatever account, as well
for stock subscriptions and all other things in action or belonging to each of
the Constituent Corporations shall be vested in the Surviving Corporation; and
all such property, rights, privileges, powers and franchises, and all and every
other interest shall be thereafter the property of the Surviving Corporation as
if they were of the Constituent Corporations, and the title to any real estate
vested by deed or otherwise in either of the Constituent Corporations shall not
revert or be in any way impaired by reason of the Merger; but all rights of
creditors and all liens upon any property of either of the Constituent
Corporations shall be preserved unimpaired, and all debts, liabilities and
duties of the Constituent Corporations shall thenceforth attach to the Surviving
Corporation, and may be enforced against the Surviving Corporation to the same
extent as if said debts, liabilities and duties had been incurred or contracted
by the Surviving Corporation.
1.3 Further Assurances.
If at any time after the Effective Time of the Merger, the Surviving
Corporation shall consider or be advised that any further deeds, assignments or
assurances in law or in any other
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things are necessary, desirable or proper to vest, perfect or confirm, of record
or otherwise, in the Surviving Corporation, the title to any property or rights
of the Constituent Corporations acquired or to be acquired by the Surviving
Corporation by reason of, or as a result of, the Merger, the Constituent
Corporations agree that the Surviving Corporation and its proper officers and
directors shall and will execute and deliver all such property deeds,
assignments and assurances in law and do all things necessary, desirable or
proper to vest perfect or confirm title to such property or rights in the
Surviving Corporation and otherwise to carry out the purposes of this Agreement,
and that the proper officers and directors of the Constituent Corporations and
the proper officers and directors of the Surviving Corporation are fully
authorized in the name of the Constituent Corporations or otherwise to take any
and all such action.
1.4 Certificate of Incorporation; By-Laws, Directors and Officers.
The Certificate of Incorporation and By-Laws of Newco, as in effect
immediately prior to the Effective Time, shall continue in full force and effect
as the Certificate of Incorporation and By-Laws of the Surviving Corporation.
From and immediately after the Effective Time, the directors of the Board of
Directors of Newco and the officers of Newco shall be the directors and officers
of the Surviving Corporation, respectively, until their respective successors
are duly elected and qualified.
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1.5 Title and Survey.
CWS shall have the period from the date hereof to and eliding at 5:00
p.m. on the date that is forty-five (45) days from the date hereof (the
"Inspection Period") to determine whether the title to all of the real property
constituting part of the Assets (as that term is defined in Section 3.2 hereof)
(the "Property") is marketable and/or insurable (subject to the exceptions set
forth in Schedule 7.5) at regular rates. If CWS determines during the Inspection
Period that such title is neither marketable nor insurable (subject to the
exceptions set forth in Schedule 7.5) at regular rates, CWS shall give
Barnstable a written notice delivered prior to the termination of the Inspection
Period setting forth any objections (the "CWS Title Objections") that CWS has to
title or survey matters affecting the marketability or insurability, as the case
may be (subject to the exceptions set forth in Schedule 7.5), of the Property.
For purposes of this Agreement, the standards of title of the Massachusetts
Conveyancers Association, to the extent applicable, shall govern the
determination of marketable and/or insurable title (subject to the exceptions
set forth in Schedule 7.5) at regular rates. Barnstable shall have the option to
cure the CWS Title Objections within thirty (30) days after the date of such
notice. If Barnstable elects not to cure or is unable to cure the CWS Title
Objections by said date, CWS shall have the option to be exercised within 10
days of said date (in its sole discretion) of either (a) accepting the title as
it then is for all purposes under this Agreement, waiving any additional rights
CWS may have arising from such CWS Title Objections, and proceeding to carry out
the transactions contemplated herein, or (b) terminating this Agreement,
whereupon this Agreement shall terminate and CWS and Barnstable shall have no
further
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obligations or liabilities hereunder other than CWS's indemnity obligation under
Section 1.6. If CWS does not give such a notice setting forth any CWS Title
Objections during the Inspection Period, this Agreement shall remain in full
force and effect, except that CWS' rights pursuant to Section 1.5 shall
terminate from and after the termination of the Inspection Period. Except for
liens securing the debt set forth on Barnstable's December 31, 1999 audited
consolidated financial statements provided pursuant to Section 3.10 hereof and
liens securing debt set forth on Schedule 1.5 hereto (the "Permitted Debt"), any
other mortgages and liens securing any of the Companies' obligations for
borrowed money will be extinguished by Barnstable on or prior to the Closing
Date. Notwithstanding the provisions of this Section 1.5, CWS shall have the
rights granted pursuant to the provisions of Section 1.7 with respect to any
Title Objections regardless of whether or not any such Title Objections are set
forth in Schedule 7.5.
1.6 Due Diligence.
(a) Within 10 days of the execution of this Agreement, Barnstable shall
provide CWS with a copy of the due diligence materials listed in Schedule 1.6.1.
Barnstable represents to CWS that, to its knowledge, there are no due diligence
materials listed in Schedule 1.6.1 within the Companies' possession and control
that will not be so delivered to CWS.
(b) During the Inspection Period, CWS, through its authorized agents or
representatives, shall be entitled, upon reasonable advance notice to
Barnstable, to enter upon the Property during normal business hours, and shall
have the right
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to make such reasonable investigations and conduct such reasonable tests,
including engineering studies, soil tests, and environmental studies, as CWS
deems necessary or advisable (the "Testing Rights"), subject to the following
limitations: (a) CWS shall give Barnstable written or telephonic notice at least
one (1) business day before conducting any inspections on the Property, and a
representative of Barnstable shall have the right to be present when CWS or its
agents or representatives conducts its or their investigations on the Property;
(b) neither CWS nor its representatives shall materially interfere with the use,
occupancy or enjoyment of the Property by the Companies; (c) neither CWS nor its
agents or representatives shall damage the Property or any portion thereof,
except for any immaterial damage caused by invasive tests, all of which shall
promptly be repaired by CWS; and (d) CWS shall indemnify, hold harmless and
defend the Companies against all costs (including reasonable attorneys' fees)
and direct damages caused by the activities of CWS or its agents or
representatives under this Section 1.6(b); provided, however, that such
indemnity shall not include any costs or damages caused by (1) the acts of the
Companies or their agents or representatives or (2) any pre-existing condition
of the Property. The foregoing indemnification obligation shall survive the
Closing Date or termination of this Agreement for a period of six (6) months,
1.7 Inspection Period.
CWS shall have the Inspection Period to exercise CWS's Testing Rights
and to otherwise conduct such due diligence, including without limitation such
investigation of any matters disclosed or not disclosed herein or in any
Schedule hereto as CWS, in its sole and absolute discretion, deems appropriate.
At
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any time before the end of the Inspection Period, CWS may, in its discretion,
give written notice thereof delivered prior to the termination of the Inspection
Period to Barnstable setting forth any objections (the "CWS Objections") that
CWS has resulting from its investigation. Barnstable shall have the option to
cure the CWS Objections within thirty (30) days after the date of such notice.
If Barnstable elects not to cure or is unable to cure the CWS Objections by said
date, CWS shall have the option to be exercised within 10 days of said date (in
its sole discretion) of either (a) accepting the situation as it then is for all
purposes under this Agreement, waiving any additional rights CWS may have
arising from such CWS Objections, and proceeding to carry-out the transactions
contemplated herein, or (b) terminating this Agreement, whereupon this Agreement
shall terminate and CWS and Barnstable shall have no further obligations or
liabilities hereunder other than CWS's indemnity obligation under Section
1.6(b). If CWS does not give such notice setting forth any CWS Objections during
the Inspection Period, this Agreement shall remain in full force and effect,
except that CWS' rights pursuant to Sections 1.6 and 1.7 shall terminate from
and after the termination of the Inspection Period.
1.8 Instruments of Title.
At least forty (40) days prior to the Closing Date, Barnstable will
provide to CWS proper legal descriptions and surveys (to the extent such surveys
presently exist) for the Property. On the Closing Date, upon consummation of the
Merger, Barnstable will deliver to CWS the following documents, fully and
properly executed, and, with respect to item 4 in the forms attached hereto as
Schedule 1.8.
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1. Corporate resolution of Barnstable;
2. Good standing certificates for the Companies;
3. Certified vote of shareholders of Barnstable
approving the Merger;
4. Opinion of counsel for the Companies described in
Section 7.9; and
5. Releases of mortgages and liens, if any, other than
those securing the Permitted Debt.
At the request of CWS after the Closing Date, Barnstable or its
successor in interest will execute and deliver any such further instruments or
certificates or confirmation thereof and will take such other action as may
reasonably be requested by CWS in order further to make effective the Merger.
1.9 Closing Date.
The closing of the transactions provided for in this Agreement (the
"Closing") shall take place at the offices of Ropes & Xxxx, Xxx Xxxxxxxxxxxxx
Xxxxx, Xxxxxx, Xxxxxxxxxxxxx, at 10:00 A.M. on the fifth business day following
the receipt of the last of the approvals described in Section 7.1 hereof, or on
such other date or at such other place as the parties may mutually agree upon
(the "Closing Date").
Subject to the provisions of this Agreement, on the Closing Date, the
parties hereto shall (A) file the Certificate and Plan of Merger with the
Secretary of State of the State of
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Connecticut and (B) file the Certificate and Plan of Merger with the Secretary
of State of the State of Delaware and (C) make all other filings or recordings
as may be required under the Connecticut Business Corporation Act and the
Delaware General Corporation Law. The Merger shall become effective at such time
as (i) such Certificate and Plan of Merger is duly filed with the Secretary of
State of the State of Connecticut and (ii) such Certificate and Plan of Merger
is filed with the Secretary of State of the State of Delaware, or at such
subsequent date or time, not to exceed 30 days after the date of filing of any
Certificate and Plan of Merger, as the parties shall specify in the Certificate
and Plan of Merger (the time the Merger becomes effective being hereinafter
referred to as the "Effective Time").
2. CONVERSION OF SHARES
2.1 Conversion Terms.
At the Effective Time by virtue of the Merger and without any further
action on the part of the holders thereof:
(a) Each share of Newco Common Stock (the "Newco Common Stock") issued
and outstanding immediately prior to the Effective Time shall remain outstanding
and not be affected in any manner by the Merger.
(b) All shares of the Common Stock of Bamstable (the "Barnstable Common
Stock") that immediately prior to the Effective Time are held in the treasury of
Barnstable shall be cancelled and retired and no cash or other consideration
shall be paid or delivered in exchange therefor.
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(c) Each share of Barnstable Common Stock outstanding immediately prior
to the Effective Time (each a "Share" and as to the holder of more than one
Share, the "Shares") shall be converted by the Merger into the right to receive
Common Stock of CWS as provided in Section 2.2.
2.2 Exchange.
(a) Aggregate Consideration
Barnstable's shareholders will receive 212,656 shares of CWS
Common Stock registered with the Securities and Exchange Commission and freely
tradable (subject to certain restrictions pursuant to Section 12.3 hereof) on
NASDAQ, for all of the outstanding shares of Barnstable's common stock, such
number of shares to be adjusted as provided in Section 2.2(b) and (c) hereof.
(b) Adjustment for Water Company and BAR Stock
As of the date hereof, Barnstable owns 716 of the 750 issued
and outstanding shares of common stock of the Water Company and 716 of the 758
issued and outstanding shares of common stock of BAR. The aggregate purchase
price of 212,656 shares of CWS common stock payable by CWS assumes Barnstable's
ownership of all 750 issued and outstanding shares of the Water Company's common
stock and all 758 issued and outstanding shares of BAR's common stock, and
Barnstable agrees to use its reasonable efforts to acquire ownership prior to
the Closing Date of the remaining such shares which it does not now own.
Barnstable shall offer to exchange shares of Barnstable common stock for each
share of
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Water Company common stock and each share of voting (and possibly non-voting)
BAR common stock not owned by Barnstable. The parties agree that the purchase
price payable by CWS to Barnstable common shareholders hereunder shall be (i)
increased by 4,000 shares of CWS Common Stock if, Barnstable owns all of the
issued and outstanding common stock of both the Water Company and of BAR on the
Closing Date; (ii) reduced by 215 shares of CWS Common Stock for each share of
the issued and outstanding common stock of the Water Company, in excess of 5
shares, not owned by Barnstable on the Closing Date; and (iii) reduced by 68
shares of CWS Common Stock for each share of the issued and outstanding voting
common stock of BAR, in excess of 5 shares, not owned by Barnstable on the
Closing Date. The parties further agree that CWS shall not be obligated to
acquire Barnstable pursuant to this Agreement unless, as of the Closing Date,
Barnstable shall own all of the issued and outstanding shares of non-voting
common stock of BAR.
(c) CWS Shares
In the Merger, each share of outstanding common stock of
Barnstable will be converted into the fight to receive a number of shares of CWS
Common Stock equal to the Exchange Ratio (the "Share Consideration"). The
Exchange Ratio shall be equal to the quotient (rounded to the nearest
thousandth) of (A) 212,656 shares of CWS Common Stock to be delivered by CWS on
the Closing Date pursuant to Section 2.2(a) hereof, as such number of shares may
be adjusted pursuant to Section 2.2(b) hereof, divided by (B) the number of
issued and outstanding shares of common stock of Barnstable outstanding on the
Closing Date. No fractional CWS shares will be issued and cash equal to that
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fraction of $31.25 (the Market Price) will be issued in lieu thereof.
2.3 Delivery of Certificates and Payment of Cash.
(a) Promptly after the Effective Time, CWS shall cause to be
mailed to each person who was, at the Effective Time, a holder of record of
Shares entitled to receive the Share Consideration pursuant to Section 2.2(c) a
form of letter of transmittal (which shall specify that delivery shall be
effected, and risk of loss and title to the certificates evidencing such shares
(the "Certificates") shall pass, only upon proper delivery of the Certificates
to such bank or other agent as CWS may designate (the "Agent")) and instructions
for use in effecting the surrender of the Certificates pursuant to such letter
of transmittal. Upon surrender of a Certificate to the Agent, together with such
letter of transmittal, duly completed and validly executed in accordance with
the instructions thereto, and such other documents as may be required pursuant
to such instructions, the holder of such Certificate shall be entitled to
receive in exchange therefor the Share Consideration for each Share formerly
evidenced by such Certificate, payable to such holder in accordance with the
provisions of Section 2.2 hereof and such Certificate shall then be cancelled.
No interest shall accrue or be paid on the Share Consideration payable upon the
surrender of any Certificate for the benefit of the holder of such Certificate.
CWS shall take all steps necessary to enable and cause the Agent to fulfill
promptly its obligations under this Section 2.3(a). If payment of the Share
Consideration is to be made to a person other than the person in whose name the
surrendered Certificate is registered on the stock transfer books of Barnstable,
it shall
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be a condition of payment that the Certificate so surrendered shall be endorsed
properly or otherwise be in proper form for transfer and that the person
requesting such payment shall have paid all transfer and other taxes required by
reason of the payment of the Share Consideration to the Agent or shall have
established to the satisfaction of the Agent that such taxes either have been
paid or are not applicable.
(b) The Agent will be entitled to deduct and withhold from the
consideration otherwise payable pursuant to this Agreement to any holder of
Shares such amounts as the Agent is required to deduct and withhold with respect
to the making of such payment under the Code, or any provision of state, local
or foreign tax law. To the extent that amounts are so withheld by the Agent,
such withheld amounts will be treated for all purposes of this Agreement as
having been paid to the holder of the Shares in respect of which such deduction
and withholding was made by the Agent. All such withheld amounts shall be
disposed of by the Agent in accordance with the Code or such state, local or
foreign tax law, as applicable.
(c) If any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
such Certificate to be lost, stolen or destroyed and subject to such other
conditions as the Agent may impose, the Agent shall issue in exchange for such
lost, stolen or destroyed Certificate the Share Consideration deliverable in
respect thereof as determined in accordance herewith. When authorizing such
issue of the Share Consideration in exchange therefor, the Agent may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed Certificate to give the Agent
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a bond in such sum as the Agent may direct as indemnity against any claim that
may be made against the Agent with respect to the Certificate alleged to have
been lost, stolen or destroyed.
(d) If any holder of Shares shall have served a written demand
upon Barnstable to be paid the "fair value" of his or her Shares after having
filed a timely written objection to the Merger as provided in Section 262 of the
Delaware Corporation Law (the "Appraisal Act") (any such shareholder being
hereinafter called an "Objecting Shareholder") and if an Objecting Shareholder
has met the requirements of the Appraisal Act and if it is determined that such
Objecting Shareholder has the right to receive payment of the "fair value" of
his or her Shares pursuant to the provisions of the Appraisal Act, such
Objecting Shareholder shall receive such payment from the Surviving Corporation
(but only after the value of such Share has been agreed upon or finally
determined pursuant to the provisions of the Appraisal Act).
2.4 No Further Transfers.
Upon and after the Effective Time, the stock transfer books of
Barnstable shall be closed, and no transfer of Shares shall thereafter be made
on such books. From and after the Effective Time the holders of Shares
outstanding immediately prior to the Effective Time shall cease to have any
rights with respect to such shares except as otherwise provided herein or by
applicable law.
3. REPRESENTATIONS AND WARRANTIES OF BARNSTABLE
Barnstable hereby represents and warrants as follows:
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3.1 Organization and Good Standing of the Companies;
Status of the Companies and Barnstable
The Water Company is a company as defined in Section I of
Chapter 165 of the Massachusetts General Laws and is legally authorized to sell
and distribute water in the town of Barnstable where it presently sells and
distributes water. Each of the Companies is a corporation duly organized,
validly existing and in good standing under the laws of its state of
incorporation, and has all other requisite corporate power and authority and all
necessary licenses and permits (except to the extent disclosed in Schedule
3.12.2) to carry on its business as it is now being conducted. The Water
Company's rates, prices and charges are and have been those shown on schedules
filed with and approved by the DTE. Except for the Subsidiaries, or as set forth
on Schedule 3.1, to Barnstable's knowledge, Barnstable has no other subsidiaries
or affiliates. As "used in this Agreement, the term "affiliate" means a person
(other than the Water Company or BAR) (1) which directly or indirectly controls,
or is controlled by, or is under common control with, Barnstable, (2) which owns
5% or more of the voting stock of Barnstable or (3) 5% or more of the voting
stock (or in the case of a person which is not a corporation, 5% or more of the
equity interest) of which is owned by Barnstable or a subsidiary. The term
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a person, whether
through the ownership of voting stock, by contract or otherwise. Barnstable
possesses full legal and other capacity to enter into and carry out the
provisions of this Agreement, and is under no receivership, impediment or
prohibition imposed by any court, regulatory commission, board,
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administrative body, arbitration board or tribunal or other federal, state or
municipal government instrumentality (any such entity being referred to hereto
as a Governmental Body ) that would render any of the Companies unable to enter
into and carry out the provisions of this Agreement.
3.2 Title to Properties; Use of Water.
To Barnstable's knowledge, the Water Company has good,
marketable and/or insurable (at regular rates) title to (i) all assets of the
Water Company (other than the Property) including, without limitation, the
System, the xxxxx, transmission and distribution mains, tanks and standpipes,
pumps and pumping stations, hydrants, meters and personal property described on
pages 400-414 of the Water Company's Annual Return to the DTE for the year ended
December 31; 1399- which pages are attached hereto as Schedule 0.0.xX, and those
acquired subsequent to December 31, 1999, and all of the Water Company s right,
title and interest in and to the curb stops, service connections (to the extent
curb stops and service connections are purported to be owned by the Water
Company) and easements, rights of way and leases, and any and all franchise
rights including without limitation all franchise and related rights set forth
in the Special Acts attached as Schedule 3.2.1B, and (ii) all documents reports,
maps and customer records pertaining to the System including, but not limited
to, all engineering, laboratory and operating reports, customer service records
including meter readings and fixture surveys, financial books and records,
property maps, gate drawings, main laying specifications and tap and service
cards, and the Water Company's cash and bank deposits, except to the extent that
the Water Company's failure to have such title has not had, and would not
reasonably be
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expected to have, a material adverse effect on the Companies, taken as a whole.
Subject to the exceptions set forth in Schedule 7.5, BAR or the Water Company,
as the case may be, has good, marketable and/or insurable (at regular rates)
title in fee simple (other than the Airport Well Lease) to all of the Property
listed in Schedule 3.2.2, except where the failure of the Water Company (but not
BAR) to have such title has not had, and would not reasonably be expected to
have, a material adverse effect on the Companies, taken as a whole. The property
(real, personal and mixed, tangible and intangible), rights, privileges and
assets now and hereafter owned or leased by any of the Companies are referred to
in this Agreement as the "Assets". Other than the Assets owned or leased by the
Water Company, no other assets are used in the conduct and operation of the
Water Company's water supply businesses and the distribution and delivery of
water to each of the Water Company's water customers. Tile Water Company has the
right to use the water it is now using in the manner in which it is using such
water. All water supply sources, pump stations and storage facilities for the
System are located on real estate owned by the Water Company in fee simple, and
all mains and service connections are located on real estate owned by the Water
Company in fee simple, within the public rights-of-way, or within permanent
easements of record in favor of the Water Company, except as may otherwise be
set forth in Schedule 3.2.4 attached hereto. Except for the stock of the
Subsidiaries owned by Barnstable, the Companies do not own, and on the Closing
Date will not own, any securities of, or any other direct or indirect interest
in, any other firm, corporation or other entity (including without limitation
any joint venture or partnership).
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3.3 Use of Assets.
To Barnstable's knowledge, the present use of the Property
conforms in all material respects to all applicable zoning, building, building
line and similar restrictions, is a permitted "non-conforming use" as defined in
such zoning, building, building line or similar restrictions or the Companies
have obtained the necessary permits, variances or relief therefor. The Assets
are located in the Town of Barnstable, Massachusetts.
3.4 Certificate of Incorporation, By-Laws and Resolutions.
The copies attached hereto, or previously delivered to CWS, of
the Companies' Certificates of Incorporation and By-laws are true and complete
copies of said documents, and said Certificates and By-laws are in full force
and effect and include any and all amendments thereto.
3.5 Authorization of Agreement.
Subject to the immediately following sentence, this Agreement
has been validly authorized, duly. executed and delivered by Barnstable and
constitutes a valid and legally binding obligation of Barnstable, enforceable in
accordance with its terms. Except as set forth on Schedule 3.5, approval by
Barnstable's shareholders is the only other corporate action required in order
to authorize Barnstable to consummate the transactions contemplated by this
Agreement. The directors and officers of the Companies are listed on Schedule
3.5 hereto.
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3.6 Absence of Defaults.
Except as specified in Schedule 3.6, the execution and
delivery of this Agreement do not and, upon approval thereof by Barnstable's
shareholders, the consummation of the transactions contemplated hereby will not
(a) violate any provision of the Certificate of Incorporation or Bylaws of any
of the Companies; (b) violate, conflict with or result in the breach or
termination of, or constitute a default under the terms of, any agreement or
instrument to which any of the Companies is a party or by which it or any of the
Assets may be bound except where such default would not reasonably be expected
to have a material adverse effect on the Companies, taken as a whole; (c) result
in the creation of any material lien, charge or encumbrance upon any of the
Assets pursuant to the terms of any such agreement or instrument; (d) violate
any judgment, order, injunction, decree, license, permit, award, rule or
regulation against, or binding upon, any of the Companies or upon any of the
Assets except where such violation would not reasonably be expected to have a
material adverse effect on the Companies, taken as a whole; or (e) constitute a
violation by any of the Companies of any law or regulation of any jurisdiction
as such law or regulation relates to any of the Companies, the System or any of
the Assets except where such violation would not reasonably be expected to have
a material adverse effect on the Companies, taken as a whole. Barnstable has
obtained or will obtain prior to Closing all material consents, releases or
waivers from Governmental Bodies and third parties which may be necessary to
prevent the execution of this Agreement or the consummation of the transactions
contemplated herein from resulting in any
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violation, breach, default or other event referred to in this Section 3.6, all
of which are set forth in Schedule 3.6.
3.7 Litigation. Orders, Etc.
Except as set forth in Schedule 3.7 hereto, there are no
actions, suits, proceedings or governmental investigations pending, or insofar
as is known to Barnstable, in prospect or threatened, against or relating to any
of the Companies or the transactions contemplated by this Agreement in or before
any Governmental Body. Except as set forth in Schedule 3.7 hereto, the System,
and the Water Company in its capacity as owner or operator of the System, is not
subject to or in violation of any judgment, order, decree, injunction or award
of any Governmental Body entered in any proceeding to which it was a party or of
which it had knowledge, including, without limitation, decisions, letter
requests or proceedings of the DTE, the DPH, the DEP, the Internal Revenue
Service and the Town of Barnstable, Massachusetts, where such judgment, order,
decree, injunction or award or said violation would reasonably be expected to
have a material adverse effect on the Companies, taken as a whole. No
proceedings are pending or, to the knowledge of Barnstable, threatened against
the rates now being charged by the Water Company.
3.8 Contracts.
Schedule 3.8 contains a true and complete list of all
contracts, agreements and leases to which any of the Companies is a party
involving the payment of $20,000 or more by or to any of the Companies in any
one fiscal year or that are otherwise material to the business of the Companies.
Except as set forth
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in Schedule 3.8, each of such contracts, agreements, and leases is valid,
binding and in full force and effect and enforceable in accordance with its
terms, and none of the Companies nor, to the best of Barnstable's knowledge, any
other party to any such contract, agreement or lease has breached any material
provision of, or is in default in any material respect under the terms of, any
such contract, agreement or lease.
3.9 No Brokers.
All negotiations relative to this Agreement have been carried
on by Barnstable directly with CWS, without the intervention of any person as a
result of any act of Barnstable in such manner as to give rise to any valid
claim against any of the parties hereto for a brokerage commission, finder's fee
or other like payment.
3.10 Financial Statements; Annual Reports.
The audited financial statements of Barnstable and its
consolidated subsidiaries and for the Water Company for each of the years of
1997, 1998 and 1999 heretofore furnished to CWS were prepared in accordance with
generally accepted accounting principles consistently applied and present fairly
in all material respects the consolidated financial position and the results of
the operations of the Companies at the dates and for the periods indicated.
Except as set forth on Schedule 3.10, none of the Companies is a guarantor,
indemnitor, accommodation party or surety for any person, entity, liability or
obligation except for liabilities or obligations to each other. All annual
returns filed by the Water Company with respect to the Water Company and the
System with the DTE from and after 1995 are
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correct and complete in all material respects and accurately represent in all
material respects for the respective periods and dates covered by such reports
the financial condition and operations of the Water Company.
3.11 Absence of Adverse Change.
Since December 31, 1999, except as may be reflected in
Schedule 3.11, there has not been any material adverse change in the financial
position, results of operations, assets, liabilities or business of the
Companies, taken as a whole.
3.12 Compliance with Laws; No Environmental Hazards.
3.12.1 To Barnstable's knowledge, the location and
construction, occupancy, operation and use of all improvements attached to or
placed, erected, constructed or developed as .a portion of any of the Property
(the "Improvements") do not materially violate any applicable law, statute,
ordinance, rule, regulation, order or determination of any Governmental Body, or
any restrictive covenant or deed restriction affecting the Property including,
without limitation, any applicable health, environmental, rates, utility, water
quality, antitrust, hiring, wages, hours, collective bargaining, safety, price
and wage controls, payment of withholding and social security taxes, zoning
ordinances and building codes, flood and disaster laws, rules and regulations
(hereinafter collectively called the "Applicable Laws") which violations would
reasonably be expected to have a material adverse effect on the Companies, taken
as a whole. Schedule 3.12.1 discloses a list of and copies of all material
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governmental licenses, permits, certifications and approvals of any governmental
authority possessed by or granted to any of the Companies ("Licenses") and used
or relied upon in the operation of any of the Companies or the System. Except as
set forth in Schedule 3.12.1, to Barnstable's knowledge, no material License
used in or necessary for the operation of any of the Companies, the Assets or
the System will terminate prior to its stated expiration date or not be renewed
in accordance with past practices of the Companies or relevant Governmental
Body, and none of the Companies is in material violation of any term or
condition of any License.
3.12.2 Without in any way limiting the generality of Section
3.12.1 above, except as disclosed on Schedule 3.12.2, neither any of the Assets
nor any of the Companies are the subject of any pending or, to the best of
Barnstable's knowledge, threatened investigation or inquiry by any Governmental
Body, or are subject to any remedial obligations under any Applicable Laws
pertaining to health or the environment, including, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended ("CERCLA"), the Resource Conservation Recovery Act of 1987, as
amended ("RCRA"), the Safe Drinking Water Act, as amended ("SDWA"), the Clean
Water Act, as amended ("CWA"), the Toxic Substances Control Act ("TSCA"), the
Massachusetts Clean Waters Act ("MCWA") or any other applicable provision of the
Massachusetts General Laws (all collectively hereinafter referred to as
"Applicable Environmental Laws").
3.12.3 Except as set forth on Schedule 3.12.2, to Barnstable's
knowledge, the Companies, taken as a whole, are in material compliance with
Applicable Environmental Laws and
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are not required to obtain any permits, licenses or authorizations (other than
the Licenses) to construct, occupy, operate or use any portion of the Property
as it is now being used by reason of any Applicable Environmental Laws.
3.12.4 Except as set forth in Schedule 3.12.2, to the best of
Barnstable's knowledge or belief, no prior use of any of the Property, by any of
the Companies or the owners of any of the Property, has occurred which violates
any Applicable Environmental Laws in any material respect. None of the Companies
has at any time, directly or indirectly "treated", "disposed of", "generated",
"stored" or, "released" any "toxic or hazardous substances," as each term is
defined under the Applicable Environmental Laws, or arranged for such
activities, in, on or under any of the Assets or any parcel of land, whether or
not owned, occupied or leased by any of the Companies in material violation of
any Applicable Environmental Law, except to the extent customary and in the
ordinary course of a water supply company's business.
3.12.5 To the best of Barnstable's knowledge and belief, there
has been no litigation brought or threatened nor any settlement reached by or
with any parties alleging the presence, disposal, release, or threatened
release, of any toxic or hazardous substance or solid wastes from the use or
operation of any of the Property, and none of the Property is on any federal or
state "Superfund" list, or subject to any liens recorded or imposed pursuant to
any federal or state "Superfund" laws.
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3.13 Insurance.
The Companies maintain insurance in connection with the Assets and the
System against hazards and risks and liability to persons and property to the
extent and in the manner set forth on Schedule 3.13. Except for workmen's
compensation insurance or as set forth on Schedule 3.13, no such insurance
provides for a retroactive premium adjustment or other experienced based
liability on the part of any of the Companies.
3.14 Condition of System.
Except as specifically set forth in Schedule 3.14 hereto, the System
was designed and installed in compliance with good waterworks engineering
practice and the applicable rules and regulations of the DTE, except where the
failure to comply with the foregoing has not had, and would not reasonably be
expected to have, a material adverse effect on the Companies, taken as a whole.
Except as set forth on Schedule 3.14, the System, taken as a whole, has been
adequately maintained and is in good operating condition and repair, ordinary
wear and tear excepted, is fit for its intended purpose and conforms to all
restrictive covenants, applicable laws, regulations and ordinances relating to
its construction, use and operation, except where the failure to comply with the
foregoing has not had, and would not reasonably be expected to have, a material
adverse effect on the Companies, taken as a whole.
3.15 Tax Matters.
Except as specifically set forth in Schedule 3.15 hereto:
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(A) Each of the Companies has (I) filed all Federal, state, local and
foreign income and other tax returns or reports (including declarations of
estimated tax) required to be filed by it, and all such returns are complete and
accurate in all material respects, (II) paid all taxes of any nature whatsoever
(together with any related penalties and interest) (any of the foregoing being
referred to herein as a "Tax"), that are shown on such Tax returns as due and
payable on or before the date of this Agreement, and (III) paid on behalf of
itself or others all Taxes otherwise required to be paid by the Companies on or
before the date of this Agreement.
(B) There are no claims or assessments pending against any of the
Companies for any alleged deficiency in Tax and, to the knowledge of Barnstable,
there is not any threatened Tax claim or assessment against any of the
Companies.
(C) The liabilities for current Taxes and for deferred Taxes reflected
in the financial statements provided pursuant to Section 3.10 are in all
material respects adequate to cover all Taxes required to be accrued through the
date thereof determined in accordance with GAAP.
(D) All Taxes required to be withheld, collected or deposited by or
with respect to each of the Companies have been timely withheld, collected or
deposited, as the case may be, and, to the extent required, have been paid to
the relevant taxing authority.
(E) There are no liens for Taxes (other than for current Taxes not yet
due and payable) on the assets of any of the Companies.
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(F) The Federal income tax returns of the consolidated group for which
Barnstable is the common parent either have been examined and settled with the
Internal Revenue Service or closed by virtue of the expiration of the applicable
statute of limitations for all years through December 31, 1995.
(G) None of the Companies shall be required to include in a taxable
period ending after the Effective Time an amount of taxable income attributable
to income that accrued in a prior taxable period but was not recognized in any
prior taxable period as a result of the installment method of accounting, the
completed contract method of accounting, the long-term contract method of
accounting, the cash method of accounting or Section 481 of the Code or
comparable provisions of state, local or foreign Tax law.
(H) None of the Companies has, within the five preceding taxable years,
deferred gain recognition for Federal income tax purposes under Sections 1031 or
1033 of the Code.
(I) None of the property owned or used by any of the Companies is
subject to a lease which the Company does not treat as a "true" lease for
Federal income tax purposes.
(J) Barnstable has not made, within the five preceding taxable years, a
disclosure on a Tax return pursuant to Section 6662(d)(2)(B)(ii) of the Code.
(K) None of the Companies has constituted either a "distributing
corporation" or a "controlled corporation" (within the meaning of Section
355(a)(1)(A) of the Code) in a
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distribution of stock qualifying for tax-free treatment under Section 355 of the
Code (1) in the two years prior to the date of this Agreement or (II) in a
distribution which could otherwise constitute part of a "plan" or "series of
related transactions" (within the meaning of Section 355(e) of the Code) in
conjunction with the Merger.
None of the Companies has taken any action, or failed to take any
action, or has knowledge of any fact, agreement, plan or other circumstance that
is reasonably likely to prevent the Merger from constituting a transaction
described in Section 368(a) of the Code.
3.16 Employees.
Schedule 3.16 contains a true and complete list of all present full-
and part-time Employees of each of the Companies and the hourly wage rate or
biweekly salary and dates of employment of such Employees and a list of all
written or oral employment contracts (including severance arrangements or any
other arrangements under which the Employees will be entitled to receive
payment, or accelerate any payment due from either of the Companies, as a result
of the transactions contemplated by this Agreement). Except as set forth in
Schedule 3.16, none of the Companies has any liability to any director, officer,
employee or to any Governmental Body or any other person for any damages, wages,
bonus, salary, commission, deferred compensation, vacation pay, health or
hospital insurance, claim for indemnification, worker's compensation benefits or
unemployment insurance premium with respect to any Employee, except for the last
pay period or any portion thereof. None of the Employees of any of the Companies
is represented by any
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labor union or labor organization. During the past three years, there has not
been any existing or threatened labor grievance or work stoppage by Employees or
any investigation or proceeding of any kind pending or threatened by any
Employee, and, to the best knowledge of Barnstable, there exists no set of facts
which would give rise to any of the foregoing. There are no unfair labor
practices or discrimination or sexual harassment charges pending or, to
Barnstable's knowledge, threatened with respect to any of the Companies or any
Employee.
3.17 Related Party Transactions.
Except as shown on Schedules 3.16 or 3.17, there are no existing
transactions or, agreements between any of the Companies and any shareholder,
officer, director, or affiliate (or member of the immediate family of any of the
foregoing) of any of the Companies.
3.18 Employee Benefit Plans.
Schedule 3.18 lists all "employee pension benefit plans" (as such term
is defined in Section 3(2) of the Employee Retirement Income Security Act of
1974 ("ERISA")), and all "employee welfare benefit plans" (as such term is
defined in Section 3(1) of ERISA), including, without limitation, all formal or
informal plans, practices, programs, contracts or arrangements (excluding
workers' compensation, unemployment compensation and other government mandated
programs) which are maintained, administered or contributed to by any of the
Companies or in which any Employees participate (each such employee welfare
benefit plan, practice, program, contract or arrangement being hereinafter
referred to as a "Plan"). No
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material liability under ERISA or the Code has been or, through the Closing Date
will be, incurred with respect to any Plan or with respect to any "employee
benefit plan" (as such term is defined in Section 3(3) of ERISA) of any trade or
business (whether or not incorporated) which is under common control, or a
member of an affiliated service group, with any of the Companies (within the
meaning of Section 4001 (b)(1) of ERISA or Section 414(b), (c) or (m) of the
Code) which could result in a material lien or other claim upon any of the
assets of any of the Companies, and no such liability will be incurred as a
result of the transactions contemplated by this Agreement. Each Plan has been,
and will continue through the Closing Date to be, operated in material
compliance with the applicable provisions of such Plan, employee benefit plan,
ERISA and the Code, except where the failure to comply with the foregoing has
not had, and would not reasonably be expected to have, a material adverse effect
on the Companies, taken as a whole. Currently, there are, and as of the Closing
Date there will be, no pending or, to Barnstable's knowledge, threatened claims
(other than routine claims for benefits), suits or other proceedings by any
Employees or Plan participants or beneficiaries, spouses or representatives of
any of them, or governmental agencies against any Plan, the assets held
thereunder, the trustees of any such Plan's assets, or any of the Companies,
involving any Plan. Other than salaries and other benefits in the ordinary
course of business, except as set forth in Schedule 3.18, CWS will not have or
incur any liability or obligation to any Employee as a result of any actions
taken by the Companies prior to the Closing.
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None of the Companies is or has been since 1984 a party to any
"multi-employer plan" (as such term is defined in Section 3(37) of ERISA).
Since the date of the audited financial statements provided pursuant to
Section 3.10, there has not been any adoption or amendment in any material
respect by any of the Companies of any collective bargaining agreement or any
bonus, pension, profit sharing, savings, deferred compensation, incentive
compensation, stock ownership, stock purchase, stock option, phantom stock,
retirement, vacation, severance, disability, death benefit, hospitalization,
medical or other plan, arrangement or understanding providing benefits for any
current or former director, officer or employee of any of the Companies, or any
change in any actuarial or other assumption used to calculate funding
obligations with respect to any pension or post-retirement benefit plans or
arrangements of any of the Companies, or any material change in the manner in
which contributions to any such pension or post-retirement benefit plans or
arrangements are made or the basis on which such contributions are determined.
3.19 Capitalization.
As of the date of this Agreement, the authorized capital stock of
Barnstable consists of 11,350 shares of common stock, of which 10,740 shares of
such common stock are presently outstanding.
The authorized capital stock of the Water Company is 2,000 shares of
common stock, with 750 shares of common stock presently outstanding, and 750
shares of Preferred Stock, of
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which 750 shares of such Preferred Stock are presently outstanding. The
authorized capital stock of BAR is 10,000 shares of voting common stock and 500
shares of non-voting common stock, with 750 shares of voting common stock and 8
shares of non-voting common stock presently outstanding.
Except as set forth in Schedule 3.19, Barnstable is the sole record and
beneficial owner of all of the shares of capital stock of each of the
Subsidiaries, free and clear of any liens, encumbrances, security interests,
rights and restrictions of any nature. None of the Companies is a party to any
proxy, power-of-attorney, voting agreement, voting trust or shareholder
agreement with respect to any of the capital stock of any of the Companies. As
of the date of this Agreement, no shares of stock are held by any of the
Companies in their respective treasuries.
Except as set forth in Schedule 3.19, as of the Closing Date there will
be, and as of the date hereof there are, no existing options, warrants, calls or
other rights or other agreements committing any of the Companies to resell,
transfer, issue or sell any shares of capital stock of any of the Companies,
except as specifically contemplated in this Agreement.
The issued and outstanding shares of capital stock of each of the
Companies have been duly authorized, validly issued and are fully paid and
non-assessable.
3.20 Corporate Records.
The stock registers delivered at the Closing, and the minutes of all
directors' and shareholders' meetings for the
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past 10 years heretofore made available to CWS, constitute all of the transfer
books and minute books and are true, complete and accurate records in all
material respects of all material proceedings of the shareholders and directors
of each of the Companies, and the issuance and record ownership of all shares of
capital stock of each of the Companies. The accounting books and records of each
of the Companies for the past ten years are in all material respects true,
correct and complete, and have been maintained in accordance with good business
practices.
3.21 Disclosure.
No representation or warranty in this Article 3 or in any information,
list, schedule or certificate furnished or to be furnished by or on behalf of
any of the Companies-pursuant to this Agreement contains or will contain any
untrue statement of a material fact or omits or will omit a material fact
necessary to make the statements contained herein or therein not misleading.
3.22 Investigation.
Any investigation or examination of the business, property or
operations of any of the Companies by CWS shall not affect the representations
and warranties of Barnstable herein contained.
3.23 Bank Accounts and/or Credit.
Schedule 3.23 sets forth a true, correct and complete list of all
financial institutions or vendors in which an account is maintained by, or
loans, lines of credit or other
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credit commitments have been secured by or for, any of the Companies, together
with the names of all persons authorized to draw thereon. Except as disclosed in
Schedule 3.23, the Companies do not have any loan or other agreements for the
borrowing of money and none of the loans or lines of credit impose any
prepayment restrictions. Except as set forth in Schedule 3.23, there are no
loans or other agreements which upon the transfer of the Shares as contemplated
by this "Agreement will accelerate to maturity, increase the rate or charges or
otherwise change their terms or provisions.
3.24 Voting Requirements.
The affirmative vote of a majority of the shares of Barnstable common
stock outstanding as of the record date with respect to the Barnstable
shareholders' meeting held pursuant to Section 5.6, voting as a single class
(with each share of common stock having one vote per share), to approve this
Agreement and the Merger are the only votes of the holders of any equity
interest of Barnstable or any class or series of capital stock of any of the
Companies necessary to approve this Agreement, the Merger and, except as stated
in Schedule 3.5, the transactions contemplated hereby.
3.25 Non-Reliance, Etc.
No promise or inducement for this Agreement has been made to Barnstable
except as set forth herein. This Agreement is executed by Barnstable freely and
voluntarily, and Barnstable agrees that it will proceed with the transactions
contemplated hereby without reliance upon any statement or representation by CWS
or Newco or any of their attorneys or agents except as set
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forth herein. Barnstable is legally competent to enter into this Agreement and
accept full responsibility therefor, and it has been represented by counsel in
the course of the negotiation of this Agreement.
4. REPRESENTATIONS AND WARRANTIES OF CWS
CWS hereby represents and warrants as follows:
4.1 Organization and Good Standing.
CWS is a corporation duly organized, validly existing and in good
standing under the laws of the State of Connecticut, and has all other requisite
corporate power and authority and all necessary licenses and permits to carry on
its business as it is now being conducted. CWS possesses full legal and other
capacity to enter into and carry out the provisions of the Agreement, and is
under no receivership, impediment or prohibition imposed by any Governmental
Body that would render CWS unable to enter into and carry out the provisions of
this Agreement.
4.2 Authority Relative to this Agreement.
The execution and delivery of this Agreement by CWS has been duly and
validly authorized by all requisite action on the part of CWS. No approval or
other action is required in order to authorize CWS to consummate the
transactions contemplated by this Agreement except for SEC action to declare
effective the Registration Statement contemplated by Section 5.8 hereof. This
Agreement has been duly executed and delivered by
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CWS and constitutes a valid and legally binding obligation of CWS, enforceable
in accordance with its terms.
4.3 Absence of Defaults.
The execution and delivery of this Agreement does not and the
consummation of the transactions contemplated hereby will not (a) violate any
provision of the Certificate of Incorporation or Bylaws of CWS; (b) violate,
conflict with or result in the breach or termination of, or constitute a default
under the terms of, any agreement or instrument to which CWS is a party or by
which it or any of its assets may be bound; (c) violate any judgment, order,
injunction, decree, license, permit, award, rule or regulation against, or
binding upon, CWS; or (d) constitute a violation by CWS of any law or regulation
of any jurisdiction as such law or regulation relates to CWS. CWS has obtained
or will obtain prior to Closing all material, consents, releases or waivers from
Governmental Bodies and third parties which may be necessary to prevent the
execution of this Agreement or the consummation of the transactions contemplated
herein from resulting in any violation, breach, default or other event referred
to in this Section 4.3.
4.4 No Brokers.
All negotiations relative to this Agreement have been carried on by CWS
directly with Barnstable without the intervention of any person as a result of
any act of CWS in such manner as to give rise to any valid claim against any of
the parties hereto for a brokerage commission, finder's fee or other like
payment.
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4.5 CWS Common Stock.
The shares of CWS Common Stock delivered to Barnstable's shareholders
pursuant to Section 2.2 will be duly authorized, validly issued, fully paid,
non-assessable and free and clear of any preemptive rights, liens, encumbrances,
security interests, rights and restrictions of any nature and the issuance of
which will be duly registered pursuant to an effective registration statement
filed pursuant to the Securities Act of 1933, as amended, in form reasonably
acceptable to Barnstable and duly registered or qualified pursuant to applicable
state blue sky laws, if any.
4.6 Absence of Adverse Change.
Since December 31, 1999, there has not been any change in the financial
position, results of operations, assets, liabilities or business of CWS as
described in the financial statements described in the SEC Filings, other than
changes in the ordinary course of business which have not been material or
adverse or changes reflected in one or more of the SEC Filings.
4.7 Litigation, Orders, Etc.
Except as set forth in Schedule 4.7 hereto, there are no actions,
suits, proceedings or governmental investigations pending, or insofar as is
known to CWS, in prospect or threatened, against or relating to CWS or the
transactions contemplated by this Agreement in or before any Governmental Body.
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4.8 Disclosure.
No representation or warranty in this Article 4 or in any information,
list, schedule or certificate furnished or to be furnished by or on behalf of
CWS pursuant to this Agreement contains or will contain any untrue statement of
a material fact or omits or will omit a material fact necessary to make the
statements contained herein or therein not misleading.
4.9 SEC Filings.
CWS has delivered to Barnstable true and complete copies of its (i)
Annual Report on Form 10-K for the year ended December 31, 1999, as filed with
the SEC, and its Annual Report to Shareholders of such year; (ii) proxy
statements relating to all of CWS's meetings of shareholders (whether annual or
special) since December 31, 1997; and (iii) all other reports, statements and
registration statements (including Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K) filed by CWS with the SEC since December 31, 1999
(collectively, the "SEC Filings"). As of their respective dates, the SEC Filings
(including all exhibits and schedules thereto and documents incorporated by
reference therein) did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading. The financial statements of CWS and its subsidiaries
included or incorporated by reference in the SEC Filings (including the related
notes and schedules) have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the periods involved
(except as may be indicated in the
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notes thereto) and fairly present the consolidated assets, liabilities and
financial position of CWS and its consolidated subsidiaries as of the dates
thereof and the consolidated results of their operations and changes in
financial position for the periods then ended (subject, in the case of any
unaudited interim financial statements, to normal year-end adjustments).
4.10 Non-Reliance, Etc.
No promise or inducement for this Agreement has been made to CWS or
Newco except as set forth herein. This Agreement is executed by CWS and Newco
freely and voluntarily, and CWS and Newco agree that they will proceed with the
transactions contemplated hereby without reliance upon any statement or
representation by Barnstable or any of its attorneys or agents except as set
forth herein. CWS and Newco are legally competent to enter into this Agreement
and accept full responsibility therefor, and they have been represented by
counsel in the course of the negotiation of this Agreement.
5. CONDUCT OF THE PARTIES PENDING THE CLOSING DATE AND AGREEMENTS OF THE
PARTIES
5.1 Approvals and Consents.
Barnstable and CWS will use commercially reasonable efforts to secure
the approval of the transactions contemplated by this Agreement by all parties
whose consent is required by law or under the terms of any indenture, contract
or agreement to which any of the Companies or CWS is a party.
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5.2 Conduct of Companies' Business.
Until the Closing Date, each of the Companies will conduct its business
and affairs only in the ordinary course and so that the representations and
warranties contained in Article 3 hereof will be true and correct in all
material respects at and as of the Closing Date (except as to representations
that refer to a specified earlier date), except for changes specifically
permitted or contemplated by this Agreement, and so that the conditions to be
satisfied by each of the Companies on or prior to the Closing Date shall then
have been satisfied. Each of the Companies will use commercially reasonable
efforts to maintain and preserve the business and operations of the Companies,
and to preserve its relationships with persons or entities having business
relations with the Companies.
Without limiting the generality of the foregoing, pending the Closing
Date, without the prior written consent of CWS:
5.2.1 None of the Companies will dispose of any of the Assets
having a value of $5,000 or more, or dispose of Assets having in the aggregate a
value of $25,000 or more, except for the sale of water in the ordinary course of
business.
5.2.2 Except for normal expenses incurred in the ordinary course
of business, none of the Companies will incur any additional liabilities in an
aggregate amount of $25,000 or more, whether for borrowed money or otherwise, or
encumber any of the Assets, except for borrowing in the ordinary course of
business, not to exceed $830,000 at any one time outstanding, under the
Company's existing Revolving Note and Covenant Agreement dated November 10,
1997, as amended.
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5.2.3 None of the Companies will take any action that would reasonably
be expected to adversely affect its ability to consummate the transactions
contemplated hereby.
5.2.4 Each of the Companies will maintain in force all existing
liability insurance policies and fidelity bonds relating to the System or the
Assets, or policies or bonds providing substantially the same coverage.
5.2.5 Each of the Companies will advise CWS in writing of any material
adverse change or of any event, occurrence or circumstance which is likely to
cause a material adverse change in any of the Assets or liabilities (whether
absolute, accrued, contingent or otherwise) or operations of the Companies,
taken as a whole.
5.2.6 Each of the Companies will maintain the Assets in good condition,
reasonable wear and tear excepted.
5.2.7 None of the Companies shall enter into any new leases or
contracts or material modifications or renewals of any existing leases or
contracts that would impose any aggregate obligations on the Companies or CWS or
on any of the Assets in excess of $25,000.
5.2.8 None of the Companies shall, in a manner unfavorable to the
Companies, (i) make any material alterations or additions to the Assets, except
as may be required by law or as may reasonably be required for the prudent
repair and maintenance of the Assets, (ii) change or attempt to change (or
consent to any change in) the zoning or other legal
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requirements applicable to the Property, or (iii) cancel, amend or modify in any
material respect any material easement, license, permit or other rights held by
any of the Companies.
5.2.9 None of the Companies will (i) take any of the actions described
in the last paragraph of Section 3.18; (ii) amend any of the plans listed on
Schedule 3.18; (iii) enter into or amend any employment, severance, retention,
consulting or special pay arrangements with any 'person; or (iv) increase the
compensation payable to any of its directors, officers or employees.
5.2.10 Except for the proposed issuance of shares of common stock of
Bamstable in exchange for the remaining privately held minority shares of common
stock of the Water Company and of BAR as contemplated by Section 2.2(b) hereof,
an acquisition or redemption of outstanding BAR non-voting common stock, and the
amendment of the terms of the Water Company preferred stock as contemplated by
Section 5.13 hereof, none of the Companies will (i) issue, sell or otherwise
dispose of or agree to issue, sell or otherwise dispose of, any shares of
capital stock of any of the Companies, or any other security convertible into or
exchangeable for shares of any of the Companies' capital stock; (ii) acquire or
agree to acquire (through redemption, repurchase or otherwise) any of its shares
of capital stock; or (iii) authorize, grant or agree to grant any options,
warrants or other rights to acquire any of its shares of capital stock, or any
other security convertible into or exchangeable for shares of capital stock of
any of the Companies.
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5.2.11 There have been no dividends or other distributions declared or
paid since September 1,2000 in respect of any of the shares of capital stock of
any of the Companies, and none of the Companies will declare or pay any other
dividends or make any other distributions in respect of any of the shares of its
capital stock, except for (i) dividend payments required by the terms of the
Water Company's outstanding Preferred Stock; (ii) the issuance of shares of
Barnstable Common Stock in exchange for outstanding minority interests in the
Water Company and BAR; (iii) dividend payments by Barnstable of not in excess of
$7.00 per Barnstable common share payable on or before December 31, 2000 to
shareholders of record on or before December 31, 2000, which amount may be
payable by Barnstable only if the Closing Date has not occurred as of said
record date; and (iv) regular dividend payments by the Water Company in the
ordinary course of business.
5.2.12 None of the Companies will (i) change (A) its methods of
accounting, except as required by GAAP or (B) its fiscal year, (ii) settle or
compromise any Tax liability or refund claim, or (iii) make any material Tax
election inconsistent with prior practice or, if no comparable Tax election has
previously been made, which would increase the current or future tax liability
of the Companies.
5.2.13 The Water Company will not make, propose or agree to any change
in its rates, charges, standards of service or accounting from those in effect
on the date of this Agreement.
5.2.14 None of the Companies will authorize, or commit or agree to take
any of the foregoing actions.
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5.3 Information and Access.
Barnstable will give to CWS and to CWS's representatives reasonable
access at such times and locations as are mutually agreed upon by CWS and
Barnstable to all the Assets, and to the books, contracts, documents, records,
and files of the Companies, and will furnish to CWS copies of documents, records
and financial information with respect to each of the Companies' business as CWS
may reasonably request. Said access shall specifically include access to (i) all
personnel records of any of the Companies (to the extent permitted by applicable
law); (ii) all contracts and agreements referred to in Section 3.8 hereof; (iii)
all files and records described in Section 3.2; and (iv) the System.
5.4 Lawsuits.
Barnstable shall notify CWS promptly if it becomes aware of any
lawsuit, claim, proceeding or investigation that may be threatened, brought,
asserted or commenced against any of the Companies (a) involving the transaction
contemplated by this Agreement or (b) which might have a material adverse effect
on the Companies, taken as a whole.
5.5 Compliance with Laws.
From the date hereof, each of the Companies shall use its commercially
reasonable efforts to remain in compliance in all material respects with all
foreign, federal, state, local and other laws, statutes, ordinances, rules,
regulations, orders, judgments, and decrees applicable to any of the
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Companies and any of their operations or Assets, the noncompliance with which
could have a material adverse effect on the Companies, taken as a whole.
5.6 Shareholder Approval.
Barnstable will submit this Agreement and Plan of Merger to the
shareholders of Barnstable at the earliest practicable date and the Board of
Directors and management of Barnstable will recommend approval of the Merger,
and use their commercially reasonable efforts to solicit the requisite approval
of the Merger by the Barnstable shareholders.
5.7 Further Assurances.
Barnstable and CWS agree to execute and deliver such instruments and
take such other action as CWS or Barnstable may reasonably require in order to
carry out the purpose and intent of this Agreement.
5.8 Prospectus/Proxy Statement.
In connection with the registration statement (the "Registration
Statement") covering (i) the shares of CWS Common Stock to he received by
Barnstable shareholders in the Merger and (ii) the resale of CWS Common Stock
received in the Merger by affiliates (as the term is used in Rule 145 under the
Securities Act of 1933, as amended) of Barnstable (the "Rule 145 Affiliates") to
be filed with the Securities and Exchange Commission (the "SEC") pursuant to
Section 6.3 and the Prospectus/Proxy Statement to be sent to Barnstable's
shareholders for purposes of the meeting of shareholders held
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pursuant to Section 5.6, Barnstable will furnish CWS all information relating to
the Companies and the Rule 145 Affiliates as is necessary to enable CWS to
comply in all material respects with the requirements of federal and applicable
state law. The information provided by the Companies contained in the
Registration Statement and Prospectus/Proxy Statement will not contain any
untrue statements of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in the light
of the Circumstances under which they were made, not misleading, except that
Barnstable makes no representation or warranty in respect of any information
contained in such Prospectus/Proxy Statement furnished by CWS. Barnstable will
cooperate with CWS and will provide CWS with its shareholder lists, including
correct addresses, to enable CWS to send Prospectus/Proxy Statement to
Barnstable's shareholders. Barnstable will cooperate with CWS to allow CWS to
send to Barnstable's shareholders amendment or supplements to the
Prospectus/Proxy Statement as may be necessary, in the light of developments
occurring subsequent to the mailing of such Prospectus/Proxy Statement, to
ensure that the Registration Statement and Prospectus/Proxy Statement, as so
amended or supplemented, will not, on the date of the meeting of shareholders,
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
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5.9 Confidentiality
CWS and Barnstable agree that they will, and will cause their
directors, officers, other personnel and authorized representatives to, hold in
strict confidence, and not to use, any data and information obtained from each
other (other than information which is a matter of general public knowledge or
which has heretofore been or is hereafter published for public distribution or
filed by the applicable party as public information with any Governmental Body
other than as a result of a breach of this covenant) and will not, and will
ensure that such other persons do not, disclose or use such data and information
unless required by legal process or applicable governmental regulations. If this
Agreement is terminated for any reason, CWS and Barnstable will not disclose or
use such data and information and will promptly return to the other party all
tangible evidence (and all copies thereof) of such data and information which
said other party has furnished to CWS or Barnstable, as the case may be.
5.10 Other Requested Information
With reasonable promptness, the Companies and their respective
officers, employees, accountants and other agents will deliver to CWS all
financial statements and audit reports that became available subsequent to the
date hereof and such other information as CWS from time to time may reasonably
request.
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5.11 Current Information
During the period from the data of this Agreement to the Closing Date,
the Companies will make available one or more of their designated
representatives to confer on a regular and frequent basis with a representative
of CWS and to report the general status of the ongoing operations of the
Companies. Barnstable will promptly notify CWS of any material change in the
normal course of business or in the operations or the properties of the
Companies and of any governmental complaints, investigations or hearings (or
communications indicating that the same may be contemplated) and will keep CWS
fully informed of such events. CWS and Barnstable agree that, without the
consent of the other, no public disclosure of this Agreement or the transactions
contemplated hereby shall be made by either party prior to the termination of
CWS' rights under Sections 1.5, 1.6 and 1.7 (including the final resolution of
all CWS Title Objections and CWS Objections delivered during the Inspection
Period in accordance therewith).
5.12 Notification of Certain Matters
Upon actual notice thereof, Barnstable shall give prompt notice to CWS
of (i) the occurrence, or failure to occur, of any event which occurrence or
failure would be likely to cause any representation or warranty contained in
this Agreement to be untrue or inaccurate in any material respect at any time
from the date hereof to the Closing Date, and (ii) any failure of any of the
Companies, as the case may be, or any officer, director, employee or agent
thereof, to comply with or satisfy any
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covenant, condition or agreement to be complied with or satisfied by it
hereunder.
5.13 Amendment of Water Company Preferred Stock Terms
Prior to the Closing, the Water Company shall amend the terms governing
its outstanding preferred stock to provide that, in addition to the voting
rights currently accorded the preferred stock, each share of Water Company
preferred stock shall be entitled to one-fifth vote per share, voting together
with the common stock on all matters which are subject to a shareholder vote.
6. COVENANTS OF CWS
6.1 Cooperation
CWS will use best efforts (a) to prevent any CWS representation or
warranty contained in this Agreement from becoming inaccurate, (b) to satisfy
the requirements, covenants, and agreements applicable to it as set forth in
this Agreement, and (c) to satisfy the conditions to the consummation of the
transactions contemplated by this Agreement.
6.2 Lawsuits
CWS shall promptly notify Barnstable promptly of any lawsuit, claim,
proceeding or investigation which may be threatened, be brought, asserted or
commenced involving the transactions called for in this Agreement or which might
have an adverse impact upon CWS or the CWS Common Stock.
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6.3 Prospectus/Proxy Statement Preparation
CWS will expeditiously prepare and file the Registration Statement with
the SEC and send shareholders of Barnstable for purposes of the meeting of
Barnstable's shareholders the Prospectus/Proxy Statement, which will comply in
all material respects with the requirements of federal and applicable state law,
and will take all actions required under any applicable federal or state
securities law in connection with (i) the issuance of CWS Common Stock to
Barnstable's shareholders pursuant to the Merger and (ii) the resale of CWS
Common Stock by the Rule 145 Affiliates during the period of one year following
the Effective Time of the Merger. The Prospectus/Proxy Statement and the
Registration Statement shall be subject to the approval of Barnstable prior to
its filing with the SEC (such approval not to be unreasonably withheld or
delayed). The information contained in the Registration Statement or the
Prospectus/Proxy Statement will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, except that CWS makes no representation or
warranty in respect to any information contained in the Registration Statement
or the Prospectus/Proxy Statement furnished by any of the Companies expressly
for use therein. CWS also makes mo representations or warranties regarding the
accuracy or completeness of Barnstable's shareholder list which Barnstable will
have provided. Subject to the ability of CWS to prevent the Rule 145 Affiliates
from reselling CWS shares because of the existence of undisclosed material
information (which restriction shall be set forth in the agreements contemplated
by Section 12.3(b)), CWS will send
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to Barnstable's shareholders such amendments and supplements to the
Prospectus/Proxy Statement as may be necessary, in the light of developments
occurring subsequent to the mailing of the Prospectus/Proxy Statement, to ensure
that the Prospectus/Proxy Statement, as so amended or supplemented, will not, on
the date of the meeting of Barnstable's shareholders or any date on which the
Rule 145 Affiliates may elect to resell some or all of said Affiliates' shares
of CWS Common Stock received in the Merger, contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. CWS shall give Barnstable, its
representatives and counsel a reasonable opportunity to participate in the
drafting of the Registration Statement and the Prospectus/Proxy Statement and
any amendments or supplements thereto and to review the Registration Statement
and the Prospectus/Proxy Statement prior to it being sent to the SEC for review
and to Barnstable's shareholders. No amendment or supplement to the
Prospectus/Proxy Statement or the Registration Statement will be made by CWS
without the approval of Barnstable (such approval not to be unreasonably
withheld or delayed). CWS will advise Barnstable, promptly after it receives
notice thereof, of the time at which the Registration Statement has become
effective or any supplement or amendment has been filed, of the issuance of any
stop order, of the suspension of the qualification of the CWS Common Stock
issuable in connection with the Merger or to be resold by the Rule 145
Affiliates pursuant to this Section 6.3 for offering or sale in any
jurisdiction, or of any request by the SEC for amendment of the Prospectus/Proxy
Statement or the Registration Statement or comments thereon and responses
thereto or requests by the SEC for additional information.
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6.4 Notification of Certain Matters
Upon actual notice thereof, CWS shall give prompt notice to Barnstable
of (i) the occurrence, or failure to occur, of any event which occurrence or
failure would be likely to cause any representation or warranty contained in
this Agreement to be untrue or inaccurate in any material respect at any time
from the date hereof to the Closing Date, and (ii) any failure of CWS or any
officer, director, employee or agent thereof, to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder.
6.5 Indianapolis Life Insurance Company Waiver.
CWS shall obtain prior to the termination of the Inspection Period a
waiver by the Indianapolis Life Insurance Company ("Insurance Company") of: (i)
the Water Company's compliance with Section 2.3 of the Note Agreement ("Note
Agreement") dated as of February 15, 1991 between the Water Company and the
Insurance Company (as amended and currently in effect); (ii) Barnstable's
compliance with Section 8 of the Guaranty Agreement ("Guaranty Agreement") dated
as of February 15, 1991 between Barnstable and the Insurance Company (as amended
and currently in effect); and (iii) any rights that holders of the Notes issued
under the Note Agreement may have upon either a Guarantor Change of Control or a
Change of Control (as defined in the Guaranty Agreement and Note Agreement,
respectively). Such waiver may be conditioned upon the payment by CWS to
Insurance Company on or after the Closing Date of a fee not in excess of $80,000
for such waiver, and payment by CWS of Insurance Company's reasonable legal fees
in connection with documenting
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such waiver, and payment by CWS of Insurance Company's reasonable legal fees
in connection with documenting such waiver; provided, however, that none of the
Companies shall be obligated to make any payment or incur any obligation or
liability in connection with the obtaining of such waiver.
6.6 Limitation on Redemptions and Purchases of Water Company
Preferred Stock
If the Water Company preferred stock is redeemed or repurchased by the
Water Company before the fifth anniversary of the Closing, all amounts employed
to effect the redemption or repurchase will be obtained from the Water Company's
available cash balances or the proceeds of amounts borrowed by the Water
Company, and such amounts shall not be funded or reimbursed by, and any such
borrowing shall not be guaranteed by, Barnstable, BAR, CWS, Newco or an
affiliate of any of them. No share of Water Company preferred stock shall be
purchased by Barnstable, BAR, CWS, Newco or an affiliate of any before the fifth
anniversary of the Closing.
7. CONDITIONS OF CWS'S OBLIGATIONS
The obligations of CWS to be performed by it under this Agreement on the
Closing Date shall be subject to the satisfaction, on or prior to the Closing
Date, of the following conditions. Each condition may be waived in whole or in
part only by written notice of such waiver from CWS to Barnstable.
7.1 Required Approvals
7.1.1 This Agreement and Plan of Merger, the Merger and the other
transactions contemplated hereby shall have been approved by the shareholders
and the Board of Directors of
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Barnstable in the manner required by law and by Barnstable's Certificate of
Incorporation or By-Laws.
7.1.2 Holders of no more than 10% of Barnstable's capital stock
shall have exercised appraisal rights under Delaware law.
7.2 Consents
Each of the Companies shall have obtained the consents listed on Section
3.6 hereto, which consents shall be all the consents or approvals required by
Section 5.1 hereof and shall be in form and substance reasonably satisfactory to
CWS.
7.3 Performance by the Company and Barnstable
The representations and warranties of Barnstable contained in this
Agreement or in any document delivered by or on behalf of any of the Companies
to CWS pursuant to this Agreement shall be true, complete and correct in all
material respects at and as of the Closing Date with the same effect as though
such representations and warranties had been made on and as of such date (except
as to representations which speak as of a specified earlier date), each of the
Companies shall have performed and complied in all material respects with all
agreements and conditions required by this Agreement to be performed or complied
with by it on or prior to the Closing Date, and Barnstable shall have certified
to such effect in writing to CWS.
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7.4 Adverse Change
Since the date of this Agreement, there shall have been no material
adverse change in the Assets of in the business, results of operations, or
condition, financial or otherwise, of the Companies, taken as a whole.
7.5 Title Insurance Policy
On the Closing Date, CWS shall have available to it, at its sole cost and
expense and at regular rates, one or more owner's title insurance policies or
commitments to issue such policies or appropriate endorsements to existing
policies (on the current ATLA Form B) with respect to the Property listed on
Schedule 3.2.2, together with any reasonable and customary required
endorsements, insuring that the Subsidiaries hold marketable and/or insurable
(at regular rates) fee simple title to or (solely with respect to the Airport
Well Lease) a good and valid leasehold interest in the Property as of the
Closing Date, subject only to liens, easements, rights, restrictions, claims and
other encumbrances listed on Schedule 7.5.
7.6 Condition of Property
On the Closing Date, except as disclosed herein, there shall be no
judicial or administrative or condemnation proceeding pending or, to
Barnstable's knowledge, threatened concerning the Property which could have a
material adverse effect on the Companies, taken as a whole.
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7.7 Form of Documents
All actions, proceedings, instruments and documents to be taken or
delivered by the Companies in connection with the consummation of the
transactions contemplated by this Agreement shall be reasonably satisfactory in
form and substance to CWS.
7.8 Litigation
No suit, action, proceeding or governmental investigation shall be
pending or, to Barnstable's or CWS's knowledge, threatened before or by any
Governmental Body which would, in the reasonable opinion of CWS or its counsel,
have a material adverse effect on the Companies, taken as a whole.
7.9 Opinion of Counsel for the Company
CWS shall have received an opinion of counsel to Barnstable, dated the
Closing Date, substantially in the form of Schedule 1.8 hereto.
7.10 Resignations
At the Closing, Barnstable shall deliver to CWS written resignations of
the officers and directors of each of the Subsidiaries (except for Xx. Xxxxxxxxx
who will remain as President of the Water Company), effective upon the Closing
Date.
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7.11 Employment Agreements
Xx. Xxxxxxxxx shall have entered into an employment agreement
with the Water Company, satisfactory in form and substance to CWS.
7.12 Registration Statement
(a) The Registration Statement shall have become effective; no stop
order suspending the effectiveness of the Registration Statement
shall be in effect, and no proceedings for such purpose shall be
pending before or threatened by the SEC.
(b) No preliminary or permanent injunction or other order issued by any
federal or state court of competent jurisdiction in the United
States or by any federal or state governmental or regulatory body
nor any statute, rule, regulation or executive order promulgated or
enacted by any federal or state Governmental Body which restrains,
enjoins or otherwise prohibits the transactions contemplated hereby
shall be in effect.
7.13 Pooling of Interests
The transaction contemplated by the Agreement shall qualify as a
pooling of interests transaction under generally accepted accounting principles,
unless such failure to qualify is due to the inability of CWS to engage in a
pooling transaction, to actions of CWS, to actions contemplated by this
Agreement or to a change in the pooling of interest rules.
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8. CONDITIONS OF THE OBLIGATIONS OF BARNSTABLE
The obligations of Barnstable to be performed by it under this Agreement
on the Closing Date shall be subject to the satisfaction, on or prior to the
Closing Date, of the following conditions. Each condition may be waived in whole
or in part only by written notice or such waiver from Barnstable to CWS.
8.1 Required Approvals
This Agreement and Plan of Merger, the Merger and the other transactions
contemplated hereby shall have been approved by the shareholders of Barnstable,
by the Board of Directors of CWS and by the shareholders and the Board of
Directors of Newco in the manner required by law and by their respective
Certificates of Incorporation or By-Laws, as applicable.
8.2 Performance by CWS.
The representations and warranties of CWS contained in this
Agreement or in any document delivered by or on behalf of CWS to Barnstable
pursuant to this Agreement shall be true, complete and correct in all material
respects at and as of the Closing Date with the same effect as if such
representations and warranties had been made on and as of such date, CWS shall
have performed and complied in all material respects with all agreements and
conditions required by this Agreement to be performed or complied with by it on
or prior to the Closing Date, and CWS shall have certified to such effect in
writing to Barnstable.
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8.3 Litigation.
No suit, action, proceeding or governmental investigation shall be
pending or, to Barnstable's or CWS's knowledge, threatened before or by any
Governmental Body which would, in the reasonable opinion of Barnstable or its
counsel, have a material adverse effect on CWS.
8.4 Opinion of Counsel for CWS.
Barnstable shall have received an opinion, dated the Closing Date, of
Messrs. Day, Xxxxx & Xxxxxx LLP, counsel for CWS, in the form of Schedule 8.4
hereto.
8.5 Form of Documents.
All actions, proceedings, instruments and documents to be taken or
delivered by CWS in connection with the consummation of the transactions
contemplated by this Agreement shall be reasonably satisfactory in form and
substance to Barnstable.
8.6 Adverse Change.
Since the date of this Agreement, there shall have been no material
adverse change in the assets or in the business, results of operations, or
condition, financial or otherwise, of CWS.
8.7 Registration Statement.
(a) The Registration Statement shall have become effective; no stop
order suspending the effectiveness of the
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Registration Statement shall be in effect, and no proceedings for such purpose
shall be pending before or threatened by the SEC.
(b) No preliminary or permanent injunction or other order issued by
any federal or state court of competent jurisdiction in the United States or by
any federal or state governmental or regulatory body nor any statute, rule,
regulation or executive order promulgated or enacted by any federal or state
governmental authority which restrains, enjoins or otherwise prohibits the
transactions contemplated hereby shall be in effect.
8.8 Tax-Free Merger.
Barnstable shall have received an opinion of Messrs. Day, Xxxxx &
Xxxxxx, counsel for CWS, in form and substance and based upon representations of
CWS, Newco and Barnstable all reasonably satisfactory to Barnstable, to the
effect that the Merger qualifies as a reorganization within the meaning of
Section 368(a)(l)(A) or 368(a)(2)(D) of the Code and that no gain or loss will
be recognized by a Barnstable stockholder on the exchange of his or her
Barnstable common stock for CWS Common Stock, except that a Barnstable
stockholder who receives cash proceeds in lieu of a fractional share interest in
CWS Common Stock will recognize gain or loss equal to the difference between
such proceeds and the tax basis allocated to the fractional share interest.
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9. EXPENSES
Regardless of whether or not the transactions contemplated herein
are consummated, all fees, costs, taxes and expenses incurred in connection with
the transactions contemplated by this Agreement and the other agreements
contemplated herein shall be paid by the party incurring such expenses.
10. TERMINATION
10.1 Termination Events.
This Agreement may be terminated and abandoned at any time prior to the
Closing Date:
(a) by mutual agreement of CWS and Barnstable; or
(b) by either party if the Closing Date has not occurred by March
31, 2001; provided, however, that said optional termination date shall be
extended, day for day, (i) for each day, if any, in excess of 60 days between
the date the CWS Registration Statement on S-4 contemplated by Section 6.3 is
filed with the SEC and declared effective by the SEC, and (ii) for each day, if
any, necessary to allow a minimum of 5 business days between the Barnstable
Special Shareholder meeting contemplated by Section 5.6 and said optional
termination date.
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10.2 Effect of Termination.
If any party terminates this Agreement pursuant to Section 10.1
above, all rights and obligations of the parties hereunder shall terminate
without any liability of any party to any other party (except for CWS's
indemnity obligation under Section 1.6(b), obligations of the parties under
Section 5.9 and any liability of any party then in breach).
11. AMENDMENT, WAIVER, AND INTERPRETATION
This Agreement may be amended in writing at any time prior to the
Closing Date by the mutual written consent of Barnstable and of CWS. At any time
prior to the Effective Time, either party may (a) extend the time for the
performance of any of the obligations or other acts of the other party, (b)
waive any inaccuracies in the representations and warranties of the other party
contained in this Agreement or in any document delivered pursuant to this
Agreement or (c) waive compliance by the other party with any of the agreements
or conditions contained in this Agreement. Any agreement on the part of a party
to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party. The failure of any party
to this Agreement to assert any of its rights under this Agreement or otherwise
shall not constitute a waiver of such rights.
The Board of Directors of Barnstable shall have full power to
interpret this Agreement on behalf of each of the Companies and such
interpretations shall be binding thereon. The President or any Vice President of
CWS have full power to
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interpret this Agreement on behalf of CWS and such interpretations shall be
binding thereon.
12. OTHER REQUIREMENTS
12.1 No Inconsistent Action/Tax Treatment.
Neither Barnstable nor CWS shall take any action inconsistent with
their obligations under this Agreement or which could materially hinder or delay
the consummation of the transactions contemplated by this Agreement. Each of
CWS, Barnstable and Newco shall use its best efforts to cause the Merger to
qualify, and will not (both before and after consummation of the Merger) take
any action which would prevent the Merger or the exchanges pursuant to the
exchange offers contemplated by Section 2.2(b) hereof from qualifying, as
reorganizations within the meaning of Section 368 of the Code.
12.2 Barnstable Office.
CWS agrees that the Water Company's office and operations center
will remain in Hyannis, Massachusetts indefinitely.
12.3 Certain Trading Restrictions.
(a) As soon as practicable after the date of this Agreement,
Barnstable shall deliver to CWS a letter identifying all persons who are, at the
time this Agreement is submitted for adoption by the shareholders of Barnstable,
"affiliates" of Barnstable, for purposes of Rule 145 under the Securities Act of
1933, as amended.
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(b) The Rule 145 Affiliates shall enter into customary agreements
with CWS restricting the resale of the CWS Common Stock to be acquired by them
pursuant to this Agreement and Plan of Merger, except as may be permitted by (i)
the terms of such agreement, (ii) the Registration Statement contemplated by
Section 6.3 or Rule 145(d) under said Act which permits regular trading
transactions in limited quantities and (iii) generally accepted accounting
principles which must be met in order to permit CWS to treat the Merger as a
pooling of interests.
13. OTHER PROVISIONS
13.1 Governing Law.
This Agreement shall be construed and interpreted according to the laws of
the State of Delaware.
13.2 Assignment.
This Agreement may not be assigned by any party hereto without the prior
written consent of the parties and any attempt to assign without such consent
shall be voidable by any party.
13.3 Notices.
All notices, waivers and consents under this Agreement shall be in writing
and shall be deemed to have been duly given if delivered or mailed, first-class
mail, postage prepaid, addressed as follows:
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If to the Companies to:
Xxxxxx X. Xxxxxxxxx
President
Barnstable Water Company
00 Xxx Xxxxxxxx Xxxx
X.X. Xxx 000
Xxxxxxx, XX 00000-0000
with a copy to:
Xxxxxx X. Xxxxxx
Ropes & Xxxx
One International PI.
Xxxxxx, XX 00000-0000
If to CWS to:
Xx. Xxxxx X. Xxxxxx
Vice President-Finance
Connecticut Water Service, Inc.
00 Xxxx Xxxx Xxxxxx
Xxxxxxx, XX 00000
with a copy to:
Xxxxxxx X. Xxxxxxxx
Day, Xxxxx & Xxxxxx LLP
CityPlace I
Xxxxxxxx, XX 00000
13.4 Counterparts
This Agreement may be executed in any number of counterparts, each
of which shall be treated as an original, but all of which, collectively, shall
constitute only one instrument.
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13.5 No Survival of Representations and Warranties; No Recourse.
CWS and Barnstable agree that the representations and warranties
contained in Section 3 of this Agreement or in any certificate delivered by
Barnstable hereunder shall not survive the Closing Date, and no officer,
director, shareholder, employee, agent or affiliate of any of the Companies or
CWS shall be under any liability or obligation whatsoever with respect to any
representation or warranty or any covenant or agreement of any of the Companies
or CWS contained in this Agreement or in any certificate delivered hereunder.
13.6 No Additional Representations.
CWS and Barnstable agree that, other than the representations,
warranties, covenants and agreements of Barnstable or CWS, as the case may be,
expressly set forth in this agreement, Barnstable and its Subsidiaries and CWS
and its subsidiaries and their respective officers, directors, shareholders,
employees, agents and affiliates have not made, nor shall any of them be deemed
to have made, any representation, warranty, covenant or agreement, express or
implied, with respect to (i) Barnstable or any of its Subsidiaries or CWS and
its subsidiaries and affiliates, as the case may be, (ii) the business of
Barnstable or any of its Subsidiaries or of CWS or any of its subsidiaries or
affiliates, as the case may be, or (iii) any of the transactions contemplated by
this Agreement.
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13.7 Successors and Assigns.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and the successors and assigns of the parties hereto.
13.8 Severability.
In case one or more provisions contained in this Agreement shall be
invalid, illegal or unenforceable in any respect under any applicable law, rule
or regulation, the validity, legality and enforceability of the remaining
provisions contained herein shall not be affected or impaired "thereby.
13.9 Attorney-Client Privilege.
The parties agree to take all steps necessary to ensure that any
privilege attaching as a result of Ropes & Xxxx representing the Companies in
connection with this transaction shall survive the Merger and remain in effect
as belonging to the directors of Barnstable as of the date of this Agreement and
not to CWS or the Surviving Corporation. In addition, CWS and the Surviving
Corporation hereby waive any conflicts that may arise in connection with (i)
Ropes & Xxxx representing any of the Companies' shareholders, directors,
officers or employees after the Merger and (ii) any communication by Ropes &
Xxxx in any such representation to any such person, including in connection with
a dispute with CWS or the Surviving Corporation following the Merger.
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13.10 Indemnification; Directors' and Officers' Insurance.
(a) The By-Laws and Certificate of Incorporation of the Surviving
Corporation shall contain provisions with respect to indemnification at least as
favorable to the persons indemnified thereby as the provisions set forth in the
By-Laws and Certificate of Incorporation of Barnstable on the date hereof, which
provisions shall not be amended, repealed or otherwise modified for a period of
six years from the Effective Time in any manner that would adversely affect the
rights thereunder of individuals who on or prior to the Effective Time were
directors, officers, employees or agents of Barnstable, unless such modification
is required by law. The provisions with respect to indemnification set forth in
the By-Laws and Certificate of Incorporation of the Water Company and BAR on the
date hereof shall not be amended, repealed or otherwise modified for a period of
six years from the Effective Time in any manner that would adversely affect the
rights thereunder of individuals who on or prior to the Effective Time were
directors, officers, employees or agents of the Water Company or BAR, unless
such modification is required by law.
(b) Each of the Companies shall, to the fullest extent permitted
under applicable law or under the relevant Company's Certificate of
Incorporation or By-Laws and regardless of whether the Merger becomes effective,
indemnify and hold harmless, and, after the Effective Time, the Surviving
Corporation shall, to the fullest extent permitted under applicable law or under
the Surviving Corporation's Certificate of Incorporation or By-Laws as in effect
at the Effective Time, or pursuant to any applicable contract or agreement as in
effect-in the date hereof, in each case for the period ending
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six years after the Effective Time, indemnify and hold harmless each present and
former director, officer or employee of the relevant Company (collectively, the
"Indemnified Parties") against any costs or expenses (including attorneys'
fees), judgements, fines, losses, claims, damages, liabilities and amounts paid
in settlement in connection with any claim, action, suit, proceeding or
investigation, whether civil, criminal, administrative or investigative, (x)
arising out of or pertaining to the transactions contemplated by this Agreement
or (y) otherwise With respect to any acts or omissions occurring at or prior to
the Effective Time; provided, however, that, in the event that any claim or
claims for indemnification are asserted or made within such six-year period, all
rights to indemnification in respect of any such claim or claims shall continue
until the disposition of any such claims.
(c) For a period of six years after the Effective Time, CWS shall
cause the Surviving Corporation, the Water Company and BAR to maintain in effect
directors' and officers' liability insurance covering those persons who are
currently covered by the directors' and officers' liability insurance policies
of Barnstable, the Water Company and BAR, the terms, coverage and scope of which
shall be no less favorable to such persons than those now applicable under the
Companies' current directors' and officers' liability insurance policies.
(d) This Section 13.10 shall survive the consummation of the Merger
at the Effective Time, is intended to benefit each of the Companies, the
Surviving Corporation and the Indemnified Parties, shall be binding on all
successors and assigns of CWS, the Surviving Corporation and each of the
Companies and shall be enforceable by the Indemnified Parties.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.
ATTEST: CONNECTICUT WATER SERVICE, INC.
("CWS")
/s/ Xxxxxxx X. XxXxxx /s/ Xxxxxxxx X. Xxxxxxxxxx
---------------------- ---------------------------
Secretary Its President
ATTEST: BARNSTABLE HOLDING COMPANY
/s/ Xxxxx X. Xxxxxx Xx. /s/ Xxxxxx Xxxxxxxxx
---------------------- ---------------------------
Assistant Clerk Its President
ATTEST: CWS BARNSTABLE ACQUISITION CORP.
/s/ Xxxxxxx X. XxXxxx /s/ Xxxxxxxx X. Xxxxxxxxxx
---------------------- ---------------------------
Secretary Its President
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