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EXHIBIT 10.18
EMERGENCY CALL TRANSPORTATION SERVICES AGREEMENT
This Emergency Call Transportation Services Agreement ("Agreement") is
effective as of 7:00 a.m. Mont Belvieu, Texas local time on the Effective Date
by and between Conoco Inc., a Delaware corporation with its principal place of
business at 000 Xxxxx Xxxxx Xxxxxxx Xxxx, Xxxxxxx, Xxxxx 00000 ("Conoco") and E.
I. du Pont de Nemours and Company, a Delaware corporation, with its principal
place of business at 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000 ("DuPont").
(Conoco and DuPont are at times referred to herein individually as a "Party" and
collectively as "Parties").
WITNESSETH
WHEREAS, prior to the initial public offering of Conoco (as defined in
the Restructuring, Transfer and Separation Agreement), Conoco has heretofore
operated the Backup Pipeline so as to provide backup service to the DuPont
Ethane Pipeline for delivering ethane to XxXxxx'x Xxxxxx River Works Facility;
and
WHEREAS, DuPont desires to continue to have an emergency call on the
Backup Pipeline and Conoco will provide such emergency backup service for the
DuPont Ethane Pipeline pursuant to this Agreement; and
WHEREAS, Conoco and DuPont do now desire to enter into this Agreement
which will, effective as of the Effective Date, provide for emergency backup
transportation services for DuPont on the Backup Pipeline; and
NOW, THEREFORE, subject to and in consideration of the terms,
conditions and covenants contained in this Agreement, Conoco and DuPont agree as
follows:
Article I. DEFINITIONS
A. "Backup Pipeline" is Conoco's 6" pipeline extending from
Conoco's Storage Facility in Mont Belvieu, Texas to Orange,
Texas.
B. "DuPont Ethane Pipeline" is DuPont's 8"/10" pipeline extending
from Conoco's Storage Facility in Mont Belvieu, Texas to
XxXxxx'x Xxxxxx River Works Facility in Orange, Texas.
C. "Product" is Purity Ethane.
D. "Call" is a clear and unambiguous communication by DuPont to
Conoco indicating a need for movement of Product through the
Backup Pipeline, a demand that such movement be undertaken in
preference to other movements of products through the Backup
Pipeline, and a commitment to pay for such movement in
accordance with this Agreement. As most Calls
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will be made under times of immediate need, such Calls may be
made orally via telephone by a DuPont representative.
E. "Receipt Meter" is the meter (Meter No. 4008) at Mont Belvieu
connecting Conoco's storage facility to the Backup Pipeline.
F. "Delivery Meter" is the meter (Meter No. 4800) connecting the
Backup Pipeline to the DuPont Ethane Pipeline in Orange,
Texas.
G. "Vista Custody Meter" is the meter (Meter No. 4600) connecting
the Backup Pipeline to Vista Chemical Company in Orange,
Texas.
H. "Effective Date" is the date on which the Conoco initial
public offering closes.
Article II. TRANSPORTATION SERVICES
Upon an unexpected and unplanned shutdown of the DuPont Ethane
Pipeline or at Conoco's permission, Conoco, pursuant to a Call
and subject to limitations of equipment and other
circumstances, shall transport Product from the Receipt Point
to the Delivery Point. Conoco shall operate the Backup
Pipeline so that movements of Product to other customers may
be postponed or reduced or transported by alternative means so
that DuPont may receive its needs in preference over such
other Conoco customers as necessary. At the time when the
DuPont Ethane Pipeline has been returned to service, the Call
shall be deemed to terminate on this Backup Pipeline and
Conoco may resume transportation services to itself and other
customers. Consistent with the purposes of this Agreement, the
Parties agree to, from time to time, mutually develop metrics
for monitoring each other's performance under this Agreement
and particularly to aid in the early identification and
correction of problems that may arise during the term of the
Agreement.
Article III. FEES AND PAYMENT
For each instance where DuPont makes a Call on the Backup
Pipeline, DuPont shall pay an interrupt fee of fifty thousand
dollars ($50,000). However, if DuPont makes a Call within one
year of a previous Call, the interrupt fee shall be
twenty-five thousand dollars ($25,000).
A "Transportation Fee" shall also apply to the volume of
Product transported pursuant to the Call. At the outset, the
Transportation Fee shall be twelve cents ($0.12) per Barrel of
Product transported. The Transportation Fee shall also be
adjusted based on the percentage change of
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the Dixie Pipeline published tariff from Mont Belvieu, Texas
to Hattiesburg, Mississippi. At the outset, the Dixie Pipeline
tariff from Mont Belvieu, Texas to Hattiesburg, Mississippi is
ninety-seven cents ($0.97) per Barrel.
Conoco may issue invoices to DuPont periodically. DuPont
agrees to remit payment of all undisputed amounts due to
Conoco via wire transfer within thirty (30) days of the date
of any invoice issued for services under this Agreement.
Conoco will maintain accurate accounts and supporting
documentation for all charges related to providing the
services under this Agreement and such other records as may
reasonably be required by DuPont in accordance with the
Generally Accepted Accounting Principles and Practices for a
period of at least five years. DuPont may at its option and
expense, inspect and audit the accounts of Conoco for the most
recent two calendar years relating to any charges imposed by
Conoco under this Agreement. Each audit must be conducted
during office hours and with at least forty-eight (48) hours
advance notice. If DuPont shall require a second audit or
inspection in any single year, DuPont shall pay all of
Conoco's costs, as determined in Conoco's reasonable
discretion, plus any other costs associated with such second
audit or inspection.
Article IV. MEASUREMENT
Currently, it is believed that the valve at the Delivery Meter
permits a small volume of Product to pass from the Backup
Pipeline to the DuPont Ethane Pipeline. Such volume has been
determined by subtracting the volumes recorded by the Vista
Custody Meter from the volumes recorded by the Delivery Meter
and has been accounted for as a delivery to DuPont. Conoco
agrees to have the valve repaired in a commercially reasonable
timeframe to control deliveries through the Delivery Meter. If
the valve is not repaired until after the Effective Date,
Conoco shall accrue the volume until the valve is repaired and
each month add the accrued volume to the volume delivered to
DuPont. (as defined in the Ethane Storage and Throughput
Agreement having the same effective date as the Effective Date
of this Agreement).
After the valve is repaired, the measurement of Product
transported to DuPont shall be determined by the Delivery
Meter. Custody transfer shall take place at the Delivery Meter
in accordance with Conoco's Custody Transfer Mass Measurement
Procedure attached as Appendix A. Conoco reserves the right to
amend this procedure from time to time, and revised procedures
shall govern 30 days after written notice is provided to
DuPont.
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DuPont will have the right to witness all meter proving and
instrument calibrations. DuPont will pay for meter proving
requested by DuPont and found to be within acceptable limits
according to the attached Appendix A.
Article V. TERM
This Agreement shall commence on the effective date and shall
have an initial term of twenty (20) consecutive years. This
Agreement may be terminated at Conoco's election if Conoco
ceases to operate the DuPont Ethane Pipeline as provided under
that certain Pipeline Operation Agreement having the same
effective date as this Agreement. In addition, DuPont shall
have the right to terminate this Agreement without cause with
one year's written notification to Conoco.
Article VI. LINEFILL
The linefill in the Backup Pipeline is owned by Conoco.
Article VII. COMPLIANCE WITH LAWS AND REGULATIONS
The Parties warrant and agree that facilities identified in
this Agreement as owned and operated by each Party shall be in
substantial compliance throughout the term of this Agreement
with all applicable local, state and federal laws,
regulations, rules, orders, directives and codes, licenses and
permits that apply to the ownership, operation, and
maintenance of such facilities. If any provision of this
Agreement or the performance of either Party is prevented,
abrogated, or substantially modified by lawful government
action or court order, the Parties will endeavor in good faith
to modify this Agreement so that it may continue in effect.
However, should the Parties be unable to reach mutually
agreeable terms in order to perpetuate this Agreement, then a
Party may terminate this Agreement upon 30 days' written
notice.
Article VIII. LIABILITIES, INDEMNITIES, CLAIMS
A. Express Negligence Disclosure. UNLESS THIS AGREEMENT EXPRESSLY
PROVIDES TO THE CONTRARY, THE INDEMNITY, RELEASE AND WAIVER
PROVISIONS SET FORTH IN THIS AGREEMENT APPLY REGARDLESS OF
WHETHER THE INDEMNIFIED PARTY (OR ITS EMPLOYEES, AGENTS,
CONTRACTORS, SUCCESSORS OR ASSIGNS) CAUSES, IN WHOLE OR IN
PART, INDEMNIFIED CLAIMS ARISING OUT OF OR RESULTING, IN WHOLE
OR IN PART, FROM, OUT OF, OR IN CONNECTION WITH, THE STORAGE
OR HANDLING OF DUPONT'S
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PRODUCT OR THE OPERATIONS OF CONOCO'S STORAGE FACILITY OR THE
INDEMNIFIED PARTY'S (OR ITS REPRESENTATIVES', CONTRACTORS',
SUCCESSORS', OR ASSIGNS') SOLE, JOINT, COMPARATIVE OR
CONCURRENT NEGLIGENCE, STRICT LIABILITY OR FAULT. DUPONT AND
CONOCO ACKNOWLEDGE THAT THIS STATEMENT COMPLIES WITH THE
EXPRESS NEGLIGENCE RULE AND IS CONSPICUOUS.
B. Conoco shall indemnify and hold DuPont harmless from any loss
or liability (including legal fees and expenses) arising from
any claim or cause of action for injury to or death of any
Conoco employee.
X. XxXxxx shall indemnify and hold Conoco harmless from any loss
or liability (including legal fees and expenses) arising from
any claim or cause of action for injury to or death of any
DuPont employee.
D. Conoco shall, to the extent permitted by law, fully indemnify,
defend and hold harmless, DuPont, with respect to any and all
claims, losses, damages, fines, debts, cost, expenses, and
penalties, liabilities, causes of action, including without
limitation, settlement costs and any reasonable legal or other
expenses paid to a third party for investigating or defending
any actions or threatened actions, (herein collectively
referred to as "Losses"), to the extent such Losses are
incurred by DuPont arising out of or as a result of any
negligence, willful misconduct, breach of contract or
violations of law or regulation by Conoco, its employees,
agents, subcontractors or assigns in the performance of
services provided pursuant to this Agreement. The Losses
covered under this paragraph, unless provided for in
paragraphs B and C above, include, without limitation, Losses
from actual or alleged (1) injury to or death of any person,
including agents, subcontractors and assigns of DuPont, (2)
loss of or damage to property including, without limitation,
property of DuPont and (3) damage to the environment.
X. XxXxxx shall, to the extent permitted by law, fully indemnify,
defend and hold harmless, Conoco, with respect to any and all
claims, losses, damages, fines, debts, cost, expenses, and
penalties, liabilities, causes of action, including without
limitation, settlement costs and any reasonable legal or other
expenses paid to a third party for investigating or defending
any actions or threatened actions, (herein collectively
referred to as "Losses"), to the extent such Losses are
incurred by Conoco arising out of or a result of any
negligence, willful misconduct, breach of contract or
violations of law or regulation by DuPont, its employees,
agents, subcontractors or assigns in the performance of
services provided pursuant to this Agreement. The Losses
covered under this paragraph, unless provided for in
paragraphs B and C above, include, without limitation, Losses
from actual or alleged
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(1) injury to or death of any person, including agents,
subcontractors and assigns of Conoco, (2) loss of or damage to
property including, without limitation, property of Conoco and
(3) damage to the environment.
F. Joint Responsibility. In circumstances that both Parties are
in some measure responsible for Losses as described in
Paragraphs D and E above, the Parties shall indemnify the
other to the extent of its proportional share of its
responsibility of such Losses.
G. Waiver of Consequential and Punitive Damages. NOTWITHSTANDING
ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT OR AT LAW
OR IN EQUITY, IN NO EVENT SHALL CONOCO BE LIABLE FOR PUNITIVE,
SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES (INCLUDING WITHOUT
LIMITATION, DAMAGES FOR LOSS OF BUSINESS PROFITS, BUSINESS
INTERRUPTION OR ANY OTHER LOSS) ARISING FROM OR RELATING TO
ANY CLAIM MADE UNDER THIS AGREEMENT OR REGARDING THE PROVISION
OF OR THE FAILURE TO PROVIDE THE STORAGE AND THROUGHPUT
SERVICES HEREUNDER, EVEN IF CONOCO HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.
H. Exclusive Remedy. The terms and provisions of this Article
VIII shall be the sole and exclusive remedy of each of the
Parties indemnified hereunder with respect to the transactions
contemplated in this Agreement.
I. Notice of Claims. Notice of claims for loss, damage, or
indemnity in connection with the services provided under this
Agreement must be made to Conoco in writing within ninety (90)
days after the same having become known to DuPont or should
have become known to DuPont. Such claims must be set forth in
specific detail and must be delivered to Conoco within the
ninety (90) day period and, unless so made and delivered to
Conoco, Conoco shall be wholly released and discharged
therefrom and shall not be liable therefore in any manner
whatsoever. Conoco shall use best efforts to respond timely to
any DuPont claim. No suit at law or in equity shall be
maintained upon any claim unless such claim is brought within
two (2) years of Conoco's refusal to accept such claim.
Article IX. FORCE MAJEURE
A. Force Majeure. Neither Party shall be liable to the other for
failure or delay in performance under this Agreement to the
extent that the failure or delay is due directly or indirectly
to Force Majeure, which is herein defined to include without
limitation, Acts of God or other causes beyond the
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reasonable control of the Parties, war (whether declared or
not), fire, flood, lightning, hurricane or other storm,
earthquake, acts of public enemy, explosion, scheduling,
operational and maintenance restrictions, rebellion, riot,
insurrections, sabotage, invasion, accident, epidemic,
strikes, lockouts or other labor difficulties or industrial
disturbances, compliance with acts, rules, regulations, or
orders of federal, state, or local government, any agency
thereof or any other authority having or purporting to have
jurisdiction, mechanical failures or similar causes not due to
either Party's fault or negligence, official order or
industry-wide request, any inability to secure necessary parts
or materials, including the inability to secure materials by
reason of allocations promulgated by authorized governmental
agencies, or any other contingency beyond the control of the
affected Party which interferes with the performance
hereunder.
B. Suspension of Performance. Performance under this Agreement
shall be suspended (except for the payment of money due or to
become due for past performance hereunder) during the period
of such Force Majeure to the extent made necessary by the
Force Majeure; provided, the settlement of strikes, lockouts,
industrial disputes, or disturbances shall be entirely within
the discretion of the Party so settling to accede to the
demands of the demands of any opposing party when such course
is inadvisable in the discretion of the Party having the
difficulty.
C. No Effect on Term. No curtailment, suspension, or acceptance
of performance pursuant to this Article IX shall operate to
extend the term of, or to terminate, this Agreement.
Performance under this Agreement shall resume to the extent
made possible by the end or amelioration of the Force Majeure
event.
D. Notice. A Party claiming Force Majeure shall notify the other
Party immediately by telephone, E-mail and/or fax and confirm
the same in writing, giving reasonable detail regarding the
type of Force Majeure and its estimated duration.
Article X. MISCELLANEOUS PROVISIONS
A. Taxes. DuPont shall pay any and all lawful taxes, assessments,
or charges levied or assessed against DuPont's Product or
other assets including, but not limited to, any gross receipts
tax, use tax, sales tax and ad valorem tax. DuPont shall
immediately reimburse Conoco for any such taxes, assessments
or charges paid by Conoco on behalf of DuPont upon receipt of
notice of payment. Conoco shall pay all income-related taxes
and all employee-related taxes and charges such as
withholdings, FICA, FICM, unemployment and other similar
taxes.
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B. Notice. All notices, demands, request and other communications
necessary to be given hereunder shall be in writing and deemed
given if personally delivered, forwarded by facsimile
transmission (with proof of transmission capability), or
mailed by either certified mail, return receipt requested, or
sent by recognized overnight carrier to the respective Party
at its address below:
If to Conoco:
Conoco Inc.
X.X. Xxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attn: Director, Fractionation Services and
Logistics
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to DuPont and related to:
Pricing and contract issues:
DuPont Sourcing
X.X. Xxx 00000
Xxxxxxxxxx, XX 00000-0000
Attn: Sourcing Manager
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Legal issues:
DuPont Legal
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Logistics and Commerce Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Operations, Day to Day issues:
DuPont Packaging and Industrial
Polymers
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Manager, Contract
Manufacturing
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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C. Assignment. Neither Party shall assign any portion of its
rights or obligations under this Agreement without the prior
written consent of the other, which consent shall not be
unreasonably withheld; provided however, either Party may
assign this Agreement to a parent corporation, or any
subsidiary or affiliate with respect to which it holds at
least fifty-one percent (51%) of the voting stock, without the
consent of the other Party; provided further, the original
Parties to this Agreement shall remain primarily obligated
hereunder. This Agreement shall be binding upon and inure to
the benefit of the Parties hereto, their successors and
assigns and nothing contained in this Agreement, express or
implied, is intended to confer upon any other person or entity
any benefits, rights, or remedies. Notwithstanding the
foregoing, DuPont shall have the right to freely assign its
entire interest in this Agreement to a third party pursuant to
such third party acquiring DuPont assets that are served by
Conoco under this Agreement.
D. Rules and Regulations. This Agreement and the provisions
hereof shall be subject to, and the Parties agree to comply
with, all applicable local, state, and federal laws and to all
applicable rules, regulations, orders and directives of any
governmental authority, agency, commission, or regulatory body
in connection with any and all matters or things under or
incident to this Agreement. The Parties warrant to one another
that they comply with all applicable laws, rules, orders, and
regulations of governmental authority covering the production,
sale and delivery of the goods or services specified herein,
including, but not limited to, the Equal Opportunity Clause
prescribed in 41 CFR 60-1.4; the Affirmative Action Clause
prescribed in 41 CFR 60-250.4, regarding disabled veterans and
veterans of the Vietnam Era; the Affirmative Action Clause for
Handicapped Workers prescribed in 41 CFR 60-741.4; 48 CFR
Chapter 1 Subpart 19.7 regarding Small Business and Small
Disadvantaged Business Concerns; 48 CFR Chapter 1 Subpart 20.3
regarding Utilization of Labor Surplus Area Concerns;
Executive Order 12138 and regulations thereunder regarding
subcontracts to women-owned business concerns; Affirmative
Action Compliance Program (41 CFR 60-1.40); annually file
SF-100 Employer Information Report (41 CFR 60-1.7); 41 CFR
60-1.8 prohibiting segregated facilities; and the Fair Labor
Standards Act of 1938, as amended.
E. Governing Law, Waiver of Jury Trial and Consent to
Jurisdiction. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED, AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE
IRRESPECTIVE OF THE RESIDENCE, PLACE OF
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BUSINESS, OR DOMICILE OF THE PARTIES HERETO OR PLACE OF
EXECUTION BY ANY PARTY HERETO, AND NOTWITHSTANDING ANY
CONFLICT OF LAWS OR PROVISIONS TO THE CONTRARY. THIS AGREEMENT
SHALL NOT BE GOVERNED BY THE U. N. CONVENTION ON CONTRACTS FOR
THE INTERNATIONAL SALE OF GOODS. IN ADDITION, EACH PARTY
HEREBY (a) WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO A JURY
TRIAL IN CONNECTION WITH ANY MATTER OR RIGHT ARISING UNDER
THIS AGREEMENT OR RELATING TO THE TRANSITIONAL SERVICES, (b)
CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL
COURT WITHIN THE STATE OF DELAWARE AND IRREVOCABLY AGREES THAT
ALL ACTIONS OR PROCEEDINGS ARISING UNDER OR RELATING TO THIS
AGREEMENT OR THE TRANSITIONAL SERVICES SHALL BE LITIGATED IN
ANY SUCH COURT, AND (c) WAIVES ANY OBJECTION WHICH IT MAY HAVE
BASED UPON IMPROPER VENUE OR FORUM NON CONVENIENS TO THE
CONDUCT OF ANY PROCEEDINGS IN ANY SUCH COURT.
F. Alternative Dispute Resolution.
1. Both Parties understand and appreciate that their
long term mutual interests will be best served by
affecting a rapid and fair resolution of any claims
or disputes which may arise out of this Agreement.
Therefore, both Parties agree to use their best
efforts to resolve all such disputes as rapidly as
possible on a fair and equitable basis. Toward this
end both Parties agree to develop and follow a
process for presenting, rapidly assessing, and
settling claims and other disputes on a fair and
equitable basis.
2. If any dispute or claim arising under this Agreement
cannot be readily resolved by the Parties pursuant to
Paragraph F.1 above, the Parties agree to refer the
matter to a panel consisting of one (1) senior
executive from each Party for review and resolution.
The senior executive shall not have been directly
involved in the claim or dispute. A copy of the
Agreement, relevant facts, areas of disagreement, and
concise summary of the basis for each side's
contentions will be provided to both executives who
shall review the same, confer, and attempt to reach a
mutual resolution of the issue. The senior executives
shall attempt to meet and resolve the dispute within
thirty (30) days of their appointment.
3. If the dispute cannot be resolved, under the process
set forth in Paragraph F.2 above, within ten (10)
days from the date of the
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panel's conference, the Parties agree to attempt to
resolve the dispute or claim through non-binding
mediation. The Parties shall select a single
qualified Mediator, knowledgeable in the pertinent
industry, who is not presently affiliated with or
related to either Party. The Mediator shall hold a
hearing (not to exceed one (1) day) as soon as
practicable after his appointment (but not later than
thirty (30) days after his appointment) during which
each Party shall present its version of the matter,
supported, if desired, by a brief statement of the
issue(s), sworn, written testimony, relevant
documents, its assessment of damages, and its
argument. The Parties shall provide the Mediator with
copies of all such materials as well as any documents
provided to their senior executives under Paragraph
F.2 at least ten (10) days prior to the scheduled
date of the mediation hearing. The Parties may also
provide the Mediator with copies of any laws or
regulations which they feel are relevant to the
dispute. A copy of the Contract will be provided to
the Mediator. Formal written arguments, legal
memoranda, and live testimony are discouraged but may
be permitted at the discretion of the Mediator. Both
Parties agree to make any relevant and involved
employees or documents available to the other Party
for its review and use in preparing its position
under this clause without the need for subpoena or
other court order.
4. The Mediator, within ten (10) days of the completion
of the hearing, will meet separately with both
Parties and provide each of them, on a confidential
basis, with his/her written views of the strengths
and weaknesses of their respective positions. The
Parties will then reconvene and, with the assistance
of the Mediator, attempt to resolve the matter. If
resolution cannot be achieved by the Parties within
forty-eight (48) hours of this second meeting, the
Mediator will, within ten (10) additional days, issue
a written, non-binding decision on the issue.
5. Each Party shall, within five (5) days of the
Mediator's written decision, notify the other in
writing whether it will accept or reject that
decision. If the matter has not been resolved
utilizing the processes set forth in this clause and
the Parties are unwilling to accept the non-binding
decision of the Mediator, either or both Parties may
elect to pursue resolution through litigation.
6. The selected Mediator shall execute a confidentiality
agreement, satisfactory to all Parties, prior to
his/her active participation in the
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mediation. The costs of the Mediator shall be shared
equally by the Parties. Each Party will bear its own
costs of mediation.
7. If the Parties cannot agree upon a choice of a
Mediator within ten (10) days of the date of the
panel's conference pursuant to Paragraph F.2, either
or both Parties may elect to directly pursue
litigation.
8. All statements, correspondence, memoranda, briefs,
decisions, testimony, communications, and materials,
whether written or oral, submitted to or generated by
the panel and/or Mediator in connection with the
processes set forth above shall be deemed to be in
furtherance of settlement negotiations and shall be
privileged and shielded from production and
disclosure in any subsequent litigation.
Notwithstanding the foregoing, documents prepared in
the normal course of business, such as invoices,
shall be subject to discovery in subsequent
litigation in accordance with applicable law.
G. Hazards. EACH PARTY ACKNOWLEDGES THAT THERE ARE HAZARDS
ASSOCIATED WITH THE STORAGE AND USE OF PRODUCT, THAT IT
UNDERSTANDS SUCH HAZARDS, AND THAT IT IS ITS OWN
RESPONSIBILITY TO WARN AND PROTECT ITS EMPLOYEES AND OTHERS
WHO MAY BE EXPOSED TO SUCH HAZARDS IN CONNECTION WITH ITS
RESPONSIBILITIES AND OBLIGATIONS CONCERNING THE STORAGE AND
USE OF THIS PRODUCT CONTEMPLATED BY THIS AGREEMENT.
H. Headings. Headings used in this Agreement are for convenience
of the Parties only, and shall not be taken into account in
construing or interpreting this Agreement.
I. Entire Agreement. This Agreement contains the entire Agreement
and understanding of the Parties with respect to the matters
contained herein and there are no promises, assurances, terms,
conditions, or obligations, whether by precedent or otherwise,
other than those contained herein.
J. Amendment. This Agreement shall not be amended or modified
except by written instrument executed by duly authorized
representatives of the respective Parties.
K. Counterparts. This Agreement may be executed in counterparts,
each of which shall constitute on original and all of which
shall constitute one document.
L. Waivers. No waiver of the provisions hereof shall be effective
unless in writing and signed by the Party to be charged with
such waiver. No waiver shall be deemed a continuing waiver or
waiver in respect to any subsequent
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breach or default, either of a similar or dissimilar nature,
unless expressly so stated in writing.
M. Confidentiality. Neither Conoco nor DuPont shall disclose any
term or condition of this Agreement without the prior written
consent of the other Party, which consent will not be
unreasonably withheld. In the event of the termination of this
Agreement, Conoco and DuPont shall, to the extent permitted by
law, keep confidential and not use any confidential
information obtained pursuant to this Agreement, unless prior
written consent is obtained or such information is readily
ascertainable from public or published information or trade
sources or is received by a Party from a third party having no
obligation of confidentiality with respect to such
information.
N. Default. In the event either Party to this Agreement shall
default in the performance of any obligations specified, the
nondefaulting Party shall notify the other Party in writing,
and if such default is not remedied with reasonable
promptness, then the nondefaulting Party shall have the right
to terminate this Contract immediately. Termination under this
Article, or under any other Article of this Contract, shall
not relieve or release either Party from any liability which
accrued prior to the date of such termination.
O. CHEMTREC. The Parties agree to use CHEMTREC to report any
chemical emergency relating to any Product under this
Agreement.
P. Safety. The Parties are vitally interested in safety and in
the safe practices of all activities covered under this
Agreement. Thus, Parties agree to maintain mutually agreeable
safety standards for activities covered under this Agreement
which are no less stringent than safety standards which are in
effect at the Effective Date. In addition to endeavoring to
maintain high safety standards, the Parties agree that its
employees, contractors, subcontractors and agents shall
respect and abide by the other Party's plant and site safety
rules when the one Party has personnel on the other Party's
plant or site.
Q. Independent Contractor. It is understood that employees,
methods, facilities, and equipment of Conoco shall at all
times be under its exclusive direction and control. Conoco's
relationship to DuPont shall be that of an independent
contractor. Nothing in the Contract shall be construed to
constitute Conoco, or any of its employees, as an agent,
associate, joint venturer, or partner of DuPont. However,
DuPont may from time to time appoint, in writing, Conoco to
act as an agent for limited purposes.
R. Minority Vendors. The Parties agree to provide maximum
practicable utilization of Minority subcontractors and vendors
among its sources of
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supply in the performance of this Contract. Minorities include
but are not limited to Black Americans, Hispanic Americans,
Native Americans, Asian Pacific Americans, and Native Hawaiian
Organizations. A Minority business is at least fifty-one
percent (51%) owned by a Minority or group of Minorities and
has its management and daily business controlled by one (1) or
more such individuals. Conoco shall report to DuPont on a
quarterly basis the dollar amounts paid by Conoco during the
previous quarter to minority subcontractors and vendors for
goods and services used in the performance of this Agreement.
S. Year 2000 Compliance.
1. Each Party covenants and agrees that it will not
permit a Year 2000 Problem to computer systems,
software or equipment owned, leased or licensed by
it, its affiliates or subsidiaries to interfere with
its performance under this Agreement. Each Party
further agrees to request from those of its suppliers
whose performance may materially affect that Party's
performance hereunder, that each such supplier
undertake the same obligation with respect to such
material performance. The Parties will use reasonable
commercial efforts to cooperate and share information
to further comply with this Article, and to minimize
the impact of Year 2000 Problems on performance of
this Agreement. Each Party will inform the other
Party of any circumstance indicating a possible
obstacle to such compliance, and the steps being
taken to avoid or overcome the obstacle.
2. Provided a Party complies with Paragraph S.1 above,
such Party will not be liable to the other Party
hereto for any failure to perform obligations under
this Agreement to the extent such failure to perform
arises from a Year 2000 Problem a) affecting one of
the non-performing Party's suppliers or b) beyond
that Party's reasonable control (e.g. a Year 2000
Problem affecting a governmental entity). IN
PARTICULAR SUCH NON-PERFORMING PARTY SHALL HAVE NO
LIABILITY FOR ANY DAMAGES, INCLUDING DIRECT,
INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL,
PUNITIVE OR EXEMPLARY DAMAGES.
3. A "Year 2000 Problem" means a date handling problem
relating to the Year 2000 date change that would
cause a computer system, software or equipment to
fail to correctly perform, process and handle date
related data for the dates within and between the
twentieth and twenty-first centuries and all other
centuries.
Emergency Call Transportation Agreement Page 14
15
T. Continuous Improvement. The Parties will meet from time to
time, preferably at least once per year, to consider potential
operating cost saving measures that may be employed in the
performance of services rendered under this Agreement. The
Parties agree that, to the extent that operating cost savings
are achieved, each Party will share with the other, on a 50/50
basis, the benefits of any cost savings realized for the
remainder of the term.
U. Controlled Substance Abuse. The Parties agree that the use,
possession, manufacture, dispensing, sale and distribution of
alcohol, drugs, and other controlled substances on their
respective premises and on or in vehicles and equipment used
for the purposes of this Agreement shall be prohibited. In
addition, the Parties shall prohibit from their property the
presence of any individual having a controlled substance in
his/her body for non-medical reasons. The Parties shall
develop a mutually agreeable Controlled Substance Abuse
policy, including drug testing, which is at least as rigorous
as Conoco's current policy and complies with DOT's policy
relating to pipeline operations.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
on the day indicated.
Conoco Inc.
By:
-------------------------------------
Title:
----------------------------------
Date:
----------------------------------
E. I. du Pont de Nemours and Company
By:
-------------------------------------
Title:
----------------------------------
Date:
----------------------------------
Emergency Call Transportation Agreement Page 15
16
EXHIBIT 10.18
ETHANE STORAGE AND THROUGHPUT AGREEMENT
This Ethane Storage and Throughput Agreement ("Agreement") is effective as of
7:00 a.m. Mont Belvieu, Texas local time, on the Effective Date by and between
Conoco Inc., a Delaware corporation with its principal place of business at 000
Xxxxx Xxxxx Xxxxxxx Xxxx, Xxxxxxx, Xxxxx 00000 ("Conoco") and E. I. du Pont de
Nemours and Company, a Delaware corporation, with its principal place of
business at 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000 ("DuPont"). (Conoco
and DuPont are at times referred to herein individually as a "Party" and
collectively as "Parties").
WITNESSETH
WHEREAS, prior to the initial public offering of Conoco (as defined in
the Restructuring, Transfer and Separation Agreement), Conoco has heretofore
provided certain ethane storage, throughput and operational services to DuPont
at Conoco's Mont Belvieu Storage Facility, located in Xxxxxxxx County, Texas;
and
WHEREAS, DuPont desires to continue to lease underground storage space
from Conoco for the storage of ethane and has requested that certain such
services continue pursuant to this Agreement; and
WHEREAS, Conoco and DuPont do now desire to enter into this Agreement
which will, effective as of the Effective Date, provide for the storage and
throughput of DuPont's ethane by Conoco; and
NOW, THEREFORE, subject to and in consideration of the terms,
conditions and covenants contained in this Agreement, Conoco and DuPont agree
as follows:
Article I. DEFINITIONS
A. "Barrel" means a volume of forty-two (42) U.S. standard
gallons.
B. "Reserved Volume(s)" means two million four hundred thousand
(2,400,000) Barrels of Product (one million, five hundred
thousand (1,500,000) Barrels of Ethane-Propane Mix and nine
hundred thousand (900,000) Barrels of Purity Ethane.
C. "Effective Date" means the date on which the Conoco initial
public offering closes.
D. "Contract Year" means a period of twelve consecutive months,
which shall commence on the Effective Date or on the
anniversary of the Effective Date each year.
E. "Day" means a period of twenty-four (24) consecutive hours
commencing at 7:00 a.m. Mont Belvieu, Texas local time and
ending at 7:00 a.m. on the following day.
Ethane Storage and Throughput Agreement Page 1
17
F. "Delivery Point" means either or both of the custody transfer
meter(s) that measures the volume of Product delivered into:
Meter No MU3006 delivering from the Storage Facility into
DuPont's 8"/10" Pipeline in Mont Belvieu, Texas; and Meter No.
MU4800 delivering from Conoco's 6" Pipeline into DuPont's
8"/10" in Orange, Texas.
G. "EP Storage Well" means that certain underground storage
cavern, No. W-3003, located at the Storage Facility presently
used for the storage of Ethane-Propane Mix.
H. "Excess Throughput" means that volume of Product which is
received at the Receipt Point in any one Contract Year in
excess of the Reserved Volume.
I. "Fractionator(s)" means those facilities located in or near
Mont Belvieu, Texas used to separate natural gas liquids into
component parts, including without limitation the Gulf Coast
Fractionator, Cedar Bayou Fractionator (formerly Xxxxxx), Xxxx
Hydrocarbons Fractionator and Enterprise Products
Fractionator.
J. "Storage Customer" means all persons or entities, including
DuPont and Conoco, storing Product in Conoco's Storage
Facility.
K. "Mont Belvieu Storage Facility" or "Storage Facility" means
Conoco's owned and operated underground storage caverns and
related equipment located at Mont Belvieu, Xxxxxxxx County,
Texas, situated on a 91.317 acre tract in the Xxxxx Xxxxxxxx
League Abstract No. A-12, Volume 353, Page 581, Deed Records
of Xxxxxxxx County, Texas.
L. "Product" means Purity Ethane and/or Ethane-Propane Mix.
M. "Purity Ethane" means a hydrocarbon stream consisting
primarily of ethane (C2H6), that is condensed, absorbed, or
separated out of natural gas with specifications as
established from time to time by Conoco, owner and operator of
the Mont Belvieu Storage Facility, and by the operators of the
Fractionators. A copy of the current Purity Ethane product
specifications is attached as Appendix A.
N. "Ethane-Propane Mix" means a hydrocarbon stream consisting
primarily of ethane (C2H6) with a substantial propane
component (C3H8), that is condensed, absorbed, or separated
out of natural gas with specifications as established from
time to time by Conoco, owner and operator of the Mont Belvieu
Storage Facility, and by the operators of the Fractionators.
A copy of the current Ethane-Propane Mix product
specifications is attached as Appendix A.
Ethane Storage and Throughput Agreement Page 2
18
O. "Purity Ethane Storage Well" means that certain underground
storage cavern, No. W-3001, located at Conoco's Mont Belvieu
Storage Facility presently used for the storage of Purity
Ethane.
P. "Receipt Point" means, as to Purity Ethane, any or all of (a)
the respective custody transfer meters that measure Purity
Ethane volume delivered from the Gulf Coast Fractionator to
Conoco (No. MU4010), the Xxxx Hydrocarbons Fractionator to
Conoco (No. MU3010) and the Enterprise Products Fractionator
to Conoco (No. FQ164), all located at or near Mont Belvieu,
Texas; and (b) Conoco's Storage Facility where DuPont may
receive Purity Ethane volume by inventory transfer from other
Storage Customers; as to Ethane-Propane Mix, (a) the
respective custody transfer meters that measure Ethane-Propane
Mix volume from Diamond Shamrock Storage Facility, Meter No.
0108, and the Dynegy Storage Facility, Meter No. 76; and (b)
Conoco's Storage Facility where DuPont may receive
Ethane-Propane Mix by inventory transfer from other Storage
Customers.
Q. "Storage Cavern(s)" or "Storage Well(s)" means any or all of
Conoco's owned and operated underground storage xxxxx located
at the Mont Belvieu Storage Facility including the EP Storage
Well and the Purity Ethane Storage Well.
R. "Storage Volume(s)" means the net current inventory of
DuPont's Product(s) in the Storage Well(s).
S. "Reservation Fee" means the fee for Reserved Volume for a
Contract Year.
T. "Cost per Reserved Barrel" means the cost, under any
particular storage arrangement, for the reservation of storage
space and the relevant annual throughput cost including the
value of product reduced by Loss Allowance, divided by the
number of Barrels of reserved volume. An example calculation
of the Cost per Reserved Barrel for storage under the initial
terms of this Agreement are included in Appendix C.
Article II. TERM
This Agreement shall be in full force and effect as of 7:00
a.m. Mont Belvieu, Texas local time on the Effective Date, and
shall continue in effect for a period of thirty (30) Contract
Years, unless terminated earlier as provided elsewhere in this
Agreement. DuPont shall have the right to terminate this
Agreement without cause upon written notification to Conoco of
at least one year.
Ethane Storage and Throughput Agreement Page 3
19
Article III. VOLUME AND STORAGE CAPACITY
A. Storage Space. DuPont agrees to reserve and Conoco agrees to
lease a total of two million, four hundred thousand
(2,400,000) Barrels of storage space at Conoco's Mont Belvieu
Storage Facility allocated as follows: one million, five
hundred thousand (1,500,000) Barrels of storage space in the
EP Storage Well; and nine hundred thousand (900,000) Barrels
of storage space in the Purity Ethane Storage Well.
B. Excess Storage Volumes. Only upon the prior written consent
of Conoco, and subject to payment of all applicable fees
including additional fees as provided in Article VII.D shall
DuPont have Storage Volume in excess of Reserved Volume at any
time, during the term of this Agreement.
C. Sublease Permitted. DuPont shall be permitted to sublease any
or all of the storage space leased under this Agreement. At
any time DuPont enters into a subleasing arrangement with a
third party, DuPont shall notify Conoco as to the volumes to
be stored, the name and address of the third party and the
terms and conditions of the sublease arrangement. However,
all volumes stored under this Agreement shall be treated by
Conoco as DuPont volumes and in no event shall Conoco have any
liability to such third party or have any obligation to
account to such third party under this Agreement.
Article IV. OPERATIONS AND THROUGHPUT CAPABILITY
A. Conoco's Storage Facility. Conoco operates at least one
Storage Well in addition to the Storage Xxxxx which are the
subject of this Agreement and may add additional Storage Xxxxx
at the Storage Facility. The additional Storage Well is
presently used to store products different than the Products
covered by this Agreement. All of the Storage Xxxxx are
connected to centrally located pipeline header facilities
operated by Conoco on its property in the vicinity of the
Storage Xxxxx. All Products delivered by DuPont into, or by
Conoco out of, storage must be delivered by pipeline to such
header facilities, and all such deliveries shall be deemed a
delivery into or out of storage.
B. Product Delivery and Receipts. It is DuPont's responsibility
to make all arrangements necessary to deliver Product into
storage and to receive Product from storage at Conoco's
Storage Facility, and to pay any charges imposed by any third
party and paid by Conoco for the collection, transfer, and
injection of DuPont's Product to such header facilities for
delivery into storage under this Agreement.
C. Daily Throughput Volumes. Subject to Conoco's Delivery,
Receipt and Allocation restrictions set forth in Article IV.D,
Conoco's Maximum
Ethane Storage and Throughput Agreement Page 4
20
Volume Capability set forth in Article IV.E, Conoco's
Limitation on Product Loss set forth in Article V.C, and the
Force Majeure restrictions set forth in Article XI, Conoco
allocates to DuPont the following maximum Receipt Point and
Delivery Point volume capabilities:
1) Receipts into the EP Storage Well: thirty thousand
(30,000) Barrels per day;
2) Receipts into the Purity Ethane Storage Well from all
Fractionators: forty-five thousand (45,000) Barrels
per day;
3) Delivery Point volume capability of up to a maximum
of forty thousand (40,000) Barrels per day from the
EP Storage Well;
4) Delivery Point volume capability of up to a maximum
of twenty thousand (20,000) Barrels per day from the
Purity Ethane Storage Well.
5) In no event is this Article IV.C to be construed to
require Conoco to make any expenditure to increase
Receipt Point or Delivery Point capabilities. Conoco
may from time to time, but is not obligated to,
provide DuPont additional new or existing Delivery
Point and Receipt Point volume capability at any time
that such capability is available and such additional
capability is not required by other Storage Customers
as determined by Conoco.
D. Delivery and Receipt Restrictions; Allocation. The delivery
and receipt flow rates into and out of storage set forth in
Article IV.C are subject to Conoco's scheduling, operational
and maintenance restrictions including, without limitation,
brine handling restrictions and Storage Facility outages to
conduct integrity tests of the Storage Xxxxx. If Conoco's
scheduling, operational or maintenance restrictions will not
permit all of the Storage Customers (including Conoco) to
deliver or receive the volumes of product requested, then
Conoco shall allocate among such parties Conoco's available
flow rates in a fair and equitable manner as determined by
Conoco. Conoco shall give DuPont timely notice of any
scheduled maintenance work on Conoco's Storage Facility which
will interrupt acceptance or redelivery of any Products
hereunder and, if scheduling and operational restrictions
exist at the time DuPont schedules movements of Product, then
Conoco will verbally notify DuPont of such restrictions.
E. Maximum Volume Capability. Conoco allocates to DuPont a
Delivery Point volume capability of forty-five thousand
(45,000) Barrels per Day of Product (take-away capacity).
Conoco may, but is not obligated to, provide additional daily
Delivery Point volume capability from its Storage Facility at
any time that such capability is not required by other Storage
Customers as determined by Conoco.
Ethane Storage and Throughput Agreement Page 5
21
F. Removal of Product. DuPont must remove all Product from the
Storage Facility no later than thirty (30) Days from the last
Day of the Term of this Agreement, and such removal shall be
subject to the prior full payment of any accrued Reservations
Fees, Throughput Fees, Excess Storage Fees and other charges,
and to the other terms, provisions, and conditions of this
Agreement.
G. Commingling. DuPont agrees that Conoco shall have the right
to commingle DuPont's Purity Ethane with Purity Ethane
belonging to others and Ethane-Propane Mix with Ethane-Propane
Mix belonging to others and Conoco is not obligated to
redeliver to DuPont the identical Product received from
DuPont. Conoco shall not be liable for any losses occurring
to DuPont as a result, directly or indirectly, of the
commingling of Ethane and Ethane-Propane Mix.
H. Sampling. Conoco shall have the right to sample all Product
to be delivered for storage and may refuse to accept delivery
of any Product if, in Conoco's opinion, the Product does not
meet the required specifications or satisfactory control of
Product specifications will not be maintained during delivery.
At Conoco's request DuPont shall provide Conoco access to the
Product to be delivered for the purpose of sampling and
provide Conoco representative samples of such Product.
I. Specifications. All Product delivered by DuPont into storage
or by Conoco from storage must meet the respective
specifications set out in Appendix A. Conoco reserves the
right to modify, add to, or revise such specifications at any
time and from time-to-time upon giving not less than thirty
(30) days prior written notice; provided, however, that any
such specification revisions shall apply to all Storage
Customers for the Product.
J. Nominations, Scheduling. Product movements must be nominated
by DuPont and accepted by Conoco on or before the fifth
working day before the end of the month for Product movements
during the succeeding month. Changes made after that time
will be accommodated on a best efforts basis by Conoco and may
incur additional throughput fees.
K. Metrics. The Parties agree to, from time to time, mutually
develop metrics for monitoring each other's performance under
this Agreement and particularly to aid in the early
identification and correction of problems that may arise
during the term of the Agreement.
Ethane Storage and Throughput Agreement Page 6
22
Article V. MEASUREMENT AND TESTING
A. Measurement and Testing. Measurement and testing of Product
into and out of the Storage Facility shall be made in
accordance with the procedures set forth in Appendix B.
B. Loss Allowance. Conoco guarantees to return to DuPont at the
Delivery Point, on a Barrel-for-Barrel basis, all throughput
volumes received at the Receipt Point less a "Loss Allowance".
At the outset of this Agreement, the Loss Allowance shall be
seventy-one thousandths of one percent (0.071%). Beginning
January 1, 1999, Loss Allowance shall be adjusted in
accordance with Article VIII. All other volume losses shall
be governed by Article V.D.
C. Limitation on Product Loss. Notwithstanding the return
guarantee set out in Article V.B above, Conoco shall be
responsible for the loss of or damage to such Product only
when, and to the extent that such loss or damage is caused by
the negligence of Conoco, its employees and agents. Any loss
of Product from Conoco's Storage Facility for which Conoco is
not responsible shall be apportioned among all of the Storage
Customers storing Product in such Storage Xxxxx on the date of
loss in proportion to the amount of Product each Storage
Customer (including Conoco) has in storage on such date.
D. Risk of Loss. DuPont's Product is not insured by Conoco
against loss or injury however caused, and any insurance
thereon must be provided and paid for by DuPont. Conoco's
liability, if any, for damages to the stored Product shall be
limited to a value equal to the Mont Belvieu OPIS Average
Price at the time of the loss, or at DuPont's option,
replacement of such lost or damaged Product in kind.
E. Monthly Inventory Reports. Conoco shall submit to DuPont
monthly stock reports supported with appropriate receiving and
shipping information showing movements of Product into and out
of Conoco's Storage Facility and the amount of Product
remaining in storage at the end of the month.
Article VI. TITLE
Title to DuPont's Product shall remain at all times with
DuPont and shall not transfer to Conoco; provided, however,
DuPont shall remain liable to Conoco for all fees, costs, and
all other liabilities as set forth in this Agreement,
regardless of whether DuPont, DuPont's customer or DuPont's
sublessee has title to the Product.
Ethane Storage and Throughput Agreement Page 7
23
Article VII. CONSIDERATION AND PAYMENT
A. Reservation Fee. DuPont agrees to pay Conoco a Reservation
Fee for the Reserved Volume. The entire Reservation Fee for
each Contract Year shall be paid in full regardless of whether
or not DuPont actually uses the amount of storage space
reserved. The Reservation Fee is due and payable in advance,
for each month or part thereof, on or before the first of each
such month in equal monthly installments throughout each
Contract Year of this Agreement. No refund will be provided
for any partial month should this Agreement be terminated at a
time other than the end of a month. At the outset of this
Agreement, the annual Reservation Fee shall be seventy-four
and one-half cents ($0.745) per year per Barrel of Reserved
Volume. The first three monthly installments shall be one
hundred, forty-nine thousand dollars ($149,000); the first of
which shall be due and payable on or before the Effective Date
and the next two shall be due and payable on or before the
first day of each of succeeding month. Beginning January 1,
1999, the monthly Reservation Fee shall be an amount
determined pursuant to Article VIII. Further adjustments to
the monthly Reservation Fee may be made pursuant to Article
VIII.
B. One Free Turn. By payment of the Reservation Fee as set forth
in Article VII.A, DuPont is entitled, in each Contract Year,
to deliver into storage a volume of Product up to the Reserved
Volume without incurring a Throughput Fee.
C. Throughput Fee. DuPont agrees to pay Conoco a handling charge
("Throughput Fee") for each Barrel of Excess Throughput. At
the outset of this Agreement, the Throughput Fee shall be
fourteen and nine tenths cents ($0.149) per Barrel of Excess
Throughput. Beginning January 1, 1999, the Throughput Fee
shall be an amount determined pursuant to Article VIII.
D. Excess Storage Fee. DuPont is not permitted, at any time, to
have a Storage Volume in excess of the Reserved Volume without
the express written consent of Conoco. In the event DuPont
has Storage Volume in excess of the Reserved Volume, in
addition to all other applicable fees, DuPont shall pay Conoco
an Excess Storage Fee of nine and one tenth cents ($0.091) per
Barrel for the total number of Barrels of Storage Volume in
excess of the relevant Reserved Volume for each month in which
there is an excess Storage Volume. Any excess Storage Volume
acquired in this manner shall be understood to be temporary
only, and shall not constitute waiver of Conoco's right to
restrict storage to the Reserved Volume at any time
thereafter. DuPont shall promptly remove any such excess
Storage Volume upon Conoco's request.
Ethane Storage and Throughput Agreement Page 8
24
E. Holdover Storage Fee. The fee for storage of any Product
remaining in storage more than thirty (30) days past the last
day of the term of this Agreement shall be twelve cents ($.12)
per Barrel per month or any portion thereof, payable in
advance on the first day of each month in the same manner and
at the same place designated above for Reservation Fees. Any
holdover storage shall be understood to be temporary only, and
shall not constitute waiver of Conoco's right to use or lease
storage space to others at any time after this Agreement is
terminated. DuPont shall promptly remove any such holdover
volume upon Conoco's request.
F. Dryer Fee. DuPont shall pay Conoco a Dryer Fee of one and
twenty six hundredths cents ($0.0126) per Barrel on all
Product dried by Conoco and delivered to DuPont.
G. Invoicing. Conoco may issue invoices to DuPont periodically
for charges that have accrued. DuPont agrees to remit payment
of all undisputed amounts due to Conoco via wire transfer
within thirty (30) days of the date of the invoice.
H. Records and Audit. Conoco will maintain accurate accounts and
supporting documentation for all charges related to providing
the services under this Agreement and such other records as
may reasonably be required by DuPont in accordance with the
Generally Accepted Accounting Principles and Practices for a
period of at least five years. DuPont may at its option and
expense, inspect and audit the accounts of Conoco for the most
recent two calendar years relating to any charges imposed by
Conoco under this Agreement. Each audit must be conducted
during office hours and with at least forty-eight (48) hours
advance notice. If DuPont shall require a second audit or
inspection in any single year, DuPont shall pay all of
Conoco's costs, as determined in Conoco's reasonable
discretion, plus any other costs associated with such second
audit or inspection.
Article VIII. ADJUSTMENT OF FEES
A. During the fourth quarter of 1998, or as quickly thereafter as
can reasonably be accomplished, the Parties shall jointly
commission and pay for a study by a qualified third party to
determine the cost for the storage that Conoco is providing
under this Agreement for DuPont. The Parties shall advise the
third party to find a reasonable number of reference storage
arrangements having a term of at least one year and
reservation and throughput volumes similar to the reservation
and throughput volume that DuPont has undertaken in this
Agreement. For each reference storage arrangement, the third
party should obtain: the reserved volume; the annual
throughput, the
Ethane Storage and Throughput Agreement Page 9
25
reservation fees, the throughput fees, loss allowance and the
term and the vintage (when the arrangement was first
effective).
B. Conoco shall also provide, under terms of confidentiality with
the third party, corresponding data for all storage
arrangements having a term of at least one year where Conoco
is the storage provider and the storage customer.
C. The third party shall, without revealing the fees involved in
each storage arrangement, disclose to the Parties the reserved
volume, throughput volume, term and vintage of each storage
arrangement discovered (not including those arrangements in
which Conoco is the storage provider). The Parties shall
then, by agreement, assign a weight to each storage
arrangement. If the Parties cannot agree on the weighting of
the various arrangements, then the default weighting procedure
is to assign weights for each reference arrangements where
half of each such assigned weight is derived by dividing the
particular reservation volume by the sum of all reservation
volumes and the other half of each assigned weight is derived
by dividing the particular throughput volume by the sum of all
throughput volumes.
D. The third party shall thereafter compute Cost per Reserved
Barrel figures for each storage arrangement where no such
figures are to be disclosed to the Parties. From these
various Cost per Reserved Barrel figures, the third party
shall then compute a Conoco provider weight averaged Cost per
Reserved Barrel and a market-based weight average Cost per
Reserved Barrel. The Conoco provider Cost per Reserved Barrel
is computed using the default procedure of weighting as
described above for the arrangements where Conoco is the
storage provider. The market-based Cost per Reserved Barrel
is computed based on the weight averaged (based on the Parties
agreed weighting or the default weighting if there is no
agreement on weighting) of all the remaining Cost per Reserved
Barrel figures. See Appendix C for an example calculation of
the Cost per Reserved Barrel using the interim fees.
E. The third party shall then determine which is the lowest Cost
per Reserved Barrel between the Conoco provider and
market-based Cost per Reserved Barrel amounts. Only the
lowest of the two amounts shall be revealed to the Parties and
it shall not be revealed whether the amount given is the
Conoco provider Cost per Reserved Barrel amount or the
market-based Cost per Reserved Barrel amount.
F. Once the Cost per Reserved Barrel is determined from the third
party, the Parties shall revise the Reservation Fee,
Throughput Fee and Loss
Ethane Storage and Throughput Agreement Page 10
26
Allowance to provide DuPont with comparable cost and Conoco
with comparable revenue per Barrel of Reserved Volume. After
adjustment, the new Loss Allowance should be based on the
ratio of the new Cost per Reserved Barrel to the old Cost per
Reserved Barrel. Also, the new Reservation Fee should remain
about five times the new Throughput Fee and preferably be
fairly round numbers. See Appendix D for example calculations
of new Reservation Fees, Throughput Fees and Loss Allowance
for various scenarios of new Cost per Reserved Barrel amounts
as might be generated by the study.
G. The new fees shall be effective upon January 1, 1999 and shall
extend until revised by a subsequent study as described above.
Subsequent studies may be conducted every three years
immediately preceding the anniversary of the Effective Date.
Thus, the next study may be conducted prior to the month and
day of the Effective Date in the year 2001 such that the
results therefrom may be effective on such date. However, for
studies after 1999, the fees shall not be adjusted unless the
study reveals that the lower of the Conoco provider and
market-based Cost per Reserved Barrel amounts deviate from the
then current Cost per Reserved Barrel by more than ten percent
(10%). Subsequent changes in fees, except in the case of a
meet or release demand in Article IX, shall be instituted at
the beginning of a Contract Year.
Article IX. MEET OR RELEASE
X. XxXxxx shall have the right during the term of this Agreement
to obtain a bonafide offer from a storage provider to provide
storage services for the entire Reserved Volume and present
such bonafide offer to Conoco for Conoco to either meet the
terms of the bonafide offer or elect to terminate the further
obligations of both Parties under this Agreement.
B. Upon the presentment of a meet or release demand, Conoco shall
be required to respond within thirty (30) days electing one of
two options: (1) Conoco may elect to accept all fees,
charges, terms and conditions of the bonafide offer and
continue to provide services under this Agreement as modified
by all provisions of the bonafide offer; or (2) elect to
terminate its obligations to provide services under this
Agreement.
C. Any such release shall not be effective until one year from
the date of Conoco's response. In addition, as there are
other services, in addition to those set forth in this
Agreement being provided by Conoco to DuPont, specifically
pipeline operation services for DuPont owned pipelines for
transporting products to and from XxXxxx'x Xxxxxx River Works
Facility, it should be noted that Conoco's election to
terminate the obligations of the
Ethane Storage and Throughput Agreement Page 11
27
Parties under this Agreement may trigger the right to
terminate services provided under such separate agreements.
Article X. LIABILITIES, INDEMNITIES, CLAIMS
A. Express Negligence Disclosure. UNLESS THIS AGREEMENT
EXPRESSLY PROVIDES TO THE CONTRARY, THE INDEMNITY, RELEASE AND
WAIVER PROVISIONS SET FORTH IN THIS AGREEMENT APPLY REGARDLESS
OF WHETHER THE INDEMNIFIED PARTY (OR ITS EMPLOYEES, AGENTS,
CONTRACTORS, SUCCESSORS OR ASSIGNS) CAUSES, IN WHOLE OR IN
PART, INDEMNIFIED CLAIMS ARISING OUT OF OR RESULTING, IN WHOLE
OR IN PART, FROM, OUT OF, OR IN CONNECTION WITH, THE STORAGE
OR HANDLING OF DUPONT'S PRODUCT OR THE OPERATIONS OF CONOCO'S
STORAGE FACILITY OR THE INDEMNIFIED PARTY'S (OR ITS
REPRESENTATIVES', CONTRACTORS', SUCCESSORS', OR ASSIGNS')
SOLE, JOINT, COMPARATIVE OR CONCURRENT NEGLIGENCE, STRICT
LIABILITY OR FAULT. DUPONT AND CONOCO ACKNOWLEDGE THAT THIS
STATEMENT COMPLIES WITH THE EXPRESS NEGLIGENCE RULE AND IS
CONSPICUOUS.
B. Conoco shall indemnify and hold DuPont harmless from any loss
or liability (including legal fees and expenses) arising from
any claim or cause of action for injury to or death of any
Conoco employee.
X. XxXxxx shall indemnify and hold Conoco harmless from any loss
or liability (including legal fees and expenses) arising from
any claim or cause of action for injury to or death of any
DuPont employee.
D. Conoco shall, to the extent permitted by law, fully indemnify,
defend and hold harmless, DuPont, with respect to any and all
claims, losses, damages, fines, debts, cost, expenses, and
penalties, liabilities, causes of action, including without
limitation, settlement costs and any reasonable legal or other
expenses paid to a third party for investigating or defending
any actions or threatened actions, (herein collectively
referred to as "Losses"), to the extent such Losses are
incurred by DuPont arising out of or as a result of any
negligence, willful misconduct, breach of contract or
violations of law or regulation by Conoco, its employees,
agents, subcontractors or assigns in the performance of
services provided pursuant to this Agreement. The Losses
covered under this paragraph, unless provided for in
paragraphs B and C above, include, without limitation, Losses
from actual or alleged (1) injury to or death of any person,
including agents, subcontractors and
Ethane Storage and Throughput Agreement Page 12
28
assigns of DuPont, (2) loss of or damage to property
including, without limitation, property of DuPont and (3)
damage to the environment.
X. XxXxxx shall, to the extent permitted by law, fully indemnify,
defend and hold harmless, Conoco, with respect to any and all
claims, losses, damages, fines, debts, cost, expenses, and
penalties, liabilities, causes of action, including without
limitation, settlement costs and any reasonable legal or other
expenses paid to a third party for investigating or defending
any actions or threatened actions, (herein collectively
referred to as "Losses"), to the extent such Losses are
incurred by Conoco arising out of or a result of any
negligence, willful misconduct, breach of contract or
violations of law or regulation by DuPont, its employees,
agents, subcontractors or assigns in the performance of
services provided pursuant to this Agreement. The Losses
covered under this paragraph, unless provided for in
paragraphs B and C above, include, without limitation, Losses
from actual or alleged (1) injury to or death of any person,
including agents, subcontractors and assigns of Conoco, (2)
loss of or damage to property including, without limitation,
property of Conoco and (3) damage to the environment.
F. Joint Responsibility. In circumstances that both Parties are
in some measure responsible for Losses as described in
Paragraphs D and E above, the Parties shall indemnify the
other to the extent of its proportional share of its
responsibility of such Losses.
G. Waiver of Consequential and Punitive Damages. NOTWITHSTANDING
ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT OR AT LAW
OR IN EQUITY, IN NO EVENT SHALL CONOCO BE LIABLE FOR PUNITIVE,
SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES (INCLUDING WITHOUT
LIMITATION, DAMAGES FOR LOSS OF BUSINESS PROFITS, BUSINESS
INTERRUPTION OR ANY OTHER LOSS) ARISING FROM OR RELATING TO
ANY CLAIM MADE UNDER THIS AGREEMENT OR REGARDING THE PROVISION
OF OR THE FAILURE TO PROVIDE THE STORAGE AND THROUGHPUT
SERVICES HEREUNDER, EVEN IF CONOCO HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.
H. Exclusive Remedy. The terms and provisions of this Article X
shall be the sole and exclusive remedy of each of the Parties
indemnified hereunder with respect to the transactions
contemplated in this Agreement.
I. Notice of Claims. Notice of claims for loss, damage, or
indemnity in connection with the services provided under this
Agreement must be made to Conoco in writing within ninety (90)
days after the same having become
Ethane Storage and Throughput Agreement Page 13
29
known to DuPont or should have become known to DuPont. Such
claims must be set forth in specific detail and must be
delivered to Conoco within the ninety (90) day period and,
unless so made and delivered to Conoco, Conoco shall be wholly
released and discharged therefrom and shall not be liable
therefore in any manner whatsoever. Conoco shall use best
efforts to respond timely to any DuPont claim. No suit at law
or in equity shall be maintained upon any claim unless such
claim is brought within two (2) years of Conoco's refusal to
accept such claim.
Article XI. FORCE MAJEURE
A. Force Majeure. Neither Party shall be liable to the other for
failure or delay in performance under this Agreement to the
extent that the failure or delay is due directly or indirectly
to Force Majeure, which is herein defined to include without
limitation, Acts of God or other causes beyond the reasonable
control of the Parties, war (whether declared or not), fire,
flood, lightning, hurricane or other storm, earthquake,
geological failure, acts of public enemy, explosion,
scheduling, operational and maintenance restrictions,
rebellion, riot, insurrections, sabotage, invasion, accident,
epidemic, strikes, lockouts or other labor difficulties or
industrial disturbances, compliance with acts, rules,
regulations, or orders of federal, state, or local government,
any agency thereof or any other authority having or purporting
to have jurisdiction, mechanical failures or similar causes
not due to either Party's fault or negligence, official order
or industry-wide request, any inability to secure necessary
parts or materials, including the inability to secure
materials by reason of allocations promulgated by authorized
governmental agencies, or any other contingency beyond the
control of the affected Party which interferes with the
performance hereunder.
B. Suspension of Performance. Performance under this Agreement
shall be suspended (except for the payment of money due or to
become due for past performance hereunder) during the period
of such Force Majeure to the extent made necessary by the
Force Majeure; provided, the settlement of strikes, lockouts,
industrial disputes, or disturbances shall be entirely within
the discretion of the Party so settling to accede to the
demands of the demands of any opposing party when such course
is inadvisable in the discretion of the Party having the
difficulty.
C. No Effect on Term. No curtailment, suspension, or acceptance
of performance pursuant to this Article XI shall operate to
extend the term of, or to terminate, this Agreement.
Performance under this Agreement shall resume to the extent
made possible by the end or amelioration of the Force Majeure
event.
Ethane Storage and Throughput Agreement Page 14
30
D. Notice. A Party claiming Force Majeure shall notify the other
Party immediately by telephone, E-mail, and/or fax and confirm
the same in writing, giving reasonable detail regarding the
type of Force Majeure and its estimated duration.
Article XII. MISCELLANEOUS PROVISIONS
A. Taxes. DuPont shall pay any and all lawful taxes,
assessments, or charges levied or assessed against DuPont's
Product or other assets including, but not limited to, any
gross receipts tax, use tax, sales tax and ad valorem tax.
DuPont shall immediately reimburse Conoco for any such taxes,
assessments or charges paid by Conoco on behalf of DuPont upon
receipt of notice of payment. Conoco shall pay all its
income-related taxes and all employee-related taxes and
charges such as withholdings, FICA, FICM, unemployment and
other similar taxes.
B. Notice. All notices, demands, request and other
communications necessary to be given hereunder shall be in
writing and deemed given if personally delivered, forwarded by
facsimile transmission (with proof of transmission
capability), or mailed by either certified mail, return
receipt requested, or sent by recognized overnight carrier to
the respective Party at its address below:
If to Conoco:
Conoco Inc.
X.X. Xxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attn: Director, Fractionation Services and Logistics
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to DuPont and related to:
Pricing and contract issues:
DuPont Sourcing
X.X. Xxx 00000
Xxxxxxxxxx, XX 00000-0000
Attn: Sourcing Manager
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Ethane Storage and Throughput Agreement Page 15
31
Legal issues:
DuPont Legal
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Logistics and Commerce Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Operations, Day to Day issues
DuPont Packaging and Industrial Polymers
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Manager, Contract Manufacturing
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
C. Assignment. Neither Party shall assign any portion of its
rights or obligations under this Agreement without the prior
written consent of the other, which consent shall not be
unreasonably withheld; provided however, either Party may
assign this Agreement to a parent corporation, or any
subsidiary or affiliate with respect to which it holds at
least fifty-one percent (51%) of the voting stock, without the
consent of the other Party; provided further, the original
Parties to this Agreement shall remain primarily obligated
hereunder. This Agreement shall be binding upon and inure to
the benefit of the Parties hereto, their successors and
assigns and nothing contained in this Agreement, express or
implied, is intended to confer upon any other person or entity
any benefits, rights, or remedies. Notwithstanding the
foregoing, DuPont shall have the right to freely assign its
entire interest in this Agreement to a third party pursuant to
such third party acquiring DuPont assets that are served by
Conoco under this Agreement.
D. Rules and Regulations. This Agreement and the provisions
hereof shall be subject to, and the Parties agree to comply
with, all applicable local, state, and federal laws and to all
applicable rules, regulations, orders and directives of any
governmental authority, agency, commission, or regulatory body
in connection with any and all matters or things under or
incident to this Agreement. The Parties warrant to one
another that they comply with all applicable laws, rules,
orders, and regulations of governmental authority covering the
production, sale and delivery of the goods or services
specified herein, including, but not limited to, the Equal
Ethane Storage and Throughput Agreement Page 16
32
Opportunity Clause prescribed in 41 CFR 60-1.4; the
Affirmative Action Clause prescribed in 41 CFR 60-250.4,
regarding disabled veterans and veterans of the Vietnam Era;
the Affirmative Action Clause for Handicapped Workers
prescribed in 41 CFR 60-741.4; 48 CFR Chapter 1 Subpart 19.7
regarding Small Business and Small Disadvantaged Business
Concerns; 48 CFR Chapter 1 Subpart 20.3 regarding Utilization
of Labor Surplus Area Concerns; Executive Order 12138 and
regulations thereunder regarding subcontracts to women-owned
business concerns; Affirmative Action Compliance Program (41
CFR 60-1.40); annually file SF-100 Employer Information Report
(41 CFR 60-1.7); 41 CFR 60-1.8 prohibiting segregated
facilities; and the Fair Labor Standards Act of 1938, as
amended.
E. Governing Law, Waiver of Jury Trial and Consent to
Jurisdiction. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED,
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
DELAWARE IRRESPECTIVE OF THE RESIDENCE, PLACE OF BUSINESS, OR
DOMICILE OF THE PARTIES HERETO OR PLACE OF EXECUTION BY ANY
PARTY HERETO, AND NOTWITHSTANDING ANY CONFLICT OF LAWS OR
PROVISIONS TO THE CONTRARY. THIS AGREEMENT SHALL NOT BE
GOVERNED BY THE U. N. CONVENTION ON CONTRACTS FOR THE
INTERNATIONAL SALE OF GOODS. IN ADDITION, EACH PARTY HEREBY
(a) WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO A JURY TRIAL IN
CONNECTION WITH ANY MATTER OR RIGHT ARISING UNDER THIS
AGREEMENT OR RELATING TO THE TRANSITIONAL SERVICES, (b)
CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL
COURT WITHIN THE STATE OF DELAWARE AND IRREVOCABLY AGREES THAT
ALL ACTIONS OR PROCEEDINGS ARISING UNDER OR RELATING TO THIS
AGREEMENT OR THE TRANSITIONAL SERVICES SHALL BE LITIGATED IN
ANY SUCH COURT, AND (c) WAIVES ANY OBJECTION WHICH IT MAY HAVE
BASED UPON IMPROPER VENUE OR FORUM NON CONVENIENS TO THE
CONDUCT OF ANY PROCEEDINGS IN ANY SUCH COURT.
F. Alternative Dispute Resolution.
1. Both Parties understand and appreciate that their
long term mutual interests will be best served by
affecting a rapid and fair resolution of any claims
or disputes which may arise out of this Agreement.
Therefore, both Parties agree to use their best
efforts to resolve all such disputes as rapidly as
possible on a fair and equitable basis.
Ethane Storage and Throughput Agreement Page 17
33
Toward this end both Parties agree to develop and
follow a process for presenting, rapidly assessing,
and settling claims and other disputes on a fair and
equitable basis.
2. If any dispute or claim arising under this Agreement
cannot be readily resolved by the Parties pursuant to
Paragraph F.1 above, the Parties agree to refer the
matter to a panel consisting of one (1) senior
executive from each Party for review and resolution.
The senior executive shall not have been directly
involved in the claim or dispute. A copy of the
Agreement, relevant facts, areas of disagreement, and
concise summary of the basis for each side's
contentions will be provided to both executives who
shall review the same, confer, and attempt to reach a
mutual resolution of the issue. The senior
executives shall attempt to meet and resolve the
dispute within thirty (30) days of their appointment.
3. If the dispute cannot be resolved, under the process
set forth in Paragraph F.2 above, within ten (10)
days from the date of the panel's conference, the
Parties agree to attempt to resolve the dispute or
claim through non-binding mediation. The Parties
shall select a single qualified Mediator,
knowledgeable in the pertinent industry, who is not
presently affiliated with or related to either Party.
The Mediator shall hold a hearing (not to exceed one
(1) day) as soon as practicable after his appointment
(but not later than thirty (30) days after his
appointment) during which each Party shall present
its version of the matter, supported, if desired, by
a brief statement of the issue(s), sworn, written
testimony, relevant documents, its assessment of
damages, and its argument. The Parties shall provide
the Mediator with copies of all such materials as
well as any documents provided to their senior
executives under Paragraph F.2 at least ten (10) days
prior to the scheduled date of the mediation hearing.
The Parties may also provide the Mediator with copies
of any laws or regulations which they feel are
relevant to the dispute. A copy of the Contract will
be provided to the Mediator. Formal written
arguments, legal memoranda, and live testimony are
discouraged but may be permitted at the discretion of
the Mediator. Both Parties agree to make any
relevant and involved employees or documents
available to the other Party for its review and use
in preparing its position under this clause without
the need for subpoena or other court order.
4. The Mediator, within ten (10) days of the completion
of the hearing, will meet separately with both
Parties and provide each of them, on a
Ethane Storage and Throughput Agreement Page 18
34
confidential basis, with his/her written views of the
strengths and weaknesses of their respective
positions. The Parties will then reconvene and, with
the assistance of the Mediator, attempt to resolve
the matter. If resolution cannot be achieved by the
Parties within forty-eight (48) hours of this second
meeting, the Mediator will, within ten (10)
additional days, issue a written, non-binding
decision on the issue.
5. Each Party shall, within five (5) days of the
Mediator's written decision, notify the other in
writing whether it will accept or reject that
decision. If the matter has not been resolved
utilizing the processes set forth in this clause and
the Parties are unwilling to accept the non-binding
decision of the Mediator, either or both Parties may
elect to pursue resolution through litigation.
6. The selected Mediator shall execute a confidentiality
agreement, satisfactory to all Parties, prior to
his/her active participation in the mediation. The
costs of the Mediator shall be shared equally by the
Parties. Each Party will bear its own costs of
mediation.
7. If the Parties cannot agree upon a choice of a
Mediator within ten (10) days of the date of the
panel's conference pursuant to Paragraph F.2, either
or both Parties may elect to directly pursue
litigation.
8. All statements, correspondence, memoranda, briefs,
decisions, testimony, communications, and materials,
whether written or oral, submitted to or generated by
the panel and/or Mediator in connection with the
processes set forth above shall be deemed to be in
furtherance of settlement negotiations and shall be
privileged and shielded from production and
disclosure in any subsequent litigation.
Notwithstanding the foregoing, documents prepared in
the normal course of business, such as invoices,
shall be subject to discovery in subsequent
litigation in accordance with applicable law.
G. Hazards. EACH PARTY ACKNOWLEDGES THAT THERE ARE HAZARDS
ASSOCIATED WITH THE STORAGE AND USE OF PRODUCT, THAT IT
UNDERSTANDS SUCH HAZARDS, AND THAT IT IS ITS OWN
RESPONSIBILITY TO WARN AND PROTECT ITS EMPLOYEES AND OTHERS
WHO MAY BE EXPOSED TO SUCH HAZARDS IN CONNECTION WITH ITS
RESPONSIBILITIES AND OBLIGATIONS CONCERNING THE STORAGE AND
USE OF THIS PRODUCT CONTEMPLATED BY THIS AGREEMENT.
Ethane Storage and Throughput Agreement Page 19
35
H. Headings. Headings used in this Agreement are for convenience
of the Parties only, and shall not be taken into account in
construing or interpreting this Agreement.
I. Entire Agreement. This Agreement contains the entire
Agreement and understanding of the Parties with respect to the
matters contained herein and there are no promises,
assurances, terms, conditions, or obligations, whether by
precedent or otherwise, other than those contained herein.
This Agreement cancels and supercedes any agreement covering
the storage and throughput of Product at Conoco's Mont Belvieu
Storage Facility or any other agreement incident thereto
previously executed by the Parties.
J. Amendment. This Agreement shall not be amended or modified
except by written instrument executed by duly authorized
representatives of the respective Parties.
K. Counterparts. This Agreement may be executed in counterparts,
each of which shall constitute on original and all of which
shall constitute one document.
L. Waivers. No waiver of the provisions hereof shall be
effective unless in writing and signed by the Party to be
charged with such waiver. No waiver shall be deemed a
continuing waiver or waiver in respect to any subsequent
breach or default, either of a similar or dissimilar nature,
unless expressly so stated in writing.
M. Confidentiality. Neither Conoco nor DuPont shall disclose any
term or condition of this Agreement without the prior written
consent of the other Party, which consent will not be
unreasonably withheld. In the event of the termination of
this Agreement, Conoco and DuPont shall, to the extent
permitted by law, keep confidential and not use any
confidential information obtained pursuant to this Agreement,
unless prior written consent is obtained or such information
is readily ascertainable from public or published information
or trade sources or is received by a Party from a third party
having no obligation of confidentiality with respect to such
information.
N. Default. In the event either Party to this Agreement shall
default in the performance of any obligations specified, the
nondefaulting Party shall notify the other Party in writing,
and if such default is not remedied with reasonable
promptness, then the nondefaulting Party shall have the right
to terminate this Contract immediately. Termination under
this Article, or under any other Article of this Contract,
shall not relieve or release either Party from any liability
which accrued prior to the date of such termination.
Ethane Storage and Throughput Agreement Page 20
36
O. CHEMTREC. The Parties agree to use CHEMTREC to report any
chemical emergency relating to any Product under this
Agreement.
P. Safety. The Parties are vitally interested in safety and in
the safe practices of all activities covered under this
Agreement. Thus, Parties agree to maintain mutually agreeable
safety standards for activities covered under this Agreement
which are no less stringent than safety standards which are in
effect at the Effective Date. In addition to endeavoring to
maintain high safety standards, the Parties agree that its
employees, contractors, subcontractors and agents shall
respect and abide by the other Party's plant and site safety
rules when the one Party has personnel on the other Party's
plant or site.
Q. Independent Contractor. It is understood that employees,
methods, facilities, and equipment of Conoco shall at all
times be under its exclusive direction and control. Conoco's
relationship to DuPont shall be that of an independent
contractor. Nothing in the Contract shall be construed to
constitute Conoco, or any of its employees, as an agent,
associate, joint venturer, or partner of DuPont. However,
DuPont may from time to time appoint, in writing, Conoco to
act as an agent for limited purposes.
R. Minority Vendors. The Parties agree to provide maximum
practicable utilization of Minority subcontractors and vendors
among its sources of supply in the performance of this
Contract. Minorities include but are not limited to Black
Americans, Hispanic Americans, Native Americans, Asian Pacific
Americans, and Native Hawaiian Organizations. A Minority
business is at least fifty-one percent (51%) owned by a
Minority or group of Minorities and has its management and
daily business controlled by one (1) or more such individuals.
Conoco shall report to DuPont on a quarterly basis the dollar
amounts paid by Conoco during the previous quarter to minority
subcontractors and vendors for goods and services used in the
performance of this Agreement.
S. Year 2000 Compliance.
1. Each Party covenants and agrees that it will not
permit a Year 2000 Problem to computer systems,
software or equipment owned, leased or licensed by
it, its affiliates or subsidiaries to interfere with
its performance under this Agreement. Each Party
further agrees to request from those of its suppliers
whose performance may materially affect that Party's
performance hereunder, that each such supplier
undertake the same obligation with respect to such
material performance. The Parties will use
reasonable commercial efforts to cooperate and share
information to further comply with this Article,
Ethane Storage and Throughput Agreement Page 21
37
and to minimize the impact of Year 2000 Problems on
performance of this Agreement. Each Party will
inform the other Party of any circumstance indicating
a possible obstacle to such compliance, and the steps
being taken to avoid or overcome the obstacle.
2. Provided a Party complies with Paragraph S.1 above,
such Party will not be liable to the other Party
hereto for any failure to perform obligations under
this Agreement to the extent such failure to perform
arises from a Year 2000 Problem a) affecting one of
the non-performing Party's suppliers or b) beyond
that Party's reasonable control (e.g. a Year 2000
Problem affecting a governmental entity). IN
PARTICULAR SUCH NON-PERFORMING PARTY SHALL HAVE NO
LIABILITY FOR ANY DAMAGES, INCLUDING DIRECT,
INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL,
PUNITIVE OR EXEMPLARY DAMAGES.
3. A "Year 2000 Problem" means a date handling problem
relating to the Year 2000 date change that would
cause a computer system, software or equipment to
fail to correctly perform, process and handle date
related data for the dates within and between the
twentieth and twenty-first centuries and all other
centuries.
T. Continuous Improvement. The Parties will meet from time to
time, preferably at least once per year, to consider potential
operating cost saving measures that may be employed in the
performance of services rendered under this Agreement. The
Parties agree that, to the extent that operating cost savings
are achieved, each Party will share with the other, on a 50/50
basis, the benefits of any cost savings realized for the
remainder of the term.
U. Controlled Substance Abuse. The Parties agree that the use,
possession, manufacture, dispensing, sale and distribution of
alcohol, drugs, and other controlled substances on their
respective premises and on or in vehicles and equipment used
for the purposes of this Agreement shall be prohibited. In
addition, the Parties shall prohibit from their property the
presence of any individual having a controlled substance in
his/her body for non-medical reasons. The Parties shall
develop a mutually agreeable Controlled Substance Abuse
policy, including drug testing, which is at least as rigorous
as Conoco's current policy and complies with DOT's policy
relating to pipeline operations.
Ethane Storage and Throughput Agreement Page 22
38
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed on the day indicated.
Conoco Inc.
By:
----------------------------------------
Title:
-------------------------------------
Date:
--------------------------------------
E. I. du Pont de Nemours and Company
By:
----------------------------------------
Title:
-------------------------------------
Date:
--------------------------------------
Ethane Storage and Throughput Agreement Page 23
39
EXHIBIT 10.18
ETHYLENE STORAGE AND THROUGHPUT AGREEMENT
This Ethylene Storage and Throughput Agreement ("Agreement") is effective as of
7:00 a.m. Mont Belvieu, Texas local time on the Effective Date by and between
Conoco Inc., a Delaware corporation with its principal place of business at 000
Xxxxx Xxxxx Xxxxxxx Xxxx, Xxxxxxx, Xxxxx 00000 ("Conoco") and E. I. du Pont de
Nemours and Company, a Delaware corporation, with its principal place of
business at 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000 ("DuPont"). (Conoco
and DuPont are at times referred to herein individually as a "Party" and
collectively as "Parties").
WITNESSETH
WHEREAS, prior to the initial public offering of Conoco (as defined in
the Restructuring, Transfer and Separation Agreement), Conoco has heretofore
provided certain storage, throughput and operational services to DuPont at
Conoco's Mont Belvieu Storage Facility, located in Xxxxxxxx County, Texas; and
WHEREAS, DuPont desires to continue to lease underground storage space
from Conoco for the storage of ethylene and has requested that certain such
services continue pursuant to this Agreement; and
WHEREAS, Conoco and DuPont do now desire to enter into this Agreement
which will, effective as of the Effective Date, provide for the storage and
throughput of DuPont's ethylene by Conoco; and
NOW, THEREFORE, subject to and in consideration of the terms,
conditions and covenants contained in this Agreement, Conoco and DuPont agree as
follows:
Article I. DEFINITIONS
A. "Barrel" means a volume of forty-two (42) U.S. standard
gallons.
B. "Reserved Volume" means the entire volume of the Ethylene
Storage Well currently about one million six hundred thousand
(1,600,000) Barrels of Product.
C. "Effective Date" means the date on which the Conoco initial
public offering closes.
D. "Contract Year" means a period of twelve consecutive months,
which shall commence on the Effective Date or on the
anniversary of the Effective Date each year.
E. "Day" means a period of twenty-four (24) consecutive hours
commencing at 7:00 a.m. local time and ending at 7:00 a.m. on
the following day.
Ethylene Storage and Throughput Agreement Page 1
40
F. "DuPont's Ethylene Pipeline" means the 8" DuPont owned
pipeline connecting Conoco's Storage Facility and XxXxxx'x
Xxxxxx River Works facility.
G. "Receipt Point(s)" means the following custody transfer
meters: Meter No. MU8001 that measures the volume of Product
from DuPont's Ethylene Pipeline to the Storage Facility; Meter
No. MU3004 that measures the volume of Product from Equistar's
Chocolate Bayou Facility to the Storage Facility; and Meter
No. MBL1FE0101 that measures the volume of Product from
Equistar's Storage Facility (formerly Lyondell) to the Storage
Facility.
H. "Delivery Point(s)" means the following custody transfer
meters: Meter No. MU8001 that measures the volume of Product
from the Storage Facility to DuPont's Ethylene Pipeline; and
Meter No. MU3007 that measures the volume of Product from the
Storage Facility to Equistar;
I. "Ethylene Storage Well" means that certain underground storage
cavern, No. W-3002, located at Conoco's Mont Belvieu Storage
Facility presently used for the storage of Ethylene.
J. "Mont Belvieu Storage Facility" or "Storage Facility" means
Conoco's owned and operated underground storage caverns and
related equipment located at Mont Belvieu, Xxxxxxxx County,
Texas, situated on a 91.317 acre tract in the Xxxxx Xxxxxxxx
League Abstract No. A-12, Volume 353, Page 581, Deed Records
of Xxxxxxxx County, Texas.
K. "Product" means Ethylene having the specifications set forth
in Appendix A.
L. "Ethylene" means a fluid consisting of primarily of ethylene
(C2H4) that is produced by DuPont at its Sabine River Works
facility and also by others and delivered to the Storage
Facility by DuPont's Ethylene Pipeline and from Equistar. The
specifications for Ethylene shall be determined by DuPont as
necessary.
M. "Storage Well(s)" or "Storage Cavern(s)" mean any one or more
of the storage xxxxx at Conoco's Storage Facility.
N. "Direct Costs" means all expenses, including capital cost,
incurred by Conoco as a direct result of providing services
under this Agreement. Direct Costs are costs which are
necessary in the performance of Conoco's duties and are
specific to the Ethylene Well. Specific Direct Costs include,
but are not limited to, repair material, contract labor,
repair costs, insurance and utilities.
O. "Allocated Costs" means costs which are necessary in the
performance of Conoco's duties, but are not specific to any
certain asset. Allocated Costs
Ethylene Storage and Throughput Agreement Page 2
41
include the wages, benefits, travel expenses, training, safety
equipment and other related employee expenses for
non-headquarters based employees that provide services to the
Ethylene Well. The determination of the proper allocation of
costs between the Storage Well and other assets, facilities
and pipelines shall be made solely by Conoco in good faith.
P. "Overhead" means an amount added to Conoco's invoices to
DuPont to cover Conoco's expenses for its Headquarters'
operating and engineering staffs as well as its supporting
Legal, Right-of-Way, Accounting, Risk Management, Tax,
Computer, and other administrative support groups as utilized
in normal day-to-day operations. Overhead shall be equal to
twenty-five percent (25%) of the Direct Costs and Allocated
Costs. Costs for engineering and other support personnel
assigned on a full-time basis to specific major projects will
be charged to those projects directly.
Q. "Storage Volume(s)" means the net current inventory of
DuPont's Product in the Storage Well.
Article II. TERM
This Agreement shall be in full force and effect as of 7:00
a.m. Mont Belvieu, Texas local time on the Effective Date, and
shall continue in effect for a period of Thirty (30) Contract
Years, unless terminated earlier as provided elsewhere in this
Agreement. DuPont shall have the right to terminate this
Agreement without cause upon one year's written notification
to Conoco.
Article III. VOLUME AND STORAGE CAPACITY
A. Storage Space. DuPont agrees to reserve and Conoco agrees to
lease to DuPont all available space in Conoco's Ethylene
Storage Well No. 3002 presently having a capacity of one
million six hundred thousand (1,600,000) Barrels of storage
space at Conoco's Mont Belvieu Storage Facility.
B. Excess Storage Volumes. Only upon the prior written consent of
Conoco, shall DuPont have in storage at the Storage Facility
at any one time, during the term of this Agreement, a volume
of Product in excess of 1,600,000 Barrels.
C. Sublease Permitted. DuPont shall be permitted to sublease any
or all of the storage space leased under this Agreement.
Article IV. OPERATIONS AND THROUGHPUT CAPABILITY
A. Conoco's Storage Facility. Conoco operates at least two
additional Storage Xxxxx in addition to the Ethylene Storage
Well and may add additional
Ethylene Storage and Throughput Agreement Page 3
42
Storage Xxxxx at the Storage Facility. The additional Storage
Xxxxx are presently used to store products different than
Ethylene. All of the Storage Xxxxx are connected to centrally
located pipeline header facilities operated by Conoco on its
property in the vicinity of the Storage Xxxxx. All Products
delivered by DuPont into, or by Conoco out of, storage must be
delivered by pipeline to such header facilities, and all such
deliveries shall be deemed a delivery into or out of storage.
B. Product Delivery and Receipts. It is DuPont's responsibility
to make all arrangements necessary to deliver and to receive
Product for storage by Conoco at Conoco's Storage Facility,
and to pay any charges imposed by any third party and paid by
Conoco for the collection, transfer, and injection of DuPont's
Product to such header facilities for delivery into storage
under this Agreement.
C. Daily Throughput Volumes. Subject to Conoco's Delivery,
Receipt and Allocation restrictions set forth in Article IV.D,
Conoco's Maximum Volume Capability set forth in Article IV.E,
Conoco's Limitation on Product Loss set forth in Article V.B;
and the Force Majeure restrictions set forth in X, Conoco
allocates to DuPont the following maximum Receipt Point and
Delivery Point volume rate capabilities:
1) Maximum Receipt Point volume rate capabilities from
the Ethylene Pipeline into the Ethylene Storage Well:
thirty-five thousand (35,000) Barrels per day;
2) Maximum Delivery Point volume capabilities from the
Ethylene Storage Well to the Ethylene Pipeline: forty
thousand (40,000) Barrels per day.
3) In no event is this Article IV.C to be construed to
require Conoco to make any expenditure to increase
receipt or delivery rate capabilities. Conoco may
from time to time, but is not obligated to, provide
DuPont additional new or existing Delivery Point and
Receipt Point volume capability at any time that such
capability is available and such additional
capability is not required by other Storage Customers
as determined by Conoco.
D. Delivery and Receipt Restrictions; Allocation. The delivery
and receipt flow rates into and out of storage set forth in
Article IV.E are subject to Conoco's scheduling, operational
and maintenance restrictions, including without limitation
Storage Facility outages to conduct integrity tests of the
various Storage Xxxxx. If Conoco's scheduling, operational or
maintenance restrictions will not permit all of parties
(including Conoco) storing any types of products in any of
Conoco's Storage Xxxxx to deliver or receive the
Ethylene Storage and Throughput Agreement Page 4
43
volumes of Product requested, then Conoco shall allocate among
such parties Conoco's available flow rates in a fair and
equitable manner as determined by Conoco. Conoco shall give
DuPont timely notice of any scheduled maintenance work on
Conoco's Storage Facility which will interrupt acceptance or
redelivery of any Products hereunder and, if scheduling and
operational restrictions exist at the time DuPont schedules
movements of Product, then Conoco will verbally notify DuPont
of such restrictions.
E. Maximum Volume Capability. In the event volumes are delivered
only from Conoco's Storage Facility, Conoco allocates to
DuPont a Delivery Point volume capability up to a maximum of
forty-five thousand (45,000) Barrels per Day of Product. The
Barrels per day represents DuPont's allocated share under this
Agreement, of the take-away capacity from Conoco's Storage
Facilities. Conoco may, but is not obligated to, provide
additional daily Delivery Point volume capability from its
Storage Facility at any time that such capability is not
required by other Storage Customers as determined by Conoco.
F. Removal of Product. DuPont must remove all Product from the
Storage Facility no later than thirty (30) Days from the last
Day of the Term of this Agreement, and such removal shall be
subject to the prior full payment of any accrued rental and
other charges, and to the other terms, provisions, and
conditions of this Agreement.
G. Commingling. Conoco shall not commingle DuPont's Ethylene with
Ethylene belonging to others.
H. Sampling. Conoco shall have the right to sample all Product to
be delivered for storage and may refuse to accept delivery of
any Product if, in Conoco's opinion, the Product does not meet
the required specifications or satisfactory control of Product
specifications will not be maintained during delivery. At
Conoco's request DuPont shall provide Conoco access to the
Product to be delivered for the purpose of sampling and
provide Conoco representative samples of such Product.
I. Specifications. All Product delivered by DuPont into storage
or by Conoco from storage must meet the respective
specifications set out in Appendix A attached hereto. DuPont
shall have the right to modify, add to, or revise such
specifications at any time and from time-to-time upon giving
not less than thirty (30) days prior written notice and with
Conoco's approval. Conoco's approval shall not be unreasonably
withheld.
J. Nominations, Scheduling. Product movements must be nominated
by DuPont and accepted by Conoco on or before the fifth
working day before
Ethylene Storage and Throughput Agreement Page 5
44
the end of the month for Product movements during the
succeeding month. Changes made after that time will be
accommodated on a best efforts basis by Conoco.
K. Metrics. The Parties agree to, from time to time, mutually
develop metrics for monitoring each other's performance under
this Agreement and particularly to aid in the early
identification and correction of problems that may arise
during the term of the Agreement.
Article V. MEASUREMENT AND TESTING
A. Measurement and Testing. Measurement and testing of Product
into and out of the Storage Facility shall be made in
accordance with the procedures set forth in Appendix B
attached to this Agreement.
B. Limitation on Product Loss. Conoco shall be responsible for
the loss of or damage to such Product only when, and to the
extent that such loss or damage is caused by the negligence of
Conoco, its employees and agents.
C. Risk of Loss. DuPont's Product is not insured by Conoco
against loss or injury however caused, and any insurance
thereon must be provided and paid for by DuPont. Conoco's
liability, if any, for damages to the stored Product shall be
limited to a value equal to a fair market value of Ethylene at
the time of the loss, or at Conoco's option, replacement of
such lost or damaged Product in kind.
D. Monthly Inventory Reports. Conoco shall submit to DuPont
Monthly stock reports supported with appropriate receiving and
shipping information showing movements of Product into and out
of Conoco's Storage Facility and the amount of Product
remaining in storage at the end of the Month.
Article VI. TITLE AND RISK OF LOSS
Title to DuPont's Product and all risk of loss thereof shall
remain at all times in DuPont and shall not transfer to
Conoco; provided, however, DuPont shall remain liable to
Conoco for all fees, costs, and all other liabilities as set
forth in this Agreement, regardless of whether DuPont or
DuPont's customer has title to the Product.
Article VII. CONSIDERATION AND PAYMENT
DuPont agrees to pay Conoco's Direct and Allocable Costs plus
Overhead for the storage, handling, drying and other services
which Conoco provides during the term of this Agreement.
Conoco shall present a projection of anticipated costs for
each coming Contract Year prior to the anniversary of the
Effective Date. Conoco may issue invoices to DuPont
periodically for
Ethylene Storage and Throughput Agreement Page 6
45
actual direct and allocable costs plus overhead. DuPont agrees
to remit payment to Conoco for all undisputed amounts via wire
transfer within thirty (30) days of the date of any invoice.
Conoco will maintain accurate accounts and supporting
documentation, in accordance with the Generally Accepted
Accounting Principles and Practices, of all costs, expenses
and liabilities incurred in servicing, repairing, maintaining,
and administering the Ethylene Well for a period of at least
five years. DuPont may at its option and expense, inspect and
audit the accounts of Conoco for the most recent two calendar
years relating to any charges incurred by Conoco under this
Agreement. Each audit must be conducted during office hours
and with at least forty-eight (48) hours advance notice. If
DuPont shall require a second audit or inspection in any
single year, DuPont shall pay all of Conoco's costs, as
determined in Conoco's reasonable discretion, plus any other
costs associated with such second audit or inspection.
DuPont is not permitted have a Storage Volume beyond the term
of this Agreement without the express written permission of
Conoco. In the event DuPont does holdover a Storage Volume at
the termination of this Agreement, DuPont shall pay Conoco a
holdover charge of Conoco's Direct and Allocable Costs plus
Overhead plus an additional holdover fee of ten percent (10%)
per month or any portion thereof. Any holdover Storage Volume
shall be understood to be temporary only, and shall not
constitute waiver of Conoco's right to use or lease storage
space to others at any time after this Agreement is
terminated. DuPont shall promptly remove any such holdover
Storage Volume upon Conoco's request.
Article VIII. MEET OR RELEASE
X. XxXxxx shall have the right during the term of this Agreement
to obtain a bonafide offer from a storage provider to provide
storage services for the entire Reserved Volume and present
such bonafide offer to Conoco for Conoco to either meet the
terms of the bonafide offer or elect to terminate the further
obligations of both Parties under this Agreement.
B. Upon the presentment of a meet or release demand, Conoco shall
be required to respond within thirty (30) days electing one of
two options: (1) Conoco may elect to accept all fees, charges,
terms and conditions of the bonafide offer and continue to
provide services under this Agreement as modified by all
provisions of the bonafide offer; or (2) elect to terminate
its obligations to provide services under this Agreement.
Ethylene Storage and Throughput Agreement Page 7
46
C. Any such release shall not be effective until one year from
the date of Conoco's response. In addition, as there are other
services, in addition to those set forth in this Agreement
being provided by Conoco to DuPont, specifically pipeline
operation services for DuPont owned pipelines for transporting
products to and from XxXxxx'x Xxxxxx River Works Facility, it
should be noted that Conoco's election to terminate the
obligations of the Parties under this Agreement may trigger
Conoco's right to terminate services provided under such
separate agreements.
Article IX. LIABILITIES, INDEMNITIES, CLAIMS
A. Express Negligence Disclosure. UNLESS THIS AGREEMENT EXPRESSLY
PROVIDES TO THE CONTRARY, THE INDEMNITY, RELEASE AND WAIVER
PROVISIONS SET FORTH IN THIS AGREEMENT APPLY REGARDLESS OF
WHETHER THE INDEMNIFIED PARTY (OR ITS EMPLOYEES, AGENTS,
CONTRACTORS, SUCCESSORS OR ASSIGNS) CAUSES, IN WHOLE OR IN
PART, INDEMNIFIED CLAIMS ARISING OUT OF OR RESULTING, IN WHOLE
OR IN PART, FROM, OUT OF, OR IN CONNECTION WITH, THE STORAGE
OR HANDLING OF DUPONT'S PRODUCT OR THE OPERATIONS OF CONOCO'S
STORAGE FACILITY OR THE INDEMNIFIED PARTY'S (OR ITS
REPRESENTATIVES', CONTRACTORS', SUCCESSORS', OR ASSIGNS')
SOLE, JOINT, COMPARATIVE OR CONCURRENT NEGLIGENCE, STRICT
LIABILITY OR FAULT. DUPONT AND CONOCO ACKNOWLEDGE THAT THIS
STATEMENT COMPLIES WITH THE EXPRESS NEGLIGENCE RULE AND IS
CONSPICUOUS.
B. Conoco shall indemnify and hold DuPont harmless from any loss
or liability (including legal fees and expenses) arising from
any claim or cause of action for injury to or death of any
Conoco employee.
X. XxXxxx shall indemnify and hold Conoco harmless from any loss
or liability (including legal fees and expenses) arising from
any claim or cause of action for injury to or death of any
DuPont employee.
D. Conoco shall, to the extent permitted by law, fully indemnify,
defend and hold harmless, DuPont, with respect to any and all
claims, losses, damages, fines, debts, cost, expenses, and
penalties, liabilities, causes of action, including without
limitation, settlement costs and any reasonable legal or other
expenses paid to a third party for investigating or defending
any actions or threatened actions, (herein collectively
referred to as "Losses"), to the extent such Losses are
incurred by DuPont arising out of or as a result of any
negligence, willful misconduct, breach of contract or
violations of
Ethylene Storage and Throughput Agreement Page 8
47
law or regulation by Conoco, its employees, agents,
subcontractors or assigns in the performance of services
provided pursuant to this Agreement. The Losses covered under
this paragraph, unless provided for in paragraphs B and C
above, include, without limitation, Losses from actual or
alleged (1) injury to or death of any person, including
agents, subcontractors and assigns of DuPont, (2) loss of or
damage to property including, without limitation, property of
DuPont and (3) damage to the environment.
X. XxXxxx shall, to the extent permitted by law, fully indemnify,
defend and hold harmless, Conoco, with respect to any and all
claims, losses, damages, fines, debts, cost, expenses, and
penalties, liabilities, causes of action, including without
limitation, settlement costs and any reasonable legal or other
expenses paid to a third party for investigating or defending
any actions or threatened actions, (herein collectively
referred to as "Losses"), to the extent such Losses are
incurred by Conoco arising out of or a result of any
negligence, willful misconduct, breach of contract or
violations of law or regulation by DuPont, its employees,
agents, subcontractors or assigns in the performance of
services provided pursuant to this Agreement. The Losses
covered under this paragraph, unless provided for in
paragraphs B and C above, include, without limitation, Losses
from actual or alleged (1) injury to or death of any person,
including agents, subcontractors and assigns of Conoco, (2)
loss of or damage to property including, without limitation,
property of Conoco and (3) damage to the environment.
F. Joint Responsibility. In circumstances that both Parties are
in some measure responsible for Losses as described in
Paragraphs D and E above, the Parties shall indemnify the
other to the extent of its proportional share of its
responsibility of such Losses.
G. Waiver of Consequential and Punitive Damages. NOTWITHSTANDING
ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT OR AT LAW
OR IN EQUITY, IN NO EVENT SHALL CONOCO BE LIABLE FOR PUNITIVE,
SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES (INCLUDING WITHOUT
LIMITATION, DAMAGES FOR LOSS OF BUSINESS PROFITS, BUSINESS
INTERRUPTION OR ANY OTHER LOSS) ARISING FROM OR RELATING TO
ANY CLAIM MADE UNDER THIS AGREEMENT OR REGARDING THE PROVISION
OF OR THE FAILURE TO PROVIDE THE STORAGE AND THROUGHPUT
SERVICES HEREUNDER, EVEN IF CONOCO HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.
Ethylene Storage and Throughput Agreement Page 9
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H. Exclusive Remedy. The terms and provisions of this Article X
shall be the sole and exclusive remedy of each of the Parties
indemnified hereunder with respect to the transactions
contemplated in this Agreement.
I. Notice of Claims. Notice of claims for loss, damage, or
indemnity in connection with the services provided under this
Agreement must be made to Conoco in writing within ninety (90)
days after the same having become known to DuPont or should
have become known to DuPont. Such claims must be set forth in
specific detail and must be delivered to Conoco within the
ninety (90) day period and, unless so made and delivered to
Conoco, Conoco shall be wholly released and discharged
therefrom and shall not be liable therefore in any manner
whatsoever. Conoco shall use best efforts to respond timely to
any DuPont claim. No suit at law or in equity shall be
maintained upon any claim unless such claim is brought within
two (2) years of Conoco's refusal to accept such claim.
Article X. FORCE MAJEURE
A. Force Majeure. Neither Party shall be liable to the other for
failure or delay in performance under this Agreement to the
extent that the failure or delay is due directly or indirectly
to Force Majeure, which is herein defined to include without
limitation, Acts of God or other causes beyond the reasonable
control of the Parties, war (whether declared or not), fire,
flood, lightning, hurricane or other storm, earthquake,
geological failure, acts of public enemy, explosion,
scheduling, operational and maintenance restrictions,
rebellion, riot, insurrections, sabotage, invasion, accident,
epidemic, strikes, lockouts or other labor difficulties or
industrial disturbances, compliance with acts, rules,
regulations, or orders of federal, state, or local government,
any agency thereof or any other authority having or purporting
to have jurisdiction, mechanical failures or similar causes
not due to either Party's fault or negligence, official order
or industry-wide request, any inability to secure necessary
parts or materials, including the inability to secure
materials by reason of allocations promulgated by authorized
governmental agencies, or any other contingency beyond the
control of the affected Party which interferes with the
performance hereunder.
B. Suspension of Performance. Performance under this Agreement
shall be suspended (except for the payment of money due or to
become due for past performance hereunder) during the period
of such Force Majeure to the extent made necessary by the
Force Majeure; provided, the settlement of strikes, lockouts,
industrial disputes, or disturbances shall be entirely within
the discretion of the Party so settling to accede to the
demands of the
Ethylene Storage and Throughput Agreement Page 10
49
demands of any opposing party when such course is inadvisable
in the discretion of the Party having the difficulty.
C. No Effect on Term. No curtailment, suspension, or acceptance
of performance pursuant to this Article X shall operate to
extend the term of, or to terminate, this Agreement.
Performance under this Agreement shall resume to the extent
made possible by the end or amelioration of the Force Majeure
event. The Party suffering a Force Majeure event shall notify
the other Party immediately by telephone and confirm the same
in writing, giving reasonable detail regarding the type of
Force Majeure and its estimated duration.
D. Notice. A Party claiming Force Majeure shall notify the other
Party immediately by telephone, E-mail, and/or fax and confirm
the same in writing, giving reasonable detail regarding the
type of Force Majeure and its estimated duration.
Article XI. MISCELLANEOUS PROVISIONS
A. Taxes. DuPont shall pay any and all lawful taxes, assessments,
or charges levied or assessed against DuPont's Product or
other assets including, but not limited to, any gross receipts
tax, use tax, sales tax and ad valorem tax. DuPont shall
immediately reimburse Conoco for any such taxes, assessments
or charges paid by Conoco on behalf of DuPont upon receipt of
notice of payment. Conoco shall pay all income-related taxes
and all employee-related taxes and charges such as
withholdings, FICA, FICM, unemployment and other similar
taxes.
Ethylene Storage and Throughput Agreement Page 11
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B. Notice. All notices, demands, request and other communications
necessary to be given hereunder shall be in writing and deemed
given if personally delivered, forwarded by facsimile
transmission (with proof of transmission capability), or
mailed by either certified mail, return receipt requested, or
sent by recognized overnight carrier to the respective Party
at its address below:
If to Conoco:
Conoco Inc.
X.X. Xxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attn: Director, Fractionation Services and Logistics
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to DuPont and related to:
Pricing and contract issues:
DuPont Sourcing
X.X. Xxx 00000
Xxxxxxxxxx, XX 00000-0000
Attn: Sourcing Manager
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Legal issues:
DuPont Legal
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Logistics and Commerce Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Operations, Day to Day issues:
DuPont Packaging and Industrial Polymers
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Manager, Contract Manufacturing
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Ethylene Storage and Throughput Agreement Page 12
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C. Assignment. Neither Party shall assign any portion of its
rights or obligations under this Agreement without the prior
written consent of the other, which consent shall not be
unreasonably withheld; provided however, either Party may
assign this Agreement to a parent corporation, or any
subsidiary or affiliate with respect to which it holds at
least fifty-one percent (51%) of the voting stock, without the
consent of the other Party; provided further, the original
Parties to this Agreement shall remain primarily obligated
hereunder. This Agreement shall be binding upon and inure to
the benefit of the Parties hereto, their successors and
assigns and nothing contained in this Agreement, express or
implied, is intended to confer upon any other person or entity
any benefits, rights, or remedies. Notwithstanding the
foregoing, DuPont shall have the right to freely assign its
entire interest in this Agreement to a third party pursuant to
such third party acquiring DuPont assets that are served by
Conoco under this Agreement.
D. Rules and Regulations. This Agreement and the provisions
hereof shall be subject to, and the Parties agree to comply
with, all applicable local, state, and federal laws and to all
applicable rules, regulations, orders and directives of any
governmental authority, agency, commission, or regulatory body
in connection with any and all matters or things under or
incident to this Agreement. The Parties warrant to one another
that they comply with all applicable laws, rules, orders, and
regulations of governmental authority covering the production,
sale and delivery of the goods or services specified herein,
including, but not limited to, the Equal Opportunity Clause
prescribed in 41 CFR 60-1.4; the Affirmative Action Clause
prescribed in 41 CFR 60-250.4, regarding disabled veterans and
veterans of the Vietnam Era; the Affirmative Action Clause for
Handicapped Workers prescribed in 41 CFR 60-741.4; 48 CFR
Chapter 1 Subpart 19.7 regarding Small Business and Small
Disadvantaged Business Concerns; 48 CFR Chapter 1 Subpart 20.3
regarding Utilization of Labor Surplus Area Concerns;
Executive Order 12138 and regulations thereunder regarding
subcontracts to women-owned business concerns; Affirmative
Action Compliance Program (41 CFR 60-1.40); annually file
SF-100 Employer Information Report (41 CFR 60-1.7); 41 CFR
60-1.8 prohibiting segregated facilities; and the Fair Labor
Standards Act of 1938, as amended.
E. Governing Law, Waiver of Jury Trial and Consent to
Jurisdiction. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED, AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE
IRRESPECTIVE OF THE RESIDENCE, PLACE OF
Ethylene Storage and Throughput Agreement Page 13
52
BUSINESS, OR DOMICILE OF THE PARTIES HERETO OR PLACE OF
EXECUTION BY ANY PARTY HERETO, AND NOTWITHSTANDING ANY
CONFLICT OF LAWS OR PROVISIONS TO THE CONTRARY. THIS AGREEMENT
SHALL NOT BE GOVERNED BY THE U. N. CONVENTION ON CONTRACTS FOR
THE INTERNATIONAL SALE OF GOODS. IN ADDITION, EACH PARTY
HEREBY (a) WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO A JURY
TRIAL IN CONNECTION WITH ANY MATTER OR RIGHT ARISING UNDER
THIS AGREEMENT OR RELATING TO THE TRANSITIONAL SERVICES, (b)
CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL
COURT WITHIN THE STATE OF DELAWARE AND IRREVOCABLY AGREES THAT
ALL ACTIONS OR PROCEEDINGS ARISING UNDER OR RELATING TO THIS
AGREEMENT OR THE TRANSITIONAL SERVICES SHALL BE LITIGATED IN
ANY SUCH COURT, AND (c) WAIVES ANY OBJECTION WHICH IT MAY HAVE
BASED UPON IMPROPER VENUE OR FORUM NON CONVENIENS TO THE
CONDUCT OF ANY PROCEEDINGS IN ANY SUCH COURT.
F. Alternative Dispute Resolution.
1. Both Parties understand and appreciate that
their long term mutual interests will be best
served by affecting a rapid and fair resolution
of any claims or disputes which may arise out
of this Agreement. Therefore, both Parties
agree to use their best efforts to resolve all
such disputes as rapidly as possible on a fair
and equitable basis. Toward this end both
Parties agree to develop and follow a process
for presenting, rapidly assessing, and settling
claims and other disputes on a fair and
equitable basis.
2. If any dispute or claim arising under this
Agreement cannot be readily resolved by the
Parties pursuant to Paragraph F.1 above, the
Parties agree to refer the matter to a panel
consisting of one (1) senior executive from
each Party for review and resolution. The
senior executive shall not have been directly
involved in the claim or dispute. A copy of the
Agreement, relevant facts, areas of
disagreement, and concise summary of the basis
for each side's contentions will be provided to
both executives who shall review the same,
confer, and attempt to reach a mutual
resolution of the issue. The senior executives
shall attempt to meet and resolve the dispute
within thirty (30) days of their appointment.
3. If the dispute cannot be resolved, under the
process set forth in Paragraph F.2 above,
within ten (10) days from the date of the
Ethylene Storage and Throughput Agreement Page 14
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panel's conference, the Parties agree to
attempt to resolve the dispute or claim through
non-binding mediation. The Parties shall select
a single qualified Mediator, knowledgeable in
the pertinent industry, who is not presently
affiliated with or related to either Party. The
Mediator shall hold a hearing (not to exceed
one (1) day) as soon as practicable after his
appointment (but not later than thirty (30)
days after his appointment) during which each
Party shall present its version of the matter,
supported, if desired, by a brief statement of
the issue(s), sworn, written testimony,
relevant documents, its assessment of damages,
and its argument. The Parties shall provide the
Mediator with copies of all such materials as
well as any documents provided to their senior
executives under Paragraph F.2 at least ten
(10) days prior to the scheduled date of the
mediation hearing. The Parties may also provide
the Mediator with copies of any laws or
regulations which they feel are relevant to the
dispute. A copy of the Contract will be
provided to the Mediator. Formal written
arguments, legal memoranda, and live testimony
are discouraged but may be permitted at the
discretion of the Mediator. Both Parties agree
to make any relevant and involved employees or
documents available to the other Party for its
review and use in preparing its position under
this clause without the need for subpoena or
other court order.
4. The Mediator, within ten (10) days of the
completion of the hearing, will meet separately
with both Parties and provide each of them, on
a confidential basis, with his/her written
views of the strengths and weaknesses of their
respective positions. The Parties will then
reconvene and, with the assistance of the
Mediator, attempt to resolve the matter. If
resolution cannot be achieved by the Parties
within forty-eight (48) hours of this second
meeting, the Mediator will, within ten (10)
additional days, issue a written, non-binding
decision on the issue.
5. Each Party shall, within five (5) days of the
Mediator's written decision, notify the other
in writing whether it will accept or reject
that decision. If the matter has not been
resolved utilizing the processes set forth in
this clause and the Parties are unwilling to
accept the non-binding decision of the
Mediator, either or both Parties may elect to
pursue resolution through litigation.
6. The selected Mediator shall execute a
confidentiality agreement, satisfactory to all
Parties, prior to his/her active participation
in the
Ethylene Storage and Throughput Agreement Page 15
54
mediation. The costs of the Mediator shall be
shared equally by the Parties. Each Party will
bear its own costs of mediation.
7. If the Parties cannot agree upon a choice of a
Mediator within ten (10) days of the date of
the panel's conference pursuant to Paragraph
F.2, either or both Parties may elect to
directly pursue litigation.
8. All statements, correspondence, memoranda,
briefs, decisions, testimony, communications,
and materials, whether written or oral,
submitted to or generated by the panel and/or
Mediator in connection with the processes set
forth above shall be deemed to be in
furtherance of settlement negotiations and
shall be privileged and shielded from
production and disclosure in any subsequent
litigation. Notwithstanding the foregoing,
documents prepared in the normal course of
business, such as invoices, shall be subject to
discovery in subsequent litigation in
accordance with applicable law.
G. Hazards. EACH PARTY ACKNOWLEDGES THAT THERE ARE
HAZARDS ASSOCIATED WITH THE STORAGE AND USE OF
PRODUCT, THAT IT UNDERSTANDS SUCH HAZARDS, AND THAT
IT IS ITS OWN RESPONSIBILITY TO WARN AND PROTECT ITS
EMPLOYEES AND OTHERS WHO MAY BE EXPOSED TO SUCH
HAZARDS IN CONNECTION WITH ITS RESPONSIBILITIES AND
OBLIGATIONS CONCERNING THE STORAGE AND USE OF THIS
PRODUCT CONTEMPLATED BY THIS AGREEMENT.
H. Headings. Headings used in this Agreement are for
convenience of the Parties only, and shall not be
taken into account in construing or interpreting this
Agreement.
I. Entire Agreement. This Agreement contains the entire
Agreement and understanding of the Parties with
respect to the matters contained herein and there are
no promises, assurances, terms, conditions, or
obligations, whether by precedent or otherwise, other
than those contained herein. This Agreement cancels
and supercedes any agreement covering the storage and
throughput of Product at Conoco's Mont Belvieu
Storage Facility or any other agreement incident
thereto previously executed by the Parties.
J. Amendment. This Agreement shall not be amended or
modified except by written instrument executed by
duly authorized representatives of the respective
Parties.
K. Counterparts. This Agreement may be executed in
counterparts, each of which shall constitute on
original and all of which shall constitute one
document.
Ethylene Storage and Throughput Agreement Page 16
55
L. Waivers. No waiver of the provisions hereof shall be
effective unless in writing and signed by the Party
to be charged with such waiver. No waiver shall be
deemed a continuing waiver or waiver in respect of
any subsequent breach or default, either of a similar
or dissimilar nature, unless expressly so stated in
writing.
M. Confidentiality. Neither Conoco nor DuPont shall
disclose any term or condition of this Agreement
without the prior written consent of the other Party,
which consent will not be unreasonably withheld. In
the event of the termination of this Agreement,
Conoco and DuPont shall, to the extent permitted by
law, keep confidential and not use any confidential
information obtained pursuant to this Agreement,
unless prior written consent is obtained or such
information is readily ascertainable from public or
published information or trade sources or is received
by DuPont from a third party having no obligation of
confidentiality with respect to such information.
N. Default. In the event either Party to this Agreement
shall default in the performance of any obligations
specified, the nondefaulting Party shall notify the
other Party in writing, and if such default is not
remedied with reasonable promptness, then the
nondefaulting Party shall have the right to terminate
this Contract immediately. Termination under this
Article, or under any other Article of this Contract,
shall not relieve or release either Party from any
liability which accrued prior to the date of such
termination.
O. CHEMTREC. The Parties agree to use CHEMTREC to report
any chemical emergency relating to any Product under
this Agreement.
P. Safety. The Parties are vitally interested in safety
and in the safe practices of all activities covered
under this Agreement. Thus, Parties agree to maintain
mutually agreeable safety standards for activities
covered under this Agreement which are no less
stringent than safety standards which are in effect
at the Effective Date. In addition to endeavoring to
maintain high safety standards, the Parties agree
that its employees, contractors, subcontractors and
agents shall respect and abide by the other Party's
plant and site safety rules when the one Party has
personnel on the other Party's plant or site.
Q. Independent Contractor. It is understood that
employees, methods, facilities, and equipment of
Conoco shall at all times be under its exclusive
direction and control. Conoco's relationship to
DuPont shall be that of an independent contractor.
Nothing in the Contract shall be construed to
constitute Conoco, or any of its employees, as an
agent, associate, joint
Ethylene Storage and Throughput Agreement Page 17
56
venturer, or partner of DuPont. However, DuPont may
from time to time appoint, in writing, Conoco to act
as an agent for limited purposes.
R. Minority Vendors. The Parties agree to provide
maximum practicable utilization of Minority
subcontractors and vendors among its sources of
supply in the performance of this Contract.
Minorities include but are not limited to Black
Americans, Hispanic Americans, Native Americans,
Asian Pacific Americans, and Native Hawaiian
Organizations. A Minority business is at least
fifty-one percent (51%) owned by a Minority or group
of Minorities and has its management and daily
business controlled by one (1) or more such
individuals. Conoco shall report to DuPont on a
quarterly basis the dollar amounts paid by Conoco
during the previous quarter to minority
subcontractors and vendors for goods and services
used in the performance of this Agreement.
S. Year 2000 Compliance.
1. Each Party covenants and agrees that it will
not permit a Year 2000 Problem to computer
systems, software or equipment owned, leased or
licensed by it, its affiliates or subsidiaries
to interfere with its performance under this
Agreement. Each Party further agrees to request
from those of its suppliers whose performance
may materially affect that Party's performance
hereunder, that each such supplier undertake
the same obligation with respect to such
material performance. The Parties will use
reasonable commercial efforts to cooperate and
share information to further comply with this
Article, and to minimize the impact of Year
2000 Problems on performance of this Agreement.
Each Party will inform the other Party of any
circumstance indicating a possible obstacle to
such compliance, and the steps being taken to
avoid or overcome the obstacle.
2. Provided a Party complies with Paragraph S.1
above, such Party will not be liable to the
other Party hereto for any failure to perform
obligations under this Agreement to the extent
such failure to perform arises from a Year 2000
Problem a) affecting one of the non-performing
Party's suppliers or b) beyond that Party's
reasonable control (e.g. a Year 2000 Problem
affecting a governmental entity). IN PARTICULAR
SUCH NON-PERFORMING PARTY SHALL HAVE NO
LIABILITY FOR ANY DAMAGES, INCLUDING DIRECT,
INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL,
PUNITIVE OR EXEMPLARY DAMAGES.
Ethylene Storage and Throughput Agreement Page 18
57
3. A "Year 2000 Problem" means a date handling
problem relating to the Year 2000 date change
that would cause a computer system, software or
equipment to fail to correctly perform, process
and handle date related data for the dates
within and between the twentieth and
twenty-first centuries and all other centuries.
T. Continuous Improvement. The Parties will meet from
time to time, preferably at least once per year, to
consider potential operating cost saving measures
that may be employed in the performance of services
rendered under this Agreement. The Parties agree
that, to the extent that operating cost savings are
achieved, each Party will share with the other, on a
50/50 basis, the benefits of any cost savings
realized for the remainder of the term.
U. Controlled Substance Abuse. The Parties agree that
the use, possession, manufacture, dispensing, sale
and distribution of alcohol, drugs, and other
controlled substances on their respective premises
and on or in vehicles and equipment used for the
purposes of this Agreement shall be prohibited. In
addition, the Parties shall prohibit from their
property the presence of any individual having a
controlled substance in his/her body for non-medical
reasons. The Parties shall develop a mutually
agreeable Controlled Substance Abuse policy,
including drug testing, which is at least as rigorous
as Conoco's current policy and complies with DOT's
policy relating to pipeline operations.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
on the day indicated.
Conoco Inc.
By:
-----------------------------------
Title:
---------------------------------
Date:
---------------------------------
E. I. du Pont de Nemours and Company
By:
-----------------------------------
Title:
--------------------------------
Date:
---------------------------------
Ethylen Storage and Throughput Agreement Page 19
58
EXHIBIT 10.18
INTERIM PIPELINE OPERATION AGREEMENT
This Interim Pipeline Operation Agreement ("Agreement") is effective
7:00 a.m. Mont Belvieu, Texas local time on the Effective Date by and between
Conoco Inc., a Delaware corporation with its principal place of business at 000
Xxxxx Xxxxx Xxxxxxx Xxxx, Xxxxxxx, Xxxxx 00000 ("Conoco") and E. I. du Pont de
Nemours and Company, a Delaware corporation, with its principal place of
business at 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000 ("DuPont"). (Conoco
and DuPont are at times referred to herein individually as a "Party" and
collectively as "Parties").
WITNESSETH
WHEREAS, prior to the Effective Date (the date on which the Conoco
initial public offering closes wherein the initial public offering of Conoco is
defined in the Restructuring, Transfer and Separation Agreement), Conoco has
heretofore provided pipeline operation services to DuPont for certain pipelines
(set forth in Appendix A and referred to as "Pipeline(s)") in the Texas gulf
coast area that are owned by DuPont; and
WHEREAS, DuPont desires that Conoco continue to operate the Pipelines
on an interim basis and has requested that certain such services continue
pursuant to this Agreement; and
WHEREAS, Conoco and DuPont do now desire to enter into this Agreement
which will, effective as of the Effective Date, provide for operation of the
Pipelines by Conoco; and
NOW, THEREFORE, subject to and in consideration of the terms,
conditions and covenants contained in this Agreement, Conoco and DuPont agree as
follows:
Article I. OPERATION OF PIPELINES
Conoco hereby agrees to operate and maintain the Pipelines and
to act on DuPont's behalf and/or at DuPont's direction
concerning movements of products through the Pipelines as
appropriate. The duties associated with operating the
Pipelines are listed in the attached Appendix B. It is agreed
by the Parties that the nature and scope of the duties to be
performed by Conoco in operating the Pipelines cannot be
completely listed as the Parties cannot foresee all possible
circumstances which might arise. Thus, it is agreed that
Conoco will exercise its best judgment, in consultation with
DuPont if possible, in the performance of the duties required
for safe and prudent pipeline operations not specifically
listed in Appendix B.
Conoco shall exercise its reasonable judgment to operate and
maintain the Pipelines in a safe and prudent manner in
accordance with applicable
Interim Pipeline Operation Agreement Page 1
59
governmental laws and regulations and accepted industry
standards and practices.
The Parties further agree to, from time to time, mutually
develop metrics for monitoring each other's performance under
this Agreement and particularly to aid in the early
identification and correction of problems that may arise
during the term of the Agreement.
Conoco shall during the term of this Agreement provide
reasonable assistance as requested by DuPont to aid in
securing continuing pipeline operation services for the
Pipelines and the transition from Conoco to the succeeding
pipeline operation service provider.
Article II. TITLE AND RISK OF LOSS
Title to product in the Pipelines and all risk of loss thereof
shall remain at all times with DuPont and shall not transfer
to Conoco; provided, however, DuPont shall remain liable to
Conoco for all fees, costs, and all other liabilities as set
forth in this Agreement, regardless of whether DuPont or
DuPont's customer has title to the Product.
Article III. CONSIDERATION AND PAYMENT
Conoco may issue invoices to DuPont periodically. DuPont
agrees to remit payment to Conoco via wire transfer within
thirty (30) days of the date of any invoice for all undisputed
amounts for services under this Agreement. Conoco will invoice
DuPont for:
A. "Direct Costs" which are all expenses, including
Capital Cost, incurred by Conoco as a direct result
of providing services under this Agreement. Direct
Costs are costs which are necessary in the
performance of Conoco's duties and are specific to a
certain Pipeline. Specific Direct Costs include, but
are not limited to, repair material, contract labor,
supervisory RTU repair costs, insurance, regulatory
assessments, and utilities for the Pipelines.
B. "Allocated Costs" which are costs which are necessary
in the performance of Conoco's duties, but are not
specific to any certain Pipeline. Allocated Costs
include the wages, benefits, travel expenses,
training, safety equipment and other related employee
expenses for non-headquarters based employees that
provide services to the Pipelines. The determination
of the proper allocation of costs between the
Pipelines and other facilities and pipelines shall be
made solely by Conoco in good faith.
Interim Pipeline Operation Agreement Page 2
60
C. "Overhead" is an amount added to Conoco's invoices to
DuPont to cover Conoco's expenses for its
Headquarters' operating and engineering staffs as
well as its supporting Legal, Right-of-Way,
Accounting, Risk Management, Tax, Computer, and other
administrative support groups as utilized in normal
day-to-day operations. Overhead shall be equal to
twenty-five percent (25%) of the Direct Costs and
Allocated Costs. Costs for engineering and other
support personnel assigned on a full-time basis to
specific major projects on the Pipelines will be
charged to those projects directly.
Article IV. CAPITAL COSTS
Projects requiring capital expenditures ("Capital Costs") will
be approved by DuPont, except in emergencies. Conoco will
supervise, construct, approve and make payment of individual
invoices for said projects, and DuPont will provide adequate
financial prepayments to Conoco based upon projected forecasts
of capital expenditures.
Article V. ACCOUNTING AND AUDIT
Conoco will maintain accurate accounts and supporting
documentation, in accordance with the Generally Accepted
Accounting Principles and Practices, of all costs, expenses
and liabilities incurred in servicing, repairing, maintaining,
and administering the Pipelines for a period of at least five
years. Each month Conoco will transmit to DuPont a statement
showing the total charges under this Agreement for the account
of DuPont during the preceding calendar month. DuPont may at
its option and expense, inspect and audit the accounts of
Conoco for the most recent two calendar years relating to any
charges incurred by Conoco under this Agreement. Each audit
must be conducted during office hours and with at least
forty-eight (48) hours advance notice. If DuPont shall require
a second audit or inspection in any single year, DuPont shall
pay all of Conoco's costs, as determined in Conoco's
reasonable discretion, plus any other costs associated with
such second audit or inspection.
Article VI. TERM OF AGREEMENT
This agreement will remain in effect for a period of one (1)
year from the Effective Date.
Interim Pipeline Operation Agreement Page 3
61
Article VII. LIABILITIES, INDEMNITIES, CLAIMS
A. In the absence of gross negligence or reckless or willful
misconduct on Conoco's part, and whether or not it is
negligent, Conoco shall not be liable for any claims,
liabilities, damages, losses, costs, expenses (including, but
not limited to, settlements, judgments, court costs and
reasonable attorneys' fees), fines and penalties, arising out
of any actual or alleged injury, loss or damage of any nature
whatsoever in providing or failing to provide the Pipeline
Operation to DuPont. Notwithstanding anything to the contrary
contained herein, in the event Conoco commits an error with
respect to or incorrectly performs or fails to perform any
service provided under this Agreement, at DuPont's request,
Conoco shall use reasonable efforts to correct such error,
re-perform or perform such service; provided, that Conoco
shall have no obligation to recreate any lost or destroyed
data to the extent the same cannot be cured by the
re-performance of the service in question.
B. Conoco's liability for damages to DuPont for any cause
whatsoever, regardless of the form of action, whether in
contract or in tort, including negligence, gross negligence or
willful misconduct, shall be limited to the payments made
hereunder for the Pipeline Operation Services that allegedly
caused the damage during the period which the alleged damage
was incurred by DuPont. In no event shall Conoco be liable for
any damages caused by Conoco's failure to perform DuPont's
responsibilities hereunder. Conoco will not be liable to
DuPont for any act or omission of any other entity (other than
due to a default by Conoco in any agreement between Conoco and
such other entity) furnishing any other service.
C. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN OR
AT LAW OR IN EQUITY, NEITHER PARTY SHALL BE LIABLE TO THE
OTHER FOR PUNITIVE, SPECIAL, INDIRECT, INCIDENTAL OR
CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT LIMITATION, DAMAGES
FOR LOSS OF BUSINESS PROFITS, BUSINESS INTERRUPTION OR ANY
OTHER LOSS) ARISING FROM OR RELATING TO ANY CLAIM MADE UNDER
THIS AGREEMENT OR REGARDING THE PROVISION OF OR THE FAILURE TO
PROVIDE THE TRANSITIONAL SERVICES.
Article VIII. FORCE MAJEURE
A. Force Majeure. Neither Party shall be liable to the other for
failure or delay in performance under this Agreement to the
extent that the failure or delay is due directly or indirectly
to Force Majeure, which is herein defined to
Interim Pipeline Operation Agreement Page 4
62
include without limitation, Acts of God or other causes beyond
the reasonable control of the Parties, war (whether declared
or not), fire, flood, lightning, hurricane or other storm,
earthquake, acts of public enemy, explosion, scheduling,
operational and maintenance restrictions, rebellion, riot,
insurrections, sabotage, invasion, accident, epidemic,
strikes, lockouts or other labor difficulties or industrial
disturbances, compliance with acts, rules, regulations, or
orders of federal, state, or local government, any agency
thereof or any other authority having or purporting to have
jurisdiction, mechanical failures or similar causes not due to
either Party's fault or negligence, official order or
industry-wide request, any inability to secure necessary parts
or materials, including the inability to secure materials by
reason of allocations promulgated by authorized governmental
agencies, or any other contingency beyond the control of the
affected Party which interferes with the performance
hereunder.
B. Suspension of Performance. Performance under this Agreement
shall be suspended (except for the payment of money due or to
become due for past performance hereunder) during the period
of such Force Majeure to the extent made necessary by the
Force Majeure; provided, the settlement of strikes, lockouts,
industrial disputes, or disturbances shall be entirely within
the discretion of the Party so settling to accede to the
demands of any opposing party when such course is inadvisable
in the discretion of the Party having the difficulty.
C. No Effect on Term. No curtailment, suspension, or acceptance
of performance pursuant to this Article VIII shall operate to
extend the term of, or to terminate, this Agreement.
Performance under this Agreement shall resume to the extent
made possible by the end or amelioration of the Force Majeure
event.
D. Notice. A Party claiming Force Majeure shall notify the other
Party immediately by telephone, E-mail and/or fax and confirm
the same in writing, giving reasonable detail regarding the
type of Force Majeure and its estimated duration.
Article IX. MISCELLANEOUS PROVISIONS
A. Taxes. DuPont shall pay any and all lawful taxes, assessments,
or charges levied or assessed against DuPont's Product or
other assets including, but not limited to, any gross receipts
tax, use tax, sales tax and ad valorem tax. DuPont shall
immediately reimburse Conoco for any such taxes, assessments
or charges paid by Conoco on behalf of DuPont upon receipt of
notice of payment. Conoco shall pay all income-related taxes
and all
Interim Pipeline Operation Agreement Page 5
63
employee-related taxes and charges such as withholdings, FICA,
FICM, unemployment and other similar taxes.
B. Notice. All notices, demands, request and other communications
necessary to be given hereunder shall be in writing and deemed
given if personally delivered, forwarded by facsimile
transmission (with proof of transmission capability), or
mailed by either certified mail, return receipt requested, or
sent by recognized overnight carrier to the respective Party
at its address below:
If to Conoco:
Conoco Inc.
X.X. Xxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attn: Director, Fractionation Services and
Logistics
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to DuPont and related to:
Pricing and contract issues:
DuPont Sourcing
X.X. Xxx 00000
Xxxxxxxxxx, XX 00000-0000
Attn: Sourcing Manager
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Legal issues:
DuPont Legal
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Logistics and Commerce Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Interim Pipeline Operation Agreement Page 6
64
Operations, Day to Day issues:
DuPont Sourcing
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Manager, Logistics
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
C. Assignment. Neither Party shall assign any portion of its
rights or obligations under this Agreement without the prior
written consent of the other, which consent shall not be
unreasonably withheld; provided however, either Party may
assign this Agreement to a parent corporation, or any
subsidiary or affiliate with respect to which it holds at
least fifty-one percent (51%) of the voting stock, without the
consent of the other Party; provided further, the original
Parties to this Agreement shall remain primarily obligated
hereunder. This Agreement shall be binding upon and inure to
the benefit of the Parties hereto, their successors and
assigns and nothing contained in this Agreement, express or
implied, is intended to confer upon any other person or entity
any benefits, rights, or remedies.
D. Rules and Regulations. This Agreement and the provisions
hereof shall be subject to, and the Parties agree to comply
with, all applicable local, state, and federal laws and to all
applicable rules, regulations, orders and directives of any
governmental authority, agency, commission, or regulatory body
in connection with any and all matters or things under or
incident to this Agreement. The Parties warrant to one another
that they comply with all applicable laws, rules, orders, and
regulations of governmental authority covering the production,
sale and delivery of the goods or services specified herein,
including, but not limited to, the Equal Opportunity Clause
prescribed in 41 CFR 60-1.4; the Affirmative Action Clause
prescribed in 41 CFR 60-250.4, regarding disabled veterans and
veterans of the Vietnam Era; the Affirmative Action Clause for
Handicapped Workers prescribed in 41 CFR 60-741.4; 48 CFR
Chapter 1 Subpart 19.7 regarding Small Business and Small
Disadvantaged Business Concerns; 48 CFR Chapter 1 Subpart 20.3
regarding Utilization of Labor Surplus Area Concerns;
Executive Order 12138 and regulations thereunder regarding
subcontracts to women-owned business concerns; Affirmative
Action Compliance Program (41 CFR 60-1.40); annually file
SF-100 Employer Information Report (41 CFR 60-1.7); 41 CFR
60-1.8 prohibiting segregated facilities; and the Fair Labor
Standards Act of 1938, as amended.
Interim Pipeline Operation Agreement Page 7
65
E. Governing Law, Waiver of Jury Trial and Consent to
Jurisdiction. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED, AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE
IRRESPECTIVE OF THE RESIDENCE, PLACE OF BUSINESS, OR DOMICILE
OF THE PARTIES HERETO OR PLACE OF EXECUTION BY ANY PARTY
HERETO, AND NOTWITHSTANDING ANY CONFLICT OF LAWS PROVISIONS TO
THE CONTRARY. THIS AGREEMENT SHALL NOT BE GOVERNED BY THE U.
N. CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF
GOODS. IN ADDITION, EACH PARTY HEREBY (a) WAIVES ANY AND ALL
RIGHTS IT MAY HAVE TO A JURY TRIAL IN CONNECTION WITH ANY
MATTER OR RIGHT ARISING UNDER THIS AGREEMENT OR RELATING TO
THE TRANSITIONAL SERVICES, (b) CONSENTS TO THE EXCLUSIVE
JURISDICTION OF ANY STATE OR FEDERAL COURT WITHIN THE STATE OF
DELAWARE AND IRREVOCABLY AGREES THAT ALL ACTIONS OR
PROCEEDINGS ARISING UNDER OR RELATING TO THIS AGREEMENT OR THE
TRANSITIONAL SERVICES SHALL BE LITIGATED IN ANY SUCH COURT,
AND (c) WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED UPON
IMPROPER VENUE OR FORUM NON CONVENIENS TO THE CONDUCT OF ANY
PROCEEDINGS IN ANY SUCH COURT.
F. Alternative Dispute Resolution.
1. Both Parties understand and appreciate that their
long term mutual interests will be best served by
affecting a rapid and fair resolution of any claims
or disputes which may arise out of this Agreement.
Therefore, both Parties agree to use their best
efforts to resolve all such disputes as rapidly as
possible on a fair and equitable basis. Toward this
end both Parties agree to develop and follow a
process for presenting, rapidly assessing, and
settling claims and other disputes on a fair and
equitable basis.
2. If any dispute or claim arising under this Agreement
cannot be readily resolved by the Parties pursuant to
Paragraph F.1 above, the Parties agree to refer the
matter to a panel consisting of one (1) senior
executive from each Party for review and resolution.
The senior executive shall not have been directly
involved in the claim or dispute. A copy of the
Agreement, relevant facts, areas of disagreement, and
concise summary of the basis for each side's
contentions will be provided to both executives who
shall review the same, confer, and attempt to reach a
mutual resolution of the issue.
Interim Pipeline Operation Agreement Page 8
66
The senior executives shall attempt to meet and
resolve the dispute within thirty (30) days of their
appointment.
3. If the dispute cannot be resolved, under the process
set forth in Paragraph F.2 above, within ten (10)
days from the date of the panel's conference, the
Parties agree to attempt to resolve the dispute or
claim through non-binding mediation. The Parties
shall select a single qualified Mediator,
knowledgeable in the pertinent industry, who is not
presently affiliated with or related to either Party.
The Mediator shall hold a hearing (not to exceed one
(1) day) as soon as practicable after his appointment
(but not later than thirty (30) days after his
appointment) during which each Party shall present
its version of the matter, supported, if desired, by
a brief statement of the issue(s), sworn, written
testimony, relevant documents, its assessment of
damages, and its argument. The Parties shall provide
the Mediator with copies of all such materials as
well as any documents provided to their senior
executives under Paragraph F.2 at least ten (10) days
prior to the scheduled date of the mediation hearing.
The Parties may also provide the Mediator with copies
of any laws or regulations which they feel are
relevant to the dispute. A copy of the Contract will
be provided to the Mediator. Formal written
arguments, legal memoranda, and live testimony are
discouraged but may be permitted at the discretion of
the Mediator. Both Parties agree to make any relevant
and involved employees or documents available to the
other Party for its review and use in preparing its
position under this clause without the need for
subpoena or other court order.
4. The Mediator, within ten (10) days of the completion
of the hearing, will meet separately with both
Parties and provide each of them, on a confidential
basis, with his/her written views of the strengths
and weaknesses of their respective positions. The
Parties will then reconvene and, with the assistance
of the Mediator, attempt to resolve the matter. If
resolution cannot be achieved by the Parties within
forty-eight (48) hours of this second meeting, the
Mediator will, within ten (10) additional days, issue
a written, non-binding decision on the issue.
5. Each Party shall, within five (5) days of the
Mediator's written decision, notify the other in
writing whether it will accept or reject that
decision. If the matter has not been resolved
utilizing the processes set forth in this clause and
the Parties are unwilling to
Interim Pipeline Operation Agreement Page 9
67
accept the non-binding decision of the Mediator,
either or both Parties may elect to pursue resolution
through litigation.
6. The selected Mediator shall execute a confidentiality
agreement, satisfactory to all Parties, prior to
his/her active participation in the mediation. The
costs of the Mediator shall be shared equally by the
Parties. Each Party will bear its own costs of
mediation.
7. If the Parties cannot agree upon a choice of a
Mediator within ten (10) days of the date of the
panel's conference pursuant to Paragraph F.2, either
or both Parties may elect to directly pursue
litigation.
8. All statements, correspondence, memoranda, briefs,
decisions, testimony, communications, and materials,
whether written or oral, submitted to or generated by
the panel and/or Mediator in connection with the
processes set forth above shall be deemed to be in
furtherance of settlement negotiations and shall be
privileged and shielded from production and
disclosure in any subsequent litigation.
Notwithstanding the foregoing, documents prepared in
the normal course of business, such as invoices,
shall be subject to discovery in subsequent
litigation in accordance with applicable law.
G. Hazards. EACH PARTY ACKNOWLEDGES THAT THERE ARE HAZARDS
ASSOCIATED WITH THE TRANSPORTATION AND USE OF PRODUCT, THAT IT
UNDERSTANDS SUCH HAZARDS, AND THAT IT IS ITS OWN
RESPONSIBILITY TO WARN AND PROTECT ITS EMPLOYEES AND OTHERS
WHO MAY BE EXPOSED TO SUCH HAZARDS IN CONNECTION WITH ITS
RESPONSIBILITIES AND OBLIGATIONS CONCERNING THE STORAGE AND
USE OF THIS PRODUCT CONTEMPLATED BY THIS AGREEMENT.
H. Headings. Headings used in this Agreement are for convenience
of the Parties only, and shall not be taken into account in
construing or interpreting this Agreement.
I. Entire Agreement. This Agreement contains the entire Agreement
and understanding of the Parties with respect to the matters
contained herein and there are no promises, assurances, terms,
conditions, or obligations, whether by precedent or otherwise,
other than those contained herein. This Agreement cancels and
supercedes any agreement covering the operation and
maintenance of the Pipelines or any other agreement incident
thereto previously executed by the parties.
Interim Pipeline Operation Agreement Page 10
68
J. Amendment. This Agreement shall not be amended or modified
except by written instrument executed by duly authorized
representatives of the respective Parties.
K. Counterparts. This Agreement may be executed in counterparts,
each of which shall constitute on original and all of which
shall constitute one document.
L. Waivers. No waiver of the provisions hereof shall be effective
unless in writing and signed by the Party to be charged with
such waiver. No waiver shall be deemed a continuing waiver or
waiver in respect to any subsequent breach or default, either
of a similar or dissimilar nature, unless expressly so stated
in writing.
M. Confidentiality. Neither Conoco nor DuPont shall disclose any
term or condition of this Agreement without the prior written
consent of the other Party, which consent will not be
unreasonably withheld. In the event of the termination of this
Agreement, Conoco and DuPont shall, to the extent permitted by
law, keep confidential and not use any confidential
information obtained pursuant to this Agreement, unless prior
written consent is obtained or such information is readily
ascertainable from public or published information or trade
sources or is received by a Party from a third party having no
obligation of confidentiality with respect to such
information.
N. Conoco Authority to Act for DuPont. The Parties agree that
Conoco's authority to act on behalf of DuPont or expend (or
commit to expend) monies for DuPont shall be restricted as
follows:
1) Authorization to make improvements and/or capital
investments shall be the responsibility of DuPont.
Once authorized by DuPont, Conoco may expend or cause
to be expended capital dollars on behalf of or for
DuPont's account.
2) In emergency situations, Conoco may make commitments
to expend up to five hundred thousand dollars
($500,000) without the prior approval of DuPont.
O. Default. In the event either Party to this Agreement shall
default in the performance of any obligations specified, the
nondefaulting Party shall notify the other Party in writing,
and if such default is not remedied with reasonable
promptness, then the nondefaulting Party shall have the right
to terminate this Contract immediately. Termination under this
Article, or under any other Article of this Contract, shall
not relieve or release either Party from any liability which
accrued prior to the date of such termination.
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P. CHEMTREC. The Parties agree to use CHEMTREC to report any
chemical emergency relating to any product under this
Agreement.
Q. Safety. The Parties are vitally interested in safety and in
the safe practices of all activities covered under this
Agreement. Thus, Parties agree to maintain mutually agreeable
safety standards for activities covered under this Agreement
which are no less stringent than safety standards which are in
effect at the Effective Date. In addition to endeavoring to
maintain high safety standards, the Parties agree that its
employees, contractors, subcontractors and agents shall
respect and abide by the other Party's plant and site safety
rules when the one Party has personnel on the other Party's
plant or site.
R. Independent Contractor. It is understood that employees,
methods, facilities, and equipment of Conoco shall at all
times be under its exclusive direction and control. Conoco's
relationship to DuPont shall be that of an independent
contractor. Nothing in the Contract shall be construed to
constitute Conoco, or any of its employees, as an agent,
associate, joint venturer, or partner of DuPont. However,
DuPont may from time to time appoint, in writing, Conoco to
act as an agent for limited purposes.
S. Minority Vendors. The Parties agree to provide maximum
practicable utilization of Minority subcontractors and vendors
among its sources of supply in the performance of this
Contract. Minorities include but are not limited to Black
Americans, Hispanic Americans, Native Americans, Asian Pacific
Americans, and Native Hawaiian Organizations. A Minority
business is at least fifty-one percent (51%) owned by a
Minority or group of Minorities and has its management and
daily business controlled by one (1) or more such individuals.
Conoco shall report to DuPont on a quarterly basis the dollar
amounts paid by Conoco during the previous quarter to minority
subcontractors and vendors for goods and services used in the
performance of this Agreement.
T. Year 2000 Compliance.
1. Each Party covenants and agrees that it will not
permit a Year 2000 Problem to computer systems,
software or equipment owned, leased or licensed by
it, its affiliates or subsidiaries to interfere with
its performance under this Agreement. Each Party
further agrees to request from those of its suppliers
whose performance may materially affect that Party's
performance hereunder, that each such supplier
undertake the same obligation with respect to such
material performance. The Parties will use reasonable
commercial efforts to cooperate and share information
to further comply with this Article,
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and to minimize the impact of Year 2000 Problems on
performance of this Agreement. Each Party will inform
the other Party of any circumstance indicating a
possible obstacle to such compliance, and the steps
being taken to avoid or overcome the obstacle.
2. Provided a Party complies with Paragraph T.1 above,
such Party will not be liable to the other Party
hereto for any failure to perform obligations under
this Agreement to the extent such failure to perform
arises from a Year 2000 Problem a) affecting one of
the non-performing Party's suppliers or b) beyond
that Party's reasonable control (e.g. a Year 2000
Problem affecting a governmental entity). IN
PARTICULAR SUCH NON-PERFORMING PARTY SHALL HAVE NO
LIABILITY FOR ANY DAMAGES, INCLUDING DIRECT,
INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL,
PUNITIVE OR EXEMPLARY DAMAGES.
3. A "Year 2000 Problem" means a date handling problem
relating to the Year 2000 date change that would
cause a computer system, software or equipment to
fail to correctly perform, process and handle date
related data for the dates within and between the
twentieth and twenty-first centuries and all other
centuries.
U. Continuous Improvement. The Parties will meet from time to
time, preferably at least once per year, to consider potential
operating cost saving measures that may be employed in the
performance of services rendered under this Agreement. The
Parties agree that, to the extent that operating cost savings
are achieved, each Party will share with the other, on a 50/50
basis, the benefits of any cost savings realized for the
remainder of the term.
V. Controlled Substance Abuse. The Parties agree that the use,
possession, manufacture, dispensing, sale and distribution of
alcohol, drugs, and other controlled substances on their
respective premises and on or in vehicles and equipment used
for the purposes of this Agreement shall be prohibited. In
addition, the Parties shall prohibit from their property the
presence of any individual having a controlled substance in
his/her body for non-medical reasons. The Parties shall
develop a mutually agreeable Controlled Substance Abuse
policy, including drug testing, which is at least as rigorous
as Conoco's current policy and complies with DOT's policy
relating to pipeline operations.
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
on the day indicated.
Conoco Inc.
By:
----------------------------------
Title:
-------------------------------
Date:
--------------------------------
E. I. du Pont de Nemours and Company
By:
----------------------------------
Title:
-------------------------------
Date:
--------------------------------
Interim Pipeline Operation Agreement Page 14
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EXHIBIT 10.18
PIPELINE OPERATION AGREEMENT
This Pipeline Operation Agreement ("Agreement") is effective 7:00 a.m.
Mont Belvieu, Texas local time on the Effective Date by and between Conoco Inc.,
a Delaware corporation with its principal place of business at 000 Xxxxx Xxxxx
Xxxxxxx Xxxx, Xxxxxxx, Xxxxx 00000 ("Conoco") and E. I. du Pont de Nemours and
Company, a Delaware corporation, with its principal place of business at 0000
Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000 ("DuPont"). (Conoco and DuPont are at
times referred to herein individually as a "Party" and collectively as
"Parties").
WITNESSETH
WHEREAS, prior to the Effective Date (the date on which the Conoco
initial public offering closes wherein the initial public offering of Conoco is
defined in the Restructuring, Transfer and Separation Agreement), Conoco has
heretofore provided pipeline operation services to DuPont for certain pipelines
(set forth in Appendix A and referred to as "Pipeline(s)") in the Texas gulf
coast area that are owned by DuPont; and
WHEREAS, DuPont desires that Conoco continue to operate the Pipelines
and has requested that certain such services continue pursuant to this
Agreement; and
WHEREAS, Conoco and DuPont do now desire to enter into this Agreement
which will, effective as of the Effective Date, provide for operation of the
Pipelines by Conoco; and
NOW, THEREFORE, subject to and in consideration of the terms,
conditions and covenants contained in this Agreement, Conoco and DuPont agree as
follows:
Article I. OPERATION OF PIPELINES
Conoco hereby agrees to operate and maintain the Pipelines and
to act on DuPont's behalf and/or at DuPont's direction
concerning movements of products through the Pipelines as
appropriate. The duties associated with operating the
Pipelines are listed in the attached Appendix B. It is agreed
by the Parties that the nature and scope of the duties to be
performed by Conoco in operating the Pipelines cannot be
completely listed as the Parties cannot foresee all possible
circumstances which might arise. Thus, it is agreed that
Conoco will exercise its best judgment, in consultation with
DuPont if possible, in the performance of the duties required
for safe and prudent pipeline operations not specifically
listed in Appendix B.
Conoco shall exercise its reasonable judgment to operate and
maintain the Pipelines in a safe and prudent manner in
accordance with applicable governmental laws and regulations
and accepted industry standards and practices.
Pipeline Operation Agreement Page 1
73
The Parties further agree to, from time to time, mutually
develop metrics for monitoring each other's performance under
this Agreement and particularly to aid in the early
identification and correction of problems that may arise
during the term of the Agreement.
Article II. TITLE AND RISK OF LOSS
Title to product in the Pipelines and all risk of loss thereof
shall remain at all times with DuPont and shall not transfer
to Conoco; provided, however, DuPont shall remain liable to
Conoco for all fees, costs, and all other liabilities as set
forth in this Agreement, regardless of whether DuPont or
DuPont's customer has title to the Product.
Article III. CONSIDERATION AND PAYMENT
Conoco may issue invoices to DuPont periodically. DuPont
agrees to remit payment to Conoco via wire transfer within
thirty (30) days of the date of any invoice for all undisputed
amounts for services under this Agreement. Conoco will invoice
DuPont for:
A. "Direct Costs" which are all expenses, including
Capital Cost, incurred by Conoco as a direct result
of providing services under this Agreement. Direct
Costs are costs which are necessary in the
performance of Conoco's duties and are specific to a
certain Pipeline. Specific Direct Costs include, but
are not limited to, repair material, contract labor,
supervisory RTU repair costs, insurance, regulatory
assessments, and utilities for the Pipelines.
B. "Allocated Costs" which are costs which are necessary
in the performance of Conoco's duties, but are not
specific to any certain Pipeline. Allocated Costs
include the wages, benefits, travel expenses,
training, safety equipment and other related employee
expenses for non-headquarters based employees that
provide services to the Pipelines. The determination
of the proper allocation of costs between the
Pipelines and other facilities and pipelines shall be
made solely by Conoco in good faith.
C. "Overhead" is an amount added to Conoco's invoices to
DuPont to cover Conoco's expenses for its
Headquarters' operating and engineering staffs as
well as its supporting Legal, Right-of-Way,
Accounting, Risk Management, Tax, Computer, and other
administrative support groups as utilized in normal
day-to-day operations. Overhead shall be equal to
twenty-five percent (25%) of the Direct Costs and
Allocated Costs. Costs for engineering and other
support personnel assigned on a full-time basis to
specific
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major projects on the Pipelines will be charged to
those projects directly.
D. "Profit" shall be an amount added to Conoco's
invoices to DuPont representing the profit Conoco
would expect to make had its personnel been assigned
to other Conoco activities. Profit shall be
calculated as the average after tax operating income
(ATOI) per employee (based on the previous year's
annual report) times the number of annual man years
used to provide the pipeline operation services. At
the outset, the profit factor is one hundred thousand
dollars ($100,000) per man year. The profit factor
shall be adjusted on the anniversary of the Effective
Date each year during the term of this Agreement.
Article IV. CAPITAL COSTS
Projects requiring capital expenditures ("Capital Costs") will
be approved by DuPont, except in emergencies. Conoco will
supervise, construct, approve and make payment of individual
invoices for said projects, and DuPont will provide adequate
financial prepayments to Conoco based upon projected forecasts
of capital expenditures.
Article V. ACCOUNTING AND AUDIT
Conoco will maintain accurate accounts and supporting
documentation, in accordance with the Generally Accepted
Accounting Principles and Practices, of all costs, expenses
and liabilities incurred in servicing, repairing, maintaining,
and administering the Pipelines for a period of at least five
years. Each month Conoco will transmit to DuPont a statement
showing the total charges under this Agreement for the account
of DuPont during the preceding calendar month. DuPont may at
its option and expense, inspect and audit the accounts of
Conoco for the most recent two calendar years relating to any
charges incurred by Conoco under this Agreement. Each audit
must be conducted during office hours and with at least
forty-eight (48) hours advance notice. If DuPont shall require
a second audit or inspection in any single year, DuPont shall
pay all of Conoco's costs, as determined in Conoco's
reasonable discretion, plus any other costs associated with
such second audit or inspection.
Article VI. TERM OF AGREEMENT
A. This agreement will remain in effect for a period of twenty
(20) years from the Effective Date, and will continue
thereafter until cancelled by either
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Party upon six months' prior written notice or upon mutual
agreement of the Parties.
X. XxXxxx shall have the right to terminate this Agreement
without cause with one year's written notification to Conoco.
C. If DuPont assigns its entire interest in this Agreement to a
third party pursuant to such third party acquiring the DuPont
assets served by Conoco pursuant to Article IX.C, the
remaining term of this Agreement shall be reduced to one year
following the effective date of such assignment.
D. In addition, DuPont has certain rights under an Ethane Storage
and Throughput Agreement and an Ethylene Storage and
Throughput Agreement (both having the same effective date as
the Effective Date of this Agreement) ("Storage Agreement(s)")
to cause Conoco to meet or release a bonafide offer that
DuPont has obtained from a third party for storage and
throughput services. If Conoco elects to terminate the
obligations of the Parties under a first, chronologically, of
the above Storage Agreements pursuant to a meet or release
demand, Conoco shall thereby acquire the right to terminate,
concurrently with the termination of the storage services
provided under the first Storage Agreement, its obligations to
provide services under this Agreement for the operation of the
particular Pipeline listed in Appendix A that is most closely
associated with the stored product under the first Storage
Agreement. Further, if Conoco elects to terminate the
obligations of the Parties under a second, chronologically, of
the above Storage Agreements (meaning that Conoco will have
released DuPont from both Storage Agreements) pursuant to a
meet or release demand, Conoco shall thereby acquire the right
to terminate, concurrently with the termination of the storage
services provided under the second Storage Agreement, its
obligations to provide services under this Agreement for the
operation of all of the Pipelines, whether or not Conoco
elected to terminate services for any pipeline at the
termination of the first Storage Agreement.
Article VII. LIABILITIES, INDEMNITIES, CLAIMS
A. Express Negligence Disclosure. UNLESS THIS AGREEMENT EXPRESSLY
PROVIDES TO THE CONTRARY, THE INDEMNITY, RELEASE AND WAIVER
PROVISIONS SET FORTH IN THIS AGREEMENT APPLY REGARDLESS OF
WHETHER THE INDEMNIFIED PARTY (OR ITS EMPLOYEES, AGENTS,
CONTRACTORS, SUCCESSORS OR ASSIGNS) CAUSES, IN WHOLE OR IN
PART, INDEMNIFIED CLAIMS ARISING OUT OF OR RESULTING, IN WHOLE
OR IN PART, FROM, OUT OF, OR IN
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CONNECTION WITH, THE STORAGE OR HANDLING OF DUPONT'S PRODUCT
OR THE OPERATIONS OF CONOCO'S STORAGE FACILITY OR THE
INDEMNIFIED PARTY'S (OR ITS REPRESENTATIVES', CONTRACTORS',
SUCCESSORS', OR ASSIGNS') SOLE, JOINT, COMPARATIVE OR
CONCURRENT NEGLIGENCE, STRICT LIABILITY OR FAULT. DUPONT AND
CONOCO ACKNOWLEDGE THAT THIS STATEMENT COMPLIES WITH THE
EXPRESS NEGLIGENCE RULE AND IS CONSPICUOUS.
B. Conoco shall indemnify and hold DuPont harmless from any loss
or liability (including legal fees and expenses) arising from
any claim or cause of action for injury to or death of any
Conoco employee.
X. XxXxxx shall indemnify and hold Conoco harmless from any loss
or liability (including legal fees and expenses) arising from
any claim or cause of action for injury to or death of any
DuPont employee.
D. Conoco shall, to the extent permitted by law, fully indemnify,
defend and hold harmless, DuPont, with respect to any and all
claims, losses, damages, fines, debts, cost, expenses, and
penalties, liabilities, causes of action, including without
limitation, settlement costs and any reasonable legal or other
expenses paid to a third party for investigating or defending
any actions or threatened actions, (herein collectively
referred to as "Losses"), to the extent such Losses are
incurred by DuPont arising out of or as a result of any
negligence, willful misconduct, breach of contract or
violations of law or regulation by Conoco, its employees,
agents, subcontractors or assigns in the performance of
services provided pursuant to this Agreement. The Losses
covered under this paragraph, unless provided for in
paragraphs B and C above, include, without limitation, Losses
from actual or alleged (1) injury to or death of any person,
including agents, subcontractors and assigns of DuPont, (2)
loss of or damage to property including, without limitation,
property of DuPont and (3) damage to the environment.
X. XxXxxx shall, to the extent permitted by law, fully indemnify,
defend and hold harmless, Conoco, with respect to any and all
claims, losses, damages, fines, debts, cost, expenses, and
penalties, liabilities, causes of action, including without
limitation, settlement costs and any reasonable legal or other
expenses paid to a third party for investigating or defending
any actions or threatened actions, (herein collectively
referred to as "Losses"), to the extent such Losses are
incurred by Conoco arising out of or a result of any
negligence, willful misconduct, breach of contract or
violations of law or regulation by DuPont, its employees,
agents, subcontractors or assigns in the performance of
services provided pursuant to this Agreement. The Losses
covered under this paragraph, unless provided for in
paragraphs
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B and C above, include, without limitation, Losses from actual
or alleged (1) injury to or death of any person, including
agents, subcontractors and assigns of Conoco, (2) loss of or
damage to property including, without limitation, property of
Conoco and (3) damage to the environment.
F. Joint Responsibility. In circumstances that both Parties are
in some measure responsible for Losses as described in
Paragraphs D and E above, the Parties shall indemnify the
other to the extent of its proportional share of its
responsibility of such Losses.
G. Waiver of Consequential and Punitive Damages. NOTWITHSTANDING
ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT OR AT LAW
OR IN EQUITY, IN NO EVENT SHALL CONOCO BE LIABLE FOR PUNITIVE,
SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES (INCLUDING WITHOUT
LIMITATION, DAMAGES FOR LOSS OF BUSINESS PROFITS, BUSINESS
INTERRUPTION OR ANY OTHER LOSS) ARISING FROM OR RELATING TO
ANY CLAIM MADE UNDER THIS AGREEMENT OR REGARDING THE PROVISION
OF OR THE FAILURE TO PROVIDE THE STORAGE AND THROUGHPUT
SERVICES HEREUNDER, EVEN IF CONOCO HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.
H. Exclusive Remedy. The terms and provisions of this Article VII
shall be the sole and exclusive remedy of each of the Parties
indemnified hereunder with respect to the transactions
contemplated in this Agreement.
I. Notice of Claims. Notice of claims for loss, damage, or
indemnity in connection with the services provided under this
Agreement must be made to Conoco in writing within ninety (90)
days after the same having become known to DuPont or should
have become known to DuPont. Such claims must be set forth in
specific detail and must be delivered to Conoco within the
ninety (90) day period and, unless so made and delivered to
Conoco, Conoco shall be wholly released and discharged
therefrom and shall not be liable therefore in any manner
whatsoever. Conoco shall use best efforts to respond timely to
any DuPont claim. No suit at law or in equity shall be
maintained upon any claim unless such claim is brought within
two (2) years of Conoco's refusal to accept such claim.
Article VIII. FORCE MAJEURE
A. Force Majeure. Neither Party shall be liable to the other for
failure or delay in performance under this Agreement to the
extent that the failure or delay is due directly or indirectly
to Force Majeure, which is herein defined to
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include without limitation, Acts of God or other causes beyond
the reasonable control of the Parties, war (whether declared
or not), fire, flood, lightning, hurricane or other storm,
earthquake, acts of public enemy, explosion, scheduling,
operational and maintenance restrictions, rebellion, riot,
insurrections, sabotage, invasion, accident, epidemic,
strikes, lockouts or other labor difficulties or industrial
disturbances, compliance with acts, rules, regulations, or
orders of federal, state, or local government, any agency
thereof or any other authority having or purporting to have
jurisdiction, mechanical failures or similar causes not due to
either Party's fault or negligence, official order or
industry-wide request, any inability to secure necessary parts
or materials, including the inability to secure materials by
reason of allocations promulgated by authorized governmental
agencies, or any other contingency beyond the control of the
affected Party which interferes with the performance
hereunder.
B. Suspension of Performance. Performance under this Agreement
shall be suspended (except for the payment of money due or to
become due for past performance hereunder) during the period
of such Force Majeure to the extent made necessary by the
Force Majeure; provided, the settlement of strikes, lockouts,
industrial disputes, or disturbances shall be entirely within
the discretion of the Party so settling to accede to the
demands of any opposing party when such course is inadvisable
in the discretion of the Party having the difficulty.
C. No Effect on Term. No curtailment, suspension, or acceptance
of performance pursuant to this Article VIII shall operate to
extend the term of, or to terminate, this Agreement.
Performance under this Agreement shall resume to the extent
made possible by the end or amelioration of the Force Majeure
event.
D. Notice. A Party claiming Force Majeure shall notify the other
Party immediately by telephone, E-mail and/or fax and confirm
the same in writing, giving reasonable detail regarding the
type of Force Majeure and its estimated duration.
Article IX. MISCELLANEOUS PROVISIONS
A. Taxes. DuPont shall pay any and all lawful taxes, assessments,
or charges levied or assessed against DuPont's Product or
other assets including, but not limited to, any gross receipts
tax, use tax, sales tax and ad valorem tax. DuPont shall
immediately reimburse Conoco for any such taxes, assessments
or charges paid by Conoco on behalf of DuPont upon receipt of
notice of payment. Conoco shall pay all income-related taxes
and all
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employee-related taxes and charges such as withholdings, FICA,
FICM, unemployment and other similar taxes.
B. Notice. All notices, demands, request and other communications
necessary to be given hereunder shall be in writing and deemed
given if personally delivered, forwarded by facsimile
transmission (with proof of transmission capability), or
mailed by either certified mail, return receipt requested, or
sent by recognized overnight carrier to the respective Party
at its address below:
If to Conoco:
Conoco Inc.
X.X. Xxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attn: Director, Fractionation Services and
Logistics
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to DuPont and related to:
Pricing and contract issues:
DuPont Sourcing
X.X. Xxx 00000
Xxxxxxxxxx, XX 00000-0000
Attn: Sourcing Manager
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Legal issues:
DuPont Legal
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Logistics and Commerce Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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Operations, Day to Day issues:
DuPont Packaging and Industrial
Polymers
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Manager, Contract
Manufacturing
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
C. Assignment. Neither Party shall assign any portion of its
rights or obligations under this Agreement without the prior
written consent of the other, which consent shall not be
unreasonably withheld; provided however, either Party may
assign this Agreement to a parent corporation, or any
subsidiary or affiliate with respect to which it holds at
least fifty-one percent (51%) of the voting stock, without the
consent of the other Party; provided further, the original
Parties to this Agreement shall remain primarily obligated
hereunder. This Agreement shall be binding upon and inure to
the benefit of the Parties hereto, their successors and
assigns and nothing contained in this Agreement, express or
implied, is intended to confer upon any other person or entity
any benefits, rights, or remedies. Notwithstanding the
foregoing, DuPont shall have the right to freely assign its
entire interest in this Agreement to a third party pursuant to
such third party acquiring DuPont assets that are served by
Conoco under this Agreement.
D. Rules and Regulations. This Agreement and the provisions
hereof shall be subject to, and the Parties agree to comply
with, all applicable local, state, and federal laws and to all
applicable rules, regulations, orders and directives of any
governmental authority, agency, commission, or regulatory body
in connection with any and all matters or things under or
incident to this Agreement. The Parties warrant to one another
that they comply with all applicable laws, rules, orders, and
regulations of governmental authority covering the production,
sale and delivery of the goods or services specified herein,
including, but not limited to, the Equal Opportunity Clause
prescribed in 41 CFR 60-1.4; the Affirmative Action Clause
prescribed in 41 CFR 60-250.4, regarding disabled veterans and
veterans of the Vietnam Era; the Affirmative Action Clause for
Handicapped Workers prescribed in 41 CFR 60-741.4; 48 CFR
Chapter 1 Subpart 19.7 regarding Small Business and Small
Disadvantaged Business Concerns; 48 CFR Chapter 1 Subpart 20.3
regarding Utilization of Labor Surplus Area Concerns;
Executive Order 12138 and regulations thereunder regarding
subcontracts to women-owned business concerns; Affirmative
Action Compliance Program (41 CFR 60-1.40); annually file
SF-100
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Employer Information Report (41 CFR 60-1.7); 41 CFR 60-1.8
prohibiting segregated facilities; and the Fair Labor
Standards Act of 1938, as amended.
E. Governing Law, Waiver of Jury Trial and Consent to
Jurisdiction. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED, AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE
IRRESPECTIVE OF THE RESIDENCE, PLACE OF BUSINESS, OR DOMICILE
OF THE PARTIES HERETO OR PLACE OF EXECUTION BY ANY PARTY
HERETO, AND NOTWITHSTANDING ANY CONFLICT OF LAWS PROVISIONS TO
THE CONTRARY. THIS AGREEMENT SHALL NOT BE GOVERNED BY THE U.
N. CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF
GOODS. IN ADDITION, EACH PARTY HEREBY (a) WAIVES ANY AND ALL
RIGHTS IT MAY HAVE TO A JURY TRIAL IN CONNECTION WITH ANY
MATTER OR RIGHT ARISING UNDER THIS AGREEMENT OR RELATING TO
THE TRANSITIONAL SERVICES, (b) CONSENTS TO THE EXCLUSIVE
JURISDICTION OF ANY STATE OR FEDERAL COURT WITHIN THE STATE OF
DELAWARE AND IRREVOCABLY AGREES THAT ALL ACTIONS OR
PROCEEDINGS ARISING UNDER OR RELATING TO THIS AGREEMENT OR THE
TRANSITIONAL SERVICES SHALL BE LITIGATED IN ANY SUCH COURT,
AND (c) WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED UPON
IMPROPER VENUE OR FORUM NON CONVENIENS TO THE CONDUCT OF ANY
PROCEEDINGS IN ANY SUCH COURT.
F. Alternative Dispute Resolution.
1. Both Parties understand and appreciate that their
long term mutual interests will be best served by
affecting a rapid and fair resolution of any claims
or disputes which may arise out of this Agreement.
Therefore, both Parties agree to use their best
efforts to resolve all such disputes as rapidly as
possible on a fair and equitable basis. Toward this
end both Parties agree to develop and follow a
process for presenting, rapidly assessing, and
settling claims and other disputes on a fair and
equitable basis.
2. If any dispute or claim arising under this Agreement
cannot be readily resolved by the Parties pursuant to
Paragraph F.1 above, the Parties agree to refer the
matter to a panel consisting of one (1) senior
executive from each Party for review and resolution.
The senior executive shall not have been directly
involved in the claim or dispute. A copy of the
Agreement, relevant facts, areas of
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disagreement, and concise summary of the basis for
each side's contentions will be provided to both
executives who shall review the same, confer, and
attempt to reach a mutual resolution of the issue.
The senior executives shall attempt to meet and
resolve the dispute within thirty (30) days of their
appointment.
3. If the dispute cannot be resolved, under the process
set forth in Paragraph F.2 above, within ten (10)
days from the date of the panel's conference, the
Parties agree to attempt to resolve the dispute or
claim through non-binding mediation. The Parties
shall select a single qualified Mediator,
knowledgeable in the pertinent industry, who is not
presently affiliated with or related to either Party.
The Mediator shall hold a hearing (not to exceed one
(1) day) as soon as practicable after his appointment
(but not later than thirty (30) days after his
appointment) during which each Party shall present
its version of the matter, supported, if desired, by
a brief statement of the issue(s), sworn, written
testimony, relevant documents, its assessment of
damages, and its argument. The Parties shall provide
the Mediator with copies of all such materials as
well as any documents provided to their senior
executives under Paragraph F.2 at least ten (10) days
prior to the scheduled date of the mediation hearing.
The Parties may also provide the Mediator with copies
of any laws or regulations which they feel are
relevant to the dispute. A copy of the Contract will
be provided to the Mediator. Formal written
arguments, legal memoranda, and live testimony are
discouraged but may be permitted at the discretion of
the Mediator. Both Parties agree to make any relevant
and involved employees or documents available to the
other Party for its review and use in preparing its
position under this clause without the need for
subpoena or other court order.
4. The Mediator, within ten (10) days of the completion
of the hearing, will meet separately with both
Parties and provide each of them, on a confidential
basis, with his/her written views of the strengths
and weaknesses of their respective positions. The
Parties will then reconvene and, with the assistance
of the Mediator, attempt to resolve the matter. If
resolution cannot be achieved by the Parties within
forty-eight (48) hours of this second meeting, the
Mediator will, within ten (10) additional days, issue
a written, non-binding decision on the issue.
5. Each Party shall, within five (5) days of the
Mediator's written decision, notify the other in
writing whether it will accept or reject
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that decision. If the matter has not been resolved
utilizing the processes set forth in this clause and
the Parties are unwilling to accept the non-binding
decision of the Mediator, either or both Parties may
elect to pursue resolution through litigation.
6. The selected Mediator shall execute a confidentiality
agreement, satisfactory to all Parties, prior to
his/her active participation in the mediation. The
costs of the Mediator shall be shared equally by the
Parties. Each Party will bear its own costs of
mediation.
7. If the Parties cannot agree upon a choice of a
Mediator within ten (10) days of the date of the
panel's conference pursuant to Paragraph F.2, either
or both Parties may elect to directly pursue
litigation.
8. All statements, correspondence, memoranda, briefs,
decisions, testimony, communications, and materials,
whether written or oral, submitted to or generated by
the panel and/or Mediator in connection with the
processes set forth above shall be deemed to be in
furtherance of settlement negotiations and shall be
privileged and shielded from production and
disclosure in any subsequent litigation.
Notwithstanding the foregoing, documents prepared in
the normal course of business, such as invoices,
shall be subject to discovery in subsequent
litigation in accordance with applicable law.
G. Hazards. EACH PARTY ACKNOWLEDGES THAT THERE ARE HAZARDS
ASSOCIATED WITH THE TRANSPORTATION AND USE OF PRODUCT, THAT IT
UNDERSTANDS SUCH HAZARDS, AND THAT IT IS ITS OWN
RESPONSIBILITY TO WARN AND PROTECT ITS EMPLOYEES AND OTHERS
WHO MAY BE EXPOSED TO SUCH HAZARDS IN CONNECTION WITH ITS
RESPONSIBILITIES AND OBLIGATIONS CONCERNING THE STORAGE AND
USE OF THIS PRODUCT CONTEMPLATED BY THIS AGREEMENT.
H. Headings. Headings used in this Agreement are for convenience
of the Parties only, and shall not be taken into account in
construing or interpreting this Agreement.
I. Entire Agreement. This Agreement contains the entire Agreement
and understanding of the Parties with respect to the matters
contained herein and there are no promises, assurances, terms,
conditions, or obligations, whether by precedent or otherwise,
other than those contained herein. This Agreement cancels and
supercedes any agreement covering the operation and or
maintenance of the Pipelines or any other agreement incident
thereto previously executed by the parties.
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J. Amendment. This Agreement shall not be amended or modified
except by written instrument executed by duly authorized
representatives of the respective Parties.
K. Counterparts. This Agreement may be executed in counterparts,
each of which shall constitute on original and all of which
shall constitute one document.
L. Waivers. No waiver of the provisions hereof shall be effective
unless in writing and signed by the Party to be charged with
such waiver. No waiver shall be deemed a continuing waiver or
waiver in respect to any subsequent breach or default, either
of a similar or dissimilar nature, unless expressly so stated
in writing.
M. Confidentiality. Neither Conoco nor DuPont shall disclose any
term or condition of this Agreement without the prior written
consent of the other Party, which consent will not be
unreasonably withheld. In the event of the termination of this
Agreement, Conoco and DuPont shall, to the extent permitted by
law, keep confidential and not use any confidential
information obtained pursuant to this Agreement, unless prior
written consent is obtained or such information is readily
ascertainable from public or published information or trade
sources or is received by a Party from a third party having no
obligation of confidentiality with respect to such
information.
N. Conoco Authority to Act for DuPont. The Parties agree that
Conoco's authority to act on behalf of DuPont or expend (or
commit to expend) monies for DuPont shall be restricted as
follows:
1) Authorization to make improvements and/or capital
investments shall be the responsibility of DuPont. Once
authorized by DuPont, Conoco may expend or cause to be
expended capital dollars on behalf of or for DuPont's
account.
2) In emergency situations, Conoco may make commitments to
expend up to $500,000 without the prior approval of
DuPont.
O. Default. In the event either Party to this Agreement shall
default in the performance of any obligations specified, the
nondefaulting Party shall notify the other Party in writing,
and if such default is not remedied with reasonable
promptness, then the nondefaulting Party shall have the right
to terminate this Contract immediately. Termination under this
Article, or under any other Article of this Contract, shall
not relieve or release either Party from any liability which
accrued prior to the date of such termination.
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P. CHEMTREC. The Parties agree to use CHEMTREC to report any
chemical emergency relating to any product under this
Agreement.
Q. Safety. The Parties are vitally interested in safety and in
the safe practices of all activities covered under this
Agreement. Thus, Parties agree to maintain mutually agreeable
safety standards for activities covered under this Agreement
which are no less stringent than safety standards which are in
effect at the Effective Date. In addition to endeavoring to
maintain high safety standards, the Parties agree that its
employees, contractors, subcontractors and agents shall
respect and abide by the other Party's plant and site safety
rules when the one Party has personnel on the other Party's
plant or site.
R. Independent Contractor. It is understood that employees,
methods, facilities, and equipment of Conoco shall at all
times be under its exclusive direction and control. Conoco's
relationship to DuPont shall be that of an independent
contractor. Nothing in the Contract shall be construed to
constitute Conoco, or any of its employees, as an agent,
associate, joint venturer, or partner of DuPont. However,
DuPont may from time to time appoint, in writing, Conoco to
act as an agent for limited purposes.
S. Minority Vendors. The Parties agree to provide maximum
practicable utilization of Minority subcontractors and vendors
among its sources of supply in the performance of this
Contract. Minorities include but are not limited to Black
Americans, Hispanic Americans, Native Americans, Asian Pacific
Americans, and Native Hawaiian Organizations. A Minority
business is at least fifty-one percent (51%) owned by a
Minority or group of Minorities and has its management and
daily business controlled by one (1) or more such individuals.
Conoco shall report to DuPont on a quarterly basis the dollar
amounts paid by Conoco during the previous quarter to minority
subcontractors and vendors for goods and services used in the
performance of this Agreement.
T. Year 2000 Compliance.
1. Each Party covenants and agrees that it will not
permit a Year 2000 Problem to computer systems,
software or equipment owned, leased or licensed by
it, its affiliates or subsidiaries to interfere with
its performance under this Agreement. Each Party
further agrees to request from those of its suppliers
whose performance may materially affect that Party's
performance hereunder, that each such supplier
undertake the same obligation with respect to such
material performance. The Parties will use reasonable
commercial efforts to cooperate and share information
to further comply with this Article,
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86
and to minimize the impact of Year 2000 Problems on
performance of this Agreement. Each Party will inform
the other Party of any circumstance indicating a
possible obstacle to such compliance, and the steps
being taken to avoid or overcome the obstacle.
2. Provided a Party complies with Paragraph T.1 above,
such Party will not be liable to the other Party
hereto for any failure to perform obligations under
this Agreement to the extent such failure to perform
arises from a Year 2000 Problem a) affecting one of
the non-performing Party's suppliers or b) beyond
that Party's reasonable control (e.g. a Year 2000
Problem affecting a governmental entity). IN
PARTICULAR SUCH NON-PERFORMING PARTY SHALL HAVE NO
LIABILITY FOR ANY DAMAGES, INCLUDING DIRECT,
INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL,
PUNITIVE OR EXEMPLARY DAMAGES.
3. A "Year 2000 Problem" means a date handling problem
relating to the Year 2000 date change that would
cause a computer system, software or equipment to
fail to correctly perform, process and handle date
related data for the dates within and between the
twentieth and twenty-first centuries and all other
centuries.
U. Continuous Improvement. The Parties will meet from time to
time, preferably at least once per year, to consider potential
operating cost saving measures that may be employed in the
performance of services rendered under this Agreement. The
Parties agree that, to the extent that operating cost savings
are achieved, each Party will share with the other, on a 50/50
basis, the benefits of any cost savings realized for the
remainder of the term.
V. Controlled Substance Abuse. The Parties agree that the use,
possession, manufacture, dispensing, sale and distribution of
alcohol, drugs, and other controlled substances on their
respective premises and on or in vehicles and equipment used
for the purposes of this Agreement shall be prohibited. In
addition, the Parties shall prohibit from their property the
presence of any individual having a controlled substance in
his/her body for non-medical reasons. The Parties shall
develop a mutually agreeable Controlled Substance Abuse
policy, including drug testing, which is at least as rigorous
as Conoco's current policy and complies with DOT's policy
relating to pipeline operations.
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
on the day indicated.
Conoco Inc.
By:
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Title:
-----------------------------------
Date:
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E. I. du Pont de Nemours and Company
By:
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Title:
-----------------------------------
Date:
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