2002-058OmXNANCE O 'P
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. D/B/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. ("CoServ 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 CoServ 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 "Term'marion of Agreement for
Provision of Electric Service" ("Termination of Contract") was executed by CoServ
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 CoServ Electric the request of
Denton CJW Partners, Ltd., and requested that CoServ Electric provide DME with
substantiation that the Contract between CoServ Electric and Denton CJW Parmers, Ltd.
had been terminated; CoServ produced the fully-executed "Termination of Contract" as
requested; and
WHEREAS, DME and CoServ Electric, effective on January 28, 2002, signed a
Letter Agreement confirming that the Contract was terminated; that CoServ Electric does
not oppose the provision of electric service to The Vintage by DME; and that CoServ
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, CoServ 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, CoServ Electric; is currently a Debtor-in-
Possession of its property, the subject of the bankruptcy estate; and
WHEREAS, DME and CoServ Electric have negotiated a purchase by DME of all
of the electric infrastructure improvements now in place in The Vintage development,
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 CoServ 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 CoServ
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 19th
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 19th 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 tree 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. dgo/a CoServ 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 CoServ 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 CoServ Electric.
SECTION4. This ordinance shall become effective immediately upon its
passage and approval.
//
PASSED AND APPROVED this the /~/~ day of x~(g~ , 2002.
EULINE BROCK, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
APPROVED AS TO LEGAL FORM:
HERBERT L. PROUTY, CITY ATTORNEY
S:\Our Documents\Ordinances\02XDME Acquisition of CoServ Electric lnfrstmcture - Vintage.doc
BILL OF SALE AND SALES AGREEMENT
STATE OF TEXAS
COUNTY OF DENTON
KNOW ALL IVIEN BY THESE PRESENTS:
THAT for and in consideration of the sum of EIGHTY-SIX THOUSAND AND NO/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, rifle, 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 lransferable.
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 KIND 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.
3. 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 ear~ 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 Co)
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 Agreemem, 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 ail 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 party. 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 party 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 eagh lransfer or assignment thereof.
of
IN W][TNESS WHEREOF, this Bill of Sale and Sales Agreement is executed on the ~ clay
[~f~ ,2002.
BUYER:
DENTON MUNICIPAL ELECTRIC
By:
Narae:
Title:
SELLER:
DENTON COUNTY ELECTRIC
COOPERATIVE, INC.,
D/B/A COSERV ELECTRIC
By:
Name:
Title:
'-cffm/iC. "rflviff "/
Senior Vice President - Energy Services
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
APPROVED AS TO LEGAL FORM:
HERBERT L. PROUTY, CITY ATTORNEY
STATE OF TEXAS
COUNTY OF DENTON
__ BEFORE ME, the undersigned authority, on this day personally app.e.ared
~A)~ //~t-'~' ]) , O_.ll~ .~.~. Q_/'~c ,~'~ of DentonMunlelpal
Electric, a..,Oy/d/_//'/Ja~l/'~"~.tO'Atg/O-g~dl~knownO[O me to beadae person and officer whose
name is su'b~cribed to fhe foregoing instrument and acknowledged to me that he/she executed the
same for the purposes and ?ns~eration therein e}pr. essed, in the capacity stated, and as the act and
deed of said-/~ff~~~~
Given under my hand and seal of office, on this the/~day of '~/////~/~' , 2002.
'1
I"" S
' o,"'"' JENNIFER K. WALTER
Notary public, State of Texas
My C~ammissian Expires
~ta~'Pq~lic in and for the State of Texas
My Commission Expires:
STATE OF TEXAS
COUNTY OF DENTON
BEFORE ME, the undersigned authority, on this , day personally
C$fin~ Eleeffie Cooperative, Inc., d~/a CoSe~ Electric, a Texas c~pemt~ve co~oration,
~om to me to be ~e person ~d officer whose nme is subscribed to ~e forego~g ~s~ent ~d
ac~owledged to me ~at he/she executed ~e sine for ~e p~oses ~d consideration ~erein
expressed, ~ ~e capaci~ stated, ~d ~ ~e act ~d deed of s~d co~oration.
Given~dermyh~d~dseflofoffice, n~is~e ~dayof ~ ,2002.
~ ~x- ...?--:.~</;% Not~ Public in ~d for ~Smte of Texas
~ (~)~} My Co~ission Expires: [a-Oq-~
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 ~4 TT~4 CHED