EXHIBIT 10.A
GENERAL AND ADMINISTRATIVE SERVICES AGREEMENT
This General and Administrative Services Agreement (this "Agreement")
is entered into as of April 8, 2002 by and between DeepTech International Inc.,
a Delaware corporation ("DII"), El Paso Energy Partners Company (formerly
Leviathan Gas Pipeline Company), a Delaware corporation ("EPEPC"), and El Paso
Field Services, L.P., a Delaware limited partnership ("EPFS"). DII, EPEPC and
EPFS are sometimes referred to collectively herein as the "Parties" and
individually as a "Party."
RECITALS
WHEREAS, EPEPC is a wholly-owned subsidiary of DII and the general
partner (in such capacity, the "General Partner") of El Paso Energy Partners,
L.P., a publicly-owned Delaware limited partnership (the "Partnership");
WHEREAS, all management powers over the business and affairs of the
Partnership are exclusively vested in the General Partner and the General
Partner is required to conduct, direct and exercise full control over all
activities of the Partnership, including, among other things, providing various
general and administrative resources;
WHEREAS, DII historically has provided certain operational, financial,
accounting and administrative services to EPEC through the Management Agreement
dated July 1, 1992, as amended and restated by the First Amended and Restated
Management Agreement dated as of June 27, 1994 (as amended, the "Existing
Agreement");
WHEREAS, EPEC and DII have amended the terms of the Existing Agreement
from time to time to address changing circumstances, including, among other
things, providing for incremental general and administrative resources necessary
to manage additional assets acquired (through construction, purchase or
otherwise) by the Partnership, adjusting the fees for such resources to reflect
changes in the costs thereof, and extending the term of the Existing Agreement;
WHEREAS, (i) substantially contemporaneous with the date of this
Agreement, the Partnership acquired approximately $750 million of midstream
natural gas assets located in Texas and New Mexico from El Paso Corporation (the
"Acquisition Transactions") and (ii) the initial term of the Existing Agreement
expires on July 1, 2002; and
WHEREAS, the Parties desire to amend, restate and replace the Existing
Agreement to, among other things, (i) change the name of the Existing Agreement
to "General and Administrative Services Agreement" to more accurately reflect
the nature of the arrangements between the Parties, (ii) extend the initial term
of the Existing Agreement, (iii) increase the fees paid by EPEPC to DII to
reflect the increased general and administrative costs to be incurred following
the consummation of the Acquisition Transactions and (iv) add EPFS as a party.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and other good and valuable consideration (the receipt and
sufficiency of which are hereby confirmed and acknowledged), the Parties agree
as follows:
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I. REPLACEMENT OF EXISTING AGREEMENT
The Parties hereby amend and restate, and replace in its entirety, the
Existing Agreement with this Agreement.
II. DEFINITIONS
2.1 Defined Terms. For purposes of this Agreement, the following
capitalized terms shall have the following meanings:
"Affiliates" means, with respect to either Party, entities that
directly or indirectly through one or more intermediaries control, or are
controlled by, or are under common control with such Party, and the term
"control" shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of an entity,
whether through the ownership of voting securities, by contract or otherwise;
provided, however, that (i) with respect to DII, the term "Affiliate" shall
exclude each member of the Partnership Group and (ii) with respect to EPEPC, the
term "Affiliate" shall exclude each member of the El Paso Group.
"Agreement" shall have the meaning set forth in the preamble.
"Communications Facilities" means communications equipment, towers and
other facilities (including rights-of-way and fee property).
"Communications Services" means communications services, including: (i)
providing access to Communication Facilities; (ii) providing use of
Communication Facilities; (iii) maintaining bandwith and network connectivity to
meet the communications requirements for Partnership Facilities; (iv)
transporting and networking of voice, data and video used to support field
operations, including mobile radio systems, SCADA communications, telephone
systems, videoconferencing and wide area and local area networking; (v)
operating and maintaining the Communication Facilities so as to ensure reliable
service at a consistent level across the entire network; (vi) operating and
maintaining Communications Facilities in compliance with all applicable laws and
regulations and in accordance with all licenses and permits; (vii) maintaining
in full force and effect all rights-of-way used with respect to Communications
Facilities; designing and engineering additions and modifications to the
existing Communications Facilities so as to provide the above-described
communications services for future growth and changes (as agreed to by the
Parties); and (viii) all other communications-related services necessary for the
operation of the Partnership Facilities consistent with their level of operation
prior to the date of this Agreement.
"DII" shall have the meaning set forth in the preamble.
"El Paso Group" means, other than members of the Partnership Group, (i)
each Affiliate of El Paso Corporation in which El Paso Corporation owns
(directly or indirectly) an equity interest and (ii) each natural person that is
an Affiliate of any person described in (i) above solely because of such natural
person's position as an officer (or natural person performing similar
functions), director (or natural person performing similar functions) or other
representative of
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any person described in (i) above, but only to the extent that such natural
person is acting in such capacity.
"EPEPC" shall have the meaning set forth in the preamble.
"EPFS" shall have the meaning set forth in the preamble.
"Existing Agreement" shall have the meaning set forth in the recitals.
"Fiscal Year" shall mean the period from July 1 through June 30.
"General Partner" shall have the meaning set forth in the recitals.
"Party" and "Parties" shall have the meanings set forth in the
preamble.
"Partnership" shall have the meaning set forth in the recitals.
"Partnership Agreement" shall mean the Second Amended and Restated
Agreement of Limited Partnership of the Partnership, dated effective as of
August 31, 2000, as it may be amended, supplemented, restated or otherwise
modified from time to time.
"Partnership Facilities" means all of the Partnership's assets and
facilities.
"Partnership Group" means (i) EPEPC, (ii) the Partnership, (iii) each
Affiliate of the Partnership in which the Partnership owns (directly or
indirectly) an equity interest and (iv) each natural person that is an Affiliate
of any person described in (i) - (iii) above solely because of such natural
person's position as an officer (or natural person performing similar
functions), director (or natural person performing similar functions) or other
representative of any person described in (i) - (iii) above, but only to the
extent that such natural person is acting in such capacity.
"Primary Term" shall have the meaning set forth in Section 6.1.
"Renewal Date" means December 31, 2005.
2.2 Other Definitions. Capitalized terms used herein but not otherwise
defined in Section 2.1 shall have the meanings ascribed to them throughout this
Agreement.
III. DUTIES AND OBLIGATIONS OF EPEPC
3.1 Management Services. DII or any Affiliate or designee of DII shall
provide non-exclusive management and other related services to EPEPC, its
subsidiaries and the Partnership through EPEPC, which shall include, but shall
not be limited to, services related to acquisitions to be made by EPEPC, cash
management, review of significant operating and financial opportunities and such
other management services as the Parties may from time to time agree.
3.2 Chief Executive Officer. In order to provide the services set forth
in Section 3.1, DII shall provide to EPEPC the services of a Chief Executive
Officer who shall serve with EPEPC in that capacity. The individual to serve as
Chief Executive Officer of EPEPC shall be recommended by DII but shall be
subject to the approval of the Board of Directors of EPEPC.
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3.3 Communications Services. DII will, or will cause the applicable El
Paso Group member to, provide Communications Services for the Partnership
Facilities, as necessary or appropriate to operate the Partnership Facilities in
the manner in which such facilities had been operated prior to the date of this
Agreement. All Communications Services will be provided in a good and
workmanlike manner, and in accordance with industry standards. DII will ensure
that the Partnership has the right to inspect all Communications Facilities on
reasonable (but no less than 24 hours) notice.
IV. COMPENSATION, EXPENSES AND PAYMENT
4.1 Fees. Prior to the date hereof, the annual compensation due DII
from EPEPC for services provided pursuant to this Agreement shall accrue in
accordance with the terms and conditions of the Existing Agreement. On and as of
the date hereof through the term of this Agreement, the annual compensation
(prorated for any portion of a month) due DII from EPEPC for services provided
pursuant to this Agreement shall be as follows:
(a) For costs associated with the Partnership's current
assets, a fee of $775,000 per month; and
(b) For additional costs associated with the assets acquired
in the Acquisition Transactions (including costs associated with
Communications Services), a fee of $833,333 per month.
EPEPC shall also promptly reimburse DII for (i) amounts actually paid by DII for
reasonable out-of-pocket expenditures to Persons other than the El Paso Group
and who are directly engaged to provide goods or services to the Partnership
Group, (ii) the value for the use of materials or equipment (other than in
connection with Communications Services, which costs are included in the fee
described in Section 4.1(b)) provided by the El Paso Group to the Partnership
Group (including, but not limited to, field equipment, vehicles and vessels) and
(iii) to the extent of the actual time expended directly in connection with
providing services to the Partnership Group, the corresponding portion of the
salaries, wages and employee benefit costs of employees (1) who work in the
field, (2) whose primary function is the direct supervision of employees who
work in the field or (3) who have special and specific engineering, geological
or other professional skills and whose primary function is addressing, resolving
and otherwise handling operating conditions and problems related to assets of
the Partnership Group. DII shall maintain time sheets and other appropriate
records to substantiate such costs and allocations thereof.
4.2 Payment of Fee. For purposes of accounting and periodic payment,
before the first day of each calendar month, DII shall present EPEPC with an
invoice which reflects an amount equal to all reimbursable amounts. EPEPC shall
pay such sum on or before the first day of that calendar month. On or before
September 1 of each calendar year, DII shall furnish a statement to EPEPC
detailing (i) payments made from EPEPC to DII for such Fiscal Year and (ii) any
adjustment balance due to/from DII. Within 15 days of the date of such
statement, EPEPC or DII, as applicable, shall remit the balance due.
4.3 Uncompensated Services. It is recognized by the Parties that DII
owns all of the issued and outstanding shares of common stock of EPEPC. It is
expressly acknowledged and
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agreed by the Parties that the compensation to DII provided for in Section 4.1
is solely to compensate DII for services to be rendered by DII to EPEPC or on
EPEPC's behalf which are of direct benefit to EPEPC and such compensation is not
and shall not be related to DII's status as a shareholder of EPEPC.
V. ACCESS TO INFORMATION, BOOKS AND RECORDS
DII and its duly authorized representatives shall have complete access
to EPEPC's offices, facilities and records wherever located, in order to
discharge DII's responsibilities hereunder; provided, however, that EPEPC shall
provide and make available to DII and its duly authorized representatives at
DII's Houston offices, at DII's request, all such records required by DII to
perform its duties pursuant to this Agreement. All records and materials
furnished to DII by EPEPC in performance of this Agreement shall at all times
during the term of this Agreement remain the property of EPEPC.
VI. TERM AND TERMINATION OF THE AGREEMENT
6.1 Initial and Extended Term. This Agreement shall be in effect until
the Renewal Date (the "Primary Term") subject, however, to the terms of Section
6.2. At the end of the Primary Term, this Agreement shall continue in force and
effect for subsequent one-year periods unless terminated by either Party
pursuant to Section 6.2. 6.2 Termination. This Agreement may be sooner
terminated on the first to occur of the following:
(a) Termination by Mutual Agreement. If the Parties so
mutually agree in writing, this Agreement may be terminated on the
terms and dates stipulated therein.
(b) Optional Termination. Either Party may, 90 days prior to
the Renewal Date or any anniversary thereof, provide to the other Party
written notice of its intent to terminate this Agreement on such date,
whereupon this Agreement shall terminate on the date specified in such
notice.
(c) Uncorrected Material Breach. If either Party shall fail to
discharge any of its material obligations hereunder, or shall commit a
material breach of this Agreement, and such default or breach shall
continue for a period of 30 days after the other Party has served
notice of such default, this Agreement may then be terminated at the
option of the non-breaching Party by notice thereof to the breaching
Party.
6.3 Effects of Termination. Except for covenants or other provisions
herein that, by their terms, expressly extend beyond the term of this Agreement,
the Parties' obligations hereunder are limited to the term of this Agreement.
6.4 EPEPC's Remedies. If DII shall at any time owe or otherwise become
liable to EPEPC for any amount pursuant to the terms of this Agreement, in
addition to EPEPC's other rights hereunder, at law or in equity, EPEPC shall
have the right to offset any such amount against any amount held by EPEPC for
the account of DII and against any amount otherwise due or to become due to DII
from EPEPC.
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VII. INDEMNIFICATION OF DII
EPEPC hereby agrees to indemnify and hold harmless DII from and against
any and all claims, courses of action, liabilities, damages, costs, charges,
fees, expenses (including reasonable attorneys' fees and expenses to be
reimbursed as incurred), suits, order, judgments, adjudications and losses of
whatever nature and kind which DII or its Affiliates or designees or for which
DII or its Affiliates or designees become liable as the result of the
performance of DII's obligations and duties pursuant to this Agreement;
provided, however, that EPEPC shall not be obligated to indemnify DII for any
claims, courses of action, liabilities, damages, costs, charges, fees, expenses
(including reasonable attorneys' fees and expenses to be reimbursed as
incurred), suits, order, judgments, adjudications and losses attributable to the
gross negligence or willful misconduct of DII or its Affiliates or
subcontractors.
VIII. OBLIGATIONS OF EPFS
EPFS executes this Agreement for the sole purpose of assuming all
obligations of DII hereunder and agrees to fully and timely perform and
discharge (including the payment of money) all obligations and liabilities of
DII now existing or hereafter arising under this Agreement and hereby agrees
that if DII shall fail (i) to pay any amount when and as the same shall be due
and payable by DII to EPEPC or (ii) timely to perform and discharge in full any
other obligation or liability in accordance with the terms of this Agreement,
EPFS will forthwith pay to EPEPC such amount or perform and discharge any such
obligation or liability, as the case may be, as such payment or performance and
discharge is required to be made or done by the DII pursuant to the terms of
this Agreement.
IX. MISCELLANEOUS
9.1 Relationship of Parties. This Agreement does not create a
partnership, joint venture or association; nor does this Agreement, or the
operations hereunder, create the relationship of lessor and lessee or xxxxxx and
bailee. Nothing contained in this Agreement or in any agreement made pursuant
hereto shall ever be construed to create a partnership, joint venture or
association, or the relationship of lessor and lessee or xxxxxx and bailee, or
to impose any duty, obligation or liability that would arise therefrom with
respect to either or both or the Parties. Specifically, but not by way of
limitation, except as otherwise expressly provided for herein, nothing contained
herein shall be construed as imposing any responsibility on DII for the debts or
obligations of EPEPC or any if its Affiliates. It is expressly understood that
DII is hereby engaged by EPEPC to provide management and operational services as
an agent of EPEPC. DII, its Affiliates and designees shall have the right to
render similar services for other business entities and persons, including its
own, whether or not engaged in the same business as EPEPC, and may enter into
such other business activities as DII and its Affiliates, in their sole
discretion, may determine.
9.2 No Third Party Beneficiaries. Except to the extent (i) that EPEPC
utilizes services provide hereunder by DII to perform its obligations as General
Partner to the Partnership in accordance with the terms of the Partnership
Agreement or (ii) a third party is expressly given rights herein, any agreement
herein contained, expressed or implied, shall be only for the benefit of the
Parties and their respective legal representatives, successors, and permitted
assigns, and
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such agreements or assumption shall not inure to the benefit of any other party
whomsoever, it being the intention of the Parties that no person or entity shall
be deemed a third party beneficiary of this Agreement except to the extent a
third party is expressly given rights herein.
9.3 General Representations. Each Party represents and warrants that on
the date hereof: (i) it is a corporation, duly established, validly existing and
in good standing under the laws of its state or jurisdiction of incorporation,
with power and authority to carry on the business in which it is engaged and to
perform its respective obligations under this Agreement; (ii) the execution and
delivery of this Agreement have been duly authorized and approved by all
requisite corporate action; (iii) it has all the requisite corporate power and
authority to enter into this Agreement and to perform its obligations hereunder;
and (iv) the execution and delivery of this Agreement do not, and consummation
of the transactions contemplated herein shall not, violate any of the provisions
of its charter or bylaws or any applicable state or federal laws applicable to
it.
9.4 Notices. All notices, requests, demands, claims, and other
communications hereunder shall be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given two business
days after it is sent by registered or certified mail, return receipt requested,
postage prepaid, and addressed to the intended recipient as set forth below:
If to DII, to: DeepTech International Inc.
Attention: President
El Paso Building
0000 Xxxxxxxxx
Xxxxxxx, Xxxxx 00000
(000) 000-0000
If to EPEPC, to: El Paso Energy Partners Company
Attention: President
0 Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
(000) 000-0000
If to EPFS, to: El Paso Field Services, L.P.
Attention: President
El Paso Building
0000 Xxxxxxxxx
Xxxxxxx, Xxxxx 00000
(000) 000-0000
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the addresses set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, ordinary mail, or electronic mail), but no such notice, request,
demand, claim, or other communication shall be deemed to have been duly given
unless and until it actually is received by the intended recipient. Any Party
may
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change the address to which notices, requests, demands, claims, and other
communications hereunder are to be delivered by giving the other Party notice in
the manner herein set forth.
9.5 GOVERNING LAW. THIS AGREEMENT HAS BEEN EXECUTED AND DELIVERED AND
SHALL BE INTERPRETED, CONSTRUED, GOVERNED AND ENFORCED PURSUANT TO AND IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO ANY CHOICE OR
CONFLICT OF LAW PRINCIPLES (WHETHER OF THE STATE OF TEXAS OR ANY OTHER
JURISDICTION) WHICH, IF APPLIED, MIGHT PERMIT OR REQUIRE THE APPLICATION OF THE
LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF TEXAS.
9.6 Assignment. No assignment of this Agreement or any of the rights or
obligations set forth herein by either Party shall be valid without the specific
written consent of the other Party; provided, however, that DII shall have the
right to assign its rights and obligations under this Agreement to any Affiliate
without the consent of EPEPC, and any such Affiliate may reassign such rights
and obligations so long as such rights and obligations are not assigned to any
entity other than an Affiliate of DII.
9.7 Waiver of Breach. The waiver by either Party of a breach or
violation of any provision of this Agreement, whether intentional or not, shall
not operate as, or be construed to be, a waiver of any subsequent breach of the
same or any other provision hereof.
9.8 Additional Assurances. The provisions of this Agreement shall be
self-operative and shall not require further accord between the Parties except
as may herein specifically be provided to the contrary; provided, however, that
at the request of either Party, the other Party shall execute such additional
instruments and take such additional actions as shall be necessary to effectuate
this Agreement.
9.9 Severability. If any provision of this Agreement is held to be
unenforceable for any reason, such provision shall be severable from this
Agreement if it is capable of being identified with and apportioned to
reciprocal consideration or to the extent that it is a provision that is not
essential and the absence of which would not have prevented the Parties from
entering into this Agreement. The unenforceability of a provision that has been
performed shall not be grounds for invalidation of this Agreement under
circumstances in which the true controversy between the Parties does not involve
such provision.
9.10 Article and Section Headings. The article and section headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning of interpretation of this Agreement.
9.11 Amendments. No amendment of any provision of this Agreement shall
be valid unless the same shall be in writing and signed by each Party.
9.12 Entire Agreement. This Agreement (including the documents referred
to herein) supersedes all previous understandings, representations, contracts or
agreements, written, oral or otherwise, between the Parties and constitutes the
entire Agreement between the Parties with respect to the subject matter of this
Agreement, and no changes in or additions to this Agreement shall be recognized
unless incorporated herein by written amendment.
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9.13 Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. If an ambiguity or question of
intent or interpretation arises, this Agreement shall be construed as if drafted
jointly by the Parties and no presumption or burden of proof shall arise
favoring or disfavoring any Party by virtue of the authorship of any of the
provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean "including without limitation". All personal
pronouns used in this Agreement, whether used in the masculine, feminine or
neuter gender, shall include all other genders; the singular shall include the
plural, and vice versa. All references herein to Exhibits, Schedules, Articles,
Sections or subdivisions thereof shall refer to the corresponding Exhibits,
Schedules, Article, Section or subdivision thereof of this Agreement unless
specific reference is made to such exhibits, articles, sections or subdivisions
of another document or instrument. The terms "herein," "hereby," "hereunder,"
"hereof," "hereinafter," and other equivalent words refer to this Agreement in
its entirety and not solely to the particular portion of the Agreement in which
such word is used.
9.14 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original but which together shall constitute one and
the same instrument.
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by their respective duly authorized representatives as of the day and
year first above written.
DII: DEEPTECH INTERNATIONAL INC.
By: /s/ D. Xxxx Xxxxxx
--------------------------------------
Senior Vice President and Controller
EPEPC: EL PASO ENERGY PARTNERS COMPANY
By: /s/ D. Xxxx Xxxxxx
--------------------------------------
Senior Vice President and Controller
EPFS: EL PASO FIELD SERVICES, L.P.
By: /s/ D. Xxxx Xxxxxx
--------------------------------------
Senior Vice President and Controller
