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HomeMy WebLinkAboutRes 0859 - Purchase Assests of Independent Water CompanyCITY OF TUKWILA WHEREAS, the City of Tukwila wishes to purchase the assets only of the Independent Water Company; and WHEREAS, City representatives have negotiated with representatives of the Independent Water Company a proposed Purchase and Sale Agreement, a copy of which is attached hereto; and WHEREAS, it is not practical to require the seller to obtain and assemble all the various contract assignments, real property transfers, and other supporting paperwork prior to closing, and the City, therefore, being willing to evaluate this Purchase and Sale Agreement without first reviewing that support- ing paperwork. NOW, THEREFORE, the City Council of the City of Tukwila, Washington, does resolve as follows: 1. The Mayor is authorized to execute a Purchase and Sale Agreement, in the form attached hereto, with the Independent Water Company. 2. The date of closing shall be July 1. 1983. At the time of closing, all documents identified in the Purchase and Sale Agreement shall be turned over to the City, and the City shall take possession and control of the assets of the Independent Water Company on the date of closing. PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, 4 day of 1 1983. WASHINGTON, a regular meeting thereof this 4th day of April 1983 Approved as to Form: A RESOLUTION OF THE CITY OF TUKWILA, WASHINGTON, AUTHORIZING THE MAYOR TO NEGOTIATE AND EXECUTE AN AGREEMENT TO PURCHASE THE ASSETS OF THE INDEPENDENT WATER COMPANY. Daniel D. Woo Deputy City Attorney WASHINGTON RESOLUTION NO 859 Mabel J. Harris Mayor Pro tem Maxine Anderson City Clerk PERSONAL GUARANTY HELEN NELSEN represents that she has a personal interest in that Purchase and Sale Agreement dated 1983, by and between the Independent Water Co., Inc. (herein- after "Water Co. and the City of Tukwila (hereinafter "City and that she will be personally benefited by the closing of the transaction provided for therein. It is anticipated that, because all assets of Water Co. are being transferred, Water Co. will, in the future, be unable to indemnify City or respond in damages in the event of a breach by Water Co. of the Purchase and Sale Agreement. To induce City, therefore, to execute that Purchase and Sale Agreement, Helen Nelsen hereby agrees that she will personally indemnify the City for any and all costs, losses, expenses (including related or resulting expenses), or other damage suffered or incurred by the City resulting from, arising out of, or incurred with respect to the falsity or the breach of the Water Co.'s representations and warranties set forth in paragraph 3 of the Purchase and Sale Agreement identified above, including all the subsections of paragraph 3, except subsection 3.1(b), and any claim asserted by Industrial Crating Packaging, as described in paragraph 4.2 of that Agreement. Said indemnification will be in the procedure and manner set forth in paragraphs 4.3, 4.4, and 4.5 of the Purchase and Sale Agreement. DATED this day of 1983. Helen Nelsen AGREEMENT, made as of the PURCHASE AND SALE AGREEMENT Page 1 0496B /LEH /CJC PURCHASE AND SALE AGREEMENT MAR 1 1713 day of 1983, by and between the CITY OF TUKWILA, a municipal corporation (hereinafter referred to as "City and the INDEPENDENT WATER COMPANY, INC., a Washington corporation (hereinafter referred to as "Water Co. W I T N E S S E T H WHEREAS, Water Co. is an existing business which owns and operates a facility designed to supply water, and is a Washington corporation having its principal place of business at Tukwila, Washington; WHEREAS, the City desires to purchase and Water Co. desires to sell all of the assets of Water Co., upon the terms and conditions set forth in this Agreement. NOW, THEREFORE, in consideration of the mutual promises set forth herein and for other good and valuable consideration, the parties hereby agree as follows: 1. SALE AND PURCHASE OF ASSETS. On the closing date, except as provided otherwise herein City shall purchase from Water Co. and Water Co. shall sell to City any and all assets of any nature whatsoever belonging to Water Co., including but not limited to all real or personal property, and all contract rights, intangible assets or contingent cliams, but excluding (a) accounts receivable owed to Water Co. at the time of closing, (b) incidental office furniture or equipment, and (c) any shares of Water Co. stock which Water Co. may own. City shall not purchase, or assume responsibility for, Water Co.'s debts or liabilities. The description below of specific assets being sold under this Agreement in no way limits the generality of this paragraph 1. Among the assets being sold are the following: 1.1 Personal Property. All personal property forming a part of the water distribution system, including but not limited to all pipe, hydrants, meters, valves and accessories are included in the assets transferred under this agreement. Attached hereto as Exhibit "A consisting of pages, incorporated by this reference herein, is a description of certain physical assets which are being transferred; the description of Exhibit "A" does not limit the generality of this paragraph 1.1. 1.2 Easement Rights. All easements of any nature in favor or Water Co. are included in the assets transferred under this Agreement. Without limiting the generality of the foregoing, attached hereto as Exhibit "B consisting of 1 page, incorporated by this reference fully herein, is a description of those easements which Water Co. has made known to City as of the date of closing. 1.3 Franchises and Permits. All franchises and permits of any nature granted in favor of the Water Co. are included in the assets sold under this Agreement. Included also are any and all rights or authority of the Water Co., from whatever source, to provide water service to any territory or geographical area. It is understood by the parties that the right to provide service to Water Co.'s "service area" shall be transferred to the City. 2. PURCHASE PRICE AND PAYMENT. The purchase price for the assets and property purchased in accordance with paragraph 1 shall be $35,000. PURCHASE AND SALE AGREEMENT Page 2 0496B /LEH /CJC Payment shall be as follows: $15,000 on closing, with the remaining principal balance to bear simple interest at the rate of 8% per annum; on the 1st annual anniversary date of the date of closing, City shall pay all accrued interest plus $10,000 of the principal; on the 2nd annual anniversary of closing, City shall pay all accrued interest plus the remaining $10,000 princ herein fall on a weekend or city holiday, the date shall be extended to the next regular business day. City shall have the right to prepay the outstanding principal, or any portion thereof, at any time without penalty. 3. REPRESENTATIONS AND WARRANTIES OF WATER CO. Water Co. represents and warrants as follows: 3.1 Title to Property Real and Personal. (a) Water Co. has good and marketable title to all properties and assets described in paragraph 1 and its subparts, and all of said properties and assets are owned by it free and clear of all known mortgages, liens, pledges, charges or encumbrances of any nature whatsoever. (b) All currently used property and assets which Water Co. owns, has an interest in, or has in its possession, are in substantially good operating condition and repair, subject only to ordinary wear and tear; except the meter for Industrial Crating Packing, Inc. is inaccessible and cannot be read. (c) No notice of any unremedied violation of any zoning laws, or other statutes, ordinances or regulations relating to such property and assets, has been received by Water Co. PURCHASE AND SALE AGREEMENT Page 3 0496B /LEH /CJC 1. If any of the payment dates set forth (d) Water Co. warrants that Exhibit "B a copy of which is attached hereto and by this reference made a part hereof, is a description of all esements in which Water Co. has a beneficial interest. Water Co. has previously delivered a true and correct copy and description of each easement described and identified on Exhibit "B Water Co. has all rights and interest as the holder of said easements, free of all liens, claims or encumbrances, and all said easements are valid and in full force and effect. (e) No agreement exists, and to Water Co.'s knowledge no legal restrictions exist, which will prevent City from changing the pressure of the water being provided to Water Co. users or customers. City acknowledges that, in connection with any change in water pressure, customers will have to be notified and arrangements made to adjust their pressure intake valves. 3.2 Undisclosed Liabilities. Water Co. has no liabilities or obligations, either accrued, absolute, contingent or otherwise, except: Industrial Crating and Packaging, Inc. is asserting a claim in uncertain amount against Water Co., for construction costs incurred in 1972 which were paid by Industrial Crating. 3.3 No Litigation or Adverse Events. Other than described in paragraph 3.2 above, there is no suit, action, or legal, administrative, arbitration or other proceeding or governmental investigation, and to Water Co.'s knowledge no event, condition or trend of any character, pertaining to the business and assets of Water Co. which might materially and adversely affect the business or assets of Water Co. PURCHASE AND SALE AGREEMENT Page 4 0496B /LEH /CJC 3.4 Insurance. The assets of Water Co. are adequately insured in accordance with reasonable business practice, and all policies of insurance carried by Water Co. are in force, and all premiums thereon are accrued to date. 3.5 Disclosure. No representation or warranty by Water Co. in this Agreement, nor any statement, certificate, schedule or exhibit hereto furnished or to be furnished by or on behalf of Water Co. pursuant to Agreement, nor any document or certificate delivered to City pursuant to this Agreement or in connection with actions contemplated hereby, contains or shall contain any untrue statement of material fact or omits or shall omit a material fact necessary to make the statement contained therein not misleading. 4. INDEMNIFICATION. 4.1 In General. Water Co. shall indemnify City for any and all loss, costs, expenses (including all related and resulting expenses) or other damage, suffered or incurred by City resulting from, arising out of, or incurred due to the falsity or the breach of any representation, warranty, covenant or agreement made by Water Co. herein. 4.2 Industrial Crating and Packaging. Water Co. shall indemnify City for any and all loss, costs, expenses (including all related and resulting expenses), or other damage, suffered or incurred by City as a result of the claim by Industrial crating and Packaging described in paragraph 3.2, above. 4.3 Manner of Indemnification. City shall promptly give notice to Water Co., after obtaining knowledge of any claim against City as to which recovery may be sought against Water Co. because of the indemnity set forth in paragraphs 4.1 PURCHASE AND SALE AGREEMENT Page 5 0496B /LEH /CJC or 4.2 above, and (if such indemnity shall arise from the claim of a third party) shall permit Water Co. to assume the defense of any such claim or any litigation resulting from such claim. Failure by Water Co. to notify City of its election to defend any such claim or action by a third party within 15 days after notice thereof shall have been given to Water Co. shall be deemed a waiver by Water Co. of its right to defend such claim or action. If Water Co. assumes the defense of any such claim or litigation resulting therefrom, the obligations of Water Co. hereunder as to such claims shall include taking all steps necessary in the defense or settlement of such claim or litigation resulting therefrom and holding City harmless from and against any and all losses, damages and liabilities caused by or arising out of any settlement approved by Water Co. or any judgment in connection with such claim or litigation resulting therefrom. Water Co. shall not, in the defense of any claim or litigation resulting therefrom, consent to entry of any judgment except with the written consent of City, or enter into any settlement (except with the written consent of City), which does not include as an unconditional term thereof the giving by the claimant or the plaintiff to City a release from all liability in respect of such claim or litigation. 4.4 Failure to Assume Defense Settlement. If Water Co. shall not assume the defense of any such claim by a third party or litigation resulting therefrom, City may defend against such claim or litigation in such manner as it may deem appropriate and, unless Water Co. shall deposit with City a sum equivalent to the total amount demanded in such claim or litigation plus City's estimate of the cost of defending the same, City may settle such claim or litigation on such terms as PURCHASE AND SALE AGREEMENT Page 6 0496B /LEH /CJC it may deem appropriate, and Water Co. shall promptly reimburse City for the amount of such settlement and for all losses or expenses, legal or otherwise, incurred by City in connection with the defense against or settlement of such claim or litigation. 4.5 Reimbursement. Water Co. shall promptly reimburse City for the amount of any judgment rendered with respect to any claim by a third party in such litigation, and for all losses and expenses, legal or otherwise, incurred by City in the defense against such claim or litigation, and for any other loss suffered or incurred by City resulting from, arising out of or incurred by City resulting from, arising out of or incurred with respect to the falsity or the breach of any representation, warranty, coverant or agreement, whether or not arising out of the claim of a third party. 5. TAXES AND INSURANCE. Taxes and insurance for the current year shall be prorated as of the date of closing. 6. POSSESSION. City shall be entitled to possession on date of closing. 7. BILLINGS DURING TRANSITION PERIOD. All meters of Water Co. customers will be read on the date of closing. Water Co. will retain accounts receivable as of date of closing. Water Co. will pay City for all water purchased by Water Co. from City during the current billing period, up to the date of closing. In the event the meters are not read on the date of closing, income from customers of Water Co., and liability for payment of the surcharge due the City of Seattle, shall both be prorated between the parties as of the date of closing, PURCHASE AND SALE AGREEMENT Page 7 0496B /LEH /CJC according to the number of days during the billing period each party was in possession of Water Co. assets. Water Co. will, up until the date of closing, be responsible for sending to its customers the normal monthly bill. 8. CLOSING. 8.1 Time and Place. The closing of this transaction shall take place at at .M., 1983. 8.2 Documents to be Delivered by Water Co. On or before closing, Water Co. shall timely deliver to City the following documents: (a) Bill of Sale for the assets of the Water Co..; (b) Proper assignments, assigning the easements being transferred under this agreement; (c) All written consents as are necessary for the transfer or assignment or any easements, franchises or permits being transferred pursuant to this Agreement, including an affidavit of Helen Nelsen affirming that the two easements granted by her to Water Co. are not terminated. (d) Such lists of creditors, schedules or other documents a transferor must prepare to timely comply with the provisions of the Bulk Sales Act, RCW Chapter 62A.6. Water Co. will provide to City more than 10 days before closing any documents required by RCW 62A.6 -105; (e) A current list of all physical assets owned by Water Co.; if Exhibit "A" itemizes all physical assets known to Water Co., that Exhibit "A" may be used in place of a new list of assets. PURCHASE AND SALE AGREEMENT Page 8 0496B /LEH /CJC (f) A Kroll Map (schematic plan), with supporting maps to scale, showing all boundaries, mains, hydrants, services, meters and valves of the water distribution system. (g) A complete customer list (names, addresses), with billings since January, 1982 to date of closing, and current meter book. (h) Copies of all insurance policies of Water Co.; (i) Copies of all contracts and /or agreements to provide and /or to receive water to and from other parties, including rates governing the providing and receiving of such water; (j) In connection with the Water Company's operation under the Washington Utilities and Transportation Commission, the most recent Service Area Map, the most recently approved rates (tariffs), water rights, if any, and quality reports received by the Water Company from January, 1982 to the date of closing; (k) Copy of updated appraisal of the Water Company's assets dated 1/2/80, prepared by Philip Botch and Associates; and (1) Signed copy of Notice from the Water Company to the Washington Utilities and Transportation Commission of it's intent to sell its assets to the City of Tukwila. 8.3 Documents to be Delivered by Citi. At closing, City shall deliver to Water Co. a check in the amount of $15,000 payable to The Independent Water Company. 9. AMENDMENT AND MODIFICATION. Water Co. and City may amend, modify and supplement this Agreement in such a manner as may be agreed upon in writing. PURCHASE AND SALE AGREEMENT Page 9 0496B/553A/LEH 10. CONTINGENCIES. The closing of this purchase and sale shall be contingent upon the following events. So long as any of the following events do not occur, the parties to this agreement have no obligation to close the transaction: (a) Compliance by both parties with the provisions of the Bulk Sales Act, RCW Chapter 62A.6, or waiver by both parties of this requirement; and (b) Timely provision by Water Co. to the City of all the documents itemized in paragraph 8.2. 11. ENTIRE AGREEMENT. This instrument embodies the entire agreement between the parties hereto with respect to the transaction contemplated herein and there have been and are no agreements, representations or warranties between the parties other than those set forth or provided herein. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and the respective official seals to be affixed hereto, all as of the day and year first above written. (SEAL) (SEAL) APPROVED AS TO FORM Lawrence E. Hard City Attorney PURCHASE AND SALE AGREEMENT Page 10 0496B/553A/LEH CITY OF TUKWILA By: Gary Van Dusen, Mayor INDEPENDENT WATER COMPANY, INC. By: By: EXHIBIT "B" The following easements, copies of which are attached hereto as Attachment B -1 through B -5, and incorporated by this reference herein, have been granted in favor of Independent Water Co: GRANTOR DATE ATTACHMENT 1. Northern Pacific Railway Company October 29, 1946 B -1 (2 pages, including cover letter) 2. Helen B. Nelsen November 1, 1971 B -2 (3 pages) Further Description: This easement listed as attachment B -2 refers to the easement covering construction, operation and maintanance of a twelve inch water main, for which Independent Water Co. paid the grantor $6,937.50. 3. Helen B. Nelsen November 1, 1971 B -3 (3 pages) Further Description: This easement listed as attachment B -3 refers to the easement covering construction, operation and maintenance of a water main of unspecified diminsion, for which Independent Water Co. paid the grantor $2,191.25. 4. Puget Sound Power and Light Co. 5. Whitney Brothers (a partnership) PURCHASE AND SALE AGREEMENT Page 11 0496B /LEH /CJC July 11, 1977 June 30, 1978 B -4 (2 pages) B -5 (1 page)