HomeMy WebLinkAboutResolution - 2020-R0434 - 2nd Amendment to MOU with Palisade PipelineResolution No. 2020-RO434
Item No. 7.16
December 15, 2020
RESOLUTION
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK:
THAT the actions of the City Manager on December k 6 , 2020 as to the execution of
a Second Amendment to Memorandum of Understanding, a copy of which is attached hereto
as Exhibit "A" and incorporated fully herein for all purposes, said Memorandum of
Understanding serving to define roles and responsibilities of the City of Lubbock and Palisade
Pipeline, LLC of Houston, Texas, as well as all terms and conditions contained therein are
hereby approved and ratified for all purposes.
Passed by the City Council on this, the 15th day of Decem 2020.
DANIEL M. POPE, MAYOR
ATTEST:
104�" N
Rebec a Garza, City Secre
APPROVED AS TO CONTENT:
W.Jarre Atkinson, City Manager
First Wssistant City Attorney
Ccdocs/Res.Second Amendment to Memorandum of Understanding_ Palisade Pipeline
December 8, 2020
Resolution No. 2020-RO434
SECOND AMENDMENT TO MEMORANDUM OF UNDERSTANDING
This Second Amendment to Memorandum of Understanding ("Amendment") is entered
into on this, the 10th day of December , 2020 by and between the City of Lubbock, Texas, a
Texas municipal corporation ("City") and Palisade Pipeline, LLC of Houston, Texas ("Palisade"),
collectively the "Parties".
WHEREAS, the Parties entered into a Memorandum of Understanding (the "MOU") dated
June 11, 2019 (Resolution No. 2019-110215) setting forth certain terms and conditions respecting
the potential purchase by Palisade of rights to a portion of the City's effluent water; and
WHEREAS, in light of the delays and other inconveniences resulting from the COVID-19
pandemic, the Parties amended the MOU on May 26, 2020 (Resolution No. 2020-110175) to extend
time periods for performance and exclusivity covenants; and
WHEREAS, the MOU, as amended, provides that, unless extended, the MOU shall expire
upon the earlier to occur of. 1) eighteen months passage from its execution; or 2) the subsequent
execution by the Parties of a Reclaimed Water Use Agreement; and
WHEREAS, the MOU, as amended, further provides that, unless extended, an Exclusivity
Period shall run for a period of eighteen (18) months from the date of the execution of the MOU,
wherein said period of time the City may not solicit, initiate, or participate in discussions or
negotiations, or otherwise enter into a Reclaimed Water agreement such as is contemplated by
the MOU, with any other party; and
WHEREAS, the MOU, as amended, further prospectively sets forth aspirational terms and
conditions of the contemplated Reclaimed Water Use Agreement, including an automatic
termination provision; and
WHEREAS, in light of the persistent and unforeseen delays and other inconveniences
resulting from the continuing COVID-19 pandemic, the Parties now desire to amend certain
provisions contained in the MOU, as set forth below, with all other terms of the MOU remaining
unchanged.
NOW THEREFORE, in consideration of the mutual promises contained herein, and other good and
valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties
hereto agree to amend, and do amend, the MOU as follows:
A. Section 1 of the MOU is amended to read as follows:
"1. TERM
Unless earlier terminated pursuant to the terms hereof, this MOU shall expire
upon the earlier to occur of: 1) twenty-four (24) months after its execution; or 2)
upon the execution by the Parties of a subsequent agreement (the "Reclaimed
Water Use Agreement" or Agreement,") for the purchase of Reclaimed Water
Second Amendment to Memorandum of Understanding
City of Lubbock/Palisade Pipeline, LLC Page 1 of 2
(the "Term"); provided, however, that the Term may be extended up to two (2)
additional forty-five (45) day periods upon mutual written agreement of the
Parties, and tender of any additional required consideration as set forth herein."
B. Section 3(a) of the MOU is amended to read as follows:
"a. Exclusivity Period. In consideration of the time, effort and expense anticipated
to be incurred by Palisade in connection with its due diligence in advance of the
contemplated Agreement, the Parties agree that for a period of twenty-four (24)
months from the date of this MOU (the "Exclusivity Period"), City, its
administrators, officials, council members, officers, directors, employees, agents,
and representatives, shall not directly or indirectly solicit, initiate, or participate
in discussions or negotiations, or enter into any agreement with any person,
company or entity, otherthan Palisade, concerning any transaction related to the
Reclaimed Water, or otherwise similar to that described in this MOU or the
essential terms of a Agreement as set forth below, or any unrelated transaction
that would in any way reduce the amount of Reclaimed Water to be allocated to
Palisade pursuant to the Agreement; provided, however, that nothing herein shall
preclude or prohibit City from undertaking obligations it has attendant to existing
agreements concerning reclaimed water. The Exclusivity Period may be extended
by written consent of City for an additional forty-five (45) days; provided,
however, that Palisade shall pay to City TWENTY THOUSAND AND NO/100
DOLLARS ($20,000.00) for each forty-five (45) day extension. There shall not be
more than two (2) extensions of the Exclusivity Period unless expressly approved
by the City Council."
C. Section 4(n)(ii) of the MOU is amended to read as follows:
"ii. The Agreement shall automatically terminate if Palisade does not either pay
or take Reclaimed Water pursuant to Section 4(e) within forty-eight (48) months
of the execution of this MOU, unless an extension of said requirement for six (6)
months is mutually agreed upon by City and Palisade."
The Parties further agree that all other terms and conditions of the MOU shall continue in full
force and effect for all purposes.
CITY OF LUBBOCK
W. Jarrekf Atkinson, City Manager
Second Amendment to Memorandum of understanding
City of Lubbock/Palisade Pipeline, LLC
PALISADE PIPELINE, LLC
Phillip J. Laughlin, President
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