EXHIBIT 10.3
TRANSMISSION SYSTEM OPERATING SERVICES AGREEMENT
This Transmission System Operating Services Agreement ("Agreement") is
made and entered into this 23rd day of November, 1999, by and between XX
Xxxxxxxxxx Transmission Limited Liability Company, a Colorado limited liability
company ("KNWTLLC") and HS Gathering, L.L.C., a Colorado limited liability
company ("Contractor").
RECITALS
WHEREAS, KNWTLLC is the owner of the Transmission System (as hereinafter
defined).
WHEREAS, KNWTLLC desires to engage Contractor to provide certain
operating services with regard to the Transmission System as provided herein;
NOW, THEREFORE, for and in consideration of the premises, the terms,
covenants and conditions hereinafter set forth and the sums hereinafter
specified, the Parties hereby agree as follows:
ARTICLE I DEFINITIONS
Terms defined in this Article I shall, for purposes of this Agreement,
have the respective meanings set forth below. Terms defined elsewhere in this
Agreement shall have the meanings so specified when used in this Agreement.
1.1 "AFFILIATE" shall mean with respect to an entity, any other entity
controlling, controlled by or under common control with such entity. As used in
this definition, the term "control," including the correlative terms
"controlling," "controlled by" and "under common control with" shall mean the
possession, direct or indirect, of the power to direct or cause the direction of
the management or policies of an entity, whether through ownership of voting
securities, by contract or otherwise.
1.2 "BOOKS AND RECORDS" shall mean all existing financial, engineering,
operating, accounting, tax, business, environmental, legal, marketing, and other
data, files, documents, instruments, notes, papers, books and records (other
than those protected by legal privilege or that pertain to obligations retained
by Owner hereunder) of Owner and its Affiliates that relate materially to the
Transmission System, including without limitation, financial statements,
budgets, ledgers, journals, deeds, property records, title policies, drawings,
records, maps, charts, surveys, prints, franchises, customer lists, supplier
lists, sales and sales promotional data, advertising materials, cost and pricing
information, corporate records, permits, certificates, FERC filings, and
reports.
1.3 "CALENDAR YEAR" shall mean a period of 365 consecutive days, 366
consecutive days when such period includes a February 29, beginning at 8:00 a.m.
Mountain Time on January 1 and ending at 8:00 a.m. Mountain Time on the
following January 1.
1.4 "CONTRACT" shall mean any agreement, contract, commitment, license,
option, lease, or instrument, including all amendments, modifications and
supplements thereto.
1.5 "CONTRACTS-TRANSMISSION" shall mean all Contracts set forth in
Schedule 1.1(b).
1.6 "CONTRACT MONTH" shall mean each calendar month during the period
commencing with the calendar month of October 1999 and ending with the calendar
month in which termination of this Agreement occurs.
1.7 "DEFAULT RATE" shall mean the lesser of (i) the Prime Rate plus 2%
or (ii) the maximum rate permitted by applicable law.
1.8 "DIRECT COSTS" shall mean all direct costs of services, materials
and equipment, including transportation thereof, paid to non-Affiliated third
parties or any Affiliated parties to the extent such costs paid to any
Affiliated Party do not exceed the costs charged by a non-Affiliated third party
for comparable services, materials and equipment, but excluding (i) the costs of
Contractor's and its Affiliates' personnel and (ii) the costs of any material
that would otherwise be provided as routine Operating Services.
1.9 "ENVIRONMENTAL LAWS" shall mean any and all federal, state and local
laws, statutes, regulations, rules, orders, ordinances, licenses or permits of
any Governmental Authority pertaining to health, safety, the environment,
wildlife or natural resources in effect in any and all jurisdictions in which
the Transmission Assets are located, including, without limitation, the Clean
Air Act, the Federal Water Pollution Control Act, the Rivers and Harbors Act of
1899, the Safe Drinking Water Act, the Comprehensive Environmental Response,
Compensation and Liability Act; the Superfund Amendments and Reauthorization Act
of 1986, the Solid Waste Disposal Act, the Resource Conservation and Recovery
Act, the Hazardous and Solid Waste Amendments of 1984, the Toxic Substances
Control Act, the Emergency Planning and Community Right-to-Know Act, the
National Environmental Policy Act, the Occupational Safety and Health Act, the
Oil Pollution Act, the Pipeline Safety Act, the Natural Gas Pipeline Safety Act,
and the Hazardous Materials Transportation Uniform Safety Act, any state laws
implementing the foregoing federal laws, any state laws pertaining to waste
management, including, without limitation, the handling of oil and gas
exploration and production or processing wastes or the use, maintenance and
closure of pits and impoundments, all other federal, state or local
environmental conservation or protection laws, and any common law creating
liability for environmental conditions, all as amended as of the date of this
Agreement. Environmental Laws shall include, without limitation, all
restrictions, conditions, standards, limitations, prohibitions, requirements,
obligations, schedules and timetables contained in Environmental Laws in effect
on the date of this Agreement or contained in any order, decree, judgment, or
injunction which is issued, entered, promulgated or approved (x) prior to the
date of this Agreement and in effect on the date of this Agreement under any of
the foregoing Environmental Laws, or (y) after the date of this Agreement under
any of the foregoing Environmental Laws in effect as of the date of this
Agreement.
1.10 "EXCLUDED ASSETS" shall mean any properties, privileges, rights and
interests (i) described in Schedule 1.1.(c) and (ii) the "Optional Excluded
Assets" described in Schedule 5.3.19 provided that Sellers (as such term is
defined in the Purchase and Sale Agreement) notify
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Buyer (as such term is defined in the Purchase and Sale Agreement) prior to
Closing (as such term is defined in the Purchase and Sale Agreement) that
Sellers elect to retain such "Optional Excluded Assets."
1.11 "FERC" shall mean the Federal Energy Regulatory Commission.
1.12 "GOVERNMENTAL AUTHORITY" shall mean any court, governmental
department, commission, council, board, agency or other instrumentality of the
United States of America or any state, county, municipality or local government.
1.13 "INTERIM SERVICES" shall mean the services described in Section
2.3(c), (d) and (g).
1.14 "INTERIM SERVICES TRANSFER DATE" shall mean January 1, 2000, unless
otherwise agreed in writing.
1.15 "KMI GUARANTEE" shall mean the Guaranty Agreement of even date
herewith from Xxxxxx Xxxxxx, Inc., in favor of Contractor.
1.16 "LINE PACK-TRANSMISSION" shall mean the natural gas utilized as
line pack in the Transmission System.
1.17 "MODIFICATION" shall mean any expansion, enhancement, modification,
abandonment, improvement or replacement to the Transmission System, other than
those in the ordinary course of business such as routine repairs and
maintenance.
1.18 "OPERATING SERVICES" is defined in Section 2.2.
1.19 "OPERATING SERVICES FEES" is defined in Section 3.2
1.20 "OPERATIONS TRANSFER DATE" shall mean December 1, 1999.
1.21 "OTHER ASSETS-TRANSMISSION" shall mean all of the following: (i)
all Books and Records that relate materially to the Transmission System; and
(ii) all computer software (to the extent transferable) and computer files used
solely in connection with the Transmission System.
1.22 "OWNER" shall mean KNWTLLC and its successors and permitted
assigns.
1.23 "PARTY" shall mean Owner or Contractor, and "Parties" shall mean
Owner and Contractor.
1.24 "PERMITS" shall mean all permits, certificates, registrations,
licenses, franchises, authorities, consents, and approvals of a Governmental
Authority.
1.25 "PERMITS-TRANSMISSION" shall mean all Permits relating to or used
in connection with the Transmission System, the same being more particularly
described in Schedule 1.1(e).
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1.26 "PERSON" shall mean an individual, partnership, corporation
(including a business trust), joint venture, limited liability company or other
entity, or a federal, state or local governmental entity.
1.27 "PERSONAL PROPERTY-TRANSMISSION" shall mean all machinery,
equipment, compressors, tanks, pumps, pipe, engines, heaters, pipelines, meters,
liquid handling facilities, tools, fire equipment, parts, supplies, rolling
stock, vehicles, trailers, communications equipment, phones, radios, licenses,
testing equipment, and other equipment and tangible personal property owned or
leased by, or held for the benefit of, Owner relating to or used in connection
with the Transmission System, as listed in Schedule 1.1(g).
1.28 "PRIME RATE" shall mean a rate per annum equal to the lesser of (a)
a varying rate per annum that is equal to the interest rate publicly quoted by
The Chase Manhattan Bank, New York, New York from time to time as its prime
commercial or similar reference interest rate, with adjustments in that varying
rate to be made on the same date as any change in that rate or (b) the maximum
rate permitted by applicable law.
1.29 "PURCHASE AND SALE AGREEMENT" shall mean that certain Purchase and
Sale Agreement dated November 23, 1999, among Xxxxxx Xxxxxx, Inc., KN Gas
Gathering, Inc., HS Resources, Inc., and HS Gathering, L.L.C., as may be amended
or supplemented from time to time.
1.30 "REAL PROPERTY-TRANSMISSION" shall mean all land, buildings,
structures, fixtures, stations, facilities, improvements, surface and building
leases, surface use agreements, easements, Rights-of-Way, and other rights and
interests in and to real property and appurtenances thereto owned or leased by,
or held for the benefit of, Owner and relating to or used in connection with the
Transmission System, all as more particularly described in Schedule 1.1(i).
1.31 "RIGHTS-OF-WAY" shall mean any right-of-way, easement or
prescriptive right that is used in connection with the Transmission System.
1.32 "SERVICE AGREEMENTS" shall mean all transportation and other
agreements to which Owner is now or hereafter a party or to which its interest
in the Transmission System is subject pursuant to which Owner provides
transportation, and/or other services with respect to the Transmission System,
including, without in any way limiting the foregoing, those contracts described
in Schedule 1.1(b) hereto.
1.33 "STATEMENT OF OPERATING SERVICES FEES AND TRANSMISSION INTERIM
GROSS MARGIN" shall mean with respect to any Contract Month a monthly statement
submitted by Contractor to Owner setting forth (i) the Operating Services Fees
for such Contract Month, and (ii) the amount of Transmission Interim Gross
Margin with respect to such Contract Month.
1.34 "TARIFF" shall mean the First Revised FERC Gas Tariff of XX
Xxxxxxxxxx Transmission Limited Liability Company, issued November 5, 1998,
effective December 5, 1998, as may be amended or supplemented from time to time.
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1.35 "TRANSMISSION ASSETS" the Real Property-Transmission, Personal
Property-Transmission, Line Pack-Transmission, Contracts-Transmission,
Permits-Transmission and Other Assets-Transmission, except for the Excluded
Assets.
1.36 "TRANSMISSION SYSTEM" the facilities owned or leased by Owner and
used to transport natural gas from the gas gathering system owned by KN Gas
Gathering, Inc. to the gas processing plant operated by BP Amoco plc and other
delivery points, comprising approximately 58 miles of pipeline and 38,932
horsepower of site rated compression, located in Xxxxx, Denver and Weld
Counties, Colorado as more fully depicted on the map attached hereto as Exhibit
A, as operated by or on behalf of Owner on the date hereof.
1.37 "TRANSMISSION INTERIM GROSS MARGIN" shall mean with respect to any
Contract Month the following: (i) all amounts payable, including fees and
penalties, to Owner for services provided through the Transmission System during
such Contract Month; less (ii) all costs incurred for fuel and lost and
unaccounted for gas in connection with the operation of the Transmission System
during such Contract Month. Transmission Interim Gross Margin does not include
insurance proceeds or other proceeds for damage to and/or condemnation of the
Transmission System or the Facilities Fees.
ARTICLE II GENERAL RESPONSIBILITIES OF CONTRACTOR
2.1 PERFORMANCE OF OPERATING SERVICES. Subject to the terms and
conditions of this Agreement, the Contractor shall perform all Operating
Services in accordance with the terms and conditions contained herein, in
accordance with the terms and conditions of the Service Agreements and other
Contracts-Transmission, and in accordance with the requirements of all
applicable laws, rules, orders, permits and regulations of governmental
authorities having jurisdiction, including without limitation, 18 Code of
Federal Regulations Parts 154 (Rate Schedules and Tariffs) and 157 (Applications
for Certificates of Public Convenience and Necessity and for Orders Permitting
and Approving Abandonment under Section 7 of the Natural Gas Act), 49 Code of
Federal Regulations Parts 192 (Transportation of Natural and Other Gas by
Pipeline: Minimum Federal Safety Standards) and 199 (Drug and Alcohol Testing),
all Environmental Laws, and any successor laws, rules, orders and regulations,
and in accordance with sound, efficient, workmanlike and economically prudent
natural gas pipeline industry practices and Owner's standard engineering,
construction, environmental, health and safety practices and policies as
provided to Contractor prior to the execution of this Agreement, but such
policies, provided by or on behalf of Owner in the form of written manuals, are
subject to the provisions of Section 2.11(d) of the Purchase and Sale Agreement.
2.2 DESCRIPTION OF OPERATING SERVICES. From and after the Operations
Transfer Date, with respect to all Operating Services except the Interim
Services, and from and after the Interim Services Date with respect to the
Interim Services, Contractor shall perform, furnish and pay for all costs,
expenses, services, supplies, equipment, resources, material, labor and other
personnel, contractors and subcontractors, as may be required to manage, operate
and maintain the Transmission System and Transmission Assets (the "Operating
Services") in accordance with the terms of this Agreement, except only for those
services to be performed by Owner pursuant to Section 2.3. The Operating
Services shall include and Contractor hereby is granted the exclusive
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right, power and authority to perform and furnish, without limitation, the
following services, supplies, equipment, materials, labor and personnel, except
to the extent any such services are described in Section 2.3 or restricted
pursuant to Section 2.4 or any other provision of this Agreement, and subject to
the Recoveries as provided in the Purchase and Sale Agreement:
(a) Manage, operate, maintain and repair the Transmission System and
Transmission Assets and procure and furnish all materials (e.g. consumables,
including bolts, gaskets and fluids), equipment, tools, services, supplies,
supervision and labor, liquids and chemicals, and mechanical parts necessary to
carry out Contractor's responsibilities under this Agreement;
(b) Perform, on behalf of Owner, all of the obligations of Owner
continuing or arising after the Operations Transfer Date under or with respect
to the Transmission System and Transmission Assets, including, but not limited
to, the performance of all obligations consistent with, and as may be required
by, the provisions of the Tariff, all obligations of Owner under applicable FERC
certificates, all obligations of Owner under its Service Agreements and
Contracts-Transmission, all obligations of Owner (including the payment of rent
and other monetary obligations) under all leases pursuant to which any of the
Transmission Assets are leased by Owner and all obligations (including the
payment of fees, rentals and other payments) arising under all Real
Property-Transmission;
(c) Perform, on behalf of Owner, such Modifications to the
Transmission System as Contractor deems appropriate, necessary or desirable and
which satisfy the requirements of Section 2.5, and provide all supplies,
equipment and material required in connection therewith, and acquire in the name
of Owner, all Rights-of-Way or other rights as may be required in connection
therewith;
(d) Perform, on behalf of Owner, the administrative functions of Owner
relating to the maintenance of the Transmission System, including all
engineering, planning, budgeting, reporting and other technical and
administrative functions relating to maintenance;
(e) Keep an accurate account of all transactions in respect of the
Transmission System consistent with the provisions of Section 3.1 and maintain
the Books and Records;
(f) Prepare preliminary engineering plans and outlines of proposed
construction for any Modification of the Transmission System;
(g) Maintain in force and effect, and require all contractors (and
their subcontractors) of Contractor performing services for the benefit of Owner
to the extent applicable and appropriate to a particular contractor or
subcontractor to maintain in force and effect, the insurance coverage as
described in Exhibit B;
(h) Prepare, make and be solely responsible for, all filings,
notifications and reports, required to be made or filed by an Owner in support
of non-FERC related routine Operating Services with any Governmental Authority
under applicable laws, orders, rules and regulations, including Environmental
Laws;
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(i) Manage and pay all sales and use taxes and interest and penalties
associated therewith applicable to the Transmission System and Transmission
Assets (other than any taxes payable upon transfer thereof as provided in the
Purchase and Sale Agreement), and attributable to periods from and after the
Operations Transfer Date including the maintenance of all associated books and
records and the preparation and filing of all sales and use tax returns with the
requisite governmental authorities and the handling of all audits and disputes
arising therefrom;
(j) Provide and pay for any and all employees, labor, personnel,
vendors, suppliers, outside services, and independent and sub-contractors
(including overtime payments, payroll, taxes, benefits, employee expenses,
employee training and safety training) necessary for the successful performance
of Contractor's obligations hereunder;
(k) Manage, operate, maintain and, subject to Section 2.4(c), abandon
the Transmission System and Transmission Assets in accordance with all
applicable laws, orders, rules and regulations, including but not limited to
FERC regulations under the Natural Gas Act and Environmental Laws, safety
regulations and cathodic protection regulations and comply with all permits,
plans and regulatory programs existing or required in the future in connection
therewith;
(l) Manage and maintain all records consistent with and as required
by Environmental Laws;
(m) Provide for proper communications, inspections, surveillance,
flow control, electronic flow measurement, corrosion control, cathodic
protection, and monitoring of the Transmission System;
(n) Market the Transmission System transportation services to
shippers and other potential customers, and maintain customer relationships;
(o) Collect and market condensate, drip liquids, and NGL's collected
and transported through the Transmission System;
(p) Accept nominations from shippers and provide all scheduling and
dispatching required in connection with the operation of the Transmission
System;
(q) Provide written notification (which may be in the form of a
service request) to Owner of each request for service on the Transmission System
within five (5) business days after receipt of such request;
(r) Provide all metering activities, chart integration services,
measurement auditing, compression operations, maintenance and repairs, gas
analysis and measurement services, gas control and scheduling, billing and
accounting services with respect to the Transmission System;
(s) Maintain proper account payable records with respect to amounts
incurred related to the Transmission System, including all books and records for
sales and use taxes and
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the accrual and remittances thereof, and promptly pay and discharge when due all
costs and expenses incurred in connection with the operation and maintenance of
the Transmission System and Transmission Assets and the performance of Operating
Services hereunder;
(t) Maintain proper account receivable records for Owner and xxxx and
collect all revenues due to Owner in connection with the operation of the
Transmission System, with all such xxxxxxxx for Transmission System services to
be separately itemized on each xxxx consistent with the form currently used by
Owner, and pay the Transmission Interim Gross Margin to Owner as provided in
Section 3.2 ;
(u) Maintain proper accounts and records, and pay and be responsible
for, all fuel, shrinkage, line loss, and other lost and unaccounted for gas
relating to the Transmission System for periods after the Operations Transfer
Date and perform all obligations under all gas purchase contracts pursuant to
which gas is purchased in connection with the operation of the Transmission
System;
(v) Recommend to Owner such new or amended contracts or agreements or
arrangements as Contractor deems necessary, desirable or appropriate for
furnishing transportation and other services in respect to the Transmission
System; (w) Provide all emergency response services, including receiving,
handling and responding to all calls from the emergency answering line phone
service, and provide all line locating services; and
(x) Do such other acts and things as are necessary, required,
desirable or appropriate for the operation and maintenance of the Transmission
System and which are consistent with the Tariff and Owner's obligations under
the Natural Gas Act and other applicable laws and regulations.
2.3 CERTAIN RIGHTS AND OBLIGATIONS OF OWNER. Notwithstanding anything to
the contrary herein, Owner shall have the right and the obligation during the
term of this Agreement, to provide the following services with respect to the
Transmission System:
(a) Prepare and make all routine filings, notifications and
reports required to be made or filed by KNWTLLC with the FERC;
(b) Cooperate with Contractor in obtaining any FERC or other
regulatory authorization as more fully provided for in Section 2.12 of this
Agreement;
(c) Maintain and manage an electronic bulletin board for the
Transmission System in accordance with FERC requirements until such time as
Contractor and Owner can orderly transfer such duties to Contractor (which shall
occur no later than March 31, 2000).
(d) Perform all nomination and scheduling with regard to the
Transmission System, provide accounting and billing information to Contractor
not later than 15 days after the end of each Contract Month so that Contractor
may send bills to the shippers using the Transmission System, and provide
accounts payable services with respect to gas purchases
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relating to the Transmission System, until such time as Contractor and Owner can
orderly transfer such duties to Contractor (which shall occur no later than
January 1, 2000, unless otherwise agreed in writing);
(e) Pay all expenses of operating and maintaining, the Transmission
System attributable to each Contract Month ending prior to the Operations
Transfer Date;
(f) Pay all ad valorem, property, or similar taxes, and interest
and penalties associated therewith, applicable to the Transmission System and
attributable to the period from and after the date of this Agreement until
termination of this Agreement, including the preparation and filing of all
required tax returns with the requisite governmental authorities and the
handling of all audits and disputes arising therefrom;
(g) Until January 1, 2000, unless otherwise agreed in writing,
xxxx and collect all revenues for services provided by, and perform the
following services: chart integration services, measurement auditing, gas
analysis and measurement services and gas control;
(h) Prepare and file all compliance reports for reporting periods
ending on or before the Operations Transfer Date, including but not limited to
the semi-annual compliance monitoring reports that must be prepared pursuant to
the air permits associated with the compressor stations and provide Contractor
with a copy of any such reports; and
(i) Until May 1, 2000, utilize the Brighton office facilities in
connection with other operations of Owner and its Affiliates in a manner
consistent with past practices, including third parties providing services in
connection therewith.
Notwithstanding anything to the contrary contained herein, it is understood and
agreed that Owner retains all of its obligations under the Tariff and the right
to perform such obligations to the extent not performed by Contractor on Owner's
behalf pursuant to the terms hereof.
2.4 RESTRICTED ACTIVITIES. Without first procuring the prior written
approval of Owner which shall not be unreasonably withheld, conditioned or
delayed, Contractor shall not:
(a) request any change in KNWTLLC's Tariff or take any other action
that involves the FERC;
(b) enter into any new or amend any existing Service Agreement
(however, this restriction does not preclude Contractor from entering into well
connect agreements pursuant to the terms of existing Service Agreements); or
(c) decommission, retire or abandon any item of equipment that is
part of the Transmission System for which FERC authorization may be required.
Notwithstanding anything to the contrary contained in this Agreement, Contractor
shall not do anything that is inconsistent with Owner's applicable FERC
certificate authority as it exists from time to time. In addition, Contractor
shall not create any lien, security interest or other encumbrance against the
Transmission Assets and shall keep the Transmission Assets free and
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clear of any lien, security interest or other encumbrance arising out of the
operations of Contractor, except for liens, security interests and encumbrances
securing payments not more than 60 days past due or being contested by
Contractor in good faith.
2.5 MODIFICATION OF TRANSMISSION SYSTEM. Contractor shall consult with
Owner not less than 20 days prior to commencing construction of any
Modification; except for repair or maintenance of transmission facilities.
Within 10 days of the initial consultation, Owner shall reasonably determine
what, if any, authorization of FERC is required for the proposed Modification,
and if FERC authorization is determined to be required, Contractor shall provide
to Owner engineering plans, capital expense estimates, and other economic
projections regarding the proposed Modification. Contractor shall consult with
Owner on any aspect of such planned Modification and shall fairly consider
Owner's recommendations in connection therewith and Contractor shall not
commence construction activities on such Modifications until completion of
Owner's review, which review shall be completed expeditiously so as to not
unduly delay Contractors construction schedule. All Modifications shall be
engineered and constructed in accordance with prudent industry standards and
practices and, if Owner's standards and practices are higher, then in accordance
with the standards and practices previously employed by Owner. Except for any
authorization or approval from FERC, Contractor shall prepare, file and
prosecute any regulatory action necessary to authorize any Modification, and
Owner shall cooperate with and assist Contractor, at Contractor's expense, in
obtaining such regulatory authorizations, as reasonably requested by Contractor.
If Owner reasonably determines that authorization or approval from FERC is
required in connection with any proposed Modification, Contractor shall not
commence construction of such Modification until such authorization or approval
has been obtained. Obtaining any such authorization or approval from FERC shall
be done in accordance with Section 2.12. Contractor is obligated to act
consistent with and in a timely fashion observe all potentially relevant
requirements pursuant to Environmental Law, including air permit requirements
that might apply to the Modification.
2.6 EMERGENCY OPERATIONS. Notwithstanding any other provision of this
Agreement, in case of explosion, fire, extreme cold, freezing or other sudden
emergency, or any major interruption of the operation of the Transmission
System, or any part thereof, the prior notice to Owner shall not be a
prerequisite to Contractor's taking such steps and incurring such costs as are
required to deal with such emergency or interruption or to safeguard life and/or
property in such event if, in Contractor's good faith opinion, any potential
delay incurred by giving such notice would possibly jeopardize the interests of
Owner or the health and safety of the public or employees; provided, however,
that Contractor shall, as promptly as may be reasonably practicable, report such
emergency or interruption to Owner and in sufficient time to permit Owner to
make any report to FERC that it is required to make in connection therewith.
Contractor shall also, as promptly as may be reasonably practicable, make on
behalf of Owner any required reports of such emergency or interruption to
federal, state or local regulatory authorities having jurisdiction, other than
FERC.
2.7 REPORTS. Contractor shall report on a monthly basis in reasonable
detail to Owner on the operation of the Transmission System and, in so doing but
without in any way limiting the foregoing, shall timely prepare and deliver to
Owner not later than 30 days after the end of each Contract Month a report in
the form set forth on Exhibit D hereto. Contractor shall also furnish
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to Owner annual budgets and such additional information, reports, copies of all
sales and use tax returns, and records as may be reasonably requested by Owner.
Additionally, Contractor shall meet with Owner on a quarterly basis, at
Contractor's offices in the Denver metropolitan area to report on all
operational, maintenance and other aspects of its operatorship. Contractor shall
provide Owner all information required by Owner in the possession of Contractor
to enable Owner to prepare and make all filings, modifications and reports
required to be filed with or provided to the FERC in connection herewith.
Contractor shall provide Owner such additional information concerning the
operation of the Transmission System as Owner may reasonably request.
2.8 REPRESENTATION BEFORE AGENCIES. In connection with the operation of
the Transmission System, after the Operations Transfer Date, Contractor shall
and is hereby granted the authority to make applications, filings and
notifications with, appear before and make presentations to, governmental
agencies having jurisdiction over operations conducted with respect to the
Transmission System, except for any such applications, filings, notifications,
appearances or presentations with, before or to, FERC. Contractor shall provide
7 days advance notice to Owner of any meetings with or appearances before
Governmental Authorities.
2.9 ACCESS. Owner and its representatives, contractors, agents and
employees shall have access to the Transmission Assets at their sole risk and
expense for the purpose of inspecting the same and for conducting any
environmental remediation activities retained by Owner under the Purchase and
Sale Agreement. In addition, Panhandle Eastern Pipe Line Company, any successor
to its obligations under the Consent Order dated December 17, 1992 issued by the
Colorado Oil & Gas Conservation Commission IN THE MATTER OF PANHANDLE EASTERN
PIPE LINE COMPANY, and their respective representatives, contractors, agents,
and employees shall have access to the Transmission Assets in accordance with
the Temporary License Agreement Permitting Entry to Property dated March 3, 1993
between KN Front Range Gathering Company, KNWTLLC and Panhandle Eastern Pipe
Line Company. Owner and its representatives, contractors, agents and employees
shall have access to the books and records of Contractor applicable to
operations hereunder at all reasonable times and upon reasonable advance notice
to Contractor.
2.10 PERMITS. After the Operations Transfer Date , Contractor shall
obtain (other than permits and certificates from FERC), maintain in effect and
comply with all permits that are required in order to operate the Transmission
System and shall conduct any operations with respect thereto. Contractor shall
obtain all such permits in its own name, or, if required by any governmental
agency having jurisdiction, in the name of Owner and where necessary make
notification of its designation as operator. Owner shall cooperate and assist
Contractor in obtaining such permits. Any Person is entitled to rely on this
Agreement as granting to Contractor the power and authority to operate and
manage the Transmission System and to perform the Operating Services on behalf
of Owner. In order to evidence the rights, powers and duties of Contractor
hereunder, Owner has executed a Designation of Operator and Power of Attorney
(the "Power of Attorney") in the form set forth in Exhibit C. Owner shall
execute such additional counterparts of the Power of Attorney as are reasonably
requested by Contractor from time to time.
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2.11 INFORMATION. Contractor agrees to apprise Owner from time to time
as reasonably requested by Owner regarding the conduct of operations hereunder,
except that such requests that require extensive investigation, preparation or
accounting research shall be done at Owner's expense.
2.12 CERTAIN REGULATORY MATTERS. Under Section 2.3(b) above, Owner has
retained its obligations to perform those regulatory functions related to the
Transmission System that Contractor is not permitted to perform in its own name
as Contractor and has agreed to perform such regulatory functions, as may be
requested by Contractor from time to time. As to such matters and to the extent
practical, Contractor at its expense shall conduct the necessary research and
preparation of the required paperwork for Owner. All such regulatory filings and
other documentation, reports, and other paperwork shall be prepared in proper
form and in accordance with all rules and regulations of the appropriate
governmental agency. Owner shall reasonably and promptly cooperate and assist
Contractor in completing such documentation and filing such documentation with
the appropriate regulatory agency, provided that (i) such filings and paperwork
are prepared in accordance with the standards and requirements of this Agreement
and (ii) in the case of any filings with FERC, Owner shall have approved such
filing, which approval shall not be unreasonably withheld, conditioned or
delayed and which approval as to any filings related to any Modification
undertaken in accordance with Section 2.5 that requires FERC approval, shall not
be withheld based on economic considerations of the proposed Modification.
Except for routine filings, notifications and reports that Owner will be
responsible for and pay for in accordance with Section 2.3(b) above, any third
party expenses incurred by Owner in cooperating with Contractor with respect to
regulatory matters shall be reimbursed by Contractor within 15 days of receipt
of invoice from Owner.
2.13 TITLE TO MODIFICATIONS. Owner shall own and have title to all
Modifications made by Contractor to the Transmission System during the term of
this Agreement, and Contractor shall execute such documents as may be
appropriate to cause title to any such Modification to be so vested. The costs
of all Modifications made during the term of this Agreement shall be funded as
provided in Section 3.3.
ARTICLE III ACCOUNTING AND COMPENSATION
3.1 ACCOUNTING RECORDS. The Contractor shall, and shall cause its
contractors, subcontractors, agents, vendors and other representatives to keep
complete and accurate books and records concerning the operation of the
Transmission System in accordance with generally accepted accounting principles
and the FERC's Uniform System of Accounts for Class A and B natural gas
companies.
3.2 OPERATING SERVICES FEE.
(a) With respect to each Contract Month commencing with the
Contract Month of December 1999, the Owner shall pay Contractor the applicable
Operating Services Fees in the amounts set forth below. The "Operating Services
Fees" for each Contract Month is as follows:
12
(i) The Operating Services Fee for the Contract Month of December
1999, if applicable, shall be $285,072 per month.
(ii) The Operating Services Fee for each Contract Month in
Calendar Year 2000 shall be $303,405 per month.
(iii) The Operating Services Fee for each Contract Month in
Calendar Year 2001 shall be $303,405 per month escalated in accordance
with the annual GNP Implicit Price Deflator most recently published at
that time by the U.S. Department of Commerce, Bureau of Economic
Analysis.
(b) On or before the last day of the month after each Contract Month
commencing with the Contract Month of December 1999, Contractor shall (i)
deliver to Owner a combined Statement of Operating Services Fees and
Transmission Interim Gross Margin with respect to the Contract Month and (ii)
pay to Owner the amount of the Transmission Interim Gross Margin for such
Contract Month less the Operating Services Fees for such Contract Month as set
forth on such Statement.
(c) Except as otherwise stated in this Agreement, the Operating
Services Fees are intended as turnkey payments for the Operating Services to be
performed and provided by Contractor under this Agreement and are intended to
constitute full and complete reimbursement and compensation for all of the
Operating Services and all costs and expenses of every nature, whether such
costs are characterized as operating, capital, direct, indirect or otherwise,
that Contractor incurs in performing or providing the Operating Services. Except
for the Recoveries provided in the Purchase and Sale Agreement or as otherwise
set forth in this Agreement, Owner shall have no obligation to reimburse
Contractor for any costs, expenses or liabilities paid or incurred by Contractor
hereunder, all of such costs, expenses and liabilities to be borne and paid by
Contractor. If Owner pay any costs, expenses or liabilities that are properly
borne by Contractor pursuant to this Section, Contractor shall promptly
reimburse Owner for such payment.
3.3 CERTAIN CAPITAL COSTS. All costs and expenses incurred by Contractor
in making any Modification to the Transmission System shall be paid directly by
Contractor. The Direct Costs of any such Modification made in accordance with
the terms of this Agreement and that is prudently done and reasonably determined
to be economic to the Transmission System at the time of the termination shall
constitute a loan from Contractor to Owner pursuant to Section 5.3.20 of the
Purchase and Sale Agreement. Subject to the terms of the Purchase and Sale
Agreement, such loans shall be payable in full on the earlier of termination of
the Purchase and Sale Agreement or the date that the closing occurs under the
Purchase and Sale Agreement. Except for repayment of such loans as provided
above, Owner shall have no obligation to reimburse Contractor for any costs or
expenses incurred by Contractor in making any Modification.
3.4 AUDIT. Owner, after 15 days notice in writing to Contractor, shall
have the right during normal business hours to audit, at Owner's own expense,
all books and records of Contractor relating to the operation of the
Transmission System. Such audits shall not be made more often than twice each
Calendar Year. Owner shall have two years after the close of a
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Calendar Year in which to make an audit of Contractor's records for such
Calendar Year. Contractor shall neither be required nor permitted to adjust any
item unless a claim therefore is presented or adjustment is initiated within two
years after the close of the Calendar Year in which the statement therefore is
rendered, and in the absence of such timely claims or adjustments, the bills and
statements rendered shall be conclusively established as correct.
3.5 ADJUSTMENT TO BASE FEE FOR INTERIM SERVICES. If Owner continues to
provide any one or more of the Interim Services after January 1, 2000, the Base
Fee for any Contract Month after that date for which one or more of such Interim
Services are provided by Owner shall be adjusted in the amount set forth in
Exhibit E attached to this Agreement for each Interim Service so provided.
ARTICLE IV PERFORMANCE OF CONTRACTOR'S OBLIGATIONS
4.1 PERFORMANCE. In the performance of Contractor's obligations under
this Agreement, Contractor shall be an independent contractor and not an
employee or agent of Owner and shall comply with all of the applicable laws,
rules, orders and regulations of governmental authorities having jurisdiction.
So long as the Transmission System is subject to rate making regulation by the
FERC, (i) all measurement and measurement equipment shall comply with the
applicable provisions of KNWTLLC's Rate Schedules FTS and ITS and the General
Terms and Conditions applicable thereto as such may be amended from time to
time, and (ii) Contractor shall perform its duties hereunder in a manner
consistent with the standards of the Gas Industry Standards Board and applicable
rules and regulations of the FERC, except to the extent such matters are to be
performed by Owner as set forth in Section 2.3 above. Owner shall have no
supervision rights over the manner or method used by Contractor in performance
of the Operating Services. Owner's sole and exclusive interest shall be in the
results obtained by Contractor.
ARTICLE V INDEMNITY AND RISK OF LOSS
5.1 INDEMNITY. Article VII of the Purchase and Sale Agreement sets forth
the indemnity obligations and indemnification procedures of the Parties.
5.2 LIMITATION ON LIABILITIES. OWNER AND CONTRACTOR (I) AGREE THAT ONLY
ACTUAL DAMAGES SHALL BE RECOVERABLE UNDER THIS AGREEMENT AND (II) HEREBY WAIVE
ANY RIGHT TO RECOVER, AND AGREE THAT THE TERM LOSSES SHALL NOT COVER, SPECIAL,
PUNITIVE, CONSEQUENTIAL, INCIDENTAL OR EXEMPLARY DAMAGES (WHETHER BASED ON
STATUTE, CONTRACT, TORT OR OTHERWISE, AND WHETHER OR NOT ARISING FROM THE
INDEMNIFYING PARTY'S SOLE, JOINT OR CONCURRENT NEGLIGENCE, STRICT LIABILITY OR
OTHER FAULT) EXCEPT TO THE EXTENT ANY SUCH PARTY SUFFERS SUCH DAMAGES TO AN
UNAFFILIATED THIRD-PARTY IN CONNECTION WITH A THIRD-PARTY CLAIM, IN WHICH EVENT
SUCH DAMAGES SHALL BE RECOVERABLE.
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5.3 RISK OF LOSS. Risk of loss of, or damage to, the Transmission System
for any reason after the Operations Transfer Date, shall be borne as set forth
in Section 5.3.8 of the Purchase and Sale Agreement.
5.4 EXCLUSIVE REMEDIES. Except to the extent either Party has the right
to terminate this Agreement pursuant to the Purchase and Sale Agreement, the
Parties' sole and exclusive remedy for any dispute or claim arising under or
related to this Agreement or the operations conducted pursuant hereto shall be
the rights provided under Section 2.10 and Article VII of the Purchase and Sale
Agreement and under Article V and Section 10.7 hereof. The Parties hereby waive
any other remedies, whether based in contract, tort, statute or otherwise.
ARTICLE VI ASSIGNMENT
6.1 All of the terms, covenants and conditions of this Agreement shall
be binding upon, and inure to the benefit of, and be enforceable by, the Parties
and their respective successors by merger and permitted assigns (and in the case
of indemnities to the benefit of all persons indemnified). This Agreement and
the rights and obligations hereunder shall not be assigned or delegated by
either Party without the consent of the other Party, which consent will not be
unreasonably withheld, conditioned or delayed except that (i) Owner may assign
and delegate its rights and obligations hereunder in whole or in part to one or
more Affiliates of Xxxxxx Xxxxxx, Inc. to which all or any portion of the
Transmission Assets are assigned or transferred, provided that each such
Affiliate assumes and agrees to perform the obligations of Owner under this
Agreement applicable to the assigned or transferred Transmission Assets and
Xxxxxx Xxxxxx, Inc. guarantees the performance of such obligations pursuant to a
form of guaranty substantially in the same form as the KMI Guarantee, and (ii)
Contractor may assign and delegate its rights hereunder to any Affiliate of
Contractor, provided that such Affiliate assumes and agrees to perform the
obligations of Contractor under this Agreement and Contractor guarantees the
performance of such obligations pursuant to a form of guaranty substantially in
the same form as the KMI Guarantee.
ARTICLE VII FORCE MAJEURE
7.1 FORCE MAJEURE. If by reason of force majeure either Party hereto is
rendered unable, wholly or in part, to carry out its obligations under this
Agreement (except as to an obligation to pay money), and if such Party gives
notice and reasonably full particulars of such force majeure in writing or by
facsimile to the other within a reasonable time after the occurrence of the
cause relied on, the Party giving such notice, so far as and to the extent that
it is affected by such force majeure, shall not be liable in damages during the
continuance of any inability so caused; provided, such cause shall be remedied
with all reasonable dispatch.
7.2 FORCE MAJEURE DEFINED. As used herein, force majeure shall mean any
event, circumstance or condition which is not reasonably in the control of the
Party claiming suspension, including, without limitation, acts of God, strikes,
lockouts, or other industrial disturbances; acts of a public enemy, wars,
blockades, insurrections, riots, epidemics, landslides, lightning, earthquakes,
fires, storms (including but not limited to hurricanes or hurricane warnings),
arrests and restraints of the government, either federal or state, civil or
military, civil disturbances;
15
shutdowns for purposes of necessary repairs, relocation, or construction of
facilities; breakage or accident to machinery or lines of pipe; the necessity
for testing (as required by governmental authority), the necessity of making
repairs or alterations to machinery or lines of pipe; failure of surface
equipment or pipelines; accidents, breakdowns, inability to obtain necessary
material, supplies, or permits, or labor to perform or comply with any
obligation or condition of this Agreement. It is understood and agreed that the
settlement of strikes or lockouts shall be entirely within the discretion of the
Party having the difficulty and that the above requirement that any force
majeure shall be remedied with all reasonable dispatch shall not require the
settlement of strikes or lockouts by acceding to the demands of an opposing
party when such course is inadvisable in the discretion of the Party having the
difficulty.
7.3 LIMITATIONS. Such force majeure affecting the performance hereunder
by either Party, however, shall not relieve such Party of liability in the event
of concurring negligence or in the event of failure to use due diligence to
remedy the situation and to remove the cause in an adequate manner and with all
reasonable dispatch, nor shall such causes or contingencies affecting such
performance relieve either Party from its obligations to make payments as
determined hereunder.
ARTICLE VIII TERM AND TERMINATION
8.1 TERM. This Agreement shall become effective on the date of execution
hereof and shall continue in force and effect until the earlier of (i)
termination of the Purchase and Sale Agreement (in which event, this Agreement
shall terminate 90 days after the termination of the Purchase and Sale
Agreement), or (ii) closing of the sale of Owner to Contractor pursuant to the
terms of the Purchase and Sale Agreement.
8.2 EFFECT. Termination of this Agreement shall not relieve either Party
from any obligation accruing or accrued to the date of such termination or
deprive the Party not in default of any remedy otherwise available to it.
8.3 TRANSFER OF CONTRACTORSHIP. In the event of termination of this
Agreement in whole or in part, Contractor will submit to Owner a final
accounting of its operations hereunder (or the portion thereof with respect to
which this Agreement has terminated) and deliver, except as a result of the
closing of the sale of the Transmission System to Contractor, to Owner all
records, reports, and data that relate to Operating Services hereunder and that
are in its possession as Contractor hereunder as promptly as possible.
Contractor may retain copies of all of said records, reports and data, which
copies will be prepared at the expense of Contractor. Contractor will cooperate
with Owner to cause an orderly transition of operations to a successor operator,
including the execution by Contractor of all documents, instruments and
regulatory filings reasonably requested by Owner in connection with such
transition.
ARTICLE IX NOTICES
9.1 NOTICES. All notices, requests, demands and other communications
(collectively, "NOTICES") required or permitted to be given hereunder shall be
in writing and delivered
16
personally, or by facsimile transmission or mailed first class, postage prepaid,
registered or certified mail, as follows:
If to Contractor, to:
HS Gathering, L.L.C.
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attention: General Counsel
Facsimile Number: 303/296-9709
If to the Owner, to:
XX Xxxxxxxxxx Transmission Limited Liability Company
000 Xxx Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx
Attention: Xx. Xxxxxx Xxxxxxx
Facsimile Number: 303/914-7447
All Notices shall be effective upon receipt. Any Party may change its
Notice address by giving written Notice to the other Parties in the manner
specified above.
ARTICLE X MISCELLANEOUS
10.1 APPLICABLE LAW. This Agreement shall be governed by and interpreted
in accordance with the laws of the State of Colorado, without regard to any
conflicts of laws principles which, if applied, might permit or require the
application of the laws of another jurisdiction.
10.2 LAWS AND REGULATORY BODIES. This Agreement, the operation of the
Transmission System and the rights and obligations of Owner and Contractor
hereunder shall be subject to all valid and applicable laws, orders, directives,
rules and regulations of any duly constituted governmental body or official
having jurisdiction.
10.3. WAIVER. No waiver by either Party of any default by the other
Party in the performance of any provision, condition or requirement herein shall
be deemed to be a waiver of, or in any manner release the other Party from,
performance of any other provision, condition or requirement herein, nor deemed
to be a waiver of, or in any manner release the other Party from, future
performance of the same provision, condition or requirement; nor shall any delay
or omission of either Party to exercise any right hereunder in any manner impair
the exercise of any such right or any like right accruing to it thereafter.
10.4. MODIFICATION. This Agreement may not be modified, varied or
amended except by an instrument in writing signed by the Parties.
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10.5. CAPTIONS. The titles to each of the various Articles and Sections
in this Agreement are included for convenience or reference only and shall have
no effect on, or be deemed as part of the text of, this Agreement.
10.6 MULTIPLE COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be an original, and all of which, when taken
together, shall constitute but one and the same Agreement.
10.7 ARBITRATION. All disputes hereunder shall be resolved pursuant to
the arbitration provisions of Article IX of the Purchase and Sale Agreement.
10.8 CONFLICT. In the event of any conflict between the terms of this
Agreement and the terms of the Purchase and Sale Agreement the terms of the
Purchase and Sale Agreement shall prevail.
10.9 FURTHER ASSURANCES. Subject to the terms and conditions set forth
in this Agreement, each of the Parties agrees to use all reasonable efforts to
take, or to cause to be taken, all actions, and to do, or to cause to be done,
all things necessary, proper or advisable to consummate and make effective the
transactions contemplated by this Agreement. If, at any time after the execution
of this Agreement, any further action is necessary or desirable to carry out its
purposes, the proper officers, directors, managers or other representatives of
the Parties shall take or cause to be taken all such necessary action.
10.10 SURVIVAL. The indemnification obligations set forth in this
Agreement and all obligations of one Party to make payments to another Party
shall survive termination of this Agreement.
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IN WITNESS WHEREOF, the Parties have executed this Agreement in multiple
counterparts as of the date first above written.
OWNER:
XX XXXXXXXXXX TRANSMISSION
LIMITED LIABILITY COMPANY
By: /s/ Xxxx X. Xxxxxxx
---------------------------------
Name: Xxxx X. Xxxxxxx
Title: Manager, Vice President and Treasurer
CONTRACTOR:
HS GATHERING, L.L.C.
By its sole member, HS Resources, Inc.
By: /s/ Xxxxxxxx Xxxxxxx
---------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Vice President
19
EXHIBIT A
MAP OF TRANSMISSION SYSTEM
EXHIBIT B
INSURANCE REQUIREMENTS
EXHIBIT C
DESIGNATION OF OPERATOR AND POWER OF ATTORNEY
EXHIBIT D
FORM OF REPORT
EXHIBIT E
INTERIM SERVICES FEES
ARTICLE I DEFINITIONS....................................................1
1.1 Affiliate..........................................................1
1.2. "BOOKS AND RECORDS"................................................1
1.3 "CALENDAR YEAR"....................................................1
1.4 "CONTRACT".........................................................2
1.5 "CONTRACTS-TRANSMISSION"...........................................2
1.6 "CONTRACT MONTH"...................................................2
1.7 "DEFAULT RATE".....................................................2
1.8 "DIRECT COSTS".....................................................2
1.9 "ENVIRONMENTAL LAWS"...............................................2
1.10 "EXCLUDED ASSETS"................................................2
1.11 "FERC"...........................................................3
1.12 "GOVERNMENTAL AUTHORITY".........................................3
1.13 "INTERIM SERVICES"...............................................3
1.14 "INTERIM SERVICES TRANSFER DATE".................................3
1.15 "KMI GUARANTEE"..................................................3
1.16 "LINE PACK-TRANSMISSION".........................................3
1.17 "MODIFICATION"...................................................3
1.18 "OPERATING SERVICES".............................................3
1.19 "OPERATING SERVICES FEES"........................................3
1.20 "OPERATIONS TRANSFER DATE".......................................3
1.21 "OTHER ASSETS-TRANSMISSION"......................................3
1.22 "OWNER"..........................................................3
1.23 "PARTY"..........................................................3
1.24 "PERMITS"........................................................3
1.25 "PERMITS-TRANSMISSION"...........................................3
1.26 "PERSON".........................................................4
1.27 "PERSONAL PROPERTY-TRANSMISSION".................................4
1.28 "PRIME RATE".....................................................4
1.29 "PURCHASE AND SALE AGREEMENT"....................................4
1.30 "REAL PROPERTY-TRANSMISSION".....................................4
1.31 "RIGHTS-OF-WAY"..................................................4
1.32 "SERVICE AGREEMENTS".............................................4
1.33 "STATEMENT OF OPERATING SERVICES FEES AND
TRANSMISSION INTERIM GROSS MARGIN"..............................4
1.34 "TARIFF".........................................................4
1.35 "TRANSMISSION ASSETS"............................................5
1.36 "TRANSMISSION SYSTEM"............................................5
1.37 "TRANSMISSION INTERIM GROSS MARGIN"..............................5
ARTICLE II GENERAL RESPONSIBILITIES OF CONTRACTOR.........................5
2.1 PERFORMANCE OF OPERATING SERVICES..................................5
2.2 DESCRIPTION OF OPERATING SERVICES..................................5
2.3 CERTAIN RIGHTS AND OBLIGATIONS OF OWNER............................8
2.4 RESTRICTED ACTIVITIES..............................................9
2.5 MODIFICATION OF TRANSMISSION SYSTEM...............................10
2.6 EMERGENCY OPERATIONS..............................................10
2.7 REPORTS...........................................................10
2.8 REPRESENTATION BEFORE AGENCIES....................................11
2.9 ACCESS............................................................11
2.10 PERMITS.........................................................11
2.11 INFORMATION.....................................................12
2.12 CERTAIN REGULATORY MATTERS......................................12
2.13 TITLE TO MODIFICATIONS..........................................12
ARTICLE III ACCOUNTING AND COMPENSATION..................................12
3.1 ACCOUNTING RECORDS................................................12
3.2 OPERATING SERVICES FEE............................................12
3.3 CERTAIN CAPITAL COSTS.............................................13
3.4 AUDIT.............................................................13
3.5 ADJUSTMENT TO BASE FEE FOR INTERIM SERVICES.......................14
ARTICLE IV PERFORMANCE OF CONTRACTOR'S OBLIGATIONS........................14
4.1 PERFORMANCE.......................................................14
ARTICLE V INDEMNITY AND RISK OF LOSS.....................................14
5.1 INDEMNITY.........................................................14
5.2 LIMITATION ON LIABILITIES.........................................14
5.3 RISK OF LOSS......................................................15
5.4 EXCLUSIVE REMEDIES................................................15
ARTICLE VI ASSIGNMENT....................................................15
ARTICLE VII...............................................................15
7.1 FORCE MAJEURE.....................................................15
7.2 FORCE MAJEURE DEFINED.............................................15
7.3 LIMITATIONS.......................................................16
8.1 TERM..............................................................16
8.2 EFFECT............................................................16
8.3 TRANSFER OF CONTRACTORSHIP........................................16
ARTICLE IX................................................................16
9.1 NOTICES............................................................16
ARTICLE X.................................................................17
10.1 APPLICABLE LAW..................................................17
10.2 LAWS AND REGULATORY BODIES......................................17
10.3. WAIVER..........................................................17
10.4. MODIFICATION....................................................17
10.5. CAPTIONS........................................................18
10.6 MULTIPLE COUNTERPARTS...........................................18
10.8 ARBITRATION.....................................................18
10.9 CONFLICT........................................................18
10.10 FURTHER ASSURANCES..............................................18
26
