EXHIBIT 10.27
AREA OF MUTUAL INTEREST AGREEMENT
BETWEEN
PIPELINE & PROCESSING GROUP, INC.,
OEDC PARTNERS, L.P.
AND
PANENERGY FIELD SERVICES, INC.
DATED AS OF NOVEMBER 6, 1996
AREA OF MUTUAL INTEREST AGREEMENT
THIS AREA OF MUTUAL INTEREST AGREEMENT (hereinafter "AGREEMENT") is
made and entered this 6th day of November, 1996, by and between PIPELINE &
PROCESSING GROUP, INC., a Michigan corporation (hereinafter "P&PG"), OEDC
PARTNERS, L.P., a Texas limited partnership, the general partner of which is
OEDC, Inc. (hereinafter "OEDC"), and PANENERGY FIELD SERVICES, INC., a Colorado
corporation, (hereinafter "PFS"). All of such parties are hereinafter referred
to collectively as the "PARTIES" or individually as a "PARTY".
W I T N E S S E T H:
WHEREAS, the Parties desire to create an area of cooperation with
respect to certain projects located within certain counties in Mississippi,
Alabama and Florida, as hereinafter provided.
NOW, THEREFORE, in consideration of the mutual promises set forth
herein, the receipt and sufficiency of which is hereby acknowledged by the
Parties, the Parties agree as follows:
ARTICLE I
TERM
1.1 TERM. This Agreement shall remain in force and effect until the tenth
(10th) anniversary date hereof, unless terminated at an earlier time by mutual
agreement of all the Parties.
ARTICLE II
AMI OPERATIONS
2.1 AMI OPERATIONS. An AMI Operation shall mean constructing, owning,
acquiring or operating, or providing financing for, (a) any processing plants
("PROCESSING FACILITY") to be located in Jackson or Xxxxxxxx Counties,
Mississippi, Xxxxxxx County, Alabama, or Escambia County, Florida, for the
removal of natural gas liquids, and to the extent applicable, condensate
(collectively "LIQUIDS"), from natural gas, including, but not limited to,
activities such as natural gas compression, treating and dehydration at a
Processing Facility, separation, fractionation, storage, transportation and
marketing of Liquids extracted at a Processing Facility, and purchase and
transportation of natural gas as necessary for the efficient operation of a
Processing Facility, or (b) a power generation facility (a "POWER PLANT") to be
located in Mobile County, Alabama, for the generation of power to the initial
processing plant constructed pursuant to that certain General Partnership
Agreement made and entered into on November 6, 1996, by and among MCNIC
MOBILE BAY PROCESSING COMPANY, a Michigan corporation, OEDC PROCESSING, L.P., a
Texas limited partnership, the general partner of which is OEDC, INC., and
PANENERGY MOBILE BAY PROCESSING COMPANY, a Delaware corporation (the
"PARTNERSHIP AGREEMENT"), with all of the preceding described in (a) and (b)
collectively referred to as "AMI OPERATIONS").
2.2 PARTICIPATION IN AMI OPERATIONS.
(a) None of the Parties, whether directly or indirectly,
through any ownership or other interest, whether through Affiliates or
otherwise, shall participate in any AMI Operations without complying with
the provisions of this SECTION 2.2. In the event any Party participates in
an AMI Operation, whether directly or indirectly, through any ownership or
other interest, whether through Affiliates or otherwise ("ACQUIRING
PARTY") such Acquiring Party shall offer, or cause to be offered, to each
of the other Parties (each a "NON-ACQUIRING PARTY") the opportunity to
participate in such AMI Operation on the same terms and conditions
applicable to such Acquiring Party and for a portion of the Acquiring
Party's interest equal to the Ownership Interest allocated to such
Non-Acquiring Party in ARTICLE III, or such lesser interest as elected by
such Non-Acquiring Party.
(b) An Acquiring Party who participates in an AMI Operation
shall provide, subject to confidentiality or contractual restrictions, to
the Non-Acquiring Parties written notice of such participation together
with all relevant information pertaining to the AMI Operation in the
possession of the Acquiring Party (or the person through which it is
participating in such AMI Operation). If the Acquiring Party has a right
to make available such information to the Non-Acquiring Parties, each
Non-Acquiring Party prior to its receipt of such information shall execute
a confidentiality agreement containing the same terms as the
confidentiality agreement to which the Acquiring Party is bound, unless
such Non-Acquiring Party elects not to receive such information. If the
Acquiring Party does not have the right to provide the relevant
information with respect to the AMI Operation to the Non-Acquiring Parties
prior to the time the Acquiring Party completes the transaction pursuant
to which it would participate in the AMI Operation, then the obligations
of the Acquiring Party under SECTION 2.2 to provide the Non-Acquiring
Parties the opportunity to participate in such AMI Operation shall be
deferred until such time as the Acquiring Party closes such transaction,
at which time the Acquiring Party shall comply with the provisions of this
SECTION 2.2. Each of the Non-Acquiring Parties shall have sixty (60) days
in
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the case of an acquisition, and one hundred twenty (120) in the case of
construction, to notify the Acquiring Party in writing of its election to
participate in the AMI Operation. Each such notice shall stipulate whether
the Non-Acquiring Party desires to limit its participation to the
Ownership Interest allocated to it in SECTION 3.1 or a lesser interest,
and state the portion it would accept of the Ownership Interest of any
Parties who elect not to participate (for their full allocated share or
part thereof) in such AMI Operation to which it is entitled pursuant to
SECTION 3.1. If the terms of an acquisition require a lesser period of
time for the submission of an offer, the sixty (60) day response period
shall be reduced to a period ending three (3) days before the submission
deadline as provided by the terms as such acquisition. Failure of a
Non-Acquiring Party to respond timely shall constitute an election by such
Non-Acquiring Party not to participate in the AMI Operation. Failure to
specify in a timely response the share of the Ownership Interest of a
Party who elects not to participate (for their full allocated share or
part hereof) the Non-Acquiring Party elects to acquire shall be an
election to limit participation to such Non-Acquiring Parties' Ownership
Interest or such lesser interest for which it elected to participate.
AMI Operations shall be pursued pursuant to the agreements to
which the Acquiring Party is obligated or, in absence of such agreements,
agreements to form a limited liability company in form and substance
substantially similar to the Partnership Agreement unless all the Parties
otherwise agree. As used in this Agreement, the term "AFFILIATE" shall
mean any person that directly or indirectly, through one or more
intermediaries, controls or is controlled by or is under common control
with any Party. The term "PERSON" shall include, without limitation, an
individual, a corporation, a partnership, an association, a joint stock
company and a trust. The term "CONTROL" (including the terms "CONTROLS",
"CONTROLLED BY" and "UNDER COMMON CONTROL WITH") means (a) with respect to
a corporation, the ownership or other control of securities to which are
attached more than fifty percent (50%) of the voting interest of all
equity securities issued by the corporation, (b) with respect to a
partnership, the ownership of more than fifty percent (50%) interest in
the partnership, and (c) with respect to any other person, the possession,
direct or indirect, of the power to direct or cause the direction of the
management and policies of such person, by contract or otherwise.
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ARTICLE III
OWNERSHIP INTEREST
3.1 OWNERSHIP INTERESTS. Each Party shall have the right to participate
and acquire an interest in AMI Operations (hereinafter an "OWNERSHIP INTEREST")
as follows:
(a) POWER PLANT. If the AMI Operation is the Power Plant, then the
Parties shall have the right to participate in such AMI Operation in the
following proportions:
PFS 42%
P&PG 38%
OEDC 20%
; provided, however, if any Party elects not to participate (for its full
allocated share, or part thereof), then the portion of such Party's
Ownership Interest for which it elects to not participate shall be
allocated among the other Parties as follows: (1) first, to the Party with
the lesser interest up to a maximum amount that would yield such Party and
the other Party who participates in the AMI Operations the same Ownership
Interest in the AMI Operation, and (2) the remainder, if any, to such
Parties equally.
(b) PROCESSING FACILITY. If the AMI Operation concerns a Processing
Facility, each Party shall have the right to participate in such AMI
Operation for a one-third (a) interest. If any Party elects not to
participate (for its full allocate share, or part thereof), the portion of
such Party's Ownership Interest for which it elects to not participate
shall be allocated among the other Parties equally.
Notwithstanding the foregoing, the Ownership Interest allocated to
OEDC with respect to any AMI Operations relating to a Processing Facility
proposed after the earlier of (1) the termination of the "OPTION PERIOD"
as defined in that certain Option Agreement of even date herewith among
Dauphin Island Gathering Company, L.P., OEDC Processing, L.P., MCNIC
Mobile Bay Processing Company and PanEnergy Mobile Bay Processing Company
(the "OPTION AGREEMENT"), (2) the termination of the "OPTION" (as defined
in the Option Agreement) in accordance with the terms of the Option
Agreement, or (3) the date of the "EXERCISE NOTICE" (as defined in the
Option
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Agreement), shall be the same percentage interest that OEDC Processing,
L.P. owns under the terms of the Partnership Agreement.
ARTICLE IV
MISCELLANEOUS
4.1 CONTROLLING LAW. THIS AGREEMENT SHALL BE GOVERNED, INTERPRETED
AND CONSTRUED UNDER THE STATUTORY AND COMMON LAW OF THE STATE OF
TEXAS, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
4.2 NOTICES. Unless herein provided to the contrary, any notice called for
in this Agreement shall be in writing and shall be given by personal delivery,
or by mail, overnight courier or facsimile with all postage and charges prepaid
to the other Parties affected by such notice at the place designated. Notices
shall be considered as duly delivered upon actual receipt by the addressee.
Unless changed by notice in writing to all other Parties, the addresses of the
Parties are as follows:
P&PG: Pipeline & Processing Group, Inc.
000 X. Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Vice President
OEDC: OEDC Partners, L.P.
0000 Xxxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxxxxxx, Xxxxx 00000
Attention: Vice President of OEDC, Inc.
PFS: PanEnergy Field Services, Inc.
0000 Xxxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Vice President, Offshore
4.3 ASSIGNABILITY. The rights and obligations of the Parties, in and under
this Agreement shall not be assigned, sold, transferred, conveyed, made subject
to a lien or security interest or otherwise encumbered (collectively, a
"TRANSFER") without the prior written consent of all the other Parties. Any
Transfer in violation of this provision shall be null and void.
4.4 DEFAULT. No waiver of any default shall be construed as a waiver of
any future default, whether of a like or a different nature.
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4.5 SEVERABILITY. If and to the extent that any court or governmental
agency of competent jurisdiction holds any part or provision of this Agreement
to be invalid or unenforceable, the Parties shall agree upon an equitable
adjustment of the provisions of this Agreement with a view toward effecting its
purpose. Such holding shall in no way affect the validity or effectiveness of
the other provisions of this Agreement, which shall remain in full force and
effect.
4.6 REMEDIES. Each right and remedy in this Agreement is cumulative and
in addition to other rights or remedies under this Agreement or any applicable
law.
4.7 SPECIAL AND CONSEQUENTIAL DAMAGES. None of the Parties, shall be
liable to the other for any exemplary or punitive damages, or for loss of
profits, or consequential losses, arising in connection with this Agreement.
4.8 AMENDMENTS. This Agreement may only be amended, supplemented or
modified by written agreement duly executed by all Parties.
4.9 COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
but one and the same instrument.
4.10 ENTIRE AGREEMENT/CONFLICTS. This Agreement and the other documents
contemplated hereunder constitute the full and complete agreement of the Parties
hereto with respect to the subject matter hereof.
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement
as of the day and year first written.
PIPELINE & PROCESSING GROUP, INC.
By: /s/ XXXXXX X. XXXXXXX
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
OEDC PARTNERS, L.P.
By: /s/ R. XXXXX XXXXXXXX
Name: R. Xxxxx Xxxxxxxx
Title: Vice President
PANENERGY FIELD SERVICES, INC.
By: /s/ X. X. XXXXX
Name: X. X. Xxxxx
Title: Vice President
