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HomeMy WebLinkAbout2002-058ORDINANCE NO. os 6'©,�— 00 AN ORDINANCE OF THE CITY OF DENTON, TEXAS, AUTHORIZING THE CITY MANAGER TO EXECUTE A BILL OF SALE AND SALES AGREEMENT BY AND BETWEEN CITY OF DENTON, TEXAS, AS PURCHASER, AND DENTON COUNTY ELECTRIC COOPERATIVE, INC. DB/A COSERV ELECTRIC, AS SELLER, FOR ACQUISITION OF ELECTRIC INFRASTRUCTURE. IMPROVEMENTS TO THE VINTAGE, A DEVELOPMENT WITHIN THE CITY OF DENTON, TEXAS; AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR UPON EXPRESS CONDITION; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, Denton County Electric Cooperative, Inc. ("CoSery Electric') has been the provider of electric service for The Vintage development (hereinafter the "Development") situated in a multiply -certificated area in the City of Denton, Texas, pursuant to written contract entitled "Agreement for Provision of Electric Service" ("Contract') by and between CoSery Electric and Denton CJW Partners, Ltd. from the inception of that project, dated May 28, 1999; pursuant to said Contract, over time, there has been installation of a portion of the required electric infrastructure in the development; and WHEREAS, effective on January 24, 2002 a "Termination of Agreement for Provision of Electric Service" ("Temrination of Contract') was executed by CoSery Electric, Denton CJW Partners, Ltd., and Pulte Homes of Texas, Inc.; and WHEREAS, thereafter Denton CJW Partners approached Denton Municipal Electric ("DME") and requested that DME assume service as the electric service provider of the development; and DME, being duly -certificated in the area and desiring to serve Denton CJW Partners, immediately communicated to CoSery Electric the request of Denton CJW Partners, Ltd., and requested that CoSery Electric provide DME with substantiation that the Contract between CoSery Electric and Denton CJW Partners, Ltd. had been terminated; CoSery produced the fully -executed "Termination of Contract' as requested; and WHEREAS, DME and CoSery Electric, effective on January 28, 2002, signed a Letter Agreement confirming that the Contract was terminated; that CoSery Electric does not oppose the provision of electric service to The Vintage by DME; and that CoSery Electric agrees to execute any and all documents determined to be necessary or appropriate to shift electric service certification to DME, in the single -certification proceeding now pending before the Public Utilities Commission of Texas ("PUC"); and WHEREAS, on February 1, 2002, CoSery Electric filed a Chapter 11 Bankruptcy in the U.S. Bankruptcy Court, Fort Worth Division of the Northern District of Texas in Case No. 02-40665-DML-11; Debtor, CoSery Electric; is currently a Debtor -in - Possession of its property, the subject of the bankruptcy estate; and WHEREAS, DME and CoSery Electric have negotiated a purchase by DME of all of the electric infrastructure improvements now in place in The Vintage development, 1 which is advantageous, and is fair and just to both entities considering all relevant circumstances; including without limitation, the need for DME's more rapid provision of electric service to Denton CJW Partners, Ltd. with the CoSery Electric existing electric infrastructure; however DME believes that because of the Bankruptcy filing, that an order of the Bankruptcy Court is necessary and appropriate to approve and confirm the purchase transaction; and DME insists that the payment of its consideration to CoSery Electric, Debtor -in -Possession of the subject property, be expressly subject to and conditional upon the entry of a Bankruptcy Order approving and confirming such sale within the time limit specified below; and WHEREAS, in accordance with the provisions of §551.086 of the Texas Government Code, after due notice being given, the City Council, a "Public Power Utility Governing Body" under Senate Bill 7, has discussed, deliberated, and considered the matter, the subject of this ordinance, in a Closed Meeting of the City Council on the 19`h day of February, 2002, after determining by a preliminary majority vote of its members, that the consideration of the items which are the subject of this ordinance are related to the competitive activity of DME, including commercial information, which if disclosed, would give advantage to its competitors or prospective competitors; and WHEREAS, thereafter, after due public notice being given, the City Council, proceeded to discuss, deliberate, and consider the matter of the transaction which is the subject of this ordinance, and voted, in its Open Meeting of the 19`h day of February, 2002, in favor of the transaction and approved the following ordinance; NOW THEREFORE THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. That the above Preamble to this Ordinance be, and it is, hereby ratified and confirmed as being the true and correct factual background for the purchase, which is the subject of this Ordinance. SECTION 2. That the City Manager is hereby authorized to execute, on behalf of the City, a Bill of Sale and Sales Agreement by and between the City of Denton, Texas as Purchaser, and Denton County Electric Cooperative, Inc. d/b/a CoSery Electric as Seller for the purchase of electric infrastructure improvements to The Vintage, a development within the City of Denton, Texas, substantially in accordance with the Bill of Sale and Sales Agreement which is attached hereto and incorporated by reference herein. SECTION 3. The expenditure of funds as set forth in the Bill of Sale and Sales Agreement is hereby authorized; PROVIDED HOWEVER that no funds shall be paid by the City until such time as an Order is issued by the Bankruptcy Court, providing for, approving, and confirming the sale of the subject property by CoSery Electric, Debtor -in - Possession, in acceptable legal form to the City Attorney, no later than March 15, 2002. Should no such Order be received by the City Attorney by 5:00 p.m. on March 15, 2002, then at that time the City shall wholly rescind and cancel this transaction without payment to CoSery Electric. 7 SECTION 4. This ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the l7 g day of j�G-, 2002. �& ct— EULINE BROCK, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY By: APPROVED AS TO LEGAL FORM: HERBERT L. PROUTY, CITY ATTORNEY By: % S:\Our Documents\0rdinances\02\DME Acquisition of CoSery Electric Infrstructure - Vintage.doc BILL OF SALE AND SALES AGREEMENT STATE OF TEXAS § § KNOW ALL MEN BY THESE PRESENTS: COUNTY OF DENTON § THAT for and in consideration of the sum of EIGHTY-SIX THOUSAND AND N0/100 DOLLARS ($86,000.00), the receipt and sufficiency of which are hereby acknowledged and confessed, DENTON COUNTY ELECTRIC COOPERATIVE, INC., d/b/a COSERV ELECTRIC (hereinafter referred to as "Seller"), has GRANTED, BARGAINED, SOLD, ASSIGNED, TRANSFERRED, and CONVEYED to DENTON MUNICIPAL ELECTRIC (hereinafter referred to as "Buyer"), and by these presents does GRANT, BARGAIN, SELL, ASSIGN, TRANSFER and CONVEY unto the said Buyer, its successors and assigns, all of Seller's right, title, and interest to and in that equipment and those facilities described in Attachment "A" attached hereto and made a part hereof for all purposes (such equipment and facilities hereinafter collectively referred to as the "Property"), together with all warranties, guarantees, or other assurances, relating to the performance or quality of the Property, or of any materials used in or comprising any part of the Property, which Seller previously obtained from any third party and currently owns, to the extent any such items exist and are transferable. TO HAVE AND TO HOLD unto the said Buyer, its successors and assigns forever, and Seller agrees to warrant and defend the title to the Property against every person whomsoever lawfully claiming the Property or any part of it, by, though and under Seller, but not otherwise. Seller further agrees to execute and deliver, in form and content satisfactory to Seller in its reasonable discretion, such further conveyances, assignments, bills of sale, certificates, instruments of transfer, or other documents, if any, that are necessary to fully effectuate the terms of this Bill of Sale and Sales Agreement, and to vest in Buyer, its successors, and assigns, title to the Property according to the terms and conditions of this Bill of Sale and Sales Agreement. This Bill of Sale and Sales Agreement is made and accepted expressly subject to the following reservations, terms, covenants, conditions, and limitations set forth below, to -wit: 1. Bills Paid. Seller warrants that the Property is free and clear of all liens, security agreements, encumbrances, claims, demands, and charges of every kind whatsoever created by, through and under Seller (collectively, "Seller Encumbrances"). 2. NO OTHER WARRANTIES. BUYER, BY ITS EXECUTION OF THIS BILL OF SALE AND SALES AGREEMENT, ACKNOWLEDGES, AGREES AND WARRANTS THAT IT HAS INSPECTED THE PROPERTY AND ACCEPTS THE PROPERTY AS DESIGNED AND CONSTRUCTED IN ITS "AS IS," "WHERE IS," "WITH ALL FAULTS" CONDITION. BUYER HEREBY FURTHER ACCEPTS THE PROPERTY, AND SELLER HEREBY CONVEYS THE PROPERTY, WITHOUT ANY REPRESENTATION OR WARRANTY OF ANY HIND OR NATURE, WHETHER EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, THE WARRANTY OF MERCHANTABILITY AND/OR THE WARRANTY OF FITNESS FOR A PARTICULAR OR SPECIAL PURPOSE OR USE; EXCEPT ONLY THE LIMITED WARRANTY OF TITLE AS EXPRESSLY PROVIDED IN THE SECOND PARAGRAPH OF THIS BILL OF SALE AND SALES AGREEMENT, AND THE LIMITED WARRANTY REGARDING THE SELLER ENCUMBRANCES AS EXPRESSLY PROVIDED IN THE NUMBERED PARAGRAPH 1 OF THIS BILL OF SALE AND SALES AGREEMENT. EACH AND EVERY REPRESENTATION AND WARRANTY EXCLUDED FROM THE TRANSACTION COVERED BY THIS BILL OF SALE AND SALES AGREEMENT IS HEREBY EXPRESSLY WAIVED, DISCHARGED AND RELEASED BY BUYER, AND DISCLAIMED BY SELLER Miscellaneous. a. The paragraph headings used in this Bill of Sale and Sales Agreement are inserted for convenience only and shall not be regarded in construing this Bill of Sale and Sales Agreement. . b. Should any of the provisions of this Bill of Sale and Sales Agreement be finally determined invalid for any reason, the parties agree that the remaining valid portions thereof shall continue in full force and effect and, if necessary, be amended and modified to the extent necessary so that this Bill of Sale and Sales Agreement shall be validly enforceable and carry out the intentions of the parties, to the fullest extent legally permissible, as evidenced by the original terms hereof. C. Neither this Bill of Sale and Sales Agreement nor any provisions hereof may ever be amended, changed, modified, waived, discharged or terminated except by an agreement, in writing, duly executed by the parties hereto, except as necessary as provided in paragraph 3 (b) above. d. THE PARTIES HERETO AGREE AND CONFIRM THAT THIS BILL OF SALE AND SALES AGREEMENT AND THE RIGHTS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED, ENFORCED AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW PROVISIONS OR RULES (WHETHER OF THE STATE OF TEXAS OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION OTHER THAN THE STATE OF TEXAS. e. This Bill of Sale and Sales Agreement, including the exhibits hereto, constitutes the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and shall supersede and replace any and all prior agreements, understandings and representations, oral or written, between the parties with regard to the subject matter hereof. f. This Bill of Sale and Sales Agreement was prepared by both parties hereto and not by either party to the exclusion of the other parry. No provision of this Bill of Sale and Sales Agreement shall be construed against or interpreted to the disadvantage of either party by any court or other governmental or judicial authority by reason of either parry having or being deemed to have prepared, structured, or dictated such provision. g. The terms, covenants and conditions hereof shall be binding upon and shall inure to the benefit of Seller and Buyer, their respective successors and assigns, and shall attach to and run with the Property and with each transfer or assignment thereof. IN W TNESS WHEREOF, this Bill of Sale and Sales Agreement is executed on the i I" -day of 2002. BUYER: DENTON MUNICIPAL ELECTRIC SELLER: DENTON COUNTY ELECTRIC COOPERATIVE, INC., DB/A COSERV ELECTRIC By: -6m)(M&W-47 By: Name: --Curtis es `�vme: i��Ti Name: me: Title: Ac.TiNG Oki—, ANA66A— Title: error Vice President - Enemy Services ATTEST: JENNIFER WALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORM: HERBERT L. PROUTY, CITY ATTORNEY BY: STATE OF TEXAS COUNTY OF DENTON BEFO ME, the undersigned authority, on this day personally appeared Lr t of Denton Municipal Electric, a own q me to be'the person and officer whose name is subscribed to &e foregoing instrument and acknowledged to me that he/she executed the same for the purposes and consjeration therein expressed, in the capacity stated, and as the act and deed of said %i2/LEI Gc,Lat /�. ti9'�t�t ,r 1 Given under my hand and seal of office, on this the J&day of A,114 `y 2002. tary P lic in and for the State of Texas W'C4 JENNIFER K. WALTexa z,.... l� lq oa +• Notary• Public, State of bly ece mixaion Ex00 My Commission Expires: g December 19, 2002 STATE OF TEXAS COUNTY OF DENTON BEFORE ME, the undersigned authority, on this C�day personally ww'bt'Q[i ie� 1 ma f Denton C6unty Electric Cooperative, Inc., d/b/a CoSery Electric, a Texas cooperative corporation, known to me to be the person and officer whose name is subscribed to the foregoing instrument and acknowledged to me that he/she executed the same for the purposes and consideration therein expressed, in the capacity stated, and as the act and deed of said corporation. Co — Given under my hand and seal of office, n this the day of 2002. ���������p111rrrYlrNbb �� � `' Notary Public in and for State of Texas .��'��� `.. OF My Commission Expires: ATTACHMENT "A" TO THE BILL OF SALE AND SALES AGREEMENT [detailed description of equipment and facilities installed or provided as part of the Property] TO BE ATTACHED