HomeMy WebLinkAboutResolution - 1928 - Amendment To Agreement - Power Tex Joint Venture - Gas Purchase - 01/24/1985JCR:cl
RESOLUTION
Resolution #1928
January 24, 1985
Agenda Item #28
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK:
THAT the Mayor 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
to Amend Gas Purchase Agreement between the City of Lubbock and Power -Tex
Joint Venture, attached herewith, which shall be spread upon the minutes of
the Council and as 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 24th day of January 1985.
Z /: 2ZW
ALfiff HENR , MAY
ATTEST:
Ranet a Boyd, City Secretary
APPROVED AS TO CONTENT:
Robert Massenga e, A sistent City Manager
APPROVED AS TO FORM:
Jv C. Ross, Jr., City At rney
AGREEMENT TO AMEND
GAS PURCHASE AGREEMENT
THIS AGREEMENT, made and entered into this 26th day of
November, 1.984 between Power -Tex Joint Venture, as "Seller"
and the City of Lubbock, as "Buyer".
W I T N E S S E T H
THAT WHEREAS, Power -Tex, A Joint Venture and the City of
Lubbock entered into that certain Gas Purchase Agreement
dated March 8, 1984 providing for the sale by Power -Tex and
purchase by the City of Lubbock of certain volumes of natural
gas to be utilized at Buyer's Holly Avenue electric power
generation plant; and
WHEREAS, Power -Tex which originally existed as a joint
venture'of Power Line Inc. and West Texas Transmission
Corporation assigned a fifty percent (50X) interest in said
Gas Purchase Agreement to Adobe Gas Co. (Adobe) and
designated Adobe as the manager of Power -Tex Joint Venture
through that certain Joint Venture Agreement dated July 2,
1984, a copy of which is attached hereto and labelled as
Exhibit "A"; and
9.2 8
WHEREAS, through that certain Assignment dated November 20,
1984 Adobe assigned its interest to an affiliate company known
as GGSI Gas Co.; a copy of said assignment is also attached
hereto and labelled Exhibit "B"; and ,
ti
WHEREAS, through the Joint Venture Agreement, labelled
Exhibit "A", GGSI Gas Co. (GGSI) is now empowered as manager of
Power -Tex Joint Venture and responsible for all action of such;
and
WHEREAS, to truly reflect the responsible party operating as
"Seller" of that certain Gas Purchase Agreement, various
revisions are required to said Gas Purchase Agreement.
NOW THEREFORE, in consideration of the premises and mutual
covenants and agreements herein contained, and as contained in
said Agreement, the parties do hereby agree that the Gas
Purchase Agreement is amended as follows, effective as of the
date of this Agreement to Amend:
It is hereby agreed that Section 13.04 on Page 16 of the Gas
Purchase Agreement, shall be amended by deleting the address of
Seller and substituting the following:
Seller: GGSI Gas Co.
Manager, Power -Tex Joint Venture
1100 Western United Life Building
Midland, Texas 79701
IN WITNESS HEREOF, the parties hereto have caused this
instrument to be executed as of the date first written above.
"SELLER" "BUYER"
POWER -TER JOINT VENTURE CITY OF LUBBOCK
By: By'
D. B. Freeman, Vice President 4Aan Ma or
GGSI Gas Co.
Authorized Representative of
Power -Tex Joint Venture
e
Attest: Attest.
Jim Wilson
Asst. Secretary City Secretary
Approved As To Form:
Xohn C. Ros's, Jr.
City Attorney
r r r
STATE OF TEXAS S FXg,V T
COUNTY OF MIDLAND S
ARTICLES OF JOINT VENTURE
THIS AGREEMENT made and entered into this ..Zs day of
July, 1984, by and between ADOBE GAS CO., a Delaware
corporation, hereinafter referred to as "Adobe", and POWER
LINE, INC., and WEST TEXAS TRANSMISSION CORP., both Texas
corporations, hereinafter referred to as "Non -Operators".
W I T N E S S E T H
WHEREAS, Non -Operators have heretofore entered into a
certain Gas Purchase Agreement with the City of Lubbock,
Texas dated March 8, 1984, and have duly assigned an
interest in said agreement to Adobe; and
WHEREAS, aforesaid agreement obligates the sellers to
lay, construct, maintain and operate a gas pipeline
approximately 44 miles in length for the transportation of
the gas sellers are obligated to deliver pursuant to said
contract; and
WHEREAS, the parties hereto desire to enter into a
Joint Venture Agreement setting forth their respective
rights, duties and obligations with respect to the
performance required by sellers in the agreement above
described;
NOW, THEREFORE, the parties hereto do hereby enter into
a joint venture for the purpose of conducting the foregoing
business, all upon the terms and conditions hereinafter
stated:
1. Name: The name of this joint venture shall be
POWER -TER JOINT VENTURE.
2. Purpose: This joint venture is organized for the
•purpose of performing seller's obligations under that
certain contract dated March 8, 1984, by and between
Power -Tex, a joint venture, as seller, and the City of
Lubbock, Texas, as buyer, including the construction and
operation of the pipeline provided for in said agreement.
The joint venture may utilize said pipeline for the
transportation of gas other than that supplied to the City
of Lubbock.
3. Location: The pipeline operated by the joint
venture shall be located in the counties of Lubbock and
Hockley, and all management affairs of the joint venture
shall be conduct -ed from the offices of the managing joint
venturer in the city of Midland, Texas, subject to certain
approvals of the non -operators as discussed herein. Due to
the business nature of the joint venture, the parties
recognize that an office in Lubbock, Texas could be
beneficial at some point in the future, and agree to
approach this possibility mutually at such time.
4. Duration and Termination•: The joint venture shall
continue as long as the Gas Purchase Agreement with the City
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of Lubbock, or any other gas or product contract or
contracts of longer duration, remains in force and effect
and as long thereafter as all joint venturers may mutually
agree.
5. Capital Contributions: The parties hereto have
contributed, and by these presents, do contribute, to the
joint venture the Gas Purchase Agreement with the City of
Lubbock herein described.
6. Ownership: All assets, liabilities, profits and
losses of this venture shall be owned by the parties in the
following proportions:
• Adobe Gas Co. 50%
Power Line, Inc. 25%
West Texas Transmission Corp. 25%
7 Management: Adobe is hereby designated as the
manager or operator of all joint venture affairs. It shall
be authorized and obligated to enter into such contracts in
behalf of the joint venture as are mutually agreeable with
the non -operators. Prior to executing any contracts on the
joint venture's behalf, Adobe shall furnish the
non -operators a copy of same. The non -operators shall
diligently review said contracts and inform Adobe as to
their agreement or disagreement within two (2) working days.
Non -Operators shall approve or disapprove said contracts
orally or by telecopy, telegram, etc. and follow-up with
written correspondence. Any decision made, relative to
contractual matters, by seventy-five per cent (75x) of the
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ownership shall be deemed a decision of the joint venture
and shall be carried out by Adobe.
S. Duties of Managing Venturer: Adobe shall
immediately assume the responsibility, in behalf of the
joint venture, of fully performing all the obligations of
sellers as set forth in the agreement with the City of
Lubbock. Adobe shall be authorized to enter into mutually
agreed upon contracts with third parties for the purchase,
sale and transportation of products utilizing the joint
venture pipeline facilities. Adobe may, if mutually agreed
upon, borrow money in behalf of the joint venture and
mortgage and give security interest in the joint venture
property as security therefor.
9. Expenses: All material purchased for, and all
third party services rendered to the joint venture, will be
charged to the venture and will be paid by the parties
hereto in proportion to their ownership as hereinabove set
forth.
It is anticipated and agreed that Adobe will use many
of its supervisory personnel and its accounting personnel to
assist in the management of the affairs of the joint
venture. Neither the salaries of any of Adobe's employees,
nor the use of its equipment or vehicles, nor any overhead
charged shall be charged by Adobe to the joint venture
account until such time that the initial investment has been
recovered through net cash flow. At such time Adobe shall
assess a management fee of $2,000 per month which will be
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charged to the joint account. Said fee shall remain in
effect for the remainder of the initial five (5) year period
of operations. At the beginning of the sixth (6th) year
Adobe shall assess its actual cost of managing the joint
venture and submit to the non -operators a breakdown
proposing a new management fee. If the parties are unable
to agree upon said fee the matter will be referred to
arbitration.
Once the initial construction has been completed, Adobe
shall not undertake any single project concerning the
repair, maintenance or expansion of the pipeline, reasonably
estimated to require the expenditure in excess of $20,000.00
without approval of non -operators. Approval shall be deemed
to have been given two (2) working days after a non -operator
receives an "Authority for Expenditure" request, oral or
written, which itemizes the proposed expenditures from
Adobe, provided non -operator's representative makes no
objection known to Adobe. Under emergency circumstances,
Adobe shall act with exclusive authority eliminating any
approval requirements stated above. Any decision made by
seventy-five per cent (75x) of the ownership of the pipeline
shall be deemed a decision of the joint venture.
Adobe shall be fully authorized to employ in behalf of
the joint venture full-time employees for the daily
operation of the pipeline and its facilities. The salaries
of such .personnel shall be comparable with the industry and
shall be charged to the joint venture account. Adobe shall
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consult with the No._)Operators in relation to oyee
selection.
All expenses of the joint venture shall be billed to
each joint venturer monthly and in proportion to its
ownership and each invoice other than the initial billing,
shall be due and payable thirty (30) days from date of said
invoice. The initial billing for operating expenses shall
be submitted to non -operators at the end of sixty (60) days
after the date of first deliveries under the Gas Sale
Agreement and shall be due and payable within thirty (30)
days of receipt by Non -Operators. All delinquent accounts
shall bear interest at the maximum legal rate.
10. Distribution of Profits: Profits, if any, shall be
distributed monthly, it being understood that Adobe shall at
all times be entitled to withhold sums due from
non -operators relative to undisputed expenses of the
previous month(s). An undisputed expense shall be defined
as an expense which requires Non -Operator approval of which
was not obtained in accordance with this agreement.
11. Losses, Profits, Investment Income, Taxes and Tax
Benefits: All losses, profits, investment income,
taxes and tax benefits. shall be shared by the joint
venturers in proportion to their respective ownership.
12. Bookkeeping and Records: Adobe shall keep and
maintain on behalf of the joint venture good and sufficient
books and records correctly reflecting the financial
condition of the joint venture and same shall be available
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for inspection by the non -operators at all reasonable times.
Each month, Adobe shall prepare and submit a financial
summary to each non -operator reflecting the transactions of
the previous month.
13. Audit: An audit of the property effects and
profits or losses shall be taken and a full and true
statement of the affairs of the joint venture shall be made
as the parties may mutually agree.
14. Security Interests: Subject only to provisions of
other agreements which may be entered into by the parties,
no joint venturer shall be authorized to hypothecate,
pledge, mortgage or otherwise grant any security interest in
and to its right to receive the disbursement or distribution
of any money or property pursuant to the terms of this joint
venture agreement.
15. Final Accounting: Upon termination of this joint
venture as provided herein, the parties shall make a true,
final and just accounting of all things relating to the
joint venture and in all things truly adjust same and all
the property which shall then be remaining shall then be
divided among the parties in proportion to their ownership
as herein set forth.
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. IN WITNESS WHEREOF, we hereunto set our hands the day
and year first above written.
ADOBE GAS CO.
BY: 0 -400'0Z ---
D. B. Freeman
Vice President
Managing Joint Venturer
POWE L NE, INC
BY:
J 'e M. Barclay
Vice President
WEST RAS TRAN MISSION CORP.
BY:
ent Jo da
Presiden
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1�4SG �
THE STATE OF TEXAS )
COUNTY OF MIDLAND )
AGREEMENT AND
AMENDMENT TO ARTICLES OF JOINT VENTURE
FOR POWER-TEX JOINT VENTURE
WHEREAS, Adobe Gas Co., Power Line, Inc., and West Texas
Transmission Corporation did heretofore enter into Articles of Joint
Venture dated July 2, 1984, for the purposes and subject to the terms
and conditions therein expressed; and
WHEREAS, aforesaid Articles named and designated Adobe Gas co. as
manager and operator of the joint venture; and
WHEREAS, Adobe Gas co. desires to withdraw as a joint venturer and
GGSI Gas Co., a Texas corporation, desires to become a joint venturer
and assume the duties, obligations, and responsibilities of Adobe Gas
Co. as set forth in the Articles of Power -Tex Joint Venture; and
WHEREAS, all parties are agreeable to aforesaid substitution of the
parties and to the designation of GGSI GAs Co. as manager and operator
of said joint venture.
NOW,. THEREFORE, Adobe Gas Co., Power Line, Inc., and West Texas
Transmission Corp., constituting all of the present joint venturers of
Power -Tex Venture, and GGSI Gas Co., a Texas corporation, do hereby
agree as follows:
(1) Adobe Gas Co. hereby withdraws as a joint venturer in
Power -Tex Joint Venture and is relieved of any and all duties,
obligations and liabilities with respect to said joint
venture.
(2) GGSI Gas Co. is hereby admitted as a joint venturer in
Power -Tex Joint Venture owning the interest and assuming the
liabilities of Adobe Gas Co. as set forth in the Articles of
Joint Venture.
(3) It is specifically agreed that GGSI Gas Co. is designated as
manager and operator of the joint venture and is thereby
assuming all of the duties, obligations and responsibilities
heretofore undertaken by Adobe Gas Co. as set forth in the
Articles of Joint Venture.
(4) The Articles of Joint Venture for Power -Tex Joint Venture are
hereby amended by substituting the name GGSI Gas Co. in each
place the name Adobe Gas Co. appears in said Articles.
(5) GGSI Gas Co. is hereby given the right and authority to
contract with Adobe Gas Co. for the performance of its duties
and obligations as set forth in the Articles of Joint Venture,
it being understood that under any such agreement, Adobe Gas
Co. shall be an independent contractor with GGSI Gas Co. and
GGSI Gas Co. shall retain full liability for the performance
of its duties as set forth in the Joint Venture Agreement.
Little
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(6) As herein amended, the Articles of Joint Venture for Power -Tex
Joint Venture are hereby ratified, confirmed and republished.
DATED and effective as of the 20th day of November, 1984.
ADOBE GAS CO.
By: I"� OA--
D.B. Freeman, Vice President
GGSI GAS CO.
By • 4. A�+�-------
D.B. Freeman, Vice President
POWER LINE, INC.
By;
Jod M. Barclay, Vice Preside
WESTTE TRANSMISSION CORP RATION
By
rent Jord n, ice President