FORM OF MASTER SERVICES AGREEMENT By and Between COLORADO INTERSTATE GAS COMPANY and EL PASO CORPORATION TENNESSEE GAS PIPELINE COMPANY EL PASO NATURAL GAS COMPANY and CIG PIPELINE SERVICES COMPANY, L.L.C. DATED: November ___, 2007
Exhibit
10.21
FORM OF
By and Between
COLORADO INTERSTATE GAS COMPANY
and
EL PASO CORPORATION
TENNESSEE GAS PIPELINE COMPANY
EL PASO NATURAL GAS COMPANY
and
CIG PIPELINE SERVICES COMPANY, L.L.C.
DATED: November ___, 2007
INDEX
Article | Page | |
I. General Description of Operational Services to be Provided |
1 | |
II. Accounting; Compensation; Inspection; and Audit |
6 | |
III. Budgets and Financial Statements |
7 | |
IV. Applications and Reports |
8 | |
V. Defaults |
9 | |
VI. Change of Service Providers |
9 | |
VII. Indemnity; Litigations and Insurance |
10 | |
VIII. Taxes |
12 | |
IX. Forces Majeure |
12 | |
X. Notices |
13 | |
XI. Miscellaneous |
14 | |
EXECUTION |
16 | |
Exhibits: |
||
Exhibit A – Accounting Procedures |
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THIS MASTER SERVICES AGREEMENT (“Agreement”), made and entered into as of this ___ day of
November, 2007 by and between Colorado Interstate Gas Company, a Delaware partnership (“CIG”) and
El Paso Corporation, a Delaware corporation (“EPC”) and its affiliates, Tennessee Gas Pipeline
Company, a Delaware corporation (“TGP”), El Paso Natural Gas Company, a Delaware corporation
(“EPNG”) and CIG Pipeline Services Company, L.L.C., a Delaware limited liability company (“CIG
Servco”).
W I T N E S S E T H:
WHEREAS CIG owns and operates an interstate natural gas pipeline and also operates the
facilities of certain other affiliated entities pursuant to operating agreements with Wyoming
Interstate Company, Ltd. (“WIC”), Cheyenne Plains Gas Pipeline Company, L.L.C. (“CP”), and Young
Gas Storage Company, Ltd. (“Young”); and
WHEREAS, EPC, TGP, EPNG and CIG Servco each provide certain services to CIG in connection with
the operation of the CIG facilities and in support of CIG’s role as operator for WIC, CP and Young
(collectively referred to hereinafter as the “Operational Services”); and
WHEREAS, CIG reimburses EPC, TGP, EPNG and CIG Servco for the costs incurred by these entities
(collectively referred to hereinafter as the “Service Providers”) in providing the Operational
Services; and
WHEREAS, CIG and the Service Providers desire to memorialize in this Agreement the Operational
Services to be provided by the Service Providers, and the manner in which CIG’s obligation to
reimburse the Service Providers for their costs shall be determined:
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, CIG
and the Service Providers hereby agree as follows:
ARTICLE I
General Description of Operational Services to be Provided
1.1 General Description of Operational Services to be Provided to CIG by EPC. Subject
to the direction of CIG as provided herein, EPC shall provide supervisory, administrative and
financial services to CIG in connection with the operations of CIG and those other entities with
which CIG has entered into an Operating Agreement and any entity with which CIG enters into an
operating agreementin the future. EPC shall perform its services hereunder in accordance with
generally accepted practices in the natural gas pipeline industry, but such practices shall not be
less than the standards followed by EPC in providing such services to its other affiliated gas
pipeline companies.
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Without limiting the generality of the foregoing, EPC shall have responsibility and authority
to take the following actions for and on behalf of CIG:
(a) | Procure and furnish services in accordance with the operating and capital budgets approved by CIG pursuant to Article III of this Agreement which are necessary to carry out EPC’s responsibilities hereunder; provided however, that in the case of explosion, fire, storm or other emergency, whether of the same or different nature, EPC may take such steps and incur such expenses as in its opinion are required to deal with such emergency and to safeguard life and property but shall, as promptly as feasible, report such emergency to CIG and thereafter shall follow the direction of CIG as to such emergency; | ||
(b) | Perform administrative oversight and assistance to CIG in connection with the accounting, budgeting, information technology (“IT”), risk management, legal, planning, regulatory, reporting, tax and treasury functions (including appropriate tax elections) in accordance with generally accepted accounting principles and the FERC Uniform System of Accounts; | ||
(c) | Maintain for CIG and for its sole benefit and interest, custody of certain funds, securities, notes, drafts, acceptances, and other commercial paper and evidences of indebtedness of CIG; provide administrative and ministerial functions required under the financing arrangements for CIG, and, in accordance with any restrictions or requirements contained therein, keep the funds belonging to CIG on deposit in such banking institutions as CIG may, from time to time, direct and disburse such funds; invest available funds in such United States government securities, certificates of deposit, commercial paper or other marketable securities as CIG shall approve from time to time; | ||
(d) | Procure the services and determine the compensation of such outside vendors, contractors or consultants as may be necessary from time to time in performance of EPC’s obligations under this Agreement; | ||
(e) | Require all contractors (and their subcontractors) of EPC performing services for the benefit of CIG to maintain in force and effect, insurance of such types and in such amounts as CIG shall direct from time to time; | ||
(f) | Procure and maintain on behalf of CIG and those companies that are operated by CIG, insurance of such types and in such amounts as CIG shall direct from time to time; | ||
(g) | Keep an accurate account of transactions in the funds and securities of CIG for which EPC is responsible under Section 1.1(c) above and, whenever requested by CIG, promptly prepare and submit such reports |
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and other information in such form and detail as CIG may reasonably request; and | |||
(h) | Perform such other acts and functions as are necessary to carry out its responsibilities under this Agreement. |
1.2 General Description of Operational Services to be Provided to CIG by TGP. Subject
to the direction of CIG as provided herein, TGP shall provide technical services such as control,
metallurgical, pipeline integrity, engineering and rehabilitation, operational training, government
affairs, aviation, telecommunications and network systems, measurement, materials and contract
management, ad valorem tax administration and executives to CIG for the operations of CIG and
those other entities with which CIG has entered into an Operating Agreement and any entity with
which CIG enters into an operating agreement in the future. TGP shall perform its services
hereunder in accordance with generally accepted practices in the natural gas pipeline industry, but
such practices shall not be less than the standards followed by TGP in providing such services in
connection with the operation of its own gas pipeline facilities or to its other affiliated gas
pipeline companies. Without limiting the generality of the foregoing, TGP shall have
responsibility and authority to take the following actions for and on behalf of CIG:
(a) | Provide design, engineering, construction, operation and day – to – day management, testing, monitoring and supervision of certain aspects of the operations of CIG as described above in accordance with the operating and capital budgets approved by CIG pursuant to Article III of this Agreement; | ||
(b) | Operate, repair and maintain the CIG facilities and procure and furnish materials, equipment, services, supplies and labor in accordance with the operating and capital budgets approved by CIG pursuant to Article III of this Agreement which are necessary to carry out TGP’s responsibilities hereunder; provided however that in the case of explosion, fire, storm or other emergency, whether of the same or different nature, TGP may take such steps and incur such expenses as in its opinion are required to deal with such emergency and to safeguard life and property but shall, as promptly as feasible, report such emergency to CIG and thereafter shall follow the direction of CIG as to such emergency; | ||
(c) | Develop and maintain the Electronic Bulletin Board (“EBB”) for CIG; | ||
(d) | Perform certain administrative functions for CIG, consistent with the provisions of the CIG tariff, including without limitation IT, safety, environmental, and related planning, purchasing, regulatory, reporting, and record retention services; |
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(e) | Prepare the engineering studies, plans and outlines of proposed construction for the CIG facilities and for any modifications, improvements, additions or replacements thereto and all related construction fund schedules, without duplication of the services provided by EPNG or CIG Servco, in accordance with the operating and capital budgets approved by CIG pursuant to Article III of this Agreement; | ||
(f) | Purchase materials, equipment and supplies, and make sales or exchanges of materials, equipment, allow for the use of TGP’s warehouses and supplies, in connection with the other services provided by TGP, in such amounts as are reasonable under the circumstances and as are provided for in the operating and capital budgets approved by CIG pursuant to Article III of this Agreement; | ||
(g) | Procure the services and determine the compensation of such outside engineers, contractors or consultants as may be necessary from time to time in performance of TGP’s obligations under this Agreement; | ||
(h) | Maintain in force and effect, and require all contractors (and their subcontractors) of TGP performing services for the benefit of CIG to maintain in force and effect, insurance of such types and in such amounts as CIG shall direct from time to time; and | ||
(i) | Perform such other acts and functions as are necessary to carry out its responsibilities under this Agreement. |
1.3 General Description of Operational Services to be Provided to CIG by EPNG.
Subject to the direction of CIG as provided herein, EPNG shall provide supervisory,
administrative, financial and technical services such as accounting, rates, tariffs and
certificates, gas scheduling, gas control, measurement, volume accounting, marketing, market
analysis, financial reporting and executives to CIG for the operations of CIG and those other
entities with which CIG has entered into an Operating Agreement and any entity with which CIG
enters into an operating agreement in the future. EPNG shall perform its services hereunder in
accordance with generally accepted practices in the natural gas pipeline industry, but such
practices shall not be less than the standards followed by EPNG in providing such services in
connection with the operation of its own gas pipeline facilities or to its other affiliated gas
pipeline companies. Without limiting the generality of the foregoing, EPNG shall have
responsibility and authority to take the following actions for and on behalf of CIG:
(a) | Supervise, direct, administer and control the design, engineering, construction, operation, administration and day – to – day management, testing, monitoring and supervision of CIG in accordance with the operating and capital budgets approved by CIG pursuant to Article III of this Agreement; |
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(b) | Operate, repair and maintain the CIG facilities and procure and furnish materials, equipment, services, supplies and labor in accordance with the operating and capital budgets approved by CIG pursuant to Article III of this Agreement which are necessary to carry out EPNG’s responsibilities hereunder; provided however that in the case of explosion, fire, storm or other emergency, whether of the same or different nature, EPNG may take such steps and incur such expenses as in its opinion are required to deal with such emergency and to safeguard life and property but shall, as promptly as feasible, report such emergency to CIG and thereafter shall follow the direction of CIG as to such emergency; | ||
(c) | Perform administrative functions for CIG, consistent with the provisions of the CIG tariff, including without limitation the accounting, budgeting, construction, design, engineering, IT, legal, planning, marketing, purchasing, regulatory, reporting, tax and treasury functions, and maintain the books of account and records of CIG in accordance with generally accepted accounting principles and the FERC Uniform System of Accounts; | ||
(d) | Prepare the engineering studies, plans and outlines of proposed construction for the CIG facilities and for any modifications, improvements, additions or replacements thereto and all related construction fund schedules, without duplication of the services provided by TGP or CIG Servco, in accordance with the operating and capital budgets approved by CIG pursuant to Article III of this Agreement; | ||
(e) | Purchase materials, equipment and supplies, and make sales or exchanges of materials, equipment, allow for the use of EPNG’s warehouses and supplies, in connection with the other services provided by EPNG, in such amounts as are reasonable under the circumstances and as are provided for in the operating and capital budgets approved by CIG pursuant to Article III of this Agreement; | ||
(f) | Supervise and administer the gas transportation service agreements, prepare xxxxxxxx and account statements, maintain billing and payment records, perform required measurement and gas accounting functions, provide gas control functions, nominations and scheduling of receipt and delivery functions, gas imbalance functions (including the purchase and/or sale of operational gas volumes), execute and administer Operational Balancing Agreements (“XXXx”) and pipeline interconnection agreements, and maintain and post notices on the Electronic Bulletin Board (“EBB”) for CIG; | ||
(g) | Supervise and administer leases, rights-of-way, upstream or downstream pipeline service agreements and other agreements and property of |
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whatsoever nature of CIG including the collection or payment on behalf of CIG of amounts due under such agreements; | |||
(h) | Procure the services and determine the compensation of such outside engineers, contractors or consultants as may be necessary from time to time in performance of EPNG’s obligations under this Agreement; | ||
(i) | Maintain in force and effect, and require all contractors (and their subcontractors) of EPNG performing services for the benefit of CIG to maintain in force and effect, insurance of such types and in such amounts as CIG shall direct from time to time; | ||
(j) | Keep an accurate account of transactions in the funds and securities of CIG for which EPNG is responsible under Section 1.3(d) above and, whenever requested by CIG, promptly prepare and submit such reports and other information in such form and detail as CIG may reasonably request; | ||
(k) | Acquire natural gas required for operational purposes, and for installation and testing of the pipeline (including linepack); and | ||
(l) | Perform such other acts and functions as are necessary to carry out its responsibilities under this Agreement. |
1.4 General Description of Operational Services to be Provided to CIG by CIG Servco.
Subject to the direction of CIG as provided herein, CIG Servco shall provide labor and associated
support and administrative services to CIG in connection with the day-to-day management and
supervision of the facilities of CIG and those other entities with which CIG has entered into an
Operating Agreement and any entity with which CIG enters into an operating agreement in the future.
CIG Servco shall perform its services hereunder in accordance with generally accepted practices in
the natural gas pipeline industry. Without limiting the generality of the foregoing, CIG Servco
shall provide labor and services to accomplish the following actions for and on behalf of CIG:
(a) | Operate, repair and maintain the CIG facilities and procure and furnish materials, equipment, services, supplies and labor in accordance with the operating and capital budgets approved by CIG pursuant to Article III of this Agreement which are necessary to carry out CIG Servco’s responsibilities hereunder; provided however that in the case of explosion, fire, storm or other emergency, whether of the same or different nature, CIG Servco may take such steps and incur such expenses as in its opinion are required to deal with such emergency and to safeguard life and property but shall, as promptly as feasible, report such emergency to CIG and thereafter shall follow the direction of CIG as to such emergency; |
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(b) | Perform certain administrative functions for CIG, consistent with the provisions of the CIG tariff, including without limitation the marketing functions; | ||
(c) | Prepare the engineering studies, plans and outlines of proposed construction for the CIG facilities and for modifications, improvements, additions or replacements thereto and related construction fund schedules, without duplication of the services provided by TGP or EPNG, in accordance with the operating and capital budgets approved by CIG pursuant to Article III of this Agreement; | ||
(d) | Purchase materials, equipment and supplies, and make sales or exchanges of materials, equipment and supplies, in connection with the other services provided by CIG Servco, in such amounts as are reasonable under the circumstances and as are provided for in the operating and capital budgets approved by CIG pursuant to Article III of this Agreement; | ||
(e) | Supervise and administer the gas transportation service agreements; | ||
(f) | Provide field assistance in connection with the administration of leases, rights-of-way, upstream or downstream pipeline service agreements and other agreements and property of whatsoever nature of CIG including the collection or payment on behalf of CIG of amounts due under such agreements; | ||
(g) | Procure the services and determine the compensation of such outside engineers, contractors or consultants as may be necessary from time to time in performance of CIG Servco’s obligations under this Agreement; | ||
(h) | Maintain in force and effect, and require all contractors (and their subcontractors) of CIG Servco performing services for the benefit of CIG to maintain in force and effect, insurance of such types and in such amounts as CIG shall direct from time to time; | ||
(i) | Acquire natural gas required for operational purposes, and for installation and testing of the pipeline (including linepack); and | ||
(j) | Perform such other acts and functions as are necessary to carry out its responsibilities under this Agreement. |
1.5. Independent Contractor Status of Service Providers. In performance of their
responsibilities under this Agreement, other than in the execution of contracts for materials
and/or services with the value exceeding $5,000,000.00 (as provided in Section 1.8, below), each of
the Service Providers shall be an independent contractor and shall not be an employee or agent of
CIG.
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1.6 Personnel. Each of the Service Providers shall utilize and have supervision over
the Persons (including consultants and professional, service or other organizations) required to
provide the services described herein. Service Providers may use the services of their Affiliates’
employees. Each of the Service Providers shall pay all expenses in connection with the use of its
Affiliate’s employees, and such expenses shall be reimbursed by CIG as provided in the Accounting
Procedures attached hereto as Exhibit A and made a part hereof (the “Accounting Procedures”).
1.7 Information Relating to the Service. The Service Providers shall furnish to CIG
such reports and other information as may be requested by CIG at any time or from time to time, and
shall support CIG in any regulatory proceeding, including, but not limited to assisting in the
filings, responding to discovery requests and providing witnesses to support CIG’s recovery of
expenses associated with the services described in the Agreement.
1.8 Contracts. Unless CIG shall otherwise direct, all contracts for services entered
into by any Service Provider for amounts equal to or in excess of Five Million Dollars
($5,000,000.00) shall be entered into in the name of CIG, with the Service Provider executing such
agreements as the agent for CIG.
1.9 Conformity with Laws. Service Providers shall abide by and conform to all valid
and applicable laws, orders, rules and regulations of all duly constituted governmental
authorities.
ARTICLE II
Accounting; Compensation; Inspection; and Audit
2.1 Accounting. Service Providers shall each keep a full and complete account of all
revenues earned by and collected for the account of CIG and all costs, expenses and expenditures
incurred or paid in connection with providing the services described herein, consistent with
generally accepted accounting principles and applicable FERC regulations and policies, in the
manner set forth in the Accounting Procedures.
2.2 Compensation. CIG shall reimburse Service Providers for all reasonable and proper
costs, expenses and expenditures paid by Service Providers for services performed in connection
with this Agreement in accordance with the Accounting Procedures.
2.3 Audit. CIG, after thirty (30) days’ written notice to any of the Service
Providers, shall have the right during normal business hours to audit, at its own expense, all
books and records of that Service Provider relating to the costs, expenses and expenditures paid or
incurred by that Service Provider in performance of its obligations under this Agreement. Such
audits shall not be made more often than once each calendar year. CIG shall have two (2) years
after the close of a calendar year in which to initiate an audit of any Service Providers’ records
for such calendar year, provided that any audit requested before the end of such two year period
may thereafter be conducted until
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concluded and a proposed adjustment based on that audit may be submitted upon the conclusion
of such audit (but in no event later than 10 business days after the conclusion of such audit).
CIG shall bear all expenses incurred in any such audit. No Service Provider shall be required or
permitted to adjust any item unless a claim therefore has been presented, or an adjustment has been
initiated within two (2) 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; provided, however, that if an
audit has been initiated, but not concluded, before such two year anniversary, a claim may be
submitted no later than 10 business days after the conclusion of such audit and the bills and
statements rendered shall be conclusively established as correct only after such claim is resolved.
2.4 Retention of Records. Service Providers shall retain all records, books of
account, easements, deeds, leases and other land records, and all other documents related to the
operations of CIG for such periods of time as required by CIG or for such longer period of time as
may be prescribed from time to time by the FERC, the Department of Transportation (DOT) or other
governmental agencies having jurisdiction, or as may be otherwise required by law or good business
practice. Service Providers shall promptly furnish to CIG such documents retained pursuant to this
Section 2.4 or copies thereof, as CIG may request from time to time.
ARTICLE III
Budgets
Service Providers shall coordinate with CIG in the preparation of operating and capital
budgets. Except as otherwise provided in this Article III or as CIG may otherwise direct in
writing, the budget approved by CIG and then in effect shall constitute authorization to Service
Providers to incur the expenditures contained in such budget.
ARTICLE IV
Applications and Reports
Subject to prior review and approval by CIG, Service Providers shall prepare and file for CIG:
(a) all applications required to be filed with any governmental agencies for the administration,
development, construction and operation of CIG and for providing natural gas transportation
services; (b) all reports prescribed by the regulatory body or bodies under the jurisdiction of
which CIG is at the time operating; (c) all reports and returns required by Federal, state and
local taxing authorities (including income and franchise taxing authorities); (d) all reports
required by any lending institution; and (e) all other filings required by governmental agencies
having jurisdiction over CIG or its business activities. All such applications and reports shall
be prepared using a standard of practice consistent with that utilized in other investor-owned gas
pipeline projects. In connection with the preparation and filing of such applications and reports,
Service
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Providers acknowledge and agree that El Paso Noric Investments III, L.L.C. has been designated as
the tax matters partner of CIG.
ARTICLE V
Defaults
No waiver by any party of any one or more defaults by the other in the performance of any
provisions of this Agreement shall operate or be construed as a waiver of any future default or
defaults, whether of a like or of a different character. In the event of any dispute under this
Agreement, the affected parties shall, notwithstanding the pendency of such dispute, diligently
proceed with the performance of this Agreement without prejudice to the rights of the other
affected party(ies). A default by any party in the performance of any of its covenants or
obligations under this Agreement which, except for this provision, would be the legal basis for an
action for breach of contract or termination of this Agreement by another party, shall not give or
result in such a right unless and until (1) the other party shall give to the defaulting party
written notice of claim of such default and a statement setting forth the nature thereof, and (2)
such default is not cured within sixty (60) days of such notice or if such default cannot be cured
within the sixty (60) day period, the defaulting party does not undertake to cure such default
promptly upon receipt of such notice and proceed diligently thereafter.
ARTICLE VI
Change of Service Providers
6.1 Change of Service Providers by CIG. Any Service Provider may be discharged, and
its powers, rights and duties as a Service Provider may be terminated at any time upon the election
of CIG, which discharge or termination shall be effective 30 days after written notice thereof is
delivered by CIG to the applicable Service Provider or upon such other time as such Service
Provider and CIG may mutually agree.
6.2 Surrender of Possession. If any Service Provider for any reason ceases to act as
such, it shall surrender possession of and deliver to CIG all assets of CIG then in the Service
Provider’s possession, together with all pertinent books of account and records of CIG and all
documents and agreements relating thereto.
ARTICLE VII
Indemnity, Litigation and Insurance
7.1 Indemnity and Litigation.
(a) | CIG hereby agrees to indemnify and hold harmless each of the Service Providers, its officers, employees, agents and representatives from and against any and all claims, damages, losses, liabilities and causes of action |
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(to the extent only that such claims, damages, losses, liabilities and causes of action (collectively “Losses”) are not satisfied by insurance carried pursuant to Section 7.2 (a) below or otherwise carried by Service Providers) arising out of, in connection with, or as an incident to any act or omission including negligence (but not gross negligence or willful misconduct) of Service Providers, its officers, employees, agents or representatives. | |||
(b) | Each Service Provider hereby agrees to indemnify and hold harmless CIG, its partners, officers, employees, agents and representatives from and against any and all Losses arising out of, in connection with, or as an incident to any act or omission caused by or resulting from the gross negligence or willful misconduct of such Service Provider, its officers, employees, agents or representatives. | ||
(c) | Any and all Losses arising out of any of the above acts or omission of Service Providers or Service Providers’ officers, employees, agents or representatives, which are not covered by insurance shall be settled or litigated and defended by Service Providers in accordance with its best judgment and discretion when (i) the amount involved is $1,000,000.00 or less, (ii) no injunctive or similar relief is sought, (iii) no criminal sanction is sought, and (iv) the gross negligence or willful misconduct of a Service Provider is not alleged to have resulted in such Losses; otherwise, such decision shall be made by CIG, and any settlement or defense thereof shall be controlled by CIG. |
7.2 Insurance.
(a) | Service Providers shall obtain and maintain in force insurance of the type and in the amounts specified by CIG. Where customary or allowed by law, CIG shall be an additional named insured on all such policies of insurance. | ||
(b) | With respect to any Losses associated with damage, injury or destruction to any of CIG’s property, which property is covered by insurance other than insurance provided for in Section 7.2 (a), it is agreed that neither CIG nor any Service Provider shall have any rights of recovery against one another, nor against the affiliates of each, nor the insurers of any of them, and their rights of recovery are mutually waived. All such policies of insurance purchased to cover the assets of CIG, or any gas transported therein, shall be endorsed properly to effectuate this waiver of recovery. |
7.3 Request for Instructions. Any Service Provider may request instructions from CIG
with respect to any matter contemplated by this Agreement and may defer action thereon pending the
receipt of such instructions. Each Service Provider shall be fully protected in acting in
accordance with the instructions of CIG or in omitting to act
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pending the receipt of such instructions, and shall have no liability for any act in good
faith in compliance therewith, or for failure to act in good faith pending receipt thereof.
7.4 Liability of Service Providers. Notwithstanding anything to the contrary that may
be contained or implied herein, each Service Provider shall be liable to third parties for Losses
sustained or incurred as a result of the gross negligence or willful misconduct of that Service
Provider.
ARTICLE VIII
Force Majeure
8.1 Force Majeure. If because of a force majeure event any Party is rendered unable,
wholly or in part, to perform its obligations under this Agreement, and if such Party gives notice
of such event within a reasonable period of time and provides full particulars of the event in
writing or by electronic communication (other than telephone), nonperformance of the Party giving
such notice shall be excused during the continuance of such event and to the extent its performance
is affected by such event. The Party claiming force majeure shall use due diligence to remedy its
nonperformance with all reasonable dispatch, including the making of provision for such alternate
performance as may be economical and practical
8.2 Force Majeure Defined. As used herein, force majeure shall mean acts of God,
including fires, explosions, earthquakes or volcanic eruptions, storms, floods, washouts and
extreme cold or freezing weather; necessity for compliance with any court order, law, regulation or
ordinance promulgated by any governmental authority having jurisdiction, either federal, Indian,
state or local, civil or military; acts of a public enemy; wars and civil disturbances; strikes,
lockouts or other industrial disturbances; breakage or accident to machinery or lines of pipe; the
necessity for testing (as required by governmental authority or as deemed necessary for safe
operation by the testing party); inability to obtain necessary materials, supplies, permits, or
labor to perform or comply with any obligation or condition of this Agreement; inability to obtain
rights of way; and any other causes that are not reasonably in the control of the party claiming
suspension. 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.
8.3 Limitations. No force majeure event affecting the performance by either Party
shall relieve such Party of liability 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 mutually agreed hereunder.
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ARTICLE IX
Notices
Any notice or other communication required or permitted under this Agreement shall be in
writing and shall be deemed to have been duly given upon hand delivery or on the first day
following delivery to a nationally recognized United States overnight courier service, fee prepaid,
return receipt or other confirmation of delivery requested, or on the third day following delivery
to the U.S. Postal Service as certified or registered mail, return receipt requested, postage
prepaid, if addressed to each Party at the addresses set forth below, and at such other addresses
and to such other Persons as may be designated from time to time by either Party by written notice
to the other Party, or when telecopied or sent by facsimile transmission to the respective numbers
set forth for each Party below, to be followed within three (3) days by delivery of a written copy
of such communication:
COLORADO INTERSTATE GAS COMPANY: | ||||
Mail: | Colorado Interstate Gas Company | |||
X.X. Xxx 0000 | ||||
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000-0000 | ||||
Attn: Xxxxxx X. Xxxxx | ||||
Courier: | Colorado Interstate Gas Company | |||
0 Xxxxx Xxxxxx Xxxxxx | ||||
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000-0000 | ||||
Attn: Xxxxxx X. Xxxxx | ||||
FAX: | (000) 000-0000 | |||
EL PASO CORPORATION: | ||||
Mail: | El Paso Corporation | |||
Attn: | ||||
Courier: | El Paso Corporation | |||
Attn: | ||||
Fax: | (___) ___-___ | |||
TENNESSEE GAS PIPELINE COMPANY: | ||||
Mail: | Tennessee Gas Pipeline Company |
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Attn: | ||||
Courier: | Tennessee Gas Pipeline Company | |||
Attn: | ||||
Fax: | (___) ___-___ | |||
EL PASO NATURAL GAS COMPANY: | ||||
Mail: | El Paso Natural Gas Company | |||
X.X. Xxx 0000 | ||||
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000-0000 | ||||
Attn: Xxxxxx X. Xxxxxx | ||||
Courier: | El Paso Natural Gas Company | |||
0 Xxxxx Xxxxxx Xxxxxx | ||||
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000-0000 | ||||
Attn: Xxxxxx X. Xxxxxx | ||||
FAX: | (000) 000-0000 | |||
CIG PIPELINE SERVICES COMPANY, L.L.C.: | ||||
Mail: | CIG Pipeline Services Company, L.L.C. | |||
X.X. Xxx 0000 | ||||
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000-0000 | ||||
Attn: Xxxxxx X. Xxxxxx | ||||
Courier: | CIG Pipeline Services Company, L.L.C. | |||
0 Xxxxx Xxxxxx Xxxxxx | ||||
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000-0000 | ||||
Attn: Xxxxxx X. Xxxxxx | ||||
FAX: | (000) 000-0000 |
ARTICLE XI
Miscellaneous
11.1 Applicable Law. This agreement shall be interpreted and construed in accordance
with the laws of the State of Colorado.
11.2 Assignment. No assignment of this Agreement by either Party hereto shall be made
without the written consent of the other Party hereto; provided that either of such
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Parties may, without the consent of such other Party, assign all of its rights and obligations
hereunder to a financially and operationally capable affiliate of the assigning Party, or to any
company which shall succeed by purchase, merger, consolidation, or other transfer to substantially
all assets of the original Party. Such successor shall be entitled to the rights and shall be
subject to the obligations of its predecessor under this Agreement. In any event, the Party
assigning its interest shall not be released, without the consent of the other Party, of its
obligations to the other Party, hereunder.
11.3 Successors. Any company which shall succeed by purchase, merger or consolidation
to the interests of any Party hereto shall be subject to the obligations of such Party under this
Agreement.
11.4 Laws and Regulatory Bodies. This Agreement, and the rights and obligations of CIG
and Service Providers 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.
11.5 Modification. This Agreement may not be altered, changed or amended, except by an
instrument in writing, executed by Service Providers and CIG.
11.6 Conflict or Inconsistency with Accounting Procedures. In the event of any
conflict or inconsistency between this Agreement and the Accounting Procedures, this Agreement
shall control.
11.7 Captions. The titles to each of the various Articles and Paragraphs 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.
11.8 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.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of
the day and year first above written by their duly authorized officers, intending to be legally
bound thereby.
COLORADO INTERSTATE GAS COMPANY | ||||||
By: | ||||||
Vice President | ||||||
EL PASO CORPORATION | ||||||
By: | ||||||
TENNESSEE GAS PIPELINE COMPANY | ||||||
By: | ||||||
EL PASO NATURAL GAS COMPANY | ||||||
By: | ||||||
Xxxxxx X. Xxxxx | ||||||
Vice President | ||||||
CIG PIPELINE SERVICES COMPANY, L.L.C. | ||||||
By: | ||||||
Xxxxxx X. Xxxxx | ||||||
Vice President |
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EXHIBIT A
TO
By and Between
COLORADO INTERSTATE GAS COMPANY
and
EL PASO CORPORATION
TENNESSEE GAS PIPELINE COMPANY
EL PASO NATURAL GAS COMPANY
and
CIG PIPELINE SERVICES COMPANY, L.L.C.
DATED: November ___, 2007
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EXHIBIT A
TO THE MASTER SERVICES AGREEMENT BY AND BETWEEN COLORADO INTERSTATE GAS COMPANY and EL PASO
CORPORATION, TENNESSEE GAS PIPELINE COMPANY, EL PASO NATURAL GAS COMPANY and CIG PIPELINE SERVICES
COMPANY, L.L.C.
DATED: November __, 2007
Accounting Procedures
The following accounting procedures have been developed pursuant to Section 2.1 of the Master
Services Agreement by and between Colorado Interstate Gas Company (“CIG”) and El Paso Corporation
(“EPC”), Tennessee Gas Pipeline Company (“TGP”), El Paso Natural Gas Company (“EPNG”) and CIG
Pipeline Services Company, L.L.C., (“CIG Servco”). EPC, TGP, EPNG and CIG Servco may be hereinafter
collectively referred to as “Service Providers.” CIG and Service Providers mutually agree that such
accounting procedures shall remain in full force and effect until further amended by written
agreement of the parties. All references to Service Providers are also applicable to Service
Provider’s affiliates.
ARTICLE I
PAYMENTS, ADJUSTMENTS, AND DISPUTED CHARGES
PAYMENTS, ADJUSTMENTS, AND DISPUTED CHARGES
1.1 Payment Mechanism and Cash Management Arrangements. CIG shall maintain its own
general bank account containing sufficient funds to cover costs incurred by CIG or the Service
Providers regarding the operations of CIG and the facilities of certain other affiliated entities
pursuant to operating agreements. CIG may be a participating member in the cash management program
(a.k.a. cashpool) maintained by EPC and its affiliates. Such accounts and arrangements shall be
maintained in accordance with the provisions of the financing agreements between CIG and its
lenders and any restrictions contained therein.
Each of the Service Providers will xxxx (or electronically inter-unit transfer) CIG for all
costs and expenses incurred on behalf of CIG, with such billing to be submitted monthly or as
deemed appropriate by Service Providers. CIG will make payment to Service Providers by the due
date of the Service Providers’ invoices or otherwise settle through EPC’s cash management program.
If a due date is not stated on an invoice, CIG will make payment to the Service Provider within 45
days after the date of the invoice. Interest shall accrue and be paid by CIG on amounts not paid
by the end of the 45-day period, and the applicable interest rate payable on such unpaid amounts
shall be the rate determined pursuant to Section 154.501(d) of the FERC’s Code of Federal
Regulations. Interest shall accrue on unpaid amounts from and after the end of the 45-day payment
period until such amounts are paid in full. The Service Providers shall not request or hold funds
for construction-related costs or expenditures that have not been previously paid or incurred by
Service Providers.
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1.2 Adjustments and Disputed Charges. The payment of any Service Provider’s xxxxxxxx
shall not prejudice the right of CIG to protest or question the correctness of any statements,
reports, or xxxxxxxx rendered by Service Providers to CIG. Service Providers shall not be required
to adjust any item unless a written claim therefore is presented or an adjustment is initiated by
CIG. Such claim must be initiated as provided in Section 2.3 of the Master Services Agreement. In
the absence of such timely written claims for adjustments, such statement, reports, or bills
rendered shall be conclusively established as correct.
ARTICLE II
COSTS, EXPENSES, AND EXPENDITURES
2.1 Direct Charges. Direct charges incurred by Service Providers and reimbursable
hereunder shall include, but not be limited to, the following: rentals and leases, labor costs,
benefits (including but not limited to costs of holiday, vacation, sickness, jury services, and
other paid absences, employment taxes, medical benefits, retirement/pension benefits, educational
assistance and other customary employee expenses), reimbursable expenses of employees, materials
and parts, supplies, professional and contractor services, utilities, taxes, insurance, permits,
licenses, bonds, administrative and general costs.
2.2 Shared Services Costs. The Service Providers employ a shared services concept
whereby certain centralized functions provide services to all affiliates within the corporation.
Shared Services Costs include the following:
• | EPC Shared Services Costs | ||
• | TGP Shared Services Costs | ||
• | EPNG Shared Services Costs | ||
• | CIG Servco Shared Services Costs | ||
• | Reimbursement for costs incurred on behalf of an affiliate |
No less frequently than monthly, CIG will be charged for its share of the Shared Services Costs.
(a) EPC Shared Services Costs. CIG will reimburse EPC for its share of the EPC’s shared
service costs and expenses. These expenses include but are not limited to: EPC shared services
accounting, legal, internal audit, insurance, investor relations, finance, treasury, tax,
planning, risk management, subscriptions, fees, communications, public affairs, accounts payable,
aviation, building services, rent, environmental health and safety, executives, human resources
administration, information technology, materials management, security, bonuses, pension, health
and savings benefits, equity plans, depreciation, payroll tax, franchise tax, and sale and use tax.
In general these costs will be assigned directly but where direct assignment is not practicable
these costs will generally be assigned using a modified Massachusetts, Distrigas or other
appropriate allocation method.
2
(b) TGP Shared Services Costs. CIG will reimburse TGP for its share of TGP’s shared services
costs and expenses. These expenses include but are not limited to: Operational technical support,
corrosion control, metallurgical, pipeline integrity, engineering and rehabilitation, operational
training, government affairs, aviation, telecommunications and network systems, measurement,
materials and contract management, ad valorem tax administration and executives. In general, these
costs will be assigned on the basis of estimated direct time and expenses or other appropriate
allocation method.
(c) EPNG Shared Services. CIG will reimburse EPNG for its share of EPNG’s shared services
costs and expenses. These expenses include but are not limited to accounting, rates, tariffs and
certificates, gas scheduling, gas control, engineering and pipeline design, measurement, volume
accounting, marketing, market analysis, financial reporting and executives. In general these costs
will be assigned on the basis of estimated direct time and expenses or other appropriate allocation
method.
(d) CIG Servco Shared Services. CIG will reimburse CIG Servco for its share of CIG Servco’s
Shared Services cost and expenses. These expenses will include but are not limited to: labor,
benefits, employee expenses, payroll taxes, contractor costs, outside service costs, supplies and
expenses, insurance, and consumables. Until such time (if ever) as CIG Servco provides services to
another entity, all of these costs and expenses will be directly charged to CIG.
(e) Reimbursement for Costs Incurred on Behalf of an Affiliate. In the event that any of the
Service Providers or its affiliates pays direct charges on behalf of CIG, CIG shall reimburse that
Service Provider and/or its affiliate.
ARTICLE III
CONFLICTING PROVISIONS
These Accounting Procedures are intended to provide procedures supplementary to the Master
Services Agreement. When any provision of these Accounting Procedures conflicts with provisions of
the Master Services Agreement, the terms and conditions of the Master Services Agreement shall
supersede and control.
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