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HomeMy WebLinkAbout06803 ORD - 01/30/1963r� IMS:JKH: 1 -28 -63 •, AN ORDINANCE AUTHORIZING AND DIRECTING THE CITY MANAGER TO EXECUTE, FOR AND ON BEHALF OF THE CITY, A COLLATERAL AGREEMENT BETWEEN SOUTHERN COMMUNITY GAS COMPANY, CORPUS CHRISTI MUNICIPAL GAS CORPORATION AND THE CITY OF CORPUS CHRISTI, A COPY OF WHICH IS ATTACHED HERETO AND MADE A PART HEREOF, SO AS TO PROCEED WITH THE CLOSING OF THE SALE OF THE SYSTEM UNDER THE CONTRACT OF SALE HERETOFORE EXECUTED BY SAID PARTIES; AND DECLARING AN EMERGENCY. WHEREAS, IT IS DEEMED NECESSARY TO ENTER INTO AN AGREEMENT TO PROVIDE FOR A PROCEDURE FOR THE HANDLING OF THE PROPERTIES IN THE EVENT FINAL CONSUMMATION OF THE CONTRACT OF SALE NOW IN EXISTENCE BETWEEN THE SOUTHERN COMMUNITY GAS COMPANY AND CORPUS CHRISTI MUNICIPAL GAS CORPORATION 15 PREVENTED: NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI, TEXAS: SECTION 1. THE CITY MANAGER BE, AND HE IS HEREBY, AUTHORIZED TO EXECUTE, FOR AND ON BEHALF OF THE CITY, A COLLATERAL AGREEMENT BETWEEN SOUTHERN COMMUNITY GAS COMPANY, CORPUS CHRISTI MUNICIPAL GAS CORPORATION AND THE CITY OF CORPUS CHRISTI, A COPY OF WHICH IS ATTACHED HERETO AND MADE A PART HEREOF, SO AS TO PROCEED WITH THE CLOSING OF THE SALE OF THE SYSTEM UNDER THE CONTRACT OF SALE HERETOFORE EXECUTED BY SAID PARTIES. SECTION 2. THE NECESSITY FOR SETTING UP A PROCEDURE FOR THE HANDLING OF GAS SYSTEM PROPERTIES IN CASE OF AN OCCURRENCE OF EVENTS RECITED IN THE COLLATERAL AGREEMENT MENTIONED ABOVE SO AS TO FACILITATE THE CONSUMMATION OF THE GAS SALES CONTRACT WITHIN THE TIME AND TERMS PRO- VIDED IN SAID CONTRACT CREATES A PUBLIC EMERGENCY AND AN IMPERATIVE PUBLIC NECESSITY REQUIRING THE SUSPENSION OF THE CHARTER RULE THAT NO ORDINANCE OR RESOLUTION SHALL BE PASSED FINALLY ON THE DATE OF ITS INTRODUCTION AND THAT SUCH ORDINANCE OR RESOLUTION SHALL BE READ AT THREE SEVERAL MEETINGS OF THE CITY COUNCIL AND THE MAYOR, HAVING DECLARED SUCH EMERGENCY AND NECESSITY TO EXIST, HAVING REQUESTED THE SUSPENSION OF SAID CHARTER RULE AND THAT THIS ORDINANCE BE PASSED FINALLY ON THE DATE OF ITS INTRODUCTION 0 AND TAKE EFFECT AND BE IN FULL FORCE AND EFFECT FROM AND AFTER ITS PASSAGE, IT IS ACCORDINGLY SO ORDAINED THIS THE DAY OF JANUARY, 1963: ATTEST: CITY SECRETARY b APPROVED AS TO LEGAL FORM THIS ,jLDAY OF JANUARY, 1963: i CITY ATTORNEY L-MYOR THE CITY OF CORPUS CHRISTI, ERAS COLLATERAL AGREEMENT THE STATE OF TEXAS COUNTY OF NUECES THIS COLLATERAL AGREEMENT, made and entered into January 30, 1963, between Southern Community Gas Company, a corporation organized and existing under and by virtue of the laws of the State of Texas, with its principal office in Corpus Christi, Nueces County, Texas, hereinafter called "Southern "; the City of Corpus Christi, Texas, Nueoes County, a municipal corporation, herein- after sometimes called the "City"; and Corpus Christi Municipal Gas Corporation, a non-profit corporation organized and existing under and by virtue of the laws of the State of Texas, hereinafter sometimes called "Municipal Gas "; W I T N E S S E T H: WHEREAS, Southern and Municipal Gas, concurrently herewith have entered into a "Contract of Sale ", (said Contract of Sale hereinafter referred to as the "Contract of Sale ") providing for, among other things, the sale by Southern to Municipal Gas of the System as described therein (all references herein to the "System" being the same as the "System" in said Contract of Sale), all for the ultimate ownership by the City; and WHEREAS, the parties are in agreement that if a court of competent jurisdiction has issued any final judgment, decree, or order not subject to further appeal holding unenforceable any of the bonds issued under the Indenture of Mortgage securing the bonds issued by Municipal Gas concurrently herewith to purchase said System, that either the City or Municipal Gas should have the right to otherwise acquire the System; and WHEREAS, if either the City or Municipal Gas is unable to otherwise acquire the System, and the sale of the System made in the Contract of Sale is rescinded, it is important for Southern to continue with a franchise in the area where it heretofore has operated without intereference by other franchise holders; NOW, THEREFORE, for and in consideration of the mutual covenants herein contained,the execution simultaneously herewith of other documents concerning the System, and other valuable considerations set forth herein, the parties agree as follows: I. All terms used hereafter and not previously defined herein shall have the same meaning as in the Indenture of Mortgage and Deed of Trust dated January 1, 1963, between Municipal Gas and Guaranty National Bank and Trust of Corpus Christi, Trustee. 'e o II. If at any time prior to January 1, 1966 any court of competent jurisdiction has issued any final judgment', decrees, or order, not subject to further appeal, holding that any of the Bonds or Additional Bonds are unenforce- able, in whole or in part, then Southern shall lave the election, to be exercised by giving notice in writing to Municipal Gas at any time before January 31, 19661 to rescind the sale of the System to Municipal Gas and all agreements, contracts, and conveyances between the parties hereto entered into or delivered incident to the sale of the System, or to pursue its other remedies including those under the aforesaid Indenture of Mortgage and Deed of Trust; provided, however, that if City or Municipal Gas can, by a prceedure set forth in the decree of the court or otherwise, take action by the exercise of reasonable diligence within six months from the date of such notice by Southern which will result in either City or Municipal Gas being able to carry out the transactions contemplated by the Contract of Sale, then City or Municipal Gaa, as the case may be, will use due diligence to take such action and if, as a result of such action, either City or Municipal Gas will be able to carry out the transactions contemplated by the Contract of Sale, and if Municipal Gas and City execute a supplemental agreement as described in Article III hereof, then this right of rescission granted in this Collateral Agreement shall cease to exist. III. In the event of the existence of the situation as set forth in the proviso clause of Article II hereof, the parties hereto hereby agree to a supplemental contract in all respects identical to the Contract of Sale except for (i) reducing the purchase price of the System by the amount of principal of the Bonds or Additional Bonds theretofore paid, (ii) suitable adjustment of dates to make the rights and duties accrue and continue under the supplemental contract as near as practical to the times they would have accrued and existed under the Contract of Sale, (iii) suitable adjustment made necessary by the fact that the System has already been conveyed, and (iv) modifications which may be necessary to comply with the decree of the court as set forth in Article II hereof; provided, however, that such modifications shall not result in a reduction of the total consideration for the System as now provided in the Contract of Sale. • • IV. In the event Southern gives notice of its right of rescission as provided herein and a sale cannot be consummated under the procedure set forth in Articles II and III above, the rescission shall be promptly accomplished as follows: A. Southern shall repay to Municipal Gas the purchase price paid by Municipal Gas for the System and shall deliver to Municipal Gas all of the Bonds and Additional Bonds then outstanding. B. Municipal Gas shall pay to Southern the money it received for all Bonds and Additional Bonds. C. All assets of Municipal Gas, subject to all its liabilities, such assets to include all money in the Revenue Fund, Operating Fund, Interest and Sinking Fund, Reserve Fund, and Extension and Redemption Fund shall be promptly paid to Southern which amount of money together with all payments of principal and interest theretofore made on any of the Bonds and Additional Bonds is here agreed to be a reasonable rental for the System while held by Municipal Gas. D. Municipal Gas and Southern will terminate the Gas Sales Agreement entered into of even date herewith without prejudice to the right of either party thereto to collect any amounts then due it under said Gas Sales Agreement. E. The parties hereto will terminate all obligations and rights under the Contract of Sale as may have survived this closing. F. Municipal Gas shall reconvey to Southern the System (plus all extensions and additions thereto, if any, paid for out of any fund required or created by the Indenture of Mortgage and Deed of Trust, if any has been then acquired by Municipal Gas, less the accounts receivable included in the System, plus all accounts receivable from customers served by the System at the time of the reconveyance) free and clear of all mortgages, liens, and encumbrances whatsoever except as existed on the date hereof. City agrees to enter into such reconveyance to the extent of its interest in the property to be reconveyed. G. The parties hereto shall cause to be canceled the Indenture of Mortgage and Deed of Trust between Guaranty National Bank and Trust of Corpus Christi, Trustee, and Municipal Gas. H. Municipal Gas shall terminate whatever franchise it has to use the public streets of the City for constructing, maintaining, or operating natural gas pipelines of the System. • I. All books and records of Municipal Gas pertinent to the operation of the System shall be delivered to Southern. J. Each party shall pay its own expenses incident to the rescission except that Municipal Gas shall pay the cost of all documentary and other transfer stamps and recording fees in connection therewith and shall also pay any charges or transfer fees required for obtaining consents to the assignment to Southern or any necessary additional assignments or transfers of title to Southern of any of the individual properties included in the properties in the System. All ad valorem or property taxes applicable to the System and any rental on any lease included in the System shall be pro rated between Municipal Gas and Southern as of the date of the reconveyance of the System. Municipal Gas will pay all gross receipts taxes or other taxes measured by sales or deliveries of gas through the System incurred or accruing down to the date of such reconveyance. K. Southern and Municipal Gas will terminate the lease, if any, referred to in Article XX of the Contract of Sale without prejudice to the right of Municipal Gas to collect any amounts then due it under the lease from Southern. (There shall be no reconveyance of any miscellaneous property described in Article III A of the Contract of Sale.) V. If at any time after January 11 1966 and while there still remains unpaid any of the interest and principal of the Bonds and Additional Bonds, any court of competent jurisdiction has issued any final judgment, decree, or order, not subject to further appeal, holding that any of the Bonds or Additional Bonds are unenforceable in whole or in part, Municipal Gas is nevertheless firmly and unconditionally obligated to repay to Southern (or its successors as holders of the Bonds and Additional Bonds) the entire amount of the cash paid by Southern for the Bonds and Additional Bonds, together with interest thereon at the maximum rate permitted by law (less any credits resulting from payments theretofore made on the Bonds and Additional Bonds), and Municipal Gas firmly and unconditionally obligates itself to make such repayment upon demand by such party or parties entitled to receive same made at any time after final determina- tion of the invalidity or unenforceability of the Bonds and Additional Bonds, and Municipal Gas expressly agrees that its obligation to make such repayment shall be fully secured by the liens and assignments granted and created under and by virtue of the Indenture of Mortgage and Deed of Trust, and that the Indenture of Mortgage and Deed of Trust agy be foreclosed in any lawful manner upon the default of Municipal Gas in making such repayment. VI. Prior to the payment of the Bonda, City will not grant the right to anyone other than Municipal Gas to use any of the streets of the City for a natural gas distribution system supplying gas to customers within the "Northwest Area" described in the Ordinance which will authorize the granting of a franchise to Southern Community Gas Company to furnish gas to industrial customers as a result of the December 29, 1962,election. VII. The rights herein granted to Southern or other holder of the Bonds and Additional Bonds are in addition to and cumulative of all other rights and remedies to which it or they may be entitled in the event of any attack upon the validity or enforceability of the Bonds or Additional Bonds existing either under the common law, at equity, under the terms of the Indenture of Mortgagee and Deed of Trust or otherwise. IN WrMSS WHEREOF, the parties hereto have caused this instrument to be duly executed in multiple originals. SOUTHERN COMMUNITY GAS COMPANY ATTEST: By, ATTEST: Secretary CORPUS CHRISTI MUNICIPAL GAS CORPORATION By CITY CF CORPUS CHRISTI, TEXAS By ATTEST: City Manager City Secretary Director of Finance APPROVED as to Legal Form 1/30/63 City Attorney CORPUS CHRISTI, TEXAS DAY OF 7— 19 TO THE MEMBERS OF THE CITY COUNCIL CORPUS CHRISTI, TEXAS FOR THE REASONS SET FORTH IM THE EMERGENCY CLAUSE OF THE FORE- GOING ORDINANCE, A PUBLIC EMERGENCY AND IMPERATIVE NECESSITY EXIST FOR THE SUSPENSION -OF THE CHARTER RULE OR REQUIREMENT THAT NO ORDINANCE OR RESOLUTION SHALL BE PASSED FINALLY ON THE DATE IT IS INTRODUCED, AND THAT SUCH ORDINANCE OR RESOLUTION SHALL BE READ AT THREE MEE`T'INGS OF THE CITY COUNCIL, 1', THEREFORE# HEREBY REQUEST THAT YOU SUSPEND SAID CHARTER RULE OR REQUIREMENT AND PASS THIS ORDINANCE FINALLY ON THE DATE IT IS INTRODUCED, OR AT THE PRESENT MEETING OF THE CITY COUNCIL. RESPECTFULLY, MAYOR THE CITY OF CORPUS CHR TI,TEXAS THE CHARTER RULE WAS SUSPENDED BY THE FOLLOWING VOTES BEN F. MCDONALD Tom R. SWANTNER DR. JAMES L. BARNARD JOSE R. DELEON M. P. MALDONADo W. J. ROBERTS JAMES H. YOUNG 4.1-1— THE ABOVE ORDINANCE WAS PASSED BY THE FOLLOWING VOTES BEN F. MCDONALD Tom R. SWANTNER DR. JAMES L. BARNARD JOSE R. DELEoN M. P. MALOOMADO Af- W. J. ROBERTS 1741 a JAMES H. YOUNG ORDINA NCE NO. AUTHORIZING AND DIRECTING THE CITY MANAGER TO EXECUTE, FOR AND ON BEHALF OF THE CITY, A COLLATERAL AGREEMENT BETWEEN SOUTHERN COMMUN I Ty GAS COMPANY, CORPUS CHR I STI MUNICIPA L GAS CORPORATION AND THE CITY OF CORPUS CHRISTI, A COPY OF WHICH IS ATTACHED HERETO AND MADE A PART HEREOF, SO AS TO PROCEED W I TH THE CLOS I NG OF THE SALE OF THE SYSTEM UNDER THE CONTRACT OF SA LE HERETOFORE EXECUTED BY SAID PART IE£ AND DECLARING AN EMERGENCY. CITY OF CORPUS CHRISTI LEGAL DEPARTMENT A r n_ r �t m c� n m s— m N 1 — f�, w i N i ORDINA NCE NO. AUTHORIZING AND DIRECTING THE CITY MANAGER TO EXECUTE, FOR AND ON BEHALF OF THE CITY, A COLLATERAL AGREEMENT BETWEEN SOUTHERN COMMUN I Ty GAS COMPANY, CORPUS CHR I STI MUNICIPA L GAS CORPORATION AND THE CITY OF CORPUS CHRISTI, A COPY OF WHICH IS ATTACHED HERETO AND MADE A PART HEREOF, SO AS TO PROCEED W I TH THE CLOS I NG OF THE SALE OF THE SYSTEM UNDER THE CONTRACT OF SA LE HERETOFORE EXECUTED BY SAID PART IE£ AND DECLARING AN EMERGENCY. CITY OF CORPUS CHRISTI LEGAL DEPARTMENT