FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended September 30, 1999 Commission File Number 0-6028
BIRMINGHAM UTILITIES, INC.
(Exact name of registrant as specified in its charter)
CONNECTICUT 06-0878647
230 Beaver Street, Ansonia, CT 06401
(Address of principal executive office) (Zip Code)
________________________________________________________________
(Former name, former address and former fiscal year, if changes
since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports; and
(2)has been subject to such filing requirements for the past 90 days.
No _________ Yes ____X_____
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at November 1, 1999
Common Stock, No Par Value 1,582,509
PART I. FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS
BIRMINGHAM UTILITIES, INC.
STATEMENTS OF INCOME AND RETAINED EARNINGS
UNAUDITED
Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
[S] [C] [C] [C] [C]
Operating Revenue $1,294,363 $1,191,795 $3,535,441 $3,316,813
Operating Expenses:
Operating Expenses 638,733 634,963 1,823,542 1,813,810
Maintenance Expense 36,733 50,553 134,899 126,842
Depreciation 134,001 118,500 402,003 355,500
Taxes Other Than
Income Taxes 82,001 72,811 242,837 215,186
Taxes on Income 121,730 55,314 224,457 135,059
Total Operating
Expense 1,012,888 932,141 2,827,738 2,646,397
Utility Operating
Income 281,475 259,654 707,703 670,416
Amortization of
Prior Years'
Deferred Income
on Land Dispositions
(Net of income taxes) 85,740 38,306 257,220 114,919
Other Income, net 1,221 <1,843> 42,270 19,621
Income before
interest expense 368,436 296,117 1,007,193 804,956
Interest and
Amortization of
Debt Discount 112,045 148,471 337,648 435,538
Income from
dispositions of land
(net of income taxes) 7,057 -0- 9,152 849,396
Net income $263,448 $147,646 $678,697 $1,218,814
Retained earnings,
beginning $5,323,600 $2,642,568 $5,219,875 $1,831,377
Dividends 158,195 130,631 469,719 390,608
Retained earnings,
ending $5,428,853 $2,659,583 $5,428,853 $2,659,583
Earnings per share
- - basic $.17 $.10 $.43 $.80
Earnings per share
- - diluted $.16 $.10 $.41 $.78
Dividends per share $.10 $.085 $.30 $.255
The accompanying notes are an integral part of these financial
statements.
BIRMINGHAM UTILITIES, INC.
BALANCE SHEETS
(Unaudited)
September 30, Dec. 31,
1999 1998
ASSETS:
[S] [C] [C]
Utility Plant $21,491,874 $20,622,907
Accumulated depreciation 6,498,485 (6,189,596)
Net Utility Plant 14,993,389 14,433,311
Current Assets:
Cash and cash equivalent 163,084 2,696,706
Accounts receivable, net of
allowance for doubtful accounts 456,645 493,165
Accrued utility revenue 466,777 361,448
Materials & supplies 138,844 62,046
Prepayments 44,968 42,643
Total current assets 1,270,318 3,656,008
Deferred Charges 570,508 377,182
Unamortized debt expense 158,296 170,481
Income taxes recoverable 414,080 414,078
Other assets 463,093 467,826
1,605,977 1,429,567
$17,869,684 $19,518,886
STOCKHOLDERS' EQUITY AND LIABILITIES
Stockholders' Equity:
Common Stock, no par value,
authorized 2,000,000 shares;
issued and outstanding 9/30/99-
1,581,951 shares;12/31/98- 1,550,316 $2,628,899 $2,427,752
Retained earnings 5,428,853 5,219,875
8,057,752 7,647,627
Long-term debt 4,324,000 4,418,000
Current Liabilities:
Current portion of note payable
and long term debt 94,000 94,000
Accounts payable and accrued
liabilities 692,017 2,456,271
Total current liabilities 786,017 2,550,271
Customers' advances for construction 1,328,265 1,261,090
Contributions in aid of construction 1,043,716 1,043,719
Regulatory liability-income taxes
refundable 172,356 172,356
Deferred income taxes 1,524,991 1,391,476
Deferred income on disposition of land 632,587 1,034,347
4,701,915 4,902,988
$17,869,684 $19,518,886
The accompanying notes are an integral part of these financial
statements.
BIRMINGHAM UTILITIES, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
[S] [C] [C]
Nine Months Ended September 30,
Cash Flows From Operating Activities 1999 1998
Net Income $678,697 $1,218,814
Adjustments to reconcile net income to
net cash provided by operating activities:
Income from land dispositions (9,152) (849,396)
Depreciation and amortization 443,640 405,099
Amortization of deferred income,
net of tax (257,220) (114,919)
Increases and decreases in assets
and liabilities:
Accounts receivable and accrued
utility revenue (68,809) 71,996
Materials and supplies (76,798) (33,113)
Prepayments (2,325) (48,135)
Accounts payable and accrued expenses (1,764,264) (291,851)
Deferred income taxes (11,025) (11,025)
Total Adjustments (1,745,953) (871,344)
Net cash flows provided by (used in)
operating activities (1,067,256) 347,470
Cash flows from investing activities:
Proceeds from land dispositions 18,000 1,896,000
Net construction expenditures (913,341) (1,303,021)
Other assets and deferred charges, net (61,770) (146,446)
Net Cash flows from (used in)
investing activities (957,111) 446,533
Cash flows from financing activities:
Increase (decrease) in note payable -0- (311,250)
Increase (decrease) in long-term debt (94,000) (94,000)
Dividends paid - net (414,535) (351,398)
Net Cash flows provided by
financing activities: (508,535) (756,648)
Net (decrease) increase in cash
& cash equivalents (2,532,902) (37,355)
Cash & cash equivalents, beginning 2,696,706 62,699
Cash, ending $163,804 $100,054
Supplemental disclosure of cash flow information:
Cash paid for
Interest $434,957 $535,417
Income Taxes 1,822,000 $428,600
Supplemental disclosure of non-cash flow
information:The Company receives
contributions of plant from builders and
developers. These contributions of plant
are reported in utility plant and in
customers' advances for construction.
The contributions are deducted from
construction expenditures by the Company.
Gross Plant, additions $983,532 1,350,601
Customers' advances for
construction (70,191) (47,580)
Capital expenditures, net. $913,341 $1,303,021
The accompanying notes are an integral part of these financial
statements.
BIRMINGHAM UTILITIES, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
Birmingham Utilities, Inc. is a specially chartered public
service corporation in the business of collecting and distributing
water for domestic, commercial and industrial uses and fire protection.
The Company provides water to Ansonia and Derby, Connecticut and in
small parts of the contiguous Town of Seymour with a population of
approximately 31,000 people.
The Company is subject to the jurisdiction of the Connecticut
Department of Public Utility Control ("DPUC") as to accounting,
financing, ratemaking, disposal of property, the issuance of long term
securities and other matters affecting its operations. The Connecticut
Department of Public Health (The "Health Department" or "DPH") has
regulatory powers over the Company under state law with respect to water
quality, sources of supply, and the use of watershed land. The
Connecticut Department of Environmental Protection, ("DEP") is
authorized to regulate the Company's operations with regard to water
pollution abatement, diversion of water from streams and rivers, safety
of dams and the location, construction and alteration of certain water
facilities. The Company's activities are also subject to regulation
with regard to environmental and other operational matters by federal,
state and local authorities, including, without limitation, zoning
authorities.
The Company is subject to regulation of its water quality under
the Federal Safe Drinking Water Act ("SDWA"). The United States
Environmental Protection Agency has granted to the Health Department the
primary enforcement responsibility in Connecticut under the SDWA. The
Health Department has established regulations containing maximum limits
on contaminants which have or may have an adverse effect on health.
NOTE 1 - QUARTERLY FINANCIAL DATA
The accompanying financial statements of Birmingham Utilities,
Inc. (the "Company") have been prepared in accordance with generally
accepted accounting principles, without audit, except for the Balance
Sheet for the period ending December 31, 1998, which has been audited.
The interim financial information conforms to the instructions to Form
10-Q and Rule 10-01 of Regulation S-X and, as applied in the case of
rate-regulated public utilities, complies with the Uniform System of
Accounts and ratemaking practices prescribed by the DPUC. Certain
information and footnote disclosures required by generally accepted
accounting principles have been omitted, pursuant to such rules and
regulations; although the Company believes that the disclosures are
adequate to make the information presented not misleading. For
further information, refer to the financial statements and accompanying
footnotes included in the Company's Annual Report on Form 10-K for the
year ended December 31, 1998.
The Company's business of selling water is to a certain extent
seasonal because water consumption normally increases during the warmer
summer months. Other factors affecting the comparability of various
accounting periods include the timing of rate increases and the timing
and magnitude of property sales. Accordingly, annualization of the
results of operations for the nine months ended September 30, 1999 and
September 30, 1998, would not necessarily accurately forecast the annual
results of each year.
NOTE 2 - CALCULATION OF WEIGHTED AVERAGE SHARES
OUTSTANDING-DILUTED
The following table summarizes the number of common shares used
in the calculation of earnings per share.
Three Months Ended Nine Months Ended
9/30/99 9/30/98 9/30/99 9/30/98
[S] [C] [C] [C] [C]
Weighted average shares
outstanding for earnings
per share, basic 1,577,245 1,536,834 1,562,740 1,530,432
Incremental shares from
assumed conversion of
stock options 78,001 47,730 73,801 40,314
Weighted average shares
outstanding for earnings
per share, diluted 1,655,246 1,584,564 1,636,541 1,570,746
NOTE 3 - RATE MATTERS
On January 21, 1998, the DPUC granted the Company a 4.1% water
service rate increase designed to provide a $177,260 annual increase in
water service revenues and a 12.16% return on common equity. New rates
became effective on February 1, 1998.
NOTE 4 - LAND SALES
On September 13, 1999, the Company executed two purchase and sale
agreements with The Trust for Public Land, Inc., ("TPL") for the sale by
the Company and purchase by TPL of 570 and 42.5 acres of unimproved
property in the City of Ansonia and the Towns of Seymour and Woodbridge,
CT, subject to TPL arranging for the availability of public financing
for the purchases. The Company is unable to predict at this time
whether or not such financing will be available. The purchase price of
the parcels is $6,050,000 and $200,000, respectively. TPL is a
non-profit California public benefit corporation with offices in New
Haven, Connecticut. The agreements are subject to approval by the
Connecticut Department of Public Utility Control, ("DPUC"), and
applications for approval of these transactions were filed with the DPUC
on November 2, 1999. The closings are scheduled to be completed within
45 days after the completion of DPUC approval, but in no event shall
any of the closings occur after December 31, 2000 unless DPUC final
approval has not been obtained at least 45 days prior to said date, in
which event, Buyer shall designate a closing date within 45 days of
final approval. The Company sees no reason why the DPUC would not
approve these applications.
On January 21, 1998, the Company sold to the City of Derby,
Connecticut, 145 acres of land in Derby, Connecticut for $1,800,000.
The total gain from the sale amounted to $910,306 of which $81,983 was
deferred and will be recognized over a 3-year period, as approved by
the DPUC.
On April 29, 1998, the Company sold 2.9 acres of land in
Woodbridge, Connecticut for the development of a single-family home
for $96,000. The total gain from the sale amounted to $28,955 of which
$9,243 was deferred and will be recognized over a 10-year period as
approved by the DPUC.
The Company also sold, on November 23, 1998, 229 acres of land
in Seymour and Oxford, Connecticut to the Town of Seymour. This parcel
was sold below market value, and as a result, the transaction was
classified as a bargain sale for income tax purposes. The net gain from
the sale amounted to $1,010,209 of which $90,965 was deferred and will
be recognized over a 3-year period as approved by the DPUC. As a result
of the bargain sale, the net gain also includes tax deductions of
$177,064 of which $98,900 will be carried forward to reduce the
Company's tax liability in subsequent years.
On December 3, 1998, the Company sold 515 acres of land in Oxford
and Seymour, Connecticut to The Trust for Public Land for $3,220,000.
The Trust for Public Land, in turn, simultaneously sold the property to
the Town of Oxford for the same price. This parcel was also sold below
market value, and therefore, the transaction was classified as a bargain
sale for income tax purposes. The net gain from the sale amounted to
$1,743,998 of which $157,037 was deferred and will be recognized over
a 3-year period as approved by the DPUC. As a result of the bargain
sale, the net gain includes tax deductions of $329,274 of which $184,100
will be carried forward to reduce the Company 's tax liability in
subsequent years.
NOTE 5 - STOCK SPLIT
On January 11, 1999, the Company filed with the DPUC an
Application for Approval to Issue approximately 780,000 additional
shares of common stock in conjunction with a 2-for-1 stock split. The
stock split, which had been approved by the Board of Directors in
December, 1998 was approved by the DPUC on February 26, 1999. The stock
split became effective on March 31, 1999 with respect to shares held of
record on March 18, 1999. All per share financial information contained
in this Quarterly Report on Form 10-Q has been adjusted to reflect the
impact of the common stock split.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
Management's Discussion and Analysis of the Results of Operations
and Financial Condition contained in the Company's Annual Report in Form
10K for the year ended December 31, 1998, should be read in conjunction
with the comments below.
CAPITAL RESOURCES AND LIQUIDITY
Completion of the Company's Long Term Capital Improvement Program
is dependent upon the Company's ability to raise capital from external
sources, including, for the purpose of this analysis, proceeds from the
sale of the Company's holdings of excess land. For the nine months
ended September 30, 1999 and 1998, the Company's additions to utility
plant, net of customer advances, cost $913,341 and $1,303,121,
respectively. (see Statement of Cash Flows). These additions were
financed primarily from external sources, namely proceeds from land
sales.
The Company has outstanding $4,324,000 principal amount of
Mortgage Bonds, due September 1, 2011, issued under its Mortgage
Indenture. The Mortgage Indenture limits the issuing of additional
First Mortgage Bonds and the payment of dividends. It does not,
however, restrict the issuance of either long term or short term debt
which is either unsecured or secured with liens subordinate to the lien
of the Mortgage Indenture. The Company also had a $1,500,000 secured,
term loan which was repaid in full on November 23, 1998. Principal and
interest payments were made monthly up to the time of repayment.
In 1998, the Company converted its $600,000 working capital line
of credit and its $1,500,000 secured line of credit to a two-year
$2,100,000 revolving line of credit. In June, 2000, the Company will
have the option to convert any outstanding balance to a six-year term
note with principal payments based on a 20-year amortization schedule,
with a balloon payment at the end of the six-year term. The revolving
line of credit is secured by a lien (subordinate to the lien of the
Mortgage Bond Indenture) on all of the Company's utility property other
than its excess land available for sale. There were no borrowings
outstanding on the revolving line of credit on June 30, 1999.
The Company may choose among several interest rate options on the
revolving line of credit variable option of 30- or 90-day LIBOR plus 100
basis points, or prime. The term loan interest rate options consist of
a fixed rate at the bank's cost of funds plus 100 basis points, or a
variable rate of the prime rate or 90 day LIBOR plus 100 basis points
which is reset every 90 days.
The Company's 1999 Capital Budget of $1,800,000 is two-tiered.
The first tier consists of typical capital improvements made each year
for services, hydrants and meters, is budgeted for $550,000 in 1999,
and is expected to be financed primarily with internally generated
funds.
The second tier of the 1999 Capital Budget consists of
replacements and betterments which are part of the Company's Long Term
Capital Improvement Program and includes $1,250,000 of budgeted plant
additions. Plant additions from this part of the 1999 budget are
expected to require use of the Company's line of credit. Second tier
plant additions can be, and portions of it are expected to be, deferred
to future years if funds are not available for their construction in
1999.
As of September 30, 1999, the Company has approximately 960
acres of excess land available for sale, of which 612 acres is under
contract for sale (see Note 4), consisting of land currently classified
as Class III, non-watershed land under the statutory classification
system for water company lands. The Company believes that by selling
these excess lands it can generate sufficient equity capital to support
its 5 year capital budget, currently estimated at $8,000,000. Such land
dispositions are subject to approval by the DPUC. Proceeds from the
sale of land are recorded as revenue at the time of closing and portions
of the gains are deferred and amortized over various times as stipulated
by the DPUC.
Year 2000 Compliance
The Company has evaluated its exposure to the Year 2000 problem
and has taken steps to be Year 2000 compliant. In general terms, the
problem arises from the fact that many existing computer systems and
other equipment containing date-sensitive embedded technology use only
two digits to identify a year in the date field, with the assumption
that the first two digits of the year are always "19". As a result,
such systems may misinterpret dates after December 31, 1999, which may
result in miscalculations, other malfunctions or the total failure of
such systems.
The Company's existing billing and accounting software was
upgraded to comply with all Year 2000 related issues. That task was
completed on or around November 1, 1999.
The Company also has evaluated the Year 2000 compliance of
systems and equipment which are not linked to billing and accounting
software and has identified items that could be impacted by the Year
2000 problem. For the items identified as possibly presenting a Year
2000 problem, the Company has contacted suppliers, where possible, to
obtain adequate assurance that the product is Year 2000 compliant or is
in the process of determining and addressing any noncompliance. In
addition, wherever practical, the Company is independently testing such
items for compliance.
In addition to its own systems and equipment, the Company depends
upon the proper function of computer systems and other date-sensitive
equipment of outside parties. These parties include other water
companies, banks, telecommunications service providers and electric and
other utilities.
Due to the uncertainties presented by such third party Year 2000
problems, and the possibility that, despite its efforts, the Company may
be unsuccessful in preparing its internal systems and equipment for the
Year 2000, the Company is developing working plans for dealing with its
most reasonably likely worst-case scenario, many of which are contained
in the Company's approved Emergency Contingency Plan. The Company's
assessment of its most reasonably likely worst-case scenario and the
exact nature and scope of its contingency plans will be affected by the
Company's continued Year 2000 assessment.
Results of Operations for the Nine Months and Three Months Ended
September 30, 1999 and 1998.
Net Income
Net Income for the nine months ended September 30, 1999 was
$678,697 compared with $1,218,814 for the same 1998 period. The sale
of property in January of 1998 in Derby, Connecticut, to the City of
Derby, contributed $828,286 to net income in the first quarter of
1998. There were no comparable land sales in 1999. Net Income for the
three months ended September 30, 1999 of $263,448 is $115,802 higher
than the comparable three month period in 1998. Increased revenues,
lower interest charges and increased income resulting from the
amortization of prior year land sales are somewhat offset by increased
property taxes and depreciation expense.
Operating Revenues
Operating revenues for the first nine months of 1999 of
$3,535,441 are $218,628 higher than operating revenues of $3,316,813
for the first nine months of 1998. Increased water consumption in 1999
from all classes of customers and to a lesser extent the effects of an
over-all four percent water service rate increase that became effective
February 1, 1998, accounts for this increase. Operating revenues for
the three month period ending September 30, 1999 are $102,568 higher
than the comparable 1998 quarter. Increased consumption as a result of
dry weather conditions during the third quarter account for the increase.
Operating and Maintenance Expenses
Operating and Maintenance expenses of $1,958,441 for the first
nine months of 1999 are $17,789(1%) higher than the comparable 1998
period. Increased purchased power costs relating to increased water
sales and higher service line and meter expenses principally account
for the variance. Operating and Maintenance expenses of $675,156 for
the three month period ending September 30, 1999 are $10,360 lower than
the comparable 1998 quarter. Reduced general and administrative
expenses principally relating to casualty insurance and workers
compensation expense account for this variance.
Depreciation Expense
Depreciation expense for the first nine months of 1999 and for
the three month period ending September 30,1999 are $46,503 and $15,501,
respectively, higher than the comparable 1998 periods due to
depreciation expense relating to general plant additions.
Taxes Other Than Income Taxes
Taxes other than income taxes for the nine and three month
periods ended September 30, 1999 is $27,651 and $9,160 respectively,
higher than the comparable 1998 periods. Increased property taxes in
conjunction with the Company's capital improvement program account for
these increases.
Other Income
Other income for the first nine months of 1999 is $22,649 ahead
of the comparable 1998 period. Investment interest income as a result
of the Company's temporary cash investments accounts for the increase.
Other income for the three month period ending June 30, 1999 is $3,064
higher than the comparable 1998 period. Increased investment interest
income and timber sales account for this favorable variance.
Interest Expense
Interest expense for the nine and three month periods ending
September 30, 1999 is $97,890 and $36,426 below the comparable 1998
periods. Interest charges relating to short term borrowing and in
conjunction with the Company's term loan, which was repaid in the
fourth quarter of 1998, have not occurred in 1999.
Land Dispositions
When the Company disposes of land, any gain recognized, net of
tax, is shared between rate payers and stockholders based upon a formula
approved by the DPUC. The impact of land dispositions is recognized in
two places on the statement of income.
The statement of income reflects income from the disposition of
Land (net of taxes) of $849,396 for the nine months ended September 30,
1998. That amount represents the sale of 145 acres of land to the City
of Derby, CT on January 21, 1998 and 2.9 acres of property in
Woodbridge, CT in May of 1998. That amount represents the
stockholders' immediate share of income from the land sales. The net
gain on both sales totaled $941,312, including the deferred portion.
The DPUC's October 22, 1997 Decision approving the Derby sale provided
for a 3-year amortization period, as 75% of this parcel has been
dedicated as open space. There were minor sales of property that took
place in 1999 in conjunction with settling disputes about minor boundary
encroachments. The net gain totaled $9,152 on these sales.
Land disposition income is also recognized in the financial
statements as a component of operating income on the line entitled
"Amortization of Deferred Income on Dispositions of Land." These
amounts represent the recognition of income deferred on land
dispositions which occurred in prior years. The amortization of
deferred income on land dispositions net of tax, was $257,220 and
$114,919 for the nine months ended September 30, 1999 and 1998, and
$85,740 and $38,306, respectively, for the three-month periods ending
September 30, 1999 and 1998.
Recognition of deferred income will continue over time periods
ranging from three to fifteen years, depending upon the amortization
period ordered by the DPUC for each particular disposition.
PART II. OTHER INFORMATION
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
(10)(a) Contract by and between the Registrant and The
Trust For Public Land dated September 13, 1999 with respect to the
sale of approximately 570 acres of land in Ansonia and Seymour.
(10)(b) Contract by the between the Registrant and The
Trust for Public Land dated September 13, 1999 with respect to the
sale of approximately 42.5 acres of land in Ansonia and Woodbridge.
(27) - Financial Data Schedule filed herewith.
(b) Reports on Form 8-K. None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Company has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
BIRMINGHAM UTILITIES, INC.
Registrant
Date: November 10, 1999 /s/ John S. Tomac
John S. Tomac, President
<TABLE> <S> <C>
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<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE
REGISTRANT'S SEPTEMBER 30, 1999 UNAUDITED BALANCE SHEET, INCOME
STATEMENT AND
CASH FLOW STATEMENT, AND NOTES THERETO, AND IS QUALIFIED IN ITS
ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
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<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 14,993,389
<OTHER-PROPERTY-AND-INVEST> 0
<TOTAL-CURRENT-ASSETS> 1,270,318
<TOTAL-DEFERRED-CHARGES> 570,508
<OTHER-ASSETS> 1,035,469
<TOTAL-ASSETS> 17,869,684
<COMMON> 2,628,899
<CAPITAL-SURPLUS-PAID-IN> 0
<RETAINED-EARNINGS> 5,428,853
<TOTAL-COMMON-STOCKHOLDERS-EQ> 8,057,752
0
0
<LONG-TERM-DEBT-NET> 4,324,000
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<CAPITAL-LEASE-OBLIGATIONS> 0
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<GROSS-OPERATING-REVENUE> 3,535,441
<INCOME-TAX-EXPENSE> 224,457
<OTHER-OPERATING-EXPENSES> 2,603,281
<TOTAL-OPERATING-EXPENSES> 2,827,738
<OPERATING-INCOME-LOSS> 707,703
<OTHER-INCOME-NET> 308,642
<INCOME-BEFORE-INTEREST-EXPEN> 1,016,345
<TOTAL-INTEREST-EXPENSE> 337,648
<NET-INCOME> 678,697
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<EARNINGS-AVAILABLE-FOR-COMM> 678,697
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9/13/99
PURCHASE AND SALE AGREEMENT
RECITALS
A. Seller is the owner of certain real property located in the
Town of Seymour and City of Ansonia, County of New Haven, State of
Connecticut described in Exhibit A attached hereto and incorporated
herein by this reference.
Said real property, together with any and all improvements,
fixtures, timber, water and/or minerals located thereon and any and all
rights appurtenant thereto including but not limited to timber rights,
water rights, grazing rights, access rights and mineral rights, shall
be referred to in this Agreement as the "Subject Property".
B. Seller acknowledges that Buyer is entering into this
Agreement in its own right and that Buyer is not an agent of any
governmental agency or entity.
C. Buyer is a conservation organization having among its
purposes the acquisition on behalf of the public of open space, scenic
and recreational lands. Buyer is exempt from taxation under Section
501(c)(3) of the Internal Revenue Code and is included in the
"Cumulative List of Organizations described in Section 170 (c) of the
Internal Revenue Code" published by the Internal Revenue Service.
Buyer is a nonprofit organization organized for the purpose of holding
undeveloped land in trust for conservation or recreation purposes within
the meaning of Connecticut General Statutes Section 12-498 (a)(16).
Buyer is not a private foundation within the meaning of Section 509(a)
of the Internal Revenue Code.
D. Seller believes that the purchase price for the Subject
Property which is specified in this Agreement is below fair market
value. Seller intends that the difference between the purchase price
and fair market value shall be a charitable contribution to Buyer.
However, Buyer makes no representation as to the tax consequences of
the transaction contemplated by this Agreement. Seller will obtain
independent tax counsel and be solely responsible for compliance with
the gift value substantiation requirements of the Internal Revenue Code.
To the extent that the purchase price is below the fair market value,
the parties agree that it does not reflect the existence of defects in
the Subject Property, such as environmental conditions requiring
remediation, known to Seller or Buyer.
THE PARTIES AGREE AS FOLLOWS:
1. Parties and Premises. Birmingham Utilities, Inc., a public
service company, having a place of business in Ansonia, County of New
Haven, State of Connecticut which shall be referred to as "Seller",
agrees to SELL, and The Trust for Public Land (Inc.), a nonprofit
California public benefit corporation, with a place of business in New
Haven, Connecticut, which shall be referred to as "Buyer", agrees to
BUY, upon the terms hereinafter set forth, certain real property
located in the Town of Seymour and City of Ansonia, County of New
Haven, State of Connecticut described in Exhibit A attached hereto
and incorporated herein by this reference. Said real property is
divided into two sections: 487+ acres on the east side of Beaver
Street (the "East Side Land") and 89+ acres on the west side of Beaver
Street (the "West Side Land"). Said combined real property, together
with any water, timber or minerals located thereon and any and all
rights appurtenant thereto, including but not limited to water, timber,
mineral and access rights, shall be referred to as the "Subject
Property". The Subject Property is being sold "As Is", subject to the
terms and conditions of this purchase and sale agreement (the
"Agreement").
2. Deed and Title. Seller shall convey to Buyer (or its nominee
or assignee, as permitted under Paragraph 22 herein, designated in
writing five (5) days prior to closing) a good and sufficient marketable
title to an indefeasible estate in fee simple, by Connecticut-form
Warranty Deed containing the usual covenants warranting good title in
fee simple free from all encumbrances (subject only to the exceptions
hereinafter set forth), in or to the Subject Property, as applicable.
Said premises shall be conveyed subject only to the following:
(a) Real estate taxes of the Town of Seymour and City of Ansonia
on the current list, which taxes the Buyer will assume and agree to pay,
subject to a proration of current taxes as hereinafter provided.
(b) Building and building line restrictions and zoning, planning
and other municipal regulations of the Town of Seymour and City of
Ansonia as in effect on the date hereof.
(c) Any state of facts which a physical inspection or survey might
disclose, provided same do not render title unmarketable.
(d) Any balance, not delinquent as of closing, on any sewer,
water, sidewalk or other municipal improvement lien or caveat.
(e) Any and all provisions of any ordinance, municipal
regulation or public and private law.
(f) Easements in favor of the Seller as more particularly shown
on a recordable plan provided by Seller for (i) the installation, use,
operation, maintenance, repair, and replacement of water meter pits on
the Subject Property.
(g) A covenant running with the land restricting the use of not
less than 85% of the Subject Property to "open space or recreational
purposes" as defined by Sections 16-43 of the Connecticut General
Statutes on the date hereof.
If Seller shall be unable to convey good clear record and
marketable title to Buyer at closing, Buyer shall have the option to
(a) close the transaction and accept such title as Seller can
convey; or (b) cancel this Agreement, in which event all sums paid
hereunder shall be returned to the Buyer and neither party shall have
any further liabilities or obligations to the other; provided, however,
before Buyer may exercise this option, it must afford the Seller the
opportunity to postpone the closing for a period of time up to thirty
(30) days in order that Seller may, if it so desires, attempt to remedy
the alleged title defect.
Nothing shall constitute an "unmarketable" encumbrance, lien,
or exception to title for purposes of this Agreement if the Standards
of Title of the Connecticut Bar Association recommends that no
corrective or curative action is necessary in circumstances
substantially similar to those presented by such encumbrance, lien,
or exception to title. Violations, at the time of closing of title,
of any governmental (including zoning and planning) rules, regulations
or limitations shall constitute exceptions to title for the purposes of
this Agreement only if such violations substantially impair the use of
the Subject Property (as applicable) for open-space land or other
municipal uses within the unrestricted portion of the Subject Property,
or if the Buyer has been unable to obtain title insurance without
additional premium from a title insurance company licensed in the State
of Connecticut.
Buyer shall complete its review of title, and provide Seller with
a list of any objectionable title exceptions, within on or before
February 1, 2000 (the "Due Diligence Period"). Seller shall provide
Buyer with a current A-2 survey of the Subject Property by September
30, 1999, and Buyer shall have 30 days from the date of receipt to
review said survey and provide Seller with a list of any survey
objections.
3. Purchase Price. The agreed purchase price (the "Purchase
Price") for the Subject Property is Six Million Fifty Thousand
($6,050,000.00), of which
$ 1,000 have been paid as a deposit this day,
$ 10,000 are to be paid within 15 days after the
completion of the Due Diligence Period (the
"Deposits"), and
$6,039,000 are to be paid in certified funds at the Time
of Closing (as hereinafter defined).
$6,050,000 Total
4. Date and Place of Closing. Final settlement of the
obligations of the parties hereto at closing ("Closing") shall occur
at such date, place and time as Buyer designates; provided, however,
said date shall occur within forty-five (45) days after the later to
occur of (1) the final approval of all federal, state and/or local
funds needed to acquire the Subject Property and (2) Final Approval
by the Connecticut Department of Public Utility Control (DPUC),
in each case as provided for in Paragraph 31 herein, or as otherwise
agreed to by the parties, at such date, place and time as the parties
shall mutually agree. Buyer may elect to acquire the East Side Property
and the West Side Property in separate closings without waiving Buyer's
contingency contained in Section 31 b. herein. If Buyer so elects,
$5,475,000 of the Purchase Price shall be allocated to the East Side
Parcel and $575,000 shall be allocated to the West Side Parcel. All
deposits made hereunder shall be applied to the first closing.
Notwithstanding the foregoing, however, in no event shall any
Closing hereunder occur after December 31, 2000 unless DPUC Final
Approval has not been obtained at least 45 days prior to said date,
in which event, Buyer shall designate a Closing date within 45 days
of Final Approval. Buyer and Seller hereby acknowledge and agree that
time is of the essence for each and every term of this Agreement.
The parties agree that Buyer may arrange a simultaneous closing with
a public agency or municipality and Seller will cooperate in
coordinating such a simultaneous closing.
5. Title Insurance. Buyer may, at Buyer's sole cost and expense,
purchase an ALTA owner's policy of title insurance (Owner's Form B-1970)
in the full amount of the Purchase Price insuring that title to the
Subject Property is vested in Buyer at Closing subject only to the
exceptions noted in Section 2.
6. Seller's Covenants.
Seller covenants that, from and after the date hereof until the
Closing, Seller will not:
(a) make or suffer to be made any leases, contracts, options
or agreements whatsoever affecting the Subject Property, nor shall
Seller cause or permit any lien, encumbrance, mortgage, deed of trust,
right, restriction or easement to be placed upon or created with respect
to the Subject Property, except with the written consent of Buyer, which
consent shall not be unreasonably withheld, conditioned or delayed;
(b) remove or permit the removal of any vegetation, soil or
minerals from the Subject Property or disturb or suffer the disturbance
of the existing contours and/or other natural features of the land in
any way whatsoever;
(c) cause or permit any dumping or depositing of any
materials on the Subject Property, including, without limitation,
garbage, construction debris or solid or liquid wastes of any kind;
or,
(d) cause or permit any default beyond the applicable cure
period under any mortgage or deed of trust covering the Subject
Property, or cause or permit the foreclosure of any other lien affecting
the Subject Property.
Seller shall promptly cure, at Seller's sole cost and expense, each
and every breach or default of any covenant set forth in this paragraph
upon receipt of notice thereof by Buyer. Buyer shall have the right, but
no obligation, to cure or cause to be cured any such breach or default,
at Seller's sole cost and expense if, in Buyer's reasonable judgment,
Seller has failed to promptly or completely cure the same or if such
action on Buyer's part is reasonably necessary to preserve and protect
the natural, scenic or other open space values of the Subject Property.
The reasonable costs of such cure attempted or effected by Buyer may,
at Buyer's election, be credited against the balance of the purchase
price due and payable at Closing.
7. Seller's Representations and Warranties. Seller makes the
following representation and warranty:
Seller has full power and authority to enter into this
Agreement (and the persons signing this Agreement for Seller if Seller
is not an individual have full power and authority to sign for Seller
and to bind it to this Agreement) and to sell, transfer and convey all
right, title and interest in and to the Subject Property, (i) subject
to the prior approval of the DPUC, (ii) subject to any and all
statutory rights of purchase in favor of third parties, and
(iii) subject to receipt by the Seller of a consent and waiver by the
holder of the First Mortgage Bonds under that certain Amended and
Restated Mortgage Indenture (the "Indenture"), dated as of August 9,
1991, by and between the Seller, formerly known as The Ansonia Derby
Water Company, and The Connecticut National Bank, as Trustee, which
has been succeeded as such by State Street Bank and Trust Company,
and the release of the Subject Property from the lien of the Indenture
by the successor trustee.
8. Deposits and Remedies upon Default. All Deposits made
hereunder shall be held by Seller as earnest money for the proper
performance on the part of Buyer subject to the terms of this Agreement
and shall be duly accounted for at Closing. In the event Seller defaults
in the performance of any of Seller's obligations under this Agreement,
Buyer shall, in addition to any and all other remedies provided in this
Agreement or at law or in equity, have the right of specific performance
against Seller. The parties acknowledge that Seller has no adequate
remedy at law in the event of Buyer's failure to fulfill its obligations
hereunder to purchase the Subject Property because it is impossible to
compute exactly the damages that would accrue to Seller in such event.
The parties have therefore taken these facts into account in setting
the amounts of the Deposits and hereby agree that: (i) such $11,000.00
amount is the best pre-estimate of such damages which would accrue to
Seller; (ii) said $11,000.00 amount represents damages and not any
penalty against Buyer; and (iii) if Buyer shall fail to fulfill Buyer's
obligations hereunder, said $11,000.00 amount paid hereunder by Buyer
shall be retained by Seller as its full and liquidated damages in lieu
of all other rights and remedies which Seller may have against Buyer at
law or in equity for such failure.
9. Environmental Assessment. Buyer's obligation to purchase the
Subject Property pursuant to this Agreement shall be contingent upon a
determination by Buyer that the environmental conditions at the Subject
Property are acceptable to Buyer.
a. On or before the expiration of the Due Diligence Period,
Buyer, through its employees and agents, may enter upon the Subject
Property for the purpose of accomplishing an environmental assessment
of the soils, water and improvements (the "Environmental Assessment")
at Buyer's sole cost and expense. Should Buyer determine, in its sole
discretion, based on its investigations of the Subject Property, that
the environmental conditions at the Subject Property or adjacent
property are unacceptable on or before the end of the Due Diligence
Period, Buyer shall so notify Seller, and Seller shall use its best
efforts, up to an expenditure of $5,000, to remove such unacceptable
condition by Closing. In no event shall Seller be required to expend
more than $5,000 to cure such unacceptable condition. In such case
where the cost of curing an unacceptable condition exceeds $5,000, and
Seller elects not to cure said condition, Buyer may elect to terminate
this Agreement, in which case Buyer shall have no obligation to purchase
the Subject Property, and all Deposits paid under the terms of this
Agreement shall promptly be refunded. Buyer shall restore Subject
Property to its original condition if it is disturbed as a result of
the environmental inspections.
10. Survey. Seller shall be responsible for providing Buyer
with an A-2 survey and boundary monumentation for the Subject property
in conformance with the requirements of the Connecticut Department of
Environmental Protection.
11. Risk of Loss. All risk of loss shall remain with Seller
until Closing. In the event the Subject Property is destroyed or
damaged prior to Closing, Buyer shall have the right at its option to
terminate this Agreement by written notice to Seller, and thereupon
Seller shall refund to Buyer the full amount of the Deposits. Seller
shall notify Buyer in writing of any damage to or destruction of the
Subject Property within five (5) days after Seller learns of such
damage or destruction.
12. Condemnation. In the event of the taking of all or any part
of the Subject Property by eminent domain proceedings, or the
commencement of such proceedings prior to Closing, Buyer shall have the
right, at its option, to terminate this Agreement by written notice to
Seller, in which case Seller shall promptly refund to Buyer the
Deposits. If Buyer does not so terminate the Agreement, then Buyer
may, at its option, either (i) proceed to Closing with the Purchase
Price reduced by the total of any awards or other proceeds received or
to be received by Seller as a result of such proceedings, or (ii)
proceed to Closing with an assignment by Seller of all Seller's right,
title and interest in and to any and all such awards and proceeds.
Seller shall notify Buyer in writing of any eminent domain proceedings
affecting the Subject Property within five (5) days after Seller learns
of such proceedings.
13. Adjustments. Adjustments for taxes and the like shall be
made to the date of the Closing in accordance with the closing customs
of the bar of the County of New Haven. The parties acknowledge that the
conveyance of the Subject Property from Seller to Buyer, or to Buyer's
permitted nominee or assignee under Paragraph 21 herein, is exempt from
real estate conveyance taxes.
14. Notices. All notices pertaining to this Agreement shall be
in writing delivered to the parties personally, by fax, commercial
express courier service or by first class United States mail, postage
prepaid, addressed to the parties at the addresses set forth below.
All notices given personally, by fax or by commercial express courier
service shall be deemed given when received. All notices given by mail
shall be deemed given when deposited in the mail, first class postage
prepaid, addressed to the party to be notified. The parties may, by
notice as provided above, designate a different address to which notice
shall be given.
SELLER:
Birmingham Utilities, Inc.
230 Beaver Street
P.O. Box 426
Ansonia, CT 06401
Attn: Betsy Henley-Cohn, Chairwoman
Tel: (203) 735-1888
Fax: (203) 732-2616
Copies of any notice to Seller should also be sent to:
Robert J. Metzler, II, Esq.
Tyler Cooper & Alcorn, LLP
City Place/35th Floor
Hartford, CT 06103-3488
Tel: 860-725-6203
Fax: 860-278-3802
BUYER:
The Trust for Public Land (Inc.)
33 Union Street, 4th Floor
Boston, MA 02108
Attn: Arthur Badger Blackett, Jr.
Senior Project Manager
Tel: (617) 367-6200
Fax: (617) 367-1616
Copies of any notice to Buyer should also be sent to:
The Trust for Public Land (Inc.)
33 Union Street, 4th Floor
Boston, MA 02108
Attn: Dorothy Nelson Stookey, Esq.
Tel: (617) 367-6200
Fax: (617) 367-1616
15. Attorneys' Fees. If any legal action is brought by either
party to enforce any provisions of this Agreement, the prevailing party
shall be entitled to recover from the other party reasonable attorneys'
fees and court costs in such amounts as shall be allowed by the court.
16. No Broker's Commission. Each party represents to the other
that it has not used a real estate broker in connection with this
Agreement or the transaction contemplated by this Agreement. In the
event any person asserts a claim for a broker's commission or finder's
fee against one of the parties to this Agreement, the party on account
of whose actions the claim is asserted will indemnify and hold the other
party harmless from and against said claim and the provisions of this
Paragraph 16 shall survive Closing or any earlier termination of this
Agreement.
17. Binding on Successors. This Agreement shall be deemed a
covenant running with the land and shall be binding upon the parties
and also upon their heirs, personal representatives, assigns, and other
successors in interest.
18. Memorandum of Purchase and Sale Agreement Not later than the
earlier of (a) the preparation of a metes and bounds description of the
Subject Property and (b) thirty days from the execution of this
Agreement by both parties, the parties shall sign a Memorandum of
Purchase and Sale Agreement in recordable form in the form of
Exhibit B, which is attached to this Agreement and incorporated herein
by this reference. Buyer shall cause the Memorandum of Purchase and
Sale Agreement to be recorded. In the event Buyer does not acquire the
Subject Property under the terms of this Agreement, Buyer shall, if
requested to do so by Seller, deliver upon demand a quitclaim deed or
release of purchase and sale in a form suitable for recordation covering
the Subject Property so as to eliminate any cloud on Seller's title to
the Subject Property.
19. Additional Documents. Seller and Buyer agree to execute
affidavits customarily required for the issuing of title insurance
protecting against mechanics' liens and parties in possession and such
additional documents as may be reasonable and necessary to carry out the
provisions of this Agreement.
20. Non-Foreign Certificate. Concurrently with the execution of
this Agreement, Seller shall execute a Non-Foreign Certificate pursuant
to Section 1445 of the Internal Revenue Code of 1986, as amended, and
shall deliver such certificate to Buyer. Seller acknowledges that if
Seller is unable to certify that it is not a "foreign person," Buyer
may be required to withhold a portion of the Purchase Price at Closing
for federal income tax purposes.
21. Modification; Waiver. This Agreement shall be construed
without regard to any presumption or other rule requiring construction
against the party causing this Agreement to be drafted. No supplement,
modification, waiver or amendment of this Agreement shall be binding
unless specific and in writing executed by the party against whom such
supplement, modification, waiver or amendment is sought to be enforced.
No delay, forbearance or neglect in the enforcement of any of the
conditions of this Agreement or any rights or remedies hereunder shall
constitute or be construed as a waiver thereof. No waiver of any of
the provisions of this Agreement shall be deemed or shall constitute a
waiver of any other provision, whether or not similar, nor shall any
waiver constitute a continuing waiver.
22. Assignment of Buyer's Interest. This Agreement shall not be
assigned by Buyer except as specifically provided herein. The parties
hereto agree that the Buyer may assign its interest in this Agreement
to one or more municipalities or to an organization or entity that is
a qualified tax exempt organization at the time of transfer under
Section 170(h) of the Internal Revenue Code of 1986, as amended, and
the applicable regulations promulgated thereunder. Upon any such
assignment the assignee shall have all the rights and obligations of
the Buyer hereunder. Buyer also may designate a nominee to take title
to the Subject Property at the Closing.
23. Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original and which together shall
constitute one and the same agreement.
24. Severability. Each provision of this Agreement is severable
from any and all other provisions of this Agreement. Should any
provision(s) of this Agreement be for any reason unenforceable, the
balance shall nonetheless be of full force and effect.
25. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the state of Connecticut,
without regard to application of its principles of conflict of law.
26. Possession. Possession of the Subject Property shall be
delivered on the date of Closing in the same condition as it is on the
date hereof, ordinary wear and tear excepted, free and clear of the
rights or claims of any other party.
27. Seller's Promise to Remove Personal Property. Prior to
Closing, Seller promises to remove or cause to be removed from the
Subject Property at Seller's expense any and all personal property
and/or trash, rubbish or any other unsightly or offensive materials
including but not limited to any hazardous substance in tanks, barrels,
equipment, or containers on the Subject Property, excluding existing
meters and meter pits, unless otherwise agreed to in writing by Buyer.
Satisfaction of the promises contained herein shall be subject to
Buyer's inspection and approval of the physical condition of the
Subject Property, which approval shall not be unreasonably conditioned,
withheld or delayed. If, on or before the date set for Closing, Seller
has not satisfied the promises contained herein, Buyer may elect to
either (a) defer the Closing until Seller has satisfied said promises
or (b) remove or cause to be removed said personal property and/or
trash, rubbish, or other offensive materials as described above in
which case Buyer shall be credited at Closing with the amount expended
by Buyer in this regard in order to satisfy Seller's promises contained
herein. Notwithstanding the foregoing, this Paragraph 26 shall not be
construed so as to require Seller to remediate any hazardous materials
identified by Buyer on the Subject Property, the identification and
removal of which are governed by Paragraph 9 herein.
28. No Merger. The obligations contained in this Agreement will
not survive the Closing unless specifically set forth herein.
29. Expiration. This Agreement shall be of no force or effect,
and shall be null and void, unless a fully-signed original of this
Agreement, signed by both parties, is delivered to Buyer and received
by Buyer no later than September 16, 1999.
30. Headings. The headings used in this Agreement are for
convenience of reference only and shall not operate or be construed to
alter or affect the meaning of any of the provisions hereof.
31. Additional Conditions to Closing. Buyer's and Seller's
obligations to perform under the terms of this Agreement are
conditioned upon the following:
Seller's Contingencies:
(a) DPUC Approval. Notwithstanding any provision of this
Agreement to the contrary, Seller=s obligation to sell the Subject
Property hereunder is contingent upon Seller obtaining Final Approval
from the DPUC (which approval shall become "Final" only upon the
expiration of the applicable appeal periods without any appeal having
been filed or served), for the sale of the Subject Property to the Buyer
pursuant to Section 16-43 of the Connecticut General Statutes, and upon
final approval by the DPUC, as defined above, of a ratemaking accounting
treatment for the net gain from such sale reasonably satisfactory to
Seller. For the purposes of this Agreement, "reasonably satisfactory"
shall mean comparable to ratemaking accounting treatments approved by
DPUC on comparable pending or completed sales of other land owned or
sold by Seller. Such satisfaction shall be deemed to have been obtained
if the Seller does not notify the Buyer to the contrary in writing
within five (5) business days after the DPUC's final approval of the
sale and ratemaking accounting treatment. Seller agrees to submit this
Agreement to the DPUC for approval within 35 days after publishing
notice of its intention to sell in accordance with Section 16-50c(b)(2)
of the Connecticut General Statutes, to diligently pursue such
application and to supply to Buyer copies of all appraisals of the fair
market value of the Premises obtained by Seller to be submitted to the
DPUC in connection with Seller's application for approval. If Seller
shall not have received such Final approval by June 26, 2000 Seller
shall have the option to terminate this Agreement and return the
Deposits to Buyer in which event the obligations of the parties
hereunder shall terminate and come to an end. Under such termination,
the Deposits shall be retained by Seller or returned to Buyer in
accordance with the provisions of Paragraph 4, herein.
(b) Buyer acknowledges and agrees that Seller can not sell
the Subject Property until any and all statutory rights of purchase in
favor of third parties have expired or been waived. If these rights
have not expired or been waived by June 26, 2000, then Seller shall
have the right to terminate this Agreement.
(c) Seller's obligation to sell the Subject Property is
further subject to Seller's obtaining all local planning and zoning
board approvals necessary to create the lots as shown on Exhibit A,
which may include Seller's obtaining a variance for rear yard setback.
(d) Seller's obligation to sell the Subject Property is
further subject to the Seller obtaining (i) from the holder of the First
Mortgage Bonds under the Indenture, a consent and waiver, in form and
substance reasonably satisfactory to the Seller, to the effect that the
Subject Property may be released from the lien of the Indenture without
the requirement that the proceeds from the sale of the Subject Property
be deposited with the successor trustee, and (ii) from the successor
trustee under the Indenture, release of the Subject Property from said
lien without such deposit requirement.
If Seller terminates this Agreement due to any of the above
Seller's Contingencies not having been met, then Seller shall reimburse
Buyer for Buyer=s documented out of pocket expenses incurred in
connection with Buyer=s due diligence and efforts to win approval of
the Town of Seymour and City of Ansonia, excluding staff time and
overhead.
Buyer's Contingencies:
a. Buyer's agreement to purchase the Subject Property is
contingent upon satisfactory results (in Buyer's sole discretion) from
Buyer's title and environmental Due Diligence as described herein and
upon the approval of Buyer's Board of Directors, which shall be granted
or denied before the end of the Due Diligence Period. Buyer shall
notify Seller prior to the end of the Due Diligence Period if its Board
of Directors has failed to approve the purchase.
b. Buyer's agreement to purchase the Subject Property is
contingent upon the appropriation and availability of local, state and
federal funds in the amount of the Purchase Price designated for the
purpose of buying the Subject Property prior to Closing, as restricted
by the 85% open space requirement in accordance with Paragraph 2(g)
herein.
Buyer agrees to use reasonable efforts to satisfy such conditions.
If Buyer notifies Seller on or before the end of the Due Diligence
Period that one or more of the contingencies set forth in (a) above
have not been met and/or if the contingencies set forth in (a) and/or
(b) above are not so satisfied or waived by the Time of Closing, then
Buyer may elect to terminate this Agreement and this Agreement shall be
of no further force or effect. In the event that Buyer terminates this
Agreement based on the contingencies set forth in (a) above, Buyer shall
be entitled to have its Deposits returned.
32. Trail Easement. Subject to obtaining appropriate approvals
from the Connecticut Department of Health, Seller shall grant to Buyer
or Buyer=s public agency or conservation organization designee a
permanent easement for non-motorized public recreational access to
existing trails know as the Pine Hill Trail System and its extensions
on other property of Seller commonly known as the Beaver Lake Watershed.
It shall be the intent of said trail easement to provide a network of
trails accessible to the public which connect the subject property with
the Beaver Lake Watershed properties and other protected properties in
the Town of Woodbridge, Connecticut.
33. Buyer=s Cooperation. The Buyer shall provide, upon the
request from time to time of the Seller, such cooperation as shall be
necessary to enable the Seller to obtain any and all tax benefits
associated with the transactions contemplated hereunder. The
provisions of this Section 33 shall survive the closing.
IN WITNESS of the foregoing provisions, the parties have executed
and delivered this Agreement as of the date first set forth above:
SELLER: BUYER:
BIRMINGHAM UTILITIES, INC. THE TRUST FOR PUBLIC LAND (INC.)
By:_______________________ By:_________________________
Name:_____________________ Name:_______________________
Title:______________________ Title:________________________
Date:______________________ Date:________________________
EXHIBIT A
DESCRIPTION OF SUBJECT PROPERTY
The Subject Property is set forth as the "West Parcel" and the
"East Parcel" on two survey maps attached hereto and described as
follows:
1. "Property Survey -- Birmingham Utilities, Inc.-- Quillinan
Reservoir West Parcel, Ansonia - Seymour, Connecticut"
by Michael Horbal dated 3/16/99.
2. "Property Survey -- Birmingham Utilities, Inc.-- Quillinan
Reservoir East Parcel, Ansonia - Seymour, Connecticut"
by Michael Horbal dated 4/19/99.
EXHIBIT B
MEMORANDUM OF PURCHASE AND SALE AGREEMENT
THIS AGREEMENT made this ________ day of ________________, 199__
by and between Birmingham Utilities, Inc., a Connecticut corporation,
having an office in Ansonia, CT (the "Seller") and THE TRUST FOR
PUBLIC LAND (INC.), a nonprofit California public benefit corporation,
having an office in New Haven, CT ("Buyer").
W I T N E S S E T H:
1. In consideration of the terms, conditions, covenants and
agreements set forth in the Purchase and Sale Agreement dated
__________________________, 199__, Seller granted to Buyer a right to
purchase the real property of Seller described on Exhibit A attached
hereto and made a part hereof.
2. The closing date for the acquisition is not later than
December 31, 2000, unless extended by the terms of the Agreement.
3. The address of Seller is: 230 Beaver Street
P.O. Box 426
Ansonia, CT 06401
Attn: Betsy Henley-Cohn,
Chairwoman
4. The address of Buyer is: 33 Union Street, 4th Floor
Boston, MA 02108
Attn: Arthur Badger Blackett, Jr.
5. Copies of the Purchase and Sale Agreement are on file with
Seller and Buyer.
IN WITNESS WHEREOF, the parties have executed this instrument on
the date above written.
WITNESSES: Birmingham Utilities, Inc.
_______________________________ By:_______________________________
Its: _____________________________
______________________________
WITNESSES: The Trust for Public Land (Inc.)
________________________________ By:______________________________
Its:_____________________________
________________________________
ACKNOWLEDGEMENT
State of )
) ss.
County of )
On this _______ day of _____________________, 199__, before me
appeared _______________________________, personally known to me to be
the person who executed the within instrument as
____________________________________ of Birmingham Utilities, Inc., a
Connecticut corporation, on behalf of the corporation.
________________________________
Notary Public
My commission expires
ACKNOWLEDGEMENT
State of )
) ss.
County of )
On this _______ day of _____________________, 199__, before me
appeared _______________________________, personally known to me to be
the person who executed the within instrument as
___________________________________________ of The Trust for Public Land
(Inc.), a nonprofit California public benefit corporation, on behalf of
the corporation.
________________________________
Notary Public
My commission expires
9/13/99
PURCHASE AND SALE AGREEMENT
RECITALS
A. Seller is the owner of certain real property located in
the City of Ansonia, County of New Haven, State of Connecticut described
in Exhibit A attached hereto and incorporated herein by this
reference.
Said real property, together with any and all improvements,
fixtures, timber, water and/or minerals located thereon and any and all
rights appurtenant thereto including but not limited to timber rights,
water rights, grazing rights, access rights and mineral rights, shall be
referred to in this Agreement as the "Subject Property".
B. Seller acknowledges that Buyer is entering into this
Agreement in its own right and that Buyer is not an agent of any
governmental agency or entity.
C. Buyer is a conservation organization having among its
purposes the acquisition on behalf of the public of open space, scenic
and recreational lands. Buyer is exempt from taxation under Section
501(c)(3) of the Internal Revenue Code and is included in the
"Cumulative List of Organizations described in Section 170 (c) of the
Internal Revenue Code" published by the Internal Revenue Service.
Buyer is a nonprofit organization organized for the purpose of holding
undeveloped land in trust for conservation or recreation purposes
within the meaning of Connecticut General Statutes Section 12-498
(a)(16). Buyer is not a private foundation within the meaning of
Section 509(a) of the Internal Revenue Code.
D. Seller believes that the purchase price for the Subject
Property which is specified in this Agreement is below fair market
value. Seller intends that the difference between the purchase price
and fair market value shall be a charitable contribution to Buyer.
However, Buyer makes no representation as to the tax consequences of the
transaction contemplated by this Agreement. Seller will obtain
independent tax counsel and be solely responsible for compliance with
the gift value substantiation requirements of the Internal Revenue
Code. To the extent that the purchase price is below the fair market
value, the parties agree that it does not reflect the existence of
defects in the Subject Property, such as environmental conditions
requiring remediation, known to Seller or Buyer.
THE PARTIES AGREE AS FOLLOWS:
1. Parties and Premises. Birmingham Utilities, Inc., a
public service company, having a place of business in Ansonia, County
of New Haven, State of Connecticut which shall be referred to as
"Seller", agrees to SELL, and The Trust for Public Land (Inc.), a
nonprofit California public benefit corporation, with a place of
business in New Haven, Connecticut, which shall be referred to as
"Buyer", agrees to BUY, upon the terms hereinafter set forth, certain
real property located in the City of Ansonia, County of New Haven,
State of Connecticut described in Exhibit A attached hereto and
incorporated herein by this reference. Said real property, together
with any water, timber or minerals located thereon and any
and all rights appurtenant thereto, including but not limited to water,
timber, mineral and access rights, shall be referred to as the "Subject
Property". The Subject Property is being sold "As Is", subject to the
terms and conditions of this purchase and sale agreement (the
"Agreement").
2. Deed and Title. Seller shall convey to Buyer (or its
nominee or assignee, as permitted under Paragraph 22 herein,
designated in writing five (5) days prior to closing) a good and
sufficient marketable title to an indefeasible estate in fee simple,
by Connecticut-form Warranty Deed containing the usual covenants
warranting good title in fee simple free from all encumbrances
(subject only to the exceptions hereinafter set forth), in or to the
Subject Property, as applicable.
Said premises shall be conveyed subject only to the following:
(a) Real estate taxes of the City of Ansonia on the current
list, which taxes the Buyer will assume and agree to pay, subject to a
proration of current taxes as hereinafter provided.
(b) Building and building line restrictions and zoning,
planning and other municipal regulations of the City of Ansonia as
in effect on the date hereof.
(c) Any state of facts which a physical inspection or survey
might disclose, provided same do not render title unmarketable.
(d) Any balance, not delinquent as of closing, on any sewer,
water, sidewalk or other municipal improvement lien or caveat.
(e) Any and all provisions of any ordinance, municipal
regulation or public and private law.
(f) Easements in favor of the Seller as more particularly
shown on a recordable plan provided by Seller for (i) the installation,
use, operation, maintenance, repair, and replacement of water meter
pits on the Subject Property.
(g) A covenant running with the land restricting the use of
not less than 85% of the Subject Property to "open space or
recreational purposes" as defined by Section 16-43 of the Connecticut
General Statutes on the date hereof.
If Seller shall be unable to convey good clear record and
marketable title to Buyer at closing, Buyer shall have the option to
(a) close the transaction and accept such title as Seller can
convey; or (b) cancel this Agreement, in which event all sums paid
hereunder shall be returned to the Buyer and neither party shall have
any further liabilities or obligations to the other; provided, however,
before Buyer may exercise this option, it must afford the Seller the
opportunity to postpone the closing for a period of time up to thirty
(30) days in order that Seller may, if it so desires, attempt to remedy
the alleged title defect.
Nothing shall constitute an "unmarketable" encumbrance, lien,
or exception to title for purposes of this Agreement if the Standards
of Title of the Connecticut Bar Association recommends that no
corrective or curative action is necessary in circumstances
substantially similar to those presented by such encumbrance, lien, or
exception to title. Violations, at the time of closing of title, of
any governmental (including zoning and planning) rules, regulations or
limitations shall constitute exceptions to title for the purposes of
this Agreement only if such violations substantially impair the use of
the Subject Property (as applicable) for open-space land or other
municipal uses within the unrestricted portion of the Subject Property,
or if the Buyer has been unable to obtain title insurance without
additional premium from a title insurance company licensed in the State
of Connecticut.
Buyer shall complete its review of title, and provide Seller
with a list of any objectionable title exceptions on or before February
1, 2000 (the "Due Diligence Period"). Seller shall provide Buyer with
a current A-2 survey of the Subject Property by September 30, 1999,
and Buyer shall have 30 days from the date of receipt to review
said survey and provide Seller with a list of any survey objections.
3. Purchase Price. The agreed purchase price (the "Purchase
Price") for the Subject Property is Two Hundred Thousand Dollars
($200,000.00), of which
$ 1,000 have been paid as a deposit this day, and
$ 199,000 are to be paid in certified funds at the
Time of Closing (as hereinafter defined).
$ 200,000 Total
4. Date and Place of Closing. Final settlement of the
obligations of the parties hereto at closing ("Closing") shall occur at
such date, place and time as Buyer designates; provided, however, said
date shall occur within forty-five (45) days after the later to occur
of (1) the final approval of all federal, state and/or local funds
needed to acquire the Subject Property, and (2) Final Approval by the
Connecticut Department of Public Utility Control (DPUC), in each case
as provided for in Paragraph 31 herein, or as otherwise agreed to by
the parties, at such date, place and time as the parties shall mutually
agree. Notwithstanding the foregoing, however, in no event shall any
Closing hereunder occur after December 31, 2000 unless DPUC Final
Approval has not been obtained at least 45 days prior to said date, in
which event, Buyer shall designate a Closing date within 45 days of
Final Approval. Buyer and Seller hereby acknowledge and agree that
time is of the essence for each and every term of this Agreement. The
parties agree that Buyer may arrange a simultaneous closing with
a public agency or municipality and Seller will cooperate in
coordinating such a simultaneous closing.
5. Title Insurance. Buyer may, at Buyer's sole cost and
expense, purchase an ALTA owner's policy of title insurance (Owner's
Form B-1970) in the full amount of the Purchase Price insuring that
title to the Subject Property is vested in Buyer at Closing subject
only to the exceptions noted in Section 2.
6. Seller's Covenants.
Seller covenants that, from and after the date hereof until
the Closing, Seller will not:
(a) make or suffer to be made any leases, contracts, options
or agreements whatsoever affecting the Subject Property, nor shall
Seller cause or permit any lien, encumbrance, mortgage, deed of trust,
right, restriction or easement to be placed upon or created with
respect to the Subject Property, except with the written
consent of Buyer, which consent shall not be unreasonably withheld,
conditioned or delayed;
(b) remove or permit the removal of any vegetation, soil
or minerals from the Subject Property or disturb or suffer the
disturbance of the existing contours and/or other natural features
of the land in any way whatsoever;
(c) cause or permit any dumping or depositing of any
materials on the Subject Property, including, without limitation,
garbage, construction debris or solid or liquid wastes of any kind;
or,
(d) cause or permit any default beyond the applicable
cure period under any mortgage or deed of trust covering the Subject
Property, or cause or permit the foreclosure of any other lien
affecting the Subject Property.
Seller shall promptly cure, at Seller's sole cost and expense,
each and every breach or default of any covenant set forth in this
paragraph upon receipt of notice thereof by Buyer. Buyer shall have
the right, but no obligation, to cure or cause to be cured any such
breach or default, at Seller's sole cost and expense if, in Buyer's
reasonable judgment, Seller has failed to promptly or completely cure
the same or if such action on Buyer's part is reasonably necessary
to preserve and protect the natural, scenic or other open space
values of the Subject Property. The reasonable costs of such cure
attempted or effected by Buyer may, at Buyer's election, be credited
against the balance of the purchase price due and payable at Closing.
7. Seller's Representations and Warranties. Seller makes the
following representation and warranty:
Seller has full power and authority to enter into this
Agreement (and the persons signing this Agreement for Seller if Seller
is not an individual have full power and authority to sign for Seller
and to bind it to this Agreement) and to sell, transfer and convey
all right, title and interest in and to the Subject Property, (i)
subject to the prior approval of the DPUC, (ii) subject to any and all
statutory rights of purchase in favor of third parties, and (iii)
subject to receipt by the Seller of a consent and waiver by the holder
of the First Mortgage Bonds under that certain Amended and Restated
Mortgage Indenture (the "Indenture"), dated as of August 9, 1991, by
and between the Seller, formerly known as The Ansonia Derby Water
Company, and The Connecticut National Bank, as Trustee, which has been
succeeded as such by State Street Bank and Trust Company, and the release
of the Subject Property from the lien of the Indenture by the successor
trustee.
8. Deposits and Remedies upon Default. All Deposits made
hereunder shall be held by Seller as earnest money for the proper
performance on the part of Buyer subject to the terms of this Agreement
and shall be duly accounted for at Closing. In the event Seller
defaults in the performance of any of Seller's obligations under this
Agreement, Buyer shall, in addition to any and all other remedies
provided in this Agreement or at law or in equity, have the right of
specific performance against Seller. The parties acknowledge that
Seller has no adequate remedy at law in the event of Buyer's failure
to fulfill its obligations hereunder to purchase the Subject Property
because it is impossible to compute exactly the damages that would
accrue to Seller in such event. The parties have therefore taken
these facts into account in setting the amounts of the Deposits and
hereby agree that: (i) such $1,000.00 amount is the best pre-estimate
of such damages which would accrue to Seller; (ii) said $1,000.00
amount represents damages and not any penalty against Buyer; and (iii)
if Buyer shall fail to fulfill Buyer's obligations hereunder, said
$1,000.00 amount paid hereunder by Buyer shall be retained by Seller
as its full and liquidated damages in lieu of all other rights and
remedies which Seller may have against Buyer at law or in equity for
such failure.
9. Environmental Assessment. Buyer's obligation to purchase
the Subject Property pursuant to this Agreement shall be contingent upon
a determination by Buyer that the environmental conditions at the
Subject Property are acceptable to Buyer.
a. On or before the expiration of the Due Diligence
Period, Buyer, through its employees and agents, may enter upon the
Subject Property for the purpose of accomplishing an environmental
assessment of the soils, water and improvements (the "Environmental
Assessment") at Buyer's sole cost and expense. Should Buyer determine,
in its sole discretion, based on its investigations of the Subject
Property, that the environmental conditions at the Subject Property or
adjacent property are unacceptable on or before the end of the Due
Diligence Period, Buyer shall so notify Seller, and Seller shall use
its best efforts, up to an expenditure of $5,000, to remove
unacceptable condition by Closing. In no event shall Seller be
required to expend more than $5,000 to cure such unacceptable
condition. In such case where the cost of curing an unacceptable
condition exceeds $5,000, and Seller elects not to cure said condition,
Buyer may elect to terminate this Agreement, in which case Buyer shall
have no obligation to purchase the Subject Property, and all Deposits
paid under the terms of this Agreement shall promptly be refunded. Buyer
shall restore Subject Property to its original condition if it is
disturbed as a result of the environmental inspections.
10. Survey. Seller shall be responsible for providing Buyer
with an A-2 survey and boundary monumentation for the Subject Property
in conformance with the requirements of the Connecticut Department of
Environmental Protection.
11. Risk of Loss. All risk of loss shall remain with Seller
until Closing. In the event the Subject Property is destroyed or
damaged prior to Closing, Buyer shall have the right at its option to
terminate this Agreement by written notice to Seller, and thereupon
Seller shall refund to Buyer the full amount of the Deposits. Seller
shall notify Buyer in writing of any damage to or destruction of the
Subject Property within five (5) days after Seller learns of such
damage or destruction.
12. Condemnation. In the event of the taking of all or any
part of the Subject Property by eminent domain proceedings, or the
commencement of such proceedings prior to Closing, Buyer shall have the
right, at its option, to terminate this Agreement by written notice
to Seller, in which case Seller shall promptly refund to Buyer the
Deposits. If Buyer does not so terminate the Agreement, then Buyer
may, at its option, either (i) proceed to Closing with the Purchase
Price reduced by the total of any awards or other proceeds received or
to be received by Seller as a result of such proceedings, or (ii)
proceed to Closing with an assignment by Seller of all Seller's right,
title and interest in and to any and all such awards and proceeds.
Seller shall notify Buyer in writing of any eminent domain proceedings
affecting the Subject Property within five (5) days after Seller learns
of such proceedings.
13. Adjustments. Adjustments for taxes and the like shall
be made to the date of the Closing in accordance with the closing
customs of the bar of the County of New Haven. The parties acknowledge
that the conveyance of the Subject Property from Seller to Buyer, or to
Buyer's permitted nominee or assignee under Paragraph 21 herein, is
exempt from real estate conveyance taxes.
14. Notices. All notices pertaining to this Agreement shall
be in writing delivered to the parties personally, by fax, commercial
express courier service or by first class United States mail, postage
prepaid, addressed to the parties at the addresses set forth below. All
notices given personally, by fax or by commercial express courier
service shall be deemed given when received. All notices given by mail
shall be deemed given when deposited in the mail, first class postage
prepaid, addressed to the party to be notified. The parties may, by
notice as provided above, designate a different address to which notice
shall be given.
SELLER: BUYER:
Birmingham Utilities, Inc. The Trust or Public Land (Inc.)
230 Beaver Street 33 Union Street, 4th Floor
P.O. Box 426 Boston, MA 02108
Ansonia, CT 06401 Attn: Arthur Badger Blackett, Jr. Senior
Attn: Betsy Henley-Cohn, Project Manager
Chairwoman
Tel: (203) 735-1888 Tel: (617) 367-6200
Fax: (203) 732-2616 (617) 367-1616
Copies of any notice to Copies of any notice to Buyer
Seller should also be sent to: should also be sent to:
Robert J. Metzler, II, Esq. The Trust for Public Land (Inc.)
Tyler Cooper & Alcorn, LLP 33 Union Street, 4th Floor
City Place/35th Floor Boston, MA 02108
Hartford, CT 06103-3488 Attn: Dorothy Nelson Stookey, Esq.
Tel: 860-725-6203 Tel: (617) 367-6200
Fax: 860-278-3802 Fax: (617) 367-1616
15. Attorneys' Fees. If any legal action is brought by
either party to enforce any provisions of this Agreement, the
prevailing party shall be entitled to recover from the other party
reasonable attorneys' fees and court costs in such amounts as shall
be allowed by the court.
16. No Broker's Commission. Each party represents to the
other that it has not used a real estate broker in connection with this
Agreement or the transaction contemplated by this Agreement. In the
event any person asserts a claim for a broker's commission or finder's
fee against one of the parties to this Agreement, the party on account
of whose actions the claim is asserted will indemnify and hold the
other party harmless from and against said claim and the provisions of
this Paragraph 16 shall survive Closing or any earlier termination of
this Agreement.
17. Binding on Successors. This Agreement shall be deemed a
covenant running with the land and shall be binding upon the parties
and also upon their heirs, personal representatives, assigns, and other
successors in interest.
18. Memorandum of Purchase and Sale Agreement. Not later
than the earlier of (a) the preparation of a metes and bounds
description of the Subject Property and (b) thirty days from the
execution of this Agreement by both parties, the parties shall
sign a Memorandum of Purchase and Sale Agreement in recordable form in
the form of Exhibit B, which is attached to this Agreement and
incorporated herein by this reference. Buyer shall cause the
Memorandum of Purchase and Sale Agreement to be recorded. In the event
Buyer does not acquire the Subject Property under the terms of this
Agreement, Buyer shall, if requested to do so by Seller, deliver upon
demand a quitclaim deed or release of purchase and sale in a form
suitable for recordation covering the Subject Property so as to
eliminate any cloud on Seller's title to the Subject Property.
19. Additional Documents. Seller and Buyer agree to execute
affidavits customarily required for the issuing of title insurance
protecting against mechanics' liens and parties in possession and such
additional documents as may be reasonable and necessary to carry out the
provisions of this Agreement.
20. Non-Foreign Certificate. Concurrently with the execution
of this Agreement, Seller shall execute a Non-Foreign Certificate
pursuant to Section 1445 of the Internal Revenue Code of 1986, as
amended, and shall deliver such certificate to Buyer. Seller
acknowledges that if Seller is unable to certify that it is not a
"foreign person," Buyer may be required to withhold a portion of the
Purchase Price at Closing for federal income tax purposes.
21. Modification; Waiver. This Agreement shall be construed
without regard to any presumption or other rule requiring construction
against the party causing this Agreement to be drafted. No supplement,
modification, waiver or amendment of this Agreement shall be
binding unless specific and in writing executed by the party against
whom such supplement, modification, waiver or amendment is sought to be
enforced. No delay, forbearance or neglect in the enforcement of any of
the conditions of this Agreement or any rights or remedies hereunder
shall constitute or be construed as a waiver thereof. No waiver of any
of the provisions of this Agreement shall be deemed or shall constitute
a waiver of any other provision, whether or not similar, nor shall any
waiver constitute a continuing waiver.
22. Assignment of Buyer's Interest. This Agreement shall not
be assigned by Buyer except as specifically provided herein. The
parties hereto agree that the Buyer may assign its interest in this
Agreement to one or more municipalities or to an organization or entity
that is a qualified tax exempt organization at the time of transfer
under Section 170(h) of the Internal Revenue Code of 1986, as amended,
and the applicable regulations promulgated thereunder. Upon any such
assignment the assignee shall have all the rights and obligations of the
Buyer hereunder. Buyer also may designate a nominee to take title to
the Subject Property at the Closing.
23. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original and which
together shall constitute one and the same agreement.
24. Severability. Each provision of this Agreement is
severable from any and all other provisions of this Agreement. Should
any provision(s) of this Agreement be for any reason unenforceable, the
balance shall nonetheless be of full force and effect.
25. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the state of Connecticut,
without regard to application of its principles of conflict of law.
26. Possession. Possession of the Subject Property shall be
delivered on the date of Closing in the same condition as it is on the
date hereof, ordinary wear and tear excepted, free and clear of the
rights or claims of any other party.
27. Seller's Promise to Remove Personal Property. Prior to
Closing, Seller promises to remove or cause to be removed from the
Subject Property at Seller's expense any and all personal property
and/or trash, rubbish or any other unsightly or offensive materials
including but not limited to any hazardous substance in tanks, barrels,
equipment, or containers on the Subject Property, excluding existing
meters and meter pits, unless otherwise agreed to in writing by Buyer.
Satisfaction of the promises contained herein shall be subject to
Buyer's inspection and approval of the physical condition of the Subject
Property, which approval shall not be unreasonably conditioned, withheld
or delayed. If, on or before the date set for Closing, Seller has not
satisfied the promises contained herein, Buyer may elect to either (a)
defer the Closing until Seller has satisfied said promises or (b)
remove or cause to be removed said personal property and/or trash,
rubbish, or other offensive materials as described above in which case
Buyer shall be credited at Closing with the amount expended by Buyer in
this regard in order to satisfy Seller's promises contained herein.
Notwithstanding the foregoing, this Paragraph 27 shall not be construed
so as to require Seller to remediate any hazardous materials identified
by Buyer on the Subject Property, the identification and removal
of which are governed by Paragraph 9 herein.
28. No Merger. The obligations contained in this Agreement
will not survive the Closing unless specifically set forth herein.
29. Expiration. This Agreement shall be of no force or
effect, and shall be null and void, unless a fully-signed original of
this Agreement, signed by both parties, is delivered to Buyer and
received by Buyer no later than September 16, 1999.
30. Headings. The headings used in this Agreement are for
convenience of reference only and shall not operate or be construed to
alter or affect the meaning of any of the provisions hereof.
31. Additional Conditions to Closing. Buyer's and Seller's
obligations to perform under the terms of this Agreement are conditioned
upon the following:
Seller's Contingencies:
(a) DPUC Approval. Notwithstanding any provision
of this Agreement to the contrary, Seller's obligation to sell the
Subject Property hereunder is contingent upon Seller obtaining Final
Approval from the DPUC (which approval shall become "Final" only
upon the expiration of the applicable appeal periods without any appeal
having been filed or served), for the sale of the Subject Property to
the Buyer pursuant to Section 16-43 of the Connecticut General
Statutes, and upon final approval by the DPUC, as defined above, of a
ratemaking accounting treatment for the net gain from such sale
reasonably satisfactory to Seller. For the purposes of this Agreement,
"reasonably satisfactory" shall mean comparable to ratemaking
accounting treatments approved by DPUC on comparable pending or
completed sales of other land owned or sold by Seller. Such
satisfaction shall be deemed to have been obtained if the Seller does
not notify the Buyer to the contrary in writing within five (5)
business days after the DPUC's final approval of the sale and
ratemaking accounting treatment. Seller agrees to submit this Agreement
to the DPUC for approval within 35 days after publishing notice of its
intention to sell in accordance with Section 16-50c(b)(2) of the
Connecticut General Statutes, to diligently pursue such application and
to supply to Buyer copies of all appraisals of the fair market value of
the Premises obtained by Seller to be submitted to the DPUC in
connection with Seller's application for approval. If Seller shall not
have received such Final Approval by June 26, 2000, Seller shall have
the option to terminate this Agreement and return the Deposits to
Buyer in which event the obligations of the parties hereunder shall
terminate and come to an end. Under such termination, the Deposits
shall be retained by Seller or returned to Buyer in accordance
with the provisions of Paragraph 4, herein.
(b) Buyer acknowledges and agrees that Seller can
not sell the Subject Property until any and all statutory rights of
purchase in favor of third parties have expired or been waived. If
these rights have not expired or been waived by June 26, 2000, then
Seller shall have the right to terminate this Agreement.
(c) Seller's obligation to sell the Subject Property is
further subject to Seller's obtaining all local planning and zoning
board approvals necessary to create the lots as shown on Exhibit A,
which may include Seller's obtaining a variance for rear yard
setback.
(d) Seller's obligation to sell the Subject Property is
further subject to the Seller obtaining (i) from the holder of the First
Mortgage Bonds under the Indenture, a consent and waiver, in form and
substance reasonably satisfactory to the Seller, to the effect that the
Subject Property may be released from the lien of the Indenture without
the requirement that the proceeds from the sale of the Subject Property
be deposited with the successor trustee, and (ii) from the successor
trustee under the Indenture, release of the Subject Property from said
lien without such deposit requirement.
If Seller terminates this Agreement due to any of the above Seller's
Contingencies not having been met, then Seller shall reimburse Buyer
for Buyer's documented out of pocket expenses incurred in connection
with Buyer's due diligence and efforts to win approval of the City of
Ansonia, excluding staff time and overhead.
Buyer's Contingencies:
a. Buyer's agreement to purchase the Subject Property is
contingent upon satisfactory results (in Buyer's sole discretion) from
Buyer's title and environmental Due Diligence as described herein and
upon the approval of Buyer's Board of Directors, which shall be granted
or denied before the end of the Due Diligence Period.
b. Buyer's agreement to purchase the Subject Property is
contingent upon the appropriation and availability of City of Ansonia
funds in the amount of the Purchase Price designated for the purpose
of buying the Subject Property prior to Closing or the Extended
Closing, as the case may be, as restricted by the 85% open space
requirement in accordance with Paragraph 2(g) herein.
Buyer agrees to use reasonable efforts to satisfy such conditions. If
Buyer notifies Seller on or before the end of the Due Diligence Period
that one or more of the contingencies set forth in (a) above have not
been met or one or more of the contingencies set forth in (a) and/or
(b) above are not so satisfied or waived by the Time of Closing, then
Buyer may elect to terminate this Agreement and this Agreement shall be
of no further force or effect. In the event that Buyer terminates this
Agreement based on the contingencies set forth in (a) above, Buyer
shall be entitled to have its Deposits returned.
<PAGE>
32. Buyer's Cooperation. The Buyer shall provide, upon the
request from time to time of the Seller, such cooperation as shall be
necessary to enable the Seller to obtain any and all tax benefits
associated with the transactions contemplated hereunder.
The provisions of this Section 32 shall survive the closing.
IN WITNESS of the foregoing provisions, the parties have
executed and delivered this Agreement as of the date first set forth
above:
SELLER: BUYER:
BIRMINGHAM UTILITIES, INC. THE TRUST FOR PUBLIC LAND (INC.)
By:_______________________ By:_________________________
Name:_____________________ Name:_______________________
Title:____________________ Title:______________________
Date:______________________ Date:________________________
<PAGE>
EXHIBIT A
DESCRIPTION OF SUBJECT PROPERTY
The Subject Property is set forth on the survey map attached
hereto and described as follows:
"Data Accumulation Plan "Nike Site" owned by Birmingham
Utilities, Inc., Debby ane and Osborne Lane, Ansonia
Woodbridge, Connecticut" by Michael Horbal
dated 9/8/99.
<PAGE>
EXHIBIT B
MEMORANDUM OF PURCHASE AND SALE AGREEMENT
THIS AGREEMENT made this day of , 199 by
and between
Birmingham Utilities, Inc., a Connecticut corporation, having
an office in Ansonia, CT (the "Seller") and THE TRUST FOR PUBLIC LAND
(INC.), a nonprofit California public benefit corporation, having an
office in New Haven, CT ("Buyer").
W I T N E S S E T H:
1. In consideration of the terms, conditions, covenants and
agreements set forth in the Purchase and Sale Agreement dated
, 199 , Seller granted to Buyer a right to purchase the
real property of Seller described on Exhibit A
attached hereto and made a part hereof.
2. The closing date for the acquisition is not later than
December 31, 1999, unless extended by the terms of the Agreement.
3. The address of Seller is: 230 Beaver Street
P.O. Box 426
Ansonia, CT 06401
Attn: Betsy Henley-Cohn, Chairwoman
4. The address of Buyer is: 33 Union Street, 4th Floor
Boston, MA 02108
Attn: Arthur Badger Blackett, Jr.
5. Copies of the Purchase and Sale Agreement are on file with
Seller and Buyer.
IN WITNESS WHEREOF, the parties have executed this instrument on
the date above written.
WITNESSES: Birmingham Utilities, Inc.
____________________________ By:__________________________________
Its: _____________________________
____________________________
WITNESSES: The Trust for Public Land (Inc.)
____________________________ By:______________________________
Its:_____________________________
____________________________
ACKNOWLEDGMENT
State of )
) ss.
County of )
On this day of , 199 , before me appeared
, personally known to me to be the person
who executed the within instrument as of Birmingham
Utilities, Inc., a Connecticut corporation, on behalf of the corporation.
________________________________
Notary Public
My commission expires
ACKNOWLEDGMENT
State of )
)ss.
County of )
On this day of , 199 , before me appeared
, personally known to me to be the person who
executed the within instrument as of The Trust
for Public Land (Inc.), a nonprofit California public benefit
corporation, on behalf of the corporation.
_______________________________
Notary Public
My commission expires
