Agreement for the Transfer of Assets
This Agreement is entered into effective the 1st day of January,
1996, between Questar Pipeline Company, 00 Xxxxx Xxxxx Xxxxxx, Xxxx Xxxx
Xxxx, Xxxx 00000 (Questar Pipeline), and Questar Gas Management Company,
00 Xxxxx Xxxxx Xxxxxx, Xxxx Xxxx Xxxx, Xxxx 00000 (QGM). Questar
Pipeline and QGM are collectively referred to as the "Parties."
The Parties Represent as Follows:
A. Questar Pipeline is the sole owner of various gathering systems
and facilities, a few of which have been certificated by the Federal
Energy Regulatory Commission (FERC) under section 7(c) of the Natural Gas Act
(NGA). Also, the FERC generally exercises jurisdiction over the rates
of gathering services performed by interstate pipelines such as Questar
Pipeline. The gathering systems and facilities consist of gathering
laterals, field compressors, meters, dehydration equipment, regulators,
valves and related equipment, the rights of way, easements and licenses
upon which these gathering systems and facilities are located, and
various operating agreements, gathering agreements and service
agreements, all collectively referred to in this Agreement as the
"Assets." The Assets are located in the states of Colorado, Utah and
Wyoming.
B. QGM is a wholly owned subsidiary of Questar Pipeline. It is a
Utah corporation engaged in business activities not regulated by the
FERC.
C. Separation of FERC-jurisdictional and non-jurisdictional
business activities will result in efficiencies of operation that will
enable QGM to be more competitive in the gas-gathering and the
gas-processing businesses. Questar Pipeline is filing an application
with the FERC to obtain approval to abandon the certificated
jurisdictional Assets by transfer to QGM. Questar Pipeline will also
make appropriate filings with FERC under NGA section 4, seeking authorization
to terminate all gathering services. Finally, QGM will seek a
declaratory order from the FERC requesting that all of the Assets,
operations and services are declared to be exempt from the FERC's
jurisdiction under NGA sections 1(b), 2, 4 and 5.
D. The Parties desire to enter into this Agreement to transfer
ownership of the Assets in a manner that exempts QGM from FERC
jurisdiction under section 1(b) of the NGA.
Therefore, the Parties Agree as Follows:
1. Assets to be Transferred. In consideration of QGM's agreement
to operate, maintain and assume all liabilities related to the Assets,
Questar Pipeline agrees to transfer to QGM all of its right, title and
interest to the Assets described on Attachment A, a list of gathering
areas; Attachment B, a list of laterals; and Attachment C, a list of all
contracts. At the time of closing, an assignment of all Assets will be
provided to QGM on an assignment form similar to Attachment D.
Attachments A through C may be changed from time to time to add or
delete Assets.
2. Closing. Subject to receipt of all necessary FERC
authorizations referred to in section 5A, Questar Pipeline shall transfer the
Assets to QGM as an internal realignment of assets between a parent and
a subsidiary. The Assets shall be valued at the net-book value as of
January 1, 1996. As soon as practicable after receipt of acceptable
FERC authority, the Parties will set a mutually agreeable closing date.
Questar Pipeline will provide QGM with executed assignment documents to
complete the transfer of the Assets. Subject to compatible FERC
approval, the effective date of the transfer will be January 1, 1996,
regardless of the actual date of closing.
3. Title. Questar Pipeline represents that it is the lawful owner
of the Assets to be transferred under this Agreement and that the Assets
to be transferred are free and clear of all liens and encumbrances.
4. Inspection; Representations and Warranties. QGM represents
that it has inspected the Assets that are above ground, has reviewed the
maintenance records of the pipelines and other below-ground facilities
and is familiar with the condition of the Assets to be transferred.
Except as to the representations and warranties provided in section 3, Questar
Pipeline makes no representations or warranties whatsoever. All Assets
are transferred in an "as is" condition and Questar Pipeline expressly
excludes all warranties (except manufacturer's warranties) regarding the
Assets, including without limitation, warranties as to merchantability
and fitness for particular purpose, either express or implied.
5. Approvals.
A. FERC. Most of the Assets to be transferred by Questar
Pipeline to QGM are gathering facilities that have not been certificated
by the FERC; however, a small percentage of the Assets are subject to
certificates issued by the FERC. QGM will file a request for a
declaratory order with the FERC, and Questar Pipeline must file an
abandonment application under NGA section 7(b) for authorization to abandon
the certificated gathering facilities by transfer to QGM. Further,
subsequent to the FERC issuing orders in the abandonment and declaratory
order dockets, Questar Pipeline must file under NGA section 4 for
authorization to terminate gathering services provided through its
facilities. Questar Pipeline's ability to transfer the Assets and QGM's
ability to accept the Assets are conditioned upon each Party receiving,
in its sole discretion, acceptable authorizations from the FERC.
B. Board of Directors. The transfer of Assets is conditioned
on the satisfactory written evidence of the authorization and approval
of the transfer as provided for by this Agreement by the boards of
directors of Questar Pipeline and QGM.
6. Acceptance of Gas into Questar Pipeline's System. After
transfer of the Assets to QGM, Questar Pipeline will take no
unreasonable action or make no unreasonable change to its current
operating practices at any existing or future receipt point between its
facilities and the gathering facilities acquired by QGM that would deny
the receipt of gas tendered by QGM for transportation on Questar
Pipeline's system.
7. Taxes. Real and personal property taxes on the Assets shall be
paid by Questar Pipeline until December 31, 1995. Commencing January 1,
1996, all taxes on the Assets will be paid by QGM, regardless of the
closing date.
8. Additional Documents. The Parties agree to execute additional
documents that may be required after closing to accomplish the transfer
of Assets contemplated by this Agreement.
9. Successors and Assigns. This Agreement shall be binding upon
the Parties and their successors and assigns.
10. Applicable Law. This Agreement shall be interpreted in
accordance with the laws of the state of Utah.
11. Waiver. No waiver by a Party of any one or more events of
default by the other Party in the performance of any provision of this
Agreement shall operate or be construed as a waiver of any future
default or defaults, whether of a like or different character.
12. Entire Agreement; Amendments. This Agreement is the entire
agreement between the Parties. No prior representations, if any, are
being relied upon by QGM or Questar Pipeline, except as contained in
this Agreement. All amendments to this Agreement shall be in writing.
This Agreement is entered into as of the date first set forth above
by the authorized representatives of the Parties whose signatures are
set forth below.
Questar Pipeline Company
ATTEST:
s/s Xxxx X. Xxxxxxx By s/s R. D. Cash
Xxxx X. Xxxxxxx, Assistant R. D. Cash, Chairman of the Board
Secretary
Questar Gas Management Company
ATTEST:
/s/Xxxx X. Xxxxxxx By /s/X. X. Xxxxxxxxxxx
Xxxx X. Xxxxxxx, Assistant X. X. Xxxxxxxxxxx, Vice President
Secretary
Amendment Number One to the
Agreement for the Transfer of Assets
Between
Questar Pipeline Company
and
Questar Gas Management Company
Dated January 1, 1996
This Amendment is effective the 1st day of March, 1996, between
Questar Pipeline Company, 00 Xxxxx Xxxxx Xxxxxx, Xxxx Xxxx Xxxx, Xxxx
00000 (Questar Pipeline), and Questar Gas Management Company, 00 Xxxxx
Xxxxx Xxxxxx, Xxxx Xxxx Xxxx, Xxxx 00000 (QGM). Questar Pipeline and
QGM are collectively referred to as the Parties.
The Parties Represent As Follows:
A. Questar Pipeline and QGM entered into an agreement effective
January 1, 1996, for the transfer of various gathering systems and
related facilities from Questar Pipeline to QGM (Agreement).
B. The Parties have determined that it is in their mutual interest
to amend the Agreement.
Therefore, The Parties Agree As Follows:
1. Due to a delay in the receipt of Federal Energy Regulatory
Commission approval, the effective date of the transfer is March 1,
1996, instead of January 1, 1996. The date "January 1, 1996" in line
one of the opening paragraph and in lines four and eight of paragraph
two is deleted and replaced with "March 1, 1996."
2. Except as expressly amended, the Agreement remains in full
force and effect.
This Amendment is executed the 19th day of March, 1997, by the
authorized representatives of the Parties whose signatures are set forth
below.
Questar Pipeline Company
ATTEST:
/s/Xxxxxx X. Xxxxxxxx By /s/X. X. Xxxx
Xxxxxx X. Xxxxxxxx, Secretary X. X. Xxxx, President
and Chief Executive Officer
Questar Gas Management Company
ATTEST:
/s/Xxxxxx X. Xxxxxxxx By X. X. Xxxxxxx
Xxxxxx X. Xxxxxxxx, Secretary X. X. Xxxxxxx, President
and Chief Executive Officer
