HomeMy WebLinkAboutResolution - 5374 - Agreement - Power-Tex Joint Venture - Gas/Purchase Agreement - 12/19/1996RESOLUTION NO.5374
Item #15A
December 19, 1996
RESOLUTION
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK:
THAT the Mayor Pro Tempore of the City of Lubbock BE and is hereby authorized and
directed to execute for and on behalf of the City of Lubbock an Agreement amending a
Gas/Purchase Agreement and any associated documents, between the City of Lubbock and
Power -Tex Joint Venture, attached hereto, which shall be spread upon the minutes of the Council
shall be spread upon the minutes of this Council shall constitute and be a part of this Resolution as
if fully copied herein in detail.
Passed by the City Council this 19th day of December „ 1996.
ALEX "TY" COOKE. MAYOR PRO TEMPORE
ATTEST:
Kaythi arnell, City Secretary
APPROVED AS TO CONTENT:
Ebert Massengale, Manag4 Director of
Electric Utilities
APPROVED AS TO FORM:
G. Vand ver, Assistant City
WV:gs/ccdom/POWERTX.tes
December 12, 1996
RESOLUTION NO. 5374
Item #15A
December 19, 1996
311 ����T� „T�: �Ii � •
This settlement agreement and release is entered into by
and between The City of Lubbock (the "City"); Santa Fe Energy
Resources, Inc ("Santa Fe"); Hadson Gas Services, Inc., Hadson Gas
Co. g
Hadson Gas Marketin Co. Power -Tex Joint Venture and
GGSI/Crown Joint Venture (the "Power -Tex defendants"); and David
Freeman ("Freeman").
Recitals
1. In August 1995, the City filed a lawsuit (the
"Lawsuit") against Santa Fe, the Power -Tex defendants, and Freeman
in the District Court of Harris County, Texas, setting forth breach
of contract, fraud, breach of fiduciary duty,. tortious interference
and other claims against Santa Fe, the Powi:r-Tex defendants and
Freeman relating to a contractual revenue sharing arrangement
between the City and one of the Power -Tex defendants. The City
alleged, in substantial part, that the defendants engaged in
various forms of wrongful conduct that served to deprive the City
of its proper revenue sharing benefits. The Lawsuit was assigned
Case No. 95-44137 and is pending before Judge Tony Lindsay.
2. Santa Fe, the Power -Tex defendants, and Freeman have
denied: (a) all allegations of wrongdoing and (b) that they have
any liability to the City regarding any of the claims asserted by
the City. Nevertheless, the City, Santa Fe, the Power -Tex
defendants, and Freeman believe it is in the best interests of all
parties to settle the Lawsuit and forever resolve all claims and
disputes among or between them that were, or could have been,
asserted i•fi'-the Lawsuit. Accordingly, the City, Santa Fe, the
DLMAINO1 Doc: 221364_1
Power -Tex defendants, and Freeman have entered into this settlement
agreement and release by which they intend to settle the Lawsuit
and forever resolve and dismiss the claims that were, or could have
been, asserted therein.
Settlement Terms
3. The City and the Power -Tex Joint Venture shall enter
into an amendment to their August 25, 1994 gas sales contract. A
copy of the amendment is attached hereto as Exhibit A.
4. Santa Fe shall pay the sum of $100,000 directly to
the City's counsel of record, Harvill E. Weller, Jr.
Release and Dismissal
5. In exchange for the consideration recited in
Paragraphs 3 and 4, the promises of release expressed herein, and
other good and valuable consideration, the sufficiency of which is
hereby confessed, the City, Santa Fe, the Power -Tex defendants, and
Freeman hereby fully release and forever discharge each of the
others of them from any and all claims, demands, damages,
liabilities or actions, either at law or in equity, whether known
or unknown, which have accrued on the date hereof, relating in any
manner to the claims that were, or could have been, asserted in the
Lawsuit. This release shall expressly bind and apply in favor of,
and shall expressly release and discharge, LG&E Natural Inc., LG&E
Natural Plains Energy Services Inc., and LG&E Natural Plains
Marketing Inc., and any and all successor companies to any of the
Power -Tex defendants.
6. The parties shall submit a proposed final judgment,
in the form attached hereto as Exhibit B, and shall take any and
DLU AIN01 Dom 2213641 —2—
all additional steps necessary in order to dismiss the Lawsuit with
prejudice.
other Terms
7. The rights and obligations set forth in this
settlement agreement and release shall be binding upon, and shall
inure to the benefit of, the successors, assigns, parents,
affiliates, subsidiaries, partners, agents, officers, directors,
shareholders, employees, and attorneys of each of the parties
hereto.
8. The settlement of this Lawsuit and the rights and
obligations set forth in this settlement agreement and release
shall be kept confidential by the parties and shall not be
disclosed to the public or to third parties except in accordance
with the public information actor as otherwise required by law or
regulation.
9. The parties represent and warrant that each of them
has all requisite power and authority to execute, deliver and
perform its respective obligations under this settlement agreement
and release.
10. This settlement agreement and release represents the
compromise of vigorously disputed claims by and between the parties
hereto. Therefore, neither the execution and performance of this
settlement agreement and release, nor any term or provision of this
settlement agreement and release, shall be deemed an admission of
any kind by any party hereto.
DLMAINOI Doc 2213641 —3—
The C
By.
Title
Santa Fe Energy Resources, Inc.
By:
Title:
Hadson Gas Services, Inc., now
known as LG&E Natural Inc.; Hadson
Gas Co., now known as LG&E Natural
Plains Energy Services Inc.; Hadson
Gas Marketing Co., now known as
LG&E Natural Plains Marketing Inc.;
Power -Tex Joint Venture; and
GGSI/Crown Joint Venture
By.
JO YURMI4/1
Title: Senior V President
David Freeman and Dave Freeman,
Inc.
APPROVED AS TO CONTENT:
Robert MAsefigale,,Aaneging Director
of Electric Utilities
DLMAINOI Doc: 2213641 —4—
Dated: Y6 /f I
ATT ST:
ayt Darnell, City Secretary
Dated:
Dated: January 6, 1997
Dated:
APPROVED AS TO FORM:
a (_ . 4,- 1� 1A^;:
ri
Anita Burgess, City Attorney
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Datea t Januar 15, 1997
Title: Vice President, Law and General Counsel
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The City of Lubbock
By:
Title:
Sant& Fe ZU4r9y Resources, in*,
By: _
Title:
Hadson Gas services, Inc., now
known as La4Z Natural Inc.; Hadson
Gas co., Dow known as LGM Haturai
Plains Energy Services Inc.; Hadson
Gas Karketing Co., noir known as
LQU Natural Plains Marketing Inc.;
Power -Tax Joint venture; and
GGSI/CTOwn, Joint Venture
By:
V11sa-
Title: Senor V Presid0�t
Dated:
Dated:
Dated: sanuaKy 6, 1997�
Dated:
David Freeman and Dave rro*z n, '
Inc.
_117AF7 _
RESOLUTION NO. 5374
Item #15A
December 19, 1996
AGREEMENT AMENDING
GAS SALES CONTRACT
DATED AUGUST 25,1994
THIS AGREEMENT, made and entered into this 6h day of January, 1997, by
and between the CITY OF LUBBOCK, hereinafter referred to as "Buyer," and
POWER TEX JOINT VENTURE, hereinafter referred to as "Seller."
WITNESSETH:
WHEREAS, Buyer and Seller entered into a Gas Purchase Agreement dated
August 25, 1994, hereinafter referred to as "Agreement" or "said Agreement," covering
the sale and purchase of gas;
WHEREAS, Buyer and Seller desire to amend certain provisions of said
Agreement;
NOW, THEREFORE, in consideration of the premises, the mutual covenants and
agreements herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby mutually acknowledged, the parties hereto covenant and
agree as follows:
L
Article I of the Agreement is amended in the following particulars:
Section 1.11 is deleted and replaced with the following:
1.11 "Minimum Annual Quantity" shall mean three million (3,000,000)
MNMtu of gas from January 1, 1995 through December 31, 1996; four million
(4,000,000) MMBtu of gas from January 1, 1997 through December 31, 2000; and
three and one-half million (3,500,000) MMBtu of gas from January 1, 2001
through December 31, 2001.
Section 1.19 is amended by inserting a period C'.") after the phrase "($0.15) per
MMBtu" and deleting the remainder of that section.
iI
Article III of Section 3.4 of the Agreement is deleted and replaced with the
following:
3.4 Revenue Sharing. Seller agrees to share with Buyer the before tax
net revenue of Seller which is attributable to Seller's Power -Tex Transmission
Line. On or about the thirty-fifth (35'h) day following January 1, 1995, and each
month during the term hereof, Seller shall submit to Buyer, by first class United
States mail, postage prepaid, a statement showing gross revenue, total cost of gas,
total operating expenses and before tax net revenue along with Seller's credit
which represents five percent (5%) of the before tax net revenue for each such
month.
The second line of Article N shall be deleted and replaced with the following:
".... and continue in force and effect through December 31, 2001...."
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate originals effective as of the day and date first hereinabove written.
This Agreement may be executed in counterpart and each such counterpart shall have the
same effect as if all parties had executed the same instrument.
SELLER
POWER TEX JOINT VENTURE
Ln
USenior Vice Pjeside
on behalf of the
Managing Venturer
ATTEST:
elk, y).A
John N. Bellinger
Assistant Secretary
3
BUYER
CITY OF L
.YOR PRO TEM
ATTEST:
k4aki I
Kay ie Darnell,-City—Secretary
APPROVED AS TO FORM:
(Assistant) City Attorney
APPROVED AS TO CONTENT:
(JA�G�•aa
irector of Electric Utili 'es
THE STATE OF TEXAS
COUNTY OF LUBBOCK
BEFORE ME, the undersigned authority, on this day personally appeared
Alex "Ty" Cooke for the CITY OF LUBBOCK, known to me to be the
person whose name is subscribed to the foregoing instrument, and acknowledged to me
that he executed the same for the purposes and consideration therein expressed, in the
capacity therein stated, and as the act and deed of said city.
GIVEN UNDER MY HAND AND SEAL OF OFFICE THIS ON day of
January, 1997.
ff
nd heiON
IAflo
THE STATE OF TEXAS
COUNTY OF DALLAS
NotaryPublic in and for the State of Texas
My Commission expires: (113b /-1'7
BEFORE ME, the undersigned authority, on this day personally appeared John
Yurkanin on behalf of the MANAGING VENTURER OF POWER TEX JOINT
VENTURE, known to me to be the person whose name is subscribed to the foregoing
instrument, and acknowledged to me that he executed the same for the purposes and
consideration therein expressed, in the capacity therein stated, and as the act and deed of
said Joint Venture.
GIVEN UNDER MY HAND AND SEAL OF OFFICE THIS 6a` day of
January, 1997.
Notwoublic in and for the State of Texas
My Commission expires: _-7%/71"ey
JEAN WALLACE
Notary Pubitc
State of Texas
' or •�` Comm. Expires 7.17 2000-W--Gwdwlppw
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