Wednesday, July 22, 2015

Proposed Settlement Benefits US Nitrogen and Two Other Firms




By Walter F. Roche Jr.


A proposed settlement agreement between the Old Knox Highway Utility District, local government agencies and US Nitrogen would allow two other firms to draw water from the Nolichucky River through a controversial 12-mile pipeline.
The 11-page agreement, which was approved by the utility district board at a Monday evening meeting would end a lawsuit that challenged the legality of the agreements that made construction and use of the pipeline possible.
Included in the agreement is a provision that US Nitrogen, Yara North America and Praxair "or related, substitute, or other entities" could continue to use the pipeline to draw water from the river.
Other new companies seeking to use the pipeline would be required to give the utility district a 60-day right of first refusal to provide the needed services.
The inclusion of the two additional companies could overcome concerns by state officials that the pipeline would serve only one company. State transportation officials rejected the original pipeline proposal for that reason.
Under the agreement, which must be approved by the Industrial Development Board of Greeneville and Greene County, US Nitrogen would pay $50,000 to the utility district, but half of that total would be set aside for services or improvements to US Nitrogen and the other two companies.
The proposed settlement was voted on Monday evening by two of the three current members of the utility district board. The proposal has yet to come before the industrial development board, but US Nitrogen officials said they would sign it.
"Old Knoxville Highway Utility District will be valuable partner as we near the completion and startup of our state-of-the-art plant. US Nitrogen will be a long-term monthly customer of the utility district purchasing potable water needed for its facility from the utility district," US Nitrogen plant manager Justin Freeark said in a written statement. 
In addition to the $50,000 payment, the agreement calls for US Nitrogen to provide a monthly $10,000 guaranty of payments for potable water that will be used at the Mosheim facility.
Donahue Bible, a local resident and opponent of the project, said he was present at the Monday meeting along with two other residents who share his views on the pipeline.
He said he urged the panel to continue the court fight and felt betrayed by the board's decision.
"I thought we were all on the same side and would fight the battle together," he said, adding that the settlement "virtually pulled the plug out from under us."
Contact: wfrochejr999@gmail.com
______________________________________________________________________

PROPOSED SETTLEMENT

IN THE 3RD JUDICIAL DISTRICT OF THE STATE OF TENNESSEE
GREENE COUNTY CHANCERY COURT
OLD KNOXVILLE HIGHWAY )
UTILITY DISTRICT, )
)
Plaintiff, )
)
v. ) Civil Action No. 20140215
)
INDUSTRIAL DEVELOPMENT )
BOARD OF THE TOWN OF )
GREENEVILLE AND GREENE ) JURY DEMAND
COUNTY; and )
US NITROGEN LLC, )
)
Defendants. )
SETTLEMENT AGREEMENT AND RELEASE
THIS SETTLEMENT AGREEMENT AND RELEASE is made and entered into this
_____ day of July, 2015, by, between, and among Old Knoxville Highway Utility District
(“Plaintiff”), on the one hand, and The Industrial Development Board of the Town of Greeneville
and Greene County, Tennessee (“IDB”) and US Nitrogen LLC (“US Nitrogen”) (collectively
with the IDB, “Defendants”), on the other hand.
The Plaintiff filed the above-styled proceeding in the Greene County Chancery Court (the
“Proceeding”). In the Proceeding, the Plaintiff sought to enjoin the Defendants from operating a
non-potable water system constructed by the IDB that begins at the Nolichucky River near the
Conway Bridge, runs along State Highways 340 and 348, and terminates at US Nitrogen’s
facility located at 471 Pottertown Road, Midway, Tennessee 37809 (“US Nitrogen Facility”),
which is designed to take water out of and discharge water into the Nolichucky River (“Water
System”).
4816-5346-9986.9
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Recognizing that bona fide disputes and controversies exist as to the claims against and
the liability of the Defendants, the undersigned have entered into this Settlement Agreement and
Release in order that each and every aspect of such disputes and controversies and all claims can
be resolved between the Defendants and the Plaintiff and that the risk and cost of any further
litigation between them can be forever avoided.
IT IS THEREFORE AGREED AS FOLLOWS:
I.
RELEASE, ACQUITTAL, AND DISCHARGE
In consideration of the items fully detailed in Section II below, the Plaintiff hereby
completely releases, acquits, and forever discharges the following:
(a) US Nitrogen and its employees, representatives, attorneys, assigns,
predecessors, successors, corporate parents, subsidiaries, affiliates,
divisions, officers, members, managers, and/or directors; and
(b) The IDB and its employees, representatives, attorneys, assigns,
predecessors, successors, corporate parents, subsidiaries, affiliates,
divisions, officers, members, managers, and/or directors.
All of the individuals or entities named or referred to above are hereinafter collectively
referred to as the “Released Parties.” The Released Parties are completely released, acquitted,
and discharged from the following claims:
(a) All claims that are asserted in the Proceeding; and
(b) Any and all known or unknown claims related to the Proceeding or the
construction and operation of the Water System that have accrued as of the
Effective Date.
4816-5346-9986.9
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All of the aforementioned claims are referred to as the “Released Claims.” The Released Claims
shall not include any breach of this Settlement Agreement and Release.
II.
PAYMENTS AND CONSIDERATION
As consideration for the promises, agreements, obligations, releases, and representations,
and any and all other undertakings included in this Settlement Agreement and Release, the
Plaintiff and Defendants agree to the following terms:
(a) US Nitrogen shall pay the sum of FIFTY THOUSAND DOLLARS ($50,000.00)
(“Settling Payment”), to the order of the Plaintiff as the “Old Knoxville Highway
Utility District.” The Plaintiff agrees to hold one-half of the Settling Payment, or
twenty-five thousand dollars ($25,000.00), for future maintenance or upgrades of
the water infrastructure facilities of the Plaintiff or the Defendants at or around
the US Nitrogen Facility that directly benefit the US Nitrogen Facility. The
Plaintiff shall make these expenditures within fifteen (15) years of the Effective
Date of this Settlement Agreement and Release. The Plaintiff may use the
remainder of the Settling Payment for any purposes it wishes.
(b) The Defendants agree not to knowingly make any water or any part of the Water
System available to any past, current, or future customer of the Plaintiff, with the
exception of US Nitrogen and its co-locating companies.
(c) The Defendants shall, in the event any individual or entity not being served by the
Plaintiff on the Effective Date requests service from the Water System (such
individual or entity is a “Potential Customer”), provide written notice of such to
the Plaintiff. The Plaintiff shall have sixty (60) days from the date of such written
4816-5346-9986.9
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notice to agree to provide service to such Potential Customer (“Plaintiff’s Right of
First Refusal”). The Plaintiff’s Right of First Refusal shall not apply to the first
two companies currently exploring or that may explore a co-location agreement
with US Nitrogen (Yara North America, Inc.; Praxair, Inc.; or related, substitute,
or other entities), and the parties acknowledge that these co-locating companies
may obtain non-potable water service via the Water System. The Plaintiff’s Right
of First Refusal shall apply to all other companies co-locating at the US Nitrogen
Facility that may require water other than those described herein. The Plaintiff
shall have only the obligation to agree to provide service as part of the Plaintiff’s
Right of First Refusal within sixty (60) days of the written notice to the Plaintiff
from the IDB or US Nitrogen that a Potential Customer seeks service from the
Water System, and the Plaintiff will not be required to provide service within that
sixty (60) day period. Once notice is given by the Plaintiff that it intends to
provide service to a Potential Customer, such Potential Customer shall be
considered a “current” customer of the Plaintiff as used in subsection (b) of this
Section.
(d) US Nitrogen agrees to pay to the Plaintiff the greater of (1) a $10,000 monthly
service fee or (2) the value of the actual total amount of water obtained from the
Plaintiff and used in a given calendar month at the Plaintiff’s water rate in effect
at the time the water is provided to US Nitrogen, if and when the following
condition is met: US Nitrogen operates at nameplate capacity (i.e., the intended
sustained output of the facility as specified in the facility’s engineering
specifications) for at least twenty (20) days per calendar month.
4816-5346-9986.9
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(e) The Plaintiff and US Nitrogen shall review the terms of subsection (d) of this
Section every five (5) years and renegotiate these terms at that time or at any
other time as mutually agreed.
(f) The parties agree that the payment of their respective attorneys’ fees and costs,
including referral fees, and the repayment or compromise of any and all claims
and liens, including but not limited to subrogation, property damage, and
attorneys’ liens or claims, or any other liens or third-party claims, will be the sole
responsibility of each party.
(g) The Defendants and the Plaintiff hereby state and acknowledge that no portion of
the proceeds paid under this Settlement Agreement and Release represents
exemplary, punitive, or mental anguish damages, nor pre-judgment or postjudgment
interest, nor damages on account of physical injuries.
(h) The Plaintiff and US Nitrogen shall negotiate in good faith a Water Service
Agreement that contains any details necessary to effectuate this Settlement
Agreement and Release and that governs the relationship of the two parties with
respect to potable water supplied by the Plaintiff to US Nitrogen. The parties
acknowledge that any such Water Service Agreement shall be consistent with the
Plaintiff’s Rules and Regulations as currently applicable to US Nitrogen and not
inconsistent with this Settlement Agreement and Release. The Plaintiff and US
Nitrogen shall negotiate and sign this Water Service Agreement on or before
September 1, 2015, unless both parties agree to an extension. US Nitrogen
projects it will require from Plaintiff potable water at the rate of approximately
300 gallons per minute (gpm) on average calculated daily on or about September
4816-5346-9986.9
6
1, 2015, or soon thereafter, for a period of several months during start-up of the
US Nitrogen Facility. Plaintiff agrees to use its best efforts to provide US
Nitrogen with potable water at this rate for the duration of start-up of the US
Nitrogen Facility, such startup not to exceed four months. Plaintiff’s obligation to
supply potable water shall be conditioned on its ability to so do in light of all
relevant circumstances, including without limitation environmental conditions,
drought and other acts of nature, emergencies due to mechanical failures,
unlawful acts of others, fire and other catastrophes, and restrictions imposed by
law or by state or federal officials. In any of these events, Plaintiff’s obligation to
supply US Nitrogen shall be limited to using its best efforts to supply such
quantities of water as is equitable in light of all relevant circumstances.
III.
DISMISSAL WITH PREJUDICE AND COSTS
The parties hereby agree to execute through their respective attorneys an Agreed Order of
Dismissal with Prejudice dismissing with prejudice the Proceeding and all of the Plaintiff’s
claims against the Defendants in the Proceeding, and with the clerk’s mandatory costs assessed
to the Plaintiff.
IV.
REPRESENTATIONS AND WARRANTIES
OF THE DEFENDANTS
The Defendants expressly warrant and represent to the Plaintiff that:
1. They are legally competent to execute this Settlement Agreement and Release.
2. They are the owners and/or operators of the Water System.
4816-5346-9986.9
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3. They understand and agree that this Settlement Agreement and Release is in their
best interests.
4. They understand and agree that this Settlement Agreement and Release terminates
the Proceeding.
5. They have had the benefit of professional advice of attorneys of their own
choosing, and they are fully satisfied with that advice, and have relied solely and
completely upon their own judgment, together with that professional advice.
6. No promise or representation of any kind has been expressed or implied to them
by the Plaintiff, or by anyone acting for it, except as is expressly stated in this
Settlement Agreement and Release.
7. They are not relying upon any advice of the Plaintiff, or of its counsel or
representatives, as to the legal and tax consequences of this Settlement Agreement
and Release.
8. They have read, had explained to them by their respective attorneys to their
satisfaction, and understand the dismissal with prejudice to be entered by the
Court in the Proceeding, and have authorized its entry.
V.
REPRESENTATIONS AND WARRANTIES
OF THE PLAINTIFF
The Plaintiff expressly warrants and represents to the Defendants that:
1. It is legally competent to execute this Settlement Agreement and Release.
2. It understands and agrees that generally, the IDB will own the Water System and
that US Nitrogen will operate the Water System to supply its non-potable water
4816-5346-9986.9
8
requirements, and does not object to the IDB and US Nitrogen owning and
operating the Water System.
3. It understands and agrees that this Settlement Agreement and Release is in its best
interest.
4. It understands and agrees that this Settlement Agreement and Release terminates
the Proceeding.
5. It has had the benefit of professional advice of attorneys of its own choosing, and
it is fully satisfied with that advice, and has relied solely and completely upon its
own judgment, together with that professional advice.
6. No promise or representation of any kind has been expressed or implied to it by
the Defendants, or by anyone acting for them, except as is expressly stated in this
Settlement Agreement and Release.
7. It is not relying upon any advice of the Defendants, or of their counsel or
representatives, as to the legal and tax consequences of this Settlement Agreement
and Release.
8. It has read, had explained to it by its attorney to its satisfaction, and understands
the dismissal with prejudice to be entered by the Court in the Proceeding, and has
authorized its entry.
VI.
ADDITIONAL DOCUMENTS
All parties agree to cooperate fully and execute any and all supplementary documents
and to take all additional actions that may be necessary or appropriate to give full force and
effect to the basis and intent of this Settlement Agreement and Release.
4816-5346-9986.9
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VII.
ENTIRE AGREEMENT AND SUCCESSORS IN INTEREST
This Settlement Agreement and Release contains the entire agreement between the
Defendants and the Plaintiff with regard to the matters set forth in it and shall be binding upon
and inure to the benefit of the executors, administrators, personal representatives, heirs,
successors, and assigns of each. Other than water service agreements (existing and to be
written) and related documents, there are no other understandings or agreements, oral or
otherwise, in relation thereto, between the parties. No oral understandings, statements,
promises, or inducements contrary to or inconsistent with the terms of this Settlement
Agreement and Release exist. This Settlement Agreement and Release is not subject to any
modification, waiver, or addition that is made orally. This Settlement Agreement and Release
is subject to modification, waiver, or addition only by means of a writing signed by all parties.
This provision may not be waived.
VIII.
CONSTRUCTION
This Settlement Agreement and Release is not to be construed in favor of any particular
party and is to be construed as if drafted by all parties to this Settlement Agreement and Release.
A determination that any provision of this Settlement Agreement and Release is unenforceable,
invalid, or illegal shall not affect the enforceability, validity, or legality of any other provision.
A determination that the application of any provision of this Settlement Agreement and Release
to any person or circumstance is unenforceable, invalid, or illegal shall not affect the
enforceability, validity, or legality of such provision as it may apply to other persons or
circumstances.
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IX.
EFFECTIVENESS
This Settlement Agreement and Release shall become effective immediately upon
execution by the Plaintiff and both of the Defendants.
X.
GOVERNING LAW
The laws of the State of Tennessee and applicable federal laws shall apply to this
Settlement Agreement and Release, without regard to conflicts of law principles.
XI.
PARAGRAPH HEADINGS
Paragraph headings herein are for convenience and reference only and in no way define,
limit, or enlarge the rights and obligations of the parties under this Settlement Agreement and
Release.
XII.
MULTIPLE ORIGINALS
This Settlement Agreement and Release can be executed in multiple originals, all of
which, when taken together, shall constitute the original.
4816-5346-9986.9
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Defendants
US Nitrogen LLC
Name: __________________________
Title: ___________________________
Date: ___________________________
The Industrial Development Board of the
Town of Greeneville and Greene County,
Tennessee
Name: __________________________
Title: ___________________________
Date: ___________________________
Plaintiff
_________________________________
Old Knoxville Highway Utility District
Name: ______________________________
Title: _______________________________
Date: _______________________________
Approved:
_____________________
Benjamin A. Gastel
Counsel for Plaintiff
______________________
Michael K. Stagg
Counsel for Defendant US Nitrogen LLC
______________________
Jerry L. Laughlin
Counsel for Defendant The Industrial Development Board of the Town of Greeneville and
Greene County, Tennessee

















Tuesday, July 21, 2015

US Nitrogen Shipments Could Stay In Tennessee


By Walter F. Roche Jr

Truckloads of ammonium nitrate from the new US Nitrogen plant in Mosheim could be shipped not to some distant location but just 106 miles down the road to a federally licensed explosives manufacturing facility in LaFollette, TN.
State and federal records show Austin Powder, the parent company of US Nitrogen, operates the Tennessee explosives manufacturing facility that has been in operation since 2002 in LaFollette at 375 Austin Powder Lane.
US Nitrogen officials did not immediately respond to questions about the LaFollette plant and whether some or all of the ammonium nitrate produced in Mosheim will be shipped to LaFollete for processing to manufacture explosives.
In public statements and on its website US Nitrogen has repeatedly stressed that explosives will not be produced in Mosheim and they have stated that the ammonium nitrate will be shipped to Austin plants across the country.
"The majority of the product will be shipped east of the Mississippi River as far north as Canada and as far south as Florida," the US Nitrogen's website states.
The LaFollette plant, state licensing records show, was found to be out of compliance on May 19 of this year for failure to conduct required quarterly inspections of an unnamed stream that flows into nearby Big Creek.
State reports show that the site was found to be back in compliance with state regulations on July 10.
 According to the state report, the plant is on a 115 acre site and 40 of those acres are used for manufacturing.
The report states that the facility uses ammonium nitrate and fuel oil to "produce Austinite Blasting Agents. A mobile mix plant is used to produce emulsion blasting agent several times a month."

The same facility was cited by officials of the federal Bureau of Tobacco and Firearms in 2004 for making false entries in records required under Austin's federal license.
A total of 25 violations were recorded during a three day inspection of the facility in mid-April of 2005.
The Tennessee violations were among dozens from other Austin Powder facilities across the country noted in a 2005 plea agreement filed in U.S. District Court in Pennsylvania. Austin agreed to a five day shutdown of the LaFollete plant as part of the settlement.
Under the plea deal Austin agreed to pay a little over $1 million in fines and penalties. Several of its other facilities were shutdown for similar periods of time, court records show.
Nearly a decade earlier Austin was fined $7 million when it entered a  guilty plea to price fixing charges.
In addition to the LaFollette plant, records show Ohio based Austin owns two parcels of land in Sullivan County that were purchased in 2007. One parcel is 11 acres and the other 43 acres.
CONTACT: wfrochejr999@gmail.com