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EXHIBIT 10.41
ADMINISTRATIVE SERVICES AGREEMENT
THIS ADMINISTRATIVE SERVICES AGREEMENT (this "Agreement") is entered
into effective as of July 1, 2001 and is by and between EOTT ENERGY CORP., a
Delaware corporation (the "Administrator") and EOTT ENERGY GENERAL PARTNER,
L.L.C., a Delaware limited liability company (the "OLP General Partner") and the
general partner of EOTT Energy Liquids, L.P. (the "Energy OLP").
RECITALS:
The OLP General Partner has been vested with all management powers
over the business and affairs of the Energy OLP.
The OLP General Partner proposes to contract with the Administrator
for the provision of services in connection with the day-to-day business and
affairs of the Energy OLP and any other Person that may become an OLP in the
future.
The Administrator and the OLP General Partner desire by their
execution of this Agreement to evidence their understanding with respect to the
terms and conditions upon which the Administrator and its Affiliates (as defined
below) will provide services on behalf of the OLP General Partner to any OLP in
connection with the day-to-day business and affairs of such OLP.
NOW, THEREFORE, in consideration of the premises and the covenants,
conditions, and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS. (a) Capitalized terms used herein but not defined
elsewhere shall have the following meanings.
(b) As used in this Agreement, the following terms shall have the
respective meanings set forth below:
"Affiliate" means, with respect to any Person, any other Person that
directly or indirectly controls, is controlled by or is under common control
with, the Person in question; provided however, that for the purposes of this
Agreement, the OLP General Partner and any Person controlled by the OLP General
Partner or any OLP shall be deemed not to be Affiliates of the Administrator.
"OLP" shall mean the Energy OLP and any other partnership or other
entity of which the OLP General Partner becomes the general partner, managing
general partner or manager or for which it becomes responsible for performing
similar management functions.
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ARTICLE II
SERVICES
2.1 TERM; SERVICES. In exchange for the reimbursement described in
Section 3.1, the Administrator agrees to provide the OLP General Partner with
the administrative services listed below and such additional services as the OLP
General Partner may establish and authorize the Administrator to provide from
time to time (the services to be provided by the Administrator being herein
referred to as the "Services"):
(i) The day-to-day supervision, administrative liaison and related
services, including, without limitation legal, accounting,
planning support, budgeting support, technical, insurance
administration, treasury services, tax and external audit
services required in connection with the business and affairs of
the OLP General Partner.
(ii) The preparation for signature by an authorized officer of all
documents and instruments required to be signed by or otherwise
appropriate for signature by the OLP General Partner.
(iii) The maintenance of capital accounts for each owner of any OLP
that is required to maintain capital accounts.
(iv) The calculation of Available Cash of any OLP that is required to
calculate Available Cash and the making of all distributions of
cash authorized by the OLP General Partner or otherwise required
to be made.
(v) The taking or provision of custody of funds, notes, drafts,
acceptances, commercial paper and other securities belonging to
any OLP; maintain bank accounts in one or more banking
institutions; deposit funds of the OLP General Partner or any OLP
in its respective accounts and disburse funds therefrom, in each
case as necessary to satisfy the obligations of each of them in
connection with the conduct of its business and affairs; invest
available funds of the OLP General Partner or any OLP; and keep
appropriate records in connection with all the above
transactions.
(vi) The maintenance of all books and records relating to the business
and affairs of the OLP General Partner and any OLP.
(vii) The preparation and submission each year of an estimate of
distributable cash flows, operating expenses, equity earnings,
investment income, interest expense, direct charges, equity
contributions and capital expenditures (and a financing plan
relating to such contributions or expenditures, if necessary) of
any OLP that the Administrator anticipates for the ensuing
calendar year. Except as the OLP General
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Partner may otherwise direct, any budgets approved by the OLP
General Partner shall constitute authorization of the
Administrator to incur the expenditures contained therein on
behalf of the OLP General Partner, the OLP or a Partnership
Entity.
(viii) The preparation of all tax returns and the administration of the
tax matters relating to any OLP
(ix) The transfer of interests or issuance of new interests in any OLP
and the admission of substitute or new partners, members or
shareholders, as authorized by the OLP General Partner.
(x) The conduct of such internal audits as may be requested from time
to time by the OLP General Partner.
The above Services will be performed in accordance with such policies
and directives as may be issued from time to time by the OLP General Partner.
2.2 AFFILIATES. At its election, the Administrator may cause one or
more of its Affiliates or third-party contractors to provide the Services:
provided, however, that the Administrator shall remain responsible for the
provision of the Services in accordance with this Agreement.
ARTICLE III
FINANCIAL, ACCOUNTING AND BILLING PRACTICES
3.1 ACCOUNTING AND COMPENSATION. (a) The Administrator shall keep a
full and complete account of all costs, expenses and expenditures incurred by it
in connection with the provision of Services hereunder in the manner set forth
in the Accounting Procedure set forth on Exhibit A hereto (the "Accounting
Procedure").
(b) As compensation for the provision of the Services by the
Administrator, the OLP General Partner agrees to reimburse the Administrator for
all reasonable and proper costs, expenses and expenditures incurred by the
Administrator or its Affiliates in connection with the provision of Services to
such entity at the rate and in the manner set forth in the Accounting Procedure
(the aggregate amount of all such costs and expenses being herein referred to as
the "Reimbursement Amount"); provided, however, that costs incurred by the
Administrator under Section 4.3(d) shall not be reimbursed by the OLP General
Partner. In addition, the OLP General Partner shall pay all sales, use, excise,
value added or similar taxes, if any, that may be applicable from time to time
in respect of the Services provided to it by the Administrator or its
Affiliates. It is the intent of the parties that the Administrator shall carry
out its Services hereunder on a fully reimbursed basis without profit or loss.
To the extent that a deviation from this standard occurs, appropriate
adjustments will promptly be made.
(c) To the extent that the Administrator enters into activities other
than the discharge of its responsibilities under this Agreement, the
Administrator shall separately account for all such
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costs, expenses and expenditures, and the OLP General Partner shall not be
billed for such costs, expenses or expenditures.
(b) 3.2 INVOICES. (a) The Administrator shall xxxx the OLP General
Partner for its Services at such times as it deems appropriate, and the OLP
General Partner shall promptly transmit payment for all bills presented.
(c) Payment of any such bills shall not prejudice the right of the OLP
General Partner to protest or question the correctness thereto; provided,
however, all bills and statements rendered to the OLP General Partner by the
Administrator during any calendar year shall conclusively be presumed to be true
and correct after 24 months following the end of any such calendar year, unless
prior to the end of said 24-month period the OLP General Partner takes written
exception thereto and makes claim on the Administrator for adjustment. No
adjustment favorable to the Administrator shall be made unless written notice of
such adjustment is received by the OLP General Partner within the same
prescribed period.
3.3 DISPUTES; DEFAULT. The OLP General Partner may, within the time
period provided in Section 3.4, take written exception to any xxxx or statement
rendered by the Administrator for any expenditure or any part hereof, on the
grounds that the same was not a reasonable, authorized, and proper cost incurred
by the Administrator in connection with the provision of the Services. The OLP
General Partner shall nevertheless pay in full when due the amount of all
statements submitted by the Administrator. Such payment shall not be deemed a
waiver of the right of the OLP General Partner to recoup any contested portion
of any xxxx or statement. If, however, the amount as to which such written
exception is taken or any part thereof is ultimately determined by the OLP
General Partner not to be a reasonable, authorized, and proper expense incurred
by the Administrator in connection with the provision of the Services, such
amount or portion thereof (as the case may be) shall be refunded by the
Administrator to the OLP General Partner together with interest thereon at a
rate (which in no event shall be higher than the maximum rate permitted by
applicable law) equal to the prime rate charged by Citibank, N.A. in New York,
New York from time to time to responsible commercial and industrial borrowers
during the period from the date of payment by the OLP General Partner to the
date of refund by the Administrator.
3.4 AUDIT. The OLP General Partner, after fifteen (15) days' notice
in writing to the Administrator, shall have the right during normal business
hours to audit, at its own expense or at the expense of any OLP, all books and
records of the Administrator. Such audits shall not be commenced more often than
twice each calendar year. The OLP General Partner shall have two (2) years after
the close of a calendar year in which to make an audit of the Administrator's
records for such calendar year. Absent fraud or intentional concealment or
misrepresentation by the Administrator or its employees, the Administrator shall
neither be required nor permitted to adjust any item unless a claim therefore is
presented or adjustment is initiated within two (2) year after the close of the
calendar year in which the statement therefor is rendered, and in the absence of
such timely claims or adjustments, the bills and statements rendered shall be
conclusively established as correct. The Administrator shall obtain similar
rights from contractors, consultants and suppliers engaged to perform any of the
Services on behalf of the Administrator.
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ARTICLE IV
REPORTING, RECORDS AND RESPONSIBILITIES
4.1 REPORTS TO COMMITTEES. The Administrator shall make reports to
and consult with any committee established from time to time by the OLP General
Partner or an OLP in the form and at the times requested by such committee.
4.2 MAINTENANCE OF RECORDS; ACCESS TO INFORMATION AND MATERIALS. (a)
The Administrator shall maintain accurate books and records in accordance with
generally accepted accounting principles and practices covering all of the
Administrator's actions under this Agreement.
(b) The Administrator shall have access to any records, information or
other input from the OLP General Partner and any OLP that is necessary for the
Administrator to perform the Services. If the OLP General Partner or an OLP
fails to make available or supply such information or input and such failure
renders the Administrator's performance of any Services unreasonably difficult,
the Administrator, upon reasonable notice to the applicable party, may refuse to
perform such Services.
4.3 WARRANTY; LIMITATION OF LIABILITY; NATURE OF RELATIONSHIP;
INDEMNITY. (a) The Administrator represents that it will discharge its duties
hereunder in good faith and with reasonable diligence. EXCEPT AS SET FORTH IN
THE IMMEDIATELY PRECEDING SENTENCE, THE ADMINISTRATOR MAKES NO (AND HEREBY
DISCLAIMS AND NEGATES ANY AND ALL) WARRANTIES OR REPRESENTATIONS WHATSOEVER,
EXPRESS OR IMPLIED, WITH RESPECT TO THE SERVICES. IN NO EVENT SHALL THE
ADMINISTRATOR OR ITS AFFILIATES BE LIABLE TO THE OLP GENERAL PARTNER, ANY OLP OR
ANY OTHER PERSON FOR ANY INCIDENTAL, CONSEQUENTIAL, OR SPECIAL DAMAGES RESULTING
FROM ANY ERROR IN THE PERFORMANCE OF THE SERVICES, REGARDLESS OF WHETHER THE
ADMINISTRATOR, ITS AFFILATES, OR OTHERS MAY BE WHOLLY, CONCURRENTLY, PARTIALLY,
OR SOLELY NEGLIGENT OR OTHERWISE AT FAULT; PROVIDED HOWEVER, THAT THE
ADMINISTRATOR SHALL BE LIABLE FOR ANY DAMAGES ARISING OUT OF ITS GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT.
(b) The relationship of the Administrator and its Affiliates with the
OLP General Partner established under this Agreement will be that of an
independent contractor, and in no event shall any party hereto be deemed a
partner, co-venturer or agent of the other party hereto.
(c) The OLP General Partner agrees, with respect to the Services
provided to such entity hereunder, to indemnity, defend and hold harmless the
Administrator and its Affiliates, and their respective employees, officers,
directors, representatives and agents, from and against all claims, losses,
costs, damages and expenses (including. without limitation, attorneys' fees and
expenses), penalties and liabilities (collectively, "Liabilities") arising out
of the acts (or failure to act) by any such persons or entities in connector
with the performance by such persons or entities of such Services, REGARDLESS OF
WHETHER THE ADMINISTRATOR OR SUCH OTHER PERSONS OR ENTITIES MAY BE WHOLLY,
CONCURRENTLY,
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PARTIALLY OR SOLELY NEGLIGENT OR OTHERWISE AT FAULT IN CONNECTION THEREWITH;
PROVIDED, HOWEVER, THAT THE ADMINISTRATOR SHALL NOT BE INDEMNIFIED FOR THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF THE ADMINISTRATOR OR ITS AFFILIATES.
(d) The Administrator shall indemnity, defend and hold the OLP General
Partner, any OLP and their respective employees, directors, officers,
representatives and agents harmless from and against all Liabilities arising out
of the performance of this Agreement and resulting from the gross negligence or
willful misconduct of the Administrator or its Affiliates.
4.5 FORCE MAJEURE. The Administrator shall have no obligation to
perform the Services if its failure to do so is caused by or results from any
act of God, governmental action, natural disaster, strike, failure of essential
equipment, or any other cause or circumstance, whether similar or dissimilar to
the foregoing causes or circumstances, beyond the reasonable control of the
Administrator REGARDLESS OF WHETHER THE ADMINISTRATOR MAY BE WHOLLY,
CONCURRENTLY, PARTIALLY OR SOLELY NEGLIGENT OR OTHERWISE AT FAULT IN CONNECTION
WITH SUCH FAILURE TO PERFORM THE SERVICES EXCEPT TO THE EXTENT THAT THE FAILURE
WAS CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE ADMINISTRATOR OR
ITS AFFILIATES.
4.6 CONFIDENTIALITY. Because the information and knowledge gained
during the performance of services hereunder may consist of valuable propriety
information, the misuse or disclosure of which could cause substantial damage to
the OLP General Partner or an OLP, any and all information obtained by the
Administrator in performance of the obligations hereunder shall be held in
strict confidence by the Administrator, its employees or agents except as needed
to comply with the purposes of this Agreement. Any contracts entered into by the
Administrator related to its obligations under this Agreement shall contain a
provision which similarly restricts the use and disclosure of such information,
unless such contract relates to matters that will not involve access by the
contracting party to any confidential information regarding the business of the
OLP General Partner or any OLP.
ARTICLE V
MISCELLANEOUS
5.1 CHOICE OF LAW. This Agreement shall be subject to and governed by
the laws of the State of Texas, excluding any conflicts-of-law rule or principle
that might refer the construction or interpretation of this Agreement to the
laws of another state
5.2 ENTIRE AGREEMENT; SUPERSEDURE. This Agreement constitutes the
entire agreement of the parties relating to the matters contained herein,
superseding all prior contracts or agreements, whether oral or written, relating
to the matters contained herein.
5.4 EFFECT OF WAIVER OR CONSENT. No waiver or consent, express or
implied, by any party to or of any breach or default by any Person in the
performance by such Person of its obligations hereunder shall be deemed or
construed to be a consent or waiver to or of any other breach or default in the
performance by such Person of the same or any other obligations of such
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Person hereunder. Failure on the part of a party to complain of any act of any
Person or to declare any Person in default, irrespective of how long such
failure continues, shall not constitute a waiver by such party of its rights
hereunder until the applicable statute of limitations period has run.
5.5 AMENDMENT AND TERMINATION. This Agreement may be amended from
time to time only by a written amendment signed by the OLP General Partner and
the Administrator. Either the OLP General Partner or the Administrator may
terminate this Agreement at any time upon thirty (30) days' written notice.
5.6 ASSIGNMENT. Except for the right of the Administrator to
cause one or more of its Affiliates to perform certain of the Services, no party
shall have the right to assign its rights or obligations under this Agreement
without the consent of the other party hereto.
5.7 COUNTERPARTS. This Agreement may be executed in any number of
counterparts with the same effect as if all signatory parties had signed the
same document. All counterparts shall be construed together and shall constitute
one and the same instrument.
5.8 SEVERABILITY. If any provision of this Agreement or the
application thereof to any Person or circumstance shall be held invalid or
unenforceable to any extent, the remainder of this Agreement and the application
of such provision to other Persons or circumstances shall not be affected
thereby and shall be enforced to the greatest extent permitted by law.
5.9 GENDER; ARTICLES AND SECTIONS. Whenever the context requires
the gender of all words used in this Agreement shall include the masculine,
feminine and neuter, and the number of all words shall include the singular and
the plural. All references to Article numbers and Section numbers refer to
Articles and Sections of this Agreement.
5.10 FURTHER ASSURANCES. In connection with this Agreement and all
transactions contemplated by this Agreement, each signatory party hereto agrees
to execute and deliver such additional documents and instruments and to perform
such additional acts as may be necessary or appropriate to effectuate, carry out
and perform all of the terms, provisions and conditions of this Agreement and
all such transactions.
5.11 WITHHOLDING OR GRANTING OF CONSENT. Each party may, with respect
to any consent or approval that it is entitled to grant pursuant to this
Agreement, grant or withhold such consent or approval in its sole and
uncontrolled discretion, with or without cause, and subject to such conditions
as it shall deem appropriate.
5.12 LAWS AND REGULATIONS. Notwithstanding any provision of this
Agreement to the contrary, no party hereto shall be required to take any act or
fail to take any act, under this Agreement it the effect thereof would be to
cause such party to be in violation of any applicable law, statute, rule or
regulation.
5.14 NEGATION OF RIGHTS OF LIMITED PARTNERS, ASSIGNEES, AND THIRD
PARTIES. The provisions of this Agreement are enforceable solely by the parties
to this Agreement, and no Limited Partner, Assignee or other Person shall have
the right, separate and apart from the OLP
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General Partner, to enforce any provision of this Agreement or to compel any
party to this Agreement to comply with the terms of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on, and
effective as of, the Closing Date.
EOTT ENERGY CORP.
By: /s/ XXXX X. XXXXX
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Name: Xxxx X. Xxxxx
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Title: Chief Operating Officer
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Address for Notice:
X.X Xxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attention: Chief Operating Officer
Fax No.: (000) 000-0000
EOTT ENERGY GENERAL PARTNER L.L.C.
By: /s/ XXXX X. XXXXX
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Name: Xxxx X. Xxxxx
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Title: Chief Operating Officer
------------------------------------
Address for Notice:
X.X Xxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attention: Chief Operating Officer
Fax No.: (000) 000-0000
Attachment
Exhibit A - Accounting Procedures
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EXHIBIT A
to
ADMINISTRATIVE SERVICES AGREEMENT
ACCOUNTING PROCEDURES
Subject to the limitations hereinafter prescribed and the provisions
of the Administrative Services Agreement (the "Agreement") to which this
Accounting Procedure is an exhibit, the Administrator shall charge the OLP
General Partner for all costs and expenses incurred by the Administrator (except
those costs incurred pursuant to Section 4.3(d) of the Agreement) in connection
with the performance of its duties and responsibilities under the Agreement,
including, but not limited to, the following items:
a. Administrative and General Expense. All administrative and
general expenditures, including salaries and related benefits and
expenses of personnel who render services related to the
administration of the OLP General Partner, including, but not
limited to, Accounting, Administrative, Marketing, Personnel, Legal,
Risk Management, Treasury and Audit, will be charged on the basis of
costs incurred. Such expenditures related to personnel who are not
employed full time in rendering services to the OLP General Partner
under the Agreement shall be allocated to the OLP General Partner in
a fair and reasonable manner.
b. Reimbursable Expenses of Employees. Reasonable personal expenses of
employees whose salaries and wages are chargeable under paragraph a.
above; provided, however, that such expenses shall be reimbursed
only to the extent such expense relates to the provision of the
Services.
c. Services. The cost of contract services and utilities procured from
outside sources.
d. Legal Expenses and Claims. All fees and expenses of outside legal
counsel engaged to handle matters for the OLP General Partner. All
costs and expenses of handling, investigation and settling
litigation or claims at the request of the OLP General Partner,
including, but not limited, to, attorneys' fees, court cost, cost of
investigation or procuring evidence and any judgments paid or
amounts paid in settlement or satisfaction of any such litigation or
claims. The Administrator shall credit the OLP General Partner for
judgments received or amounts received in settlement of any such
litigation.
e. Taxes. All taxes of every kind and nature assessed or levied upon
or incurred in connection with the provision of the Services and
which taxes have been paid by the Administrator for the benefit of
the OLP General Partner, including charges for late payment arising
from extensions of the time for filing which is caused by the OLP
General Partner.
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f. Insurance. Net of any returns, refunds or dividends, all premiums
paid and expenses incurred for insurance carried for the benefit of
the OLP General Partner or an OLP.
g. Permits, Licenses and Bond. Cost of permits, licenses and bond
premiums necessary in the performance of the Administrator's duties
under the Agreement.
h. Rentals. All rentals paid by the Administrator.
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