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R-95-01-12-10C - 1/12/1995Conservation Commission ("TNRCC ") require that any sale or transfer occur after TNRCC approval, and WHEREAS, the TNRCC has approved the agreement between the RESOLUTION NO. k- 5 a-Joe _ WHEREAS, on the 14th day of April, 1994 the City of Round Rock adopted Resolution No. R- 94- 04- 14 -9H, which authorized the Mayor to execute a Sale and Purchase Agreement ( "Agreement ") to acquire the assets of the Round Rock Water Supply Corporation ("RRWSC"), and WHEREAS, the RRWSC desires to dissolve the Corporation and the City desires to expand its Certificate of Convenience and Necessity into the area served by the RRWSC, and WHEREAS, the regulations of the Texas Natural Resource City and the RRWSC, but has requested that the City ratify the above - mentioned agreement to conform to the TNRCC regulations, Now Therefore, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK, TEXAS, That the Agreement which the Mayor was authorized to execute in Resolution No. R- 94- 04 -14 -9H is hereby ratified, said Agreement being attached hereto and incorporated herein as Exhibit "A ", thereby making the date of the approval of this Resolution the effective date of the transaction. XS /ksvam rIoN 115301120 ATTEST: RESOLVED this 12th day of January, 1995. 0 1114 L Jn � LAND, City Secretary di 14 CHARLES CUER, Mayor City of Round Rock, Texas c xhtb,-T SALE AND PURCHASE AGREEMENT This Sale and Purchase Agreement ( "Agreement ") dated as of the day of June, 1994, by and between the City of Round Rock, Texas, a Texas home rule municipality ( "Purchaser "), and the Round Rock Water Supply Corporation ( "Seller "). Seller desires to sell and Purchaser desires to purchase all of the assets of Seller on the terms and conditions set forth in this Agreement. In consideration of the mutual promises of the parties; in reliance on the representations, warranties, covenants, and conditions contained in this Agreement; and for other good and valuable consideration, the parties agree as follows. KS /ROtNDROCK AG- RRWSC.2 INTRODUCTION ARTICLE 1 SALE Sale of Assets X14 _; ' - / 1 -9H 1.01. Seller agrees to sell, convey, transfer, assign, and deliver to Purchaser, and Purchaser agrees to purchase or accept from Seller, all of the following assets of Seller. (a) All of Seller's rights and interest in and to its water distribution system and wastewater collection system including, but not limited to, the following: water well and related equipment, water pump house, Manville external water line, Manville interconnect, all water distribution lines, all sewer collection lines, sewer lift station, and sewer force main; (b) All of Seller's rights, title and interests in and to any easements for access and placement and maintenance of lines for Seller's water distribution and sewer collection systems; (c) All of Seller's right, title and interests in the following real property: Lot 29, Block "A ", Oak Bluff Estates, a subdivision in Williamson County, Texas according to the map or plat thereof as recorded in Cabinet "F ", Slides 125 -127 of the Plat Records of Williamson County, Texas, together with that one certain 150 foot sanitary easement as shown on the plat of the above referenced subdivision; and Regardless of the foregoing, the City agrees that the Oak Bluff Homeowners Association may remove four (4) young trees and forty -five (45) young shrubs from the lot. If the trees and shrubs have not been removed by October 1, 1994, they shall become the property of the City. (d) All permits, licenses, certificates of convenience and necessity, special authorities, and other similar acts of any governmental body or agency held by Seller that may be lawfully assigned or transferred, subject to any action by such body that may be required in connection with such assignment or transfer. (e) All of Seller's cash on hand upon the dissolution of the corporation. Consideration for Sale 1.02. In consideration of the sale and transfer of the assets of Seller and the representations, warranties, and covenants of Seller set forth in this Agreement, Purchaser shall pay to Seller $130,000.00. Closing 1.03. The parties agree to use their best efforts to consummate this transaction ( "Closing "). The Closing shall take place at the offices of Stephan L. Sheets & Associates, P.C. located at 309 E. Main Street, Round Rock, Texas on April 27, 1994, or at such other time, date and place mutually agreed upon in writing by Seller and Purchaser ( "Closing Date "). In either event, all terms and conditions to the Closing of this Agreement shall have been met at least five (5) days' prior to the Closing Date. ARTICLE 2 SELLER'S REPRESENTATIONS AND WARRANTIES Seller hereby represents and warrants to Purchaser that the following facts and circumstances are and at all times up to the Closing Date will be true and correct: Organization 2.01. Seller is a water supply corporation duly organized, validly existing, and in good standing under the laws of Texas. Seller has all requisite power and authority (corporate and, when applicable, government) to own, operate, and carry on its business as now being conducted. Taxes 2.02. All federal, state, local, and foreign income, ad valorem, excise, sales, use, payroll, unemployment, and other taxes and assessments ( "Taxes ") that are due and payable by Seller have been properly computed, duly reported, fully paid, and discharged. There are no unpaid Taxes that are or could become a lien on the property or assets of Seller or require payment by Seller, except for current Taxes not yet due and payable. All current Taxes not yet due and payable by Seller have been properly accrued on the balance sheets of Seller. Seller has not incurred any liability for penalties, assessments, or interest under the Internal Revenue 2. Code. No unexpired waiver executed by or on behalf of Company with respect to any Taxes is in effect. Title to Assets and Properties 2.03. Seller has good and marketable title to all of its assets and properties, tangible and intangible, that are material to Seller's business. These assets and properties constitute all of the assets and interests in assets that are used in Seller's business. All of these assets are free and clear of mortgages, liens, pledges, charges, encumbrances, equities, claims, easements, rights of way, covenants, conditions, and restrictions, except for the following: (a) Those disclosed in Company's balance sheets as of December 31, 1993, included in the Financial Statements, or in the Exhibits to this Agreement. (b) The lien of current Taxes not yet due and payable. (c) Possible minor matters that, in the aggregate, are not substantial in amount and do not materially detract from or interfere with the present or intended use of any of the assets and properties nor materially impair business operations. All real property and tangible personal property of Seller are in good operating condition and repair, ordinary wear and tear excepted. Seller agrees to accept the equipment and tangible personal property "as is" with no warranty. Laws and Regulations 2.04. Company is not in default or in violation of any law; regulation; court order; or order of any federal, state, municipal, foreign, or other government department, board, bureau, agency, or instrumentality, wherever located, that would materially adversely affect its business or future prospect. Litigation 2.05. Except as disclosed in Exhibit "A" attached to this Agreement, there are no pending, outstanding, or threatened claims; legal, administrative, or other proceedings; or suits, investigations, inquiries, complaints, notices of violation, judgments, injunctions, orders, directives, or restrictions against or involving Seller or any of the assets, properties, or business of Seller or any of Seller's officers, directors, employees, or stockholders that will materially adversely affect Company, its assets, properties, or business. Receivables 2.06. Exhibit "B" attached to this Agreement contains a true and correct list of all accounts receivable and notes receivable of Seller. All listed accounts and notes receivable of Seller are bona fide receivables, arose in the ordinary course of business by 3. Seller, and require no further performance by Seller. No material objection, claim, or offset has been made regarding the receivables and the receivables are current and collectible in the normal course of business. Authority 2.07. Seller has full power and authority to execute, deliver, and /or consummate this Agreement, subject to the conditions to Closing set forth in this Agreement. All reports and returns required to be filed by each with any government and regulatory agency with respect to this transaction have been properly filed. Except as otherwise disclosed in this Agreement, no notice to or approval by any other person, firm, or entity, including governmental authorities, is required of Seller to consummate the transaction contemplated by this Agreement. Full Disclosure 2.08. No representation, warranty, or covenant made to Purchaser in this Agreement nor any document, certificate, exhibit, or other information given or delivered to Purchaser pursuant to this Agreement contains or will contain any untrue statement of a material fact, or omits or will omit a material fact necessary to make the statements contained in this Agreement or the matters disclosed in the related documents, certificates, information, or exhibits not misleading. Brokers 2.09. Seller has not retained, consented to, or authorized any broker, investment banker, or third party to act on Seller's behalf, directly or indirectly, as a broker or finder in connection with the transactions contemplated by this Agreement. Information Required for Bulk Sales Notice 2.10. Exhibit "C" attached to this Agreement includes a true, complete, and correct list of all existing creditors of Company, including their business addresses and the amounts of claims by each creditor against Company. Exhibit "C" also includes all information required to be furnished by Seller to Purchaser for purposes of complying with the Texas Business and Commerce Code bulk transfer provisions. ARTICLE 3 PURCHASER'S REPRESENTATIONS AND WARRANTIES Purchaser represents and warrants to Seller that: Authority 3.01. Purchaser has full power and authority to execute, deliver, and consummate this Agreement subject to the conditions to closing set forth in this Agreement. All corporate acts, reports, 4. and returns required to be filed by Purchaser with any government or regulatory agency with respect to this transaction have been or will be properly filed prior to the Closing Date. No provisions exist in any contract, document, or other instrument to which Purchaser is a party or by which Purchaser is bound that would be violated by consummation of the transactions contemplated by this Agreement. Broker 3.02. Neither Purchaser, nor any of Purchaser's officers, directors, or employees, has retained, consented to, or authorized any broker, investment banker, or third party to act on its behalf, directly or indirectly, as a broker or finder in connection with the transactions contemplated by this Agreement. Organization and Standing of Purchaser 3.03. Purchaser is a home rule municipal corporation duly organized, validly existing, and in good standing under the laws of the State of Texas. ARTICLE 4 COVENANTS Seller covenants with Purchaser that from and after the date of this Agreement until the Closing date, Seller will: Maintenance of Assets and Properties 4.01. Maintain all tangible assets and properties of Company in as good a state of operating condition and repair as they are on the date of this Agreement, except for ordinary depreciation, wear, and tear. This obligation is subject to the maintenance provision of the Interim Operating Agreement between the parties hereto. Absence of Liens 4.02. Not sell, pledge, lease, mortgage, encumber, dispose of, or agree to do any of these acts regarding any of the assets or properties of Seller, other than in the normal course of business, without the prior written approval of Purchaser. Maintain Insurance 4.03. Keep in force all policies of insurance covering the Company's business, properties, and assets, including all insurance listed in this Agreement. If Purchaser so requests in writing, to purchase additional insurance as may be reasonably required at Purchaser's expense. Notification of Litigation 4.04. Promptly notify Purchaser in writing of any outstanding or threatened claims; legal, administrative, or other proceedings, 5. suits, investigations, inquiries, complaints, notices of violation, or other process; or other judgments, orders, directives, injunctions, or restrictions against or involving Seller or its personnel that could adversely affect Seller. Access to Books and Records 4.05. Make available to Purchaser and its authorized agents and accountants for inspection at reasonable times and under reasonable circumstances the following items with respect to Company; assets; properties; business and financial records; and tax returns, working papers, files, and memoranda of its public accountants and outside legal counsel for the purposes of making an accounting review, a legal audit, and investigation and examination of Seller as deemed desirable by Purchaser. Seller will use its best efforts to cause Seller's officers, employees, public accountants, and outside legal counsel to cooperate fully with Purchaser's examination and to make a full and complete disclosure to Purchaser of all facts regarding the financial condition and business operations of Seller. Deliver Title Policies 4.06. Deliver to Purchaser title insurance policies, dated as of the Closing Date, issued by title insurance companies acceptable to Purchaser and at Purchaser's expense. The policies shall insure a fee simple title in Purchaser to all real property owned by Seller, subject only to the following: (a) The lien, if any, of current real property taxes, payment of which are not delinquent. (b) Liens and encumbrances referred to in the financial statements set forth in the exhibits to this Agreement. (c) Objections and exceptions noted in the title insurance policies that have been approved by Purchaser in writing. Best Efforts 4.07. Use its best efforts to cause all of the conditions to Close set forth in Article 5 to occur in time for the Closing. ARTICLE 5 CONDITIONS TO PURCHASER'S OBLIGATION TO CLOSE The obligation of Purchaser to Close under this Agreement is subject to each of the following conditions (any one of which may, at the option of Purchaser, be waived in writing by Purchaser) existing on the Closing Date, or such earlier date as the context may require. 6. Representations and Warranties 5.01. Each of the representations and warranties of Seller in this Agreement, the disclosures contained in the exhibits to this agreement, and all other information delivered under this Agreement shall be true in all material respects at and as of the Closing Date as though each representation, warranty, and disclosure were made and delivered at and as of the Closing Date. Compliance With Conditions 5.02. Seller shall comply with and perform all agreements, covenants, and conditions in this Agreement required to be performed and complied with by each of them. All requisite action (corporate and other) in order to consummate this Agreement shall be properly take by Seller. Suit or Proceeding 5.03. No suit or proceeding, legal or administrative, relating to any of the transactions contemplated by this Agreement shall be overtly threatened or commenced that, in the sole discretion of Purchaser and its counsel, would make it inadvisable for Purchaser to Close this transaction. Government Approvals and Filings 5.04. All necessary government approvals and filings regarding this transaction shall be received or made prior to the Closing Date in substantially the form applied for to the reasonable satisfaction of Purchaser and its counsel. Any applicable waiting period for the approvals and filings shall be expired. Corporate and Stockholder Action 5.05. All corporate and stockholder action necessary to consummate the transactions contemplated in this Agreement shall be properly taken by Seller. Purchaser shall receive copies of all appropriate resolutions of Seller's board of directors and shareholders relating to this Agreement. The resolutions shall be certified by Seller's secretary. ARTICLE 6 CONDITIONS TO SELLER'S OBLIGATION TO CLOSE The obligation of Seller to Close under this Agreement is subject to each of the following conditions (any one of which at the option of Seller may be waived in writing by Seller) existing on the Closing Date. Municipal Action 6.01. Purchaser shall take appropriate corporate action regarding this transaction, which shall be evidenced by resolutions 7. of its City Council, authorizing Purchaser to enter into and complete this transaction. 6.02. Seller shall reach agreement with the FDIC for settlement of claims in consideration for its release of liens against the assets of Seller. ARTICLE 7 PARTIES' OBLIGATIONS AT THE CLOSING Seller's Obligations at the Closing 7.01. At the Closing, Seller shall execute, if appropriate, and shall deliver to Purchaser: (a) A bill of sale in a form acceptable to Purchaser sufficient to convey to Purchaser all rights, title, and interest in and to all of the inventories, fixtures, equipment, and items of personalty being sold to Purchaser under the terms of this Agreement. Purchaser's Obligation at Closing 7.02. At the closing, Purchaser shall deliver to Seller against delivery of the items specified in Paragraph 4.01, above, a check in the amount of $130,000, payable to Seller in federal funds currently available in Texas. ARTICLE 8 INDEMNIFICATION Covenant to Indemnify and Hold Harmless 8.01. Seller covenants and agrees to indemnify, defend, and hold harmless Purchaser from and against any and all claims, suits, losses, judgments, damages, and liabilities including any investigation, legal, and other expenses incurred in connection with and any amount paid in settlement of any claim, action, suit, or proceeding (collectively called "Losses "), other than those Losses disclosed in this Agreement or any Exhibit delivered pursuant to this Agreement, to which Purchaser may become subject, if such Losses arise out of or are based upon any facts and circumstances (or alleged facts and circumstances) that could result in or give rise to a misrepresentation, breach of warranty, or breach of covenant by Seller to Purchaser in this Agreement. This right to indemnification is in addition to any other right available to Purchaser and Company, including the right to sue Seller for a misrepresentation, breach of warranty, or breach of covenant under this Agreement. 8. ARTICLE 9 GENERAL PROVISIONS Survival of Representations, Warranties, and Covenants 9.01. The representations, warranties, covenants, and agreements of the parties contained in this Agreement or contained in any writing delivered pursuant to this Agreement shall survive the Closing Date for the period of time set forth in this Agreement. If to Purchaser: Notices 9.02. All notices that are required or that may be given pursuant to the terms of this Agreement shall be in writing and shall be sufficient in all respects if given in writing and delivered personally or by registered or certified mail, return receipt requested, postage prepaid as follows: If to Seller: Howard Widmer Presidend, Round Rock Water Supply Corp. Round Rock, Texas 78664 City of Round Rock 221 E. Main Street Round Rock, Texas 78664 Attention: City Manager Assignment of Agreement 9.03. This Agreement shall be binding on and inure to the benefit of the parties to this Agreement and their respective successors and permitted assigns. This Agreement may not be assigned by any other party without the written consent of all parties and any attempt to make an assignment without consent is void. Governing Law 9.04. This Agreement shall be construed and governed by the laws of the State of Texas. Venue shall be in Williamson County, Texas. Amendments; Waiver 9.05. This Agreement may be amended only in writing by the mutual consent of all of the parties, evidenced by all necessary and proper corporate authority. No waiver of any provision of this Agreement shall arise from any action or inaction of any party, except an instrument in writing expressly waiving the provision executed by the provision executed by the party entitled to the benefit of the provision. 9. Entire Agreement 9.06. This Agreement, together with any documents and exhibits given or delivered pursuant to this Agreement, constitutes the entire agreement between the parties to this Agreement. No party shall be bound by any communications between them on the subject matter of this Agreement unless the communication is (a) in writing, (b) bears a date contemporaneous with or subsequent to the date of this Agreement, and (c) is agreed to by all parties to this Agreement. On execution of this Agreement, all prior agreements or understandings between the parties shall be null and void. Reliance Upon Representations and Warranties 9.07. The parties mutually agree that, notwithstanding any right of Purchaser to fully investigate the affairs of Seller and notwithstanding any knowledge of facts determined or determinable by Purchaser pursuant to the investigation or right to investigate, Purchaser may fully rely upon the representations, warranties, and covenants made to Purchaser in this Agreement and on the accuracy of any document, certificate, or exhibit given or delivered to Purchaser pursuant to this Agreement. Knowledge by an agent of Purchaser of any facts not otherwise disclosed in this Agreement or in a document, certificate, or exhibit delivered to Purchaser pursuant to this Agreement shall not constitute a defense by Seller for indemnification of Purchaser under Article 8 or for any claim for misrepresentation or breach of any warranty, agreement, or covenant under this Agreement or any exhibit, certificate, or document delivered under this Agreement. ATTEST: Signed on this the 0 e a/Ai E LAND, City Secretary Termination of Agreement 9.08. In the event this Agreement is not Closed by July 15, 1994, then this Agreement shall terminate on and as of that date. Any termination shall not affect in any manner any rights and remedies that any party to this Agreement may have at the time of termination. day of (A/L•.e.. - , 1994. CITY OF ROUND ROCK, TEXAS 10. ROUND ROCK WATER SUPPLY CORPORATION 11. HOWARD WIDMER, President PENDING LITIGATION: EXHIBIT A NO. 93- 208 -C368 Miller, et ux vx. Round Rock Water Supply Corporation, et al (368th District Court, Williamson County) Currently a Compromise Settlement Agreement is in progress - securing necessary signatures. EXHIBIT B ACCOUNTS RECEIVABLE / NOTES RECEIVABLE Only accounts receivable are capital recovery fees collected by City of Round Rock in behalf of Round Rock Water Supply Corporation. Two past due utility bills: 37 Stillmeadow 16 Senic Terrace $190.76 $ 41.45 EXHIBIT C LIST OF CREDITORS - ROUND ROCK WATER SUPPLY CORPORATION NAME ADDRESS AMOUNT First Madison Bank, FSB $190,000.00 James V. Hoeffner 100 Congress Avenue est. $ 3,000.00 Attomey at Law Suite 1700 Austin, Texas 78701 -4042 J. Randall Grimes 110 East 7th Street est. $ 500.00 Attomey at Law Suite 200 Georgetown, Texas 78627 -1019 Byron R. Miller (Compromise Settlement $ 1,500.00 Agreement) Accounting Services (For 1994 Tax Retum) est. $ 850.00 Capital Graphics, Inc. P.O. Box 69 est. $ 750.00 Howard R. Widmer Round Rock, Tx 78680 Nelson Ringmacher 6 Meandering Way est. $ 500.00 Round Rock, Tx 78664 Chris Parks 3 Meandering Way $ 100.00 Round Rock, Tx 78664 Texas Natural Cons. Commission est. $ 5.00 Ellen Barron 500 West Sixteenth est. $ 200.00 Austin, Texas 78701 DATE: January 10, 1995 SUBJECT: City Council Meeting - January 12, 1995 ITEM: 10.0 Consider a resolution ratifying the City's purchase of the assets of the Round Rock Water Supply Corporation. STAFF RESOURCE PERSON: Steve Sheets STAFF RECOMMENDATION: The Texas Natural Resource and Conservation Commission ( "TNRCC ") has approved the sale of assets by the Round Rock Water Supply Corporation ( "RRWSC ") to the City. According to the TNRCC's regulations, any sale agreement should be entered into after TNRCC approval. In order to conform to their regulations, TNRCC has suggested that the City ratify the Sale and Purchase Agreement previously adopted on April 14, 1994 in Resolution No. R- 94- 03- 14 -9H. KS /RESOLUTION BS50112C