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Exhibit 10.12
SERVICES AGREEMENT
This Agreement is made as of this 25th day of October 1995 between
CMS NOMECO Oil & Gas Co., a Michigan corporation ("CMS NOMECO") and CMS Energy
Corporation, a Michigan corporation ("CMS Energy").
R E C I T A L S
WHEREAS, CMS NOMECO is a subsidiary of CMS Enterprises Company, a
Michigan corporation, which in turn is a subsidiary of CMS Energy;
WHEREAS, CMS Energy desires, from time to time, to provide services to
CMS NOMECO;
WHEREAS, CMS NOMECO desires, from time to time, to purchase services
from CMS Energy; and
WHEREAS, CMS Energy is willing to perform such services as CMS NOMECO
may from time to time request on the terms and conditions contained herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties agree as follows:
1. SCOPE OF SERVICES. CMS Energy shall perform for CMS NOMECO, under the
terms of this Agreement, such administrative, clerical, managerial,
professional and/or technical services as the parties may from time to time
agree by executing an intercompany service request ("ISR") as hereinafter
provided (a copy of an ISR is attached hereto as Exhibit I). In the event CMS
NOMECO desires CMS Energy to perform any such services, then the services
desired, the time for their performance, and any other specific requirement
(not inconsistent with the Agreement) relating thereto, shall be described in
an ISR signed by an officer or other authorized person of CMS NOMECO and
delivered to CMS Energy. Upon receipt of such ISR, CMS Energy shall make all
of the necessary cost estimates and supply all other information required by
the ISR. ISRs shall not become effective and binding until a completed copy
thereof is signed by an officer or other authorized employee of both CMS NOMECO
and CMS Energy, at which time the ISR shall be deemed to become part of this
Agreement; provided, however, that in case of a discrepancy between any
provision in the ISR and any provision of this Agreement, this Agreement shall
prevail. Unless otherwise provided in this Agreement or such ISR, CMS Energy
shall provide everything necessary to perform the services requested
thereunder, including, but not limited to, all supervision, personnel,
supplies, services and transportation. CMS NOMECO reserves the right to have
similar or like services performed by others or through its own employees.
2. TERM OF AGREEMENT. This Agreement shall become effective as of the
date hereof and continue until terminated by either party, at the terminating
party's convenience, by at least thirty (30) days' written notice to the
non-terminating party. The terms of this Agreement shall remain in effect as
to each such uncompleted ISR until the services thereunder are completed or it
is terminated by CMS NOMECO under Section 12, "Termination." The terms of
Section 14, "Ownership and Confidentiality" shall survive termination of this
Agreement for a period of five (5) years after all other terms hereof expire.
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3. PRICE OF SERVICES. CMS NOMECO will pay to CMS Energy and CMS Energy
will accept as full compensation, satisfaction and payment for said services
the rates and charges set forth in the applicable ISR.
4. PAYMENTS. Within twenty (20) days after the end of each calendar
month, CMS Energy shall submit to CMS NOMECO an invoice respecting all ISRs,
itemized to CMS NOMECO's reasonable satisfaction, for the services performed
under such ISRs during the prior month, together with the amount due. Within
thirty (30) days after receipt of each properly-itemized and supported invoice
payment of such invoice shall be made to CMS Energy. Payment of such invoice
by CMS NOMECO shall not constitute acceptance of the services and shall be
subject to correction in the payment of any subsequent invoice. With each
invoice, CMS Energy shall submit copies of all vendors' and subcontractors'
invoices for amounts greater than $10,000 for which reimbursement is sought.
Credit shall be given to CMS NOMECO for any discounts received by CMS Energy on
all reimbursable invoices.
5. CHANGES IN SERVICES. Changes to any ISR issued hereunder may only be
made pursuant to a written change order signed by an officer or authorized
person of each party. Except as provided below, no claims for compensation for
additional services shall be valid unless authorized by such written change
order; provided, however, that whenever it is necessary to immediately
authorize extra work to respond to emergency conditions, CMS Energy shall be
entitled to perform services in reliance on an oral or written authorization by
one of CMS NOMECO's officers or other authorized representatives previously
identified to CMS Energy, and a written change to the ISR shall be made
covering such services as soon thereafter as is reasonably practicable.
6. INDEPENDENT CONTRACTOR. In the performances of services hereunder,
CMS Energy shall be an independent contractor with the sole authority to
control and direct such performance.
7. PERMITS AND LAWS. CMS Energy shall secure all licenses or permits
required by law and shall comply with all applicable ordinances, laws, orders,
rules and regulations, pertaining to its performance of services hereunder.
8. WARRANTY AND REMEDY. Services performed directly by CMS Energy shall
be performed in a careful and competent manner by properly trained and skilled
personnel. CMS Energy HAS NOT MADE AND DOES NOT HEREBY MAKE ANY OTHER
WARRANTIES, EXPRESS, IMPLIED OR STATUTORY AS TO THE SERVICES PERFORMED,
INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR
ANY PURPOSE. In the event any service performed directly by CMS Energy fails
to conform to the above warranty, CMS Energy will re-perform said service at
its expense if CMS NOMECO gives CMS Energy notice of such non-conformance
within one (1) year after performance of the non-conforming service. As to
services performed by subcontractors and vendors, CMS Energy shall on the
request of CMS NOMECO assign to CMS NOMECO any assignable warranties obtained
by CMS Energy. The foregoing states CMS NOMECO's sole and exclusive remedies
hereunder.
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9. LIMITATION ON LIABILITY. Notwithstanding any other provision of this
Agreement, in no event shall CMS Energy's liability to CMS NOMECO under this
Agreement exceed the compensation paid by CMS NOMECO to CMS Energy for that
portion of the services giving rise to the claim and in no event shall the
total of all such liabilities of CMS Energy exceed the total dollar amount paid
to CMS Energy under this Agreement. Further, in no event shall CMS Energy be
liable for any special, indirect, incidental or consequential damages of any
nature on account of this Agreement.
10. CHANGES TO AGREEMENT; ASSIGNMENT AND SUBCONTRACTING. The terms of
this Agreement shall not be changed, superseded or supplemented except in
writing signed by an officer of each party. This Agreement shall not be
assigned or any part thereof subcontracted by CMS Energy without CMS NOMECO's
previous written consent. Any attempted assignment without such written
consent shall be void and CMS NOMECO may refuse to permit the performance of
any unauthorized subcontract. In case any such subcontracting is approved, the
subcontract shall be in writing and shall be fully executed prior to the
commencement of the services involved. If required by CMS NOMECO to do so, CMS
Energy shall promptly furnish CMS NOMECO with copies of each executed
subcontract. Any professional engineering services to be provided under this
Agreement shall be performed by an entity or individual qualified to practice
professional engineering in any jurisdiction or jurisdictions in which such
qualification is required in order for the services to be provided.
11. AUDITING OF CMS ENERGY'S ACCOUNT AND REFUNDS. CMS Energy shall make
and keep, as the same accrue, full and complete records and books of account of
its costs, expenses, man-hours and equipment hours relating to the services
hereunder in accordance with generally accepted accounting practices and CMS
Energy's record retention policy in effect for such records whenever, by the
terms of this Agreement, CMS Energy's compensation shall be based wholly or
partially on such costs, expenses, man-hours or equipment hours. When relevant
to determining CMS Energy's compensation hereunder, said records and books of
accounts shall be open to examination during regular business hours by CMS
NOMECO or its agents for the purpose of inspecting, auditing, verifying or
copying the same or making extracts therefrom. CMS NOMECO's payment of
invoices hereunder shall not constitute acceptance of the accuracy thereof.
Amounts paid with respect to any ISR shall be subject to audit in accordance
with this section for one (1) year after the making of the last payment under
the ISR. Whenever an audit of CMS Energy's records shows that CMS NOMECO is
entitled to a refund or CMS Energy is entitled to additional payment, CMS
Energy or CMS NOMECO, as the case may be, shall promptly make said refund or
additional payment with interest, compounded annually, at the prime rate
established by the National Bank of Detroit from time to time or at the highest
rate permitted by law, whichever is less, from the date the erroneous payment
was made to CMS Energy. Each party shall bear its own costs in connection with
any such audit and billing error correction.
12. TERMINATION. Notwithstanding anything in this Agreement to the
contrary, should CMS NOMECO for any reason desire to suspend or stop the
services under any ISR hereunder at any time before the services have been
completed, CMS Energy shall stop performing the services upon notice from CMS
NOMECO. Any such termination shall be without prejudice to any other rights or
remedies of CMS NOMECO for any breach of this Agreement by CMS
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Energy. CMS Energy shall, upon the effective date of such notice of
termination, if requested by CMS NOMECO, immediately cease performance of the
services and remove its employees, representatives, tools, equipment and other
property from CMS NOMECO's premises. If CMS Energy fails to effect such
removal within a reasonable time, CMS NOMECO may do so at CMS Energy's expense.
In the event of such termination, payment for all services properly performed
through the date of such termination shall be made in accordance with the rates
and charges set forth in the applicable ISR, subject to proper deductions for
defective services, damages or costs recoverable under this Agreement by CMS
NOMECO by reason of any default, breach or failure to perform by CMS Energy.
Upon any termination pursuant to this section, CMS NOMECO shall be released
from all further obligations under any ISR so terminated except for payment as
provided for in this section and such liability or other obligations as have
accrued as of the time of termination.
13. NOTICES AND OTHER COMMUNICATIONS. Whenever notices, invoices,
payments, or other communications are required or permitted hereunder, the same
may be given, made or delivered by mail address as follows:
CMS NOMECO Oil & Gas Co. CMS Energy Corporation
Xxx Xxxxxxx Xxxxxx Xxxxxxxx Xxxxx Xxxxx, Xxxxx 0000
P. O. Box 1150 000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000 Xxxxxxxx, XX 00000
Attention: Corporate Secretary Attention: Treasury Dept.
(for payments)
General Accounting
(for all other notices)
or to such other address as the addressee shall have specified in writing.
14. OWNERSHIP AND CONFIDENTIALITY. "Confidential Information" shall
mean (i) all documents, records, data and other information furnished to CMS
Energy in any form in connection with the performance of the services
contemplated hereunder and any copies thereof, and (ii) all documents, records,
data and other work product produced by CMS Energy for CMS NOMECO in
performance of the services contemplated hereunder and copies thereof.
Confidential Information is, and shall continue to be, the property of CMS
NOMECO. CMS Energy shall, to the extent permitted by law, upon written request
from CMS NOMECO, immediately deliver to CMS NOMECO or destroy, at CMS NOMECO's
option, all Confidential Information. CMS Energy shall not disclose any
Confidential Information or the content thereof to any party except those CMS
Energy employees or agents who need to have access to such Confidential
Information unless ordered by court, administrative agency or other
governmental body having jurisdiction. If CMS Energy becomes aware that any
party is attempting to obtain any such order, CMS Energy shall immediately
notify the following person:
General Counsel
CMS NOMECO Oil & Gas. Co.
Xxx Xxxxxxx Xxxxxx
X. X. Xxx 0000
Xxxxxxx, Xxxxxxxx 00000
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or such other person as CMS NOMECO may have designated in writing.
CMS Energy acknowledges that disclosure of Confidential Information in
violation of this Agreement may cause CMS NOMECO irreparable damage and hereby
consents to the issuance of an injunction by any court of competent
jurisdiction prohibiting any disclosure of Confidential Information in
violation of this Agreement. Such right to injunctive relief is in addition to
all other remedies available to CMS NOMECO at law or in equity. CMS Energy
shall inform all employees who have access to Confidential Information of the
obligations referred to above and require their compliance with the provisions
of this Agreement.
15. GOVERNING LAW. This Agreement shall be deemed to be a Michigan
contract and shall be construed in accordance with and governed by the laws of
the State of Michigan.
16. HEADINGS. The section headings in the Agreement are included for
reference only. They shall not affect the interpretation and construction of
this Agreement.
17. ENTIRE AGREEMENT. With respect to the subject matter hereof, this
Agreement supersedes all previous agreements, representations, understandings
and negotiations, either written or oral, between the parties hereto or their
representatives, and constitutes the entire agreement between the parties.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement
as of the day and year first written above.
CMS NOMECO OIL & GAS CO. CMS ENERGY CORPORATION
By:_________________________ By:______________________
Title:______________________ Title:___________________
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