AMENDED AND RESTATED ADMINISTRATIVE SERVICES AGREEMENT AMONG PRO GP CORP., BREITBURN ENERGY COMPANY L.P. AND BREITBURN MANAGEMENT COMPANY, LLC
Exhibit
10.5
AMENDED
AND RESTATED
AMONG
PRO
GP CORP.,
BREITBURN
ENERGY COMPANY L.P.
AND
BREITBURN
MANAGEMENT COMPANY, LLC
Exhibit
10.5
TABLE
OF
CONTENTS
ARTICLE
I
DEFINITIONS
|
Section
1.1
|
Definitions
|
4
|
|
Section
1.2
|
Construction
|
7
|
|
ARTICLE
II
|
||
|
RETENTION
OF BREITBURN MANAGEMENT; SCOPE OF SERVICES
|
||
|
Section
2.1
|
Retention
of BreitBurn Management
|
8
|
|
Section
2.2
|
Scope
of Services
|
8
|
|
Section
2.3
|
Exclusion
of Services
|
8
|
|
Section
2.4
|
Performance
of Services by Affiliates and Third Parties
|
8
|
|
Section
2.5
|
Intellectual
Property
|
8
|
|
Section
2.6
|
Appointment
of Independent Accounting Firm and Independent Petroleum
Engineer
|
9
|
|
ARTICLE
III
|
||
|
BOOKS,
RECORDS AND REPORTING
|
||
|
Section
3.1
|
Books
and Records
|
9
|
|
Section
3.2
|
Audits
|
9
|
|
Section
13
|
Reports
|
10
|
|
ARTICLE
IV
|
||
|
PAYMENT
AMOUNT
|
||
|
Section
4.1
|
Payment
Amount
|
10
|
|
Section
4.2
|
Payment
of Payment Amount
|
11
|
|
Section
4.3
|
Disputed
Charges
|
12
|
|
Section
4.4
|
Set
Off
|
12
|
|
Section
4.5
|
BreitBurn
Management's Employees
|
12
|
|
Section
4.6
|
Approval
of Expenses
|
13
|
|
ARTICLE
V
|
||
|
FORCE
MAJEURE
|
||
|
Section
5.1
|
Force
Majeure
|
13
|
BREITBURN
ENERGY COMPANY L.P
AMENDED
& RESTATED ADMINISTRATIVE
SERVICES AGREEMENT
|
ARTICLE
VI
|
||
|
ASSIGNMENTS
AND SUBCONTRACTS
|
||
|
Section
6.1
|
Assignments
|
14
|
|
Section
6.2
|
Other
Requirements
|
14
|
|
ARTICLE
VII
|
||
|
TERMINATION
|
||
|
Section
7.1
|
Termination
by the Devco on behalf of the Devco Group
|
15
|
|
Section
7.2
|
Termination
by BreitBurn Management
|
15
|
|
Section
7.3
|
Effect
of Termination
|
15
|
|
ARTICLE
VIII
|
||
|
CONFIDENTIAL
INFORMATION
|
||
|
Section
8.1
|
Nondisclosure
|
16
|
|
Section
8.2
|
Permitted
Disclosure
|
16
|
|
ARTICLE
IX
|
||
|
LIMITATION
OF LIABILITY; INDEMNIFICATION
|
||
|
Section
9.1
|
Limitation
of Liability
|
16
|
|
Section
9.2
|
Indemnification
|
16
|
|
ARTICLE
X
|
||
|
DISPUTE
RESOLUTION
|
||
|
ARTICLE
XI
|
||
|
GENERAL
PROVISIONS
|
||
|
Section
11.1
|
Notices
|
17
|
|
Section
11.2
|
Further
Action
|
18
|
|
Section
11.3
|
Binding
Effect
|
19
|
|
Section
11.4
|
Integration
|
19
|
|
Section
11.5
|
Creditors
|
20
|
|
Section
11.6
|
Waiver
|
20
|
|
Section
11.7
|
Counterparts
|
20
|
|
Section
11.8
|
Applicable
Law
|
20
|
|
Section
11.9
|
Invalidity
of Provisions
|
|
|
Section
11.10
|
Amendment
or Restatement
|
|
|
Section
11.11
|
Directly
or Indirectly
|
|
BREITBURN
ENERGY COMPANY L.P
AMENDED
& RESTATED ADMINISTRATIVE
SERVICES AGREEMENT
-
3
-
Exhibit
10.5
AMENDED
AND RESTATED ADMINISTRATIVE SERVICES AGREEMENT
THIS
AMENDED AND RESTATED ADMINISTRATIVE SERVICES AGREEMENT is entered into on,
and
effective as
of the
date that the Closing occurs under the MLP Sales Documents (as defined
below)(the "Effective Date"), among Pro GP Corp., a Delaware corporation
("Pro
GP"), BreitBurn Energy Company L.P., a Delaware limited Partnership
("Devco"),
and BreitBurn Management Company, LLC, a Delaware limited liability company
("BreitBurn Management," and collectively with Pro GP and Devco,
the "Parties" and each, a "Party").
RECITALS
A. Devco
is
the owner, directly or indirectly, of interests in the Business (as hereinafter
defined);
B. The
Devco
Group (as hereinafter defined) requires certain services to operate the
Business and to fulfill other general and administrative functions relating
to
the Business;
C. The
Devco
Group desires that BreitBurn Management provide such services, and
BreitBurn Management is willing to undertake such engagement, subject to the
terms and conditions
of this Agreement following the sale by Pro GP (and certain Affiliates) of
their
interests in BreitBurn Energy Partners L.P. and BreitBurn Management Company
LLC; and
D. The
parties also wish to provide the Devco Group with the right to request of
BreitBurn Management certain transitional services.
NOW,
THEREFORE, Devco and BreitBurn Management agree as follows:
ARTICLE
1
DEFINITIONS
Section
1.1Definitions.
The
following definitions shall be for all purposes, unless otherwise clearly
indicated to the
contrary, applied to the terms used in this Agreement.
"Affiliate"
means,
with respect to any Person, any other Person that directly or indirectly
through
one or more intermediaries controls, is controlled by or is under common control
with, the
Person in question. As used herein, the term "control" means the possession,
direct or indirect,
of the power to direct or cause the direction of the management and policies
of
a Person, whether
through ownership of voting securities, by contract or otherwise.
"Agreement"
means
this Amended and Restated Administrative Services Agreement, as it may be
amended, supplemented
or restated from time to time.
BREITBURN
ENERGY COMPANY L.P
AMENDED
& RESTATED ADMINISTRATIVE
SERVICES AGREEMENT
"Business"
means
the
business of the Devco Group.
"Bankrupt"
with
respect to any Person means such Person shall generally be unable to
pay
its
debts as such debts become due, or shall so admit in writing or shall make
a
general assignment
for the benefit of creditors; or any proceeding shall be instituted by or
against such Person
seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation,
winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its debts
under any
law
relating to bankruptcy, insolvency or reorganization or relief of debtors,
or
seeking the entry
of
an order for relief or the appointment of a receiver, trustee, or other similar
official for it or
for
any substantial part of its property and, in the case of any such proceeding
instituted against
it (but not instituted by it), shall remain undismissed or unstayed for a period
of 30 days; or
such
Person shall take any action to authorize any of the actions set forth
above.
"BreitBurn
Management Party" is
defined in Section 9.1.
"Confidential
Information" means
non-public information about the disclosing Party's or any
of
its Affiliates' business or activities that is proprietary and confidential,
which shall include,
without limitation, all business, financial, technical and other information,
including software
(source and object code) and programming code, of a Party or its Affiliates
marked or designated
"confidential" or "proprietary" or by its nature or the circumstances
surrounding its disclosure
it should reasonably be regarded as confidential. Confidential Information
includes not
only
written or other tangible information, but also information transferred orally,
visually, electronically
or by any other means. Confidential Information does not include information
that (i)
is in
or enters the public domain without breach of this Agreement, or (ii) the
receiving Party lawfully
receives from a third party without restriction on disclosure and to the
receiving Party's knowledge
without breach of a nondisclosure obligation.
"Damages"
is defined
in Section 9.2.
"Default
Rate" means
an
interest rate (which shall in no event be higher than the rate permitted
by applicable law) equal to the prime interest rate of Devco's principal
lender.
"Devco"
is
defined in the introductory paragraph.
"Devco
Group" means
Pro
GP, Devco and all of their respective
Subsidiaries.
"Devco
Group Party" is
defined in Section 9.1.
"Effective
Date" is
defined in the introductory paragraph.
BREITBURN
ENERGY COMPANY L.P
AMENDED
& RESTATED ADMINISTRATIVE SERVICES AGREEMENT
-
5 -
"Environmental
Law" means
current local, county, state, federal, and/or foreign law (including
common law), statute, code, ordinance, rule, order, judgment, decree, regulation
or other
legal obligation relating to the protection of health, safety or the environment
or natural resources,
including, without limitation, the Comprehensive Environmental Response
Compensation
and Liability Act (42 U.S.C. section 9601 et seq.), as amended, the Resource
Conservation
and Recovery Act (42 U.S.C. section 6901 et seq.), as amended, the Federal
Water
Pollution
Control Act (33 U.S.C. section 1251 et seq.), as amended, the Clean Air Act
(42
U.S.C. section
7401 et seq.), as amended, the Toxic Substances Control Act (15 U.S.C. section
2601 et seq.), as amended, the Occupational Safety and Health Act (29 U.S.C.
section 651 et seq.), as amended,
the Safe Drinking Water Act (42 U.S.C. section 300(f) et seq.), as amended,
analogous state,
tribal or local laws, and any similar, implementing or successor law, and any
amendment, rule, regulation, or directive issued thereunder, including any
determination by, or interpretation of
any of
the foregoing by any Governmental Authority that has the force of
law.
"Force
Majeure" means
any
cause beyond the reasonable control of a Party, including the
following causes (unless they are within such Party's reasonable control):
acts
of God, strikes,
lockouts, acts of the public enemy, wars or warlike action (whether actual
or
impending), arrests
and other restraints of government (civil or military), blockades, embargoes,
insurrections,
riots, epidemics, landslides, lightning, earthquakes, fires, sabotage,
tornadoes, named
tropical storms and hurricanes, and floods, civil disturbances, terrorism,
mechanical breakdown
of machinery or equipment, explosions, confiscation or seizure by any government
or other
public authority, any order of any court of competent jurisdiction, regulatory
agency or governmental body having jurisdiction.
"G&A
Services" means
those general and administrative services necessary or useful for the
conduct of the business of the Devco Group, including, but not limited to,
accounting, corporate
development, finance, land, legal and engineering.
"Governmental
Approval" means
any
material consent, authorization, certificate, permit, right-of-way
grant or approval of any Governmental Authority that is necessary for the
construction,
ownership and operation of the assets used in the Business in accordance with
applicable Laws.
"Governmental
Authority" means
any
court or tribunal in any jurisdiction or any federal, state,
tribal, municipal or local government or other governmental body, agency,
authority, department,
commission, board, bureau, instrumentality, arbitrator or arbitral body or
any
quasi- governmental
or private body lawfully exercising any regulatory or taxing
authority.
"Laws"
means
any
applicable statute, Environmental Law, common law, rule, regulation,
judgment,
order, ordinance, writ, injunction or decree issued or promulgated by any
Governmental
Authority.
"MLP"
means
BreitBurn Energy Partners L.P., a Delaware limited partnership.
“MLP
Sales Documents”
means:
a) that certain Purchase Agreement by and Among Pro LP Corp., Pro GP Corp.
and
BreitBurn Energy Partners L.P. for the purchase and sale of all of the common
units of BreitBurn Energy Partners L.P. held
by
Pro GP and Pro LP
dated on
or about June 17, 2008 and b) that certain Purchase Agreement by and Among
Pro
LP Corp., Pro GP Corp. and BreitBurn Energy Partners L.P. for the purchase
and
sale of all of the limited liability company interests of BreitBurn Management
Company held by Pro GP and Pro LP dated on or about June 16, 2008.
BREITBURN
ENERGY COMPANY L.P
AMENDED
& RESTATED ADMINISTRATIVE SERVICES AGREEMENT
-
6 -
"Parties"
is
defined in the introductory paragraph.
"Partnership
Agreement" means
the
Agreement of Limited Partnership of Devco,
as
may be amended or restated from time to time.
"Payment
Amount" is
defined in Section 4.1.
"Person"
means
an
individual or a corporation, limited liability company, partnership,
joint
venture, trust, unincorporated organization, association, government agency
or
political subdivision
thereof or other entity.
"Services"
is
defined in Section 2.2.
"Subsidiary"
means,
with respect to any Person, (a) a corporation of which more than 50%
of
the voting power of shares entitled (without regard to the occurrence of any
contingency) to vote in the election of directors or other governing body of
such corporation is owned, directly or indirectly, at the date of determination,
by such Person, by one or more Subsidiaries of such Person
or
a combination thereof, (b) a partnership (whether general or limited) in which
such Person
or
a Subsidiary of such Person is, at the date of determination, a general or
limited partner of
such
partnership, but only if more than 50% of the partnership interests of such
partnership (considering
all of the partnership interests of the partnership as a single class) is owned,
directly or
indirectly, at the date of determination, by such Person, by one or more
Subsidiaries of such Person,
or a combination thereof, or (c) any other Person (other than a corporation
or a
partnership)
in which such Person, one or more Subsidiaries of such Person, or a combination
thereof,
directly or indirectly, at the date of determination, has (i) at least a
majority ownership interest or (ii) the power to elect or direct the election
of
a majority of the directors or other governing
body of such Person.
Other
terms defined herein have the meanings so given them. Section
1.2 Construction.
Unless
the context requires otherwise: (a) any pronoun used in this Agreement shall
include
the corresponding masculine, feminine or neuter forms, and the singular form
of
nouns, pronouns
and verbs shall include the plural and vice versa; (b) references to Articles
and Sections
refer to Articles and Sections of this Agreement; (c) references to Exhibits
refer to the Exhibits
attached to this Agreement, each of which is made a part hereof for all
purposes; (d) the terms
"include", "includes", "including" and words of like import shall be deemed
to
be followed
by the words "without limitation"; (e) the terms "hereof," "herein" and
"hereunder" refer
to
this Agreement as a whole and not to any particular provision of this Agreement;
and (f) references
to money refer to legal currency of the United States of America. The table
of
contents
and headings contained in this Agreement are for reference purposes only, and
shall not affect
in
any way the meaning or interpretation of this Agreement.
BREITBURN
ENERGY COMPANY L.P
AMENDED
& RESTATED ADMINISTRATIVE
SERVICES AGREEMENT
-
7 -
ARTICLE
II
RETENTION
OF BREITBURN MANAGEMENT; SCOPE OF SERVICES
Section
2.1 Retention
of BreitBurn Management.
Devco
hereby engages BreitBurn Management to perform the Services, and to provide
all
personnel and any facilities, goods and equipment
not otherwise provided by the Devco Group necessary to perform the Services.
BreitBurn
Management hereby accepts such engagement and agrees to perform the Services
requested by Pro GP and to provide any personnel, facilities, goods and
equipment not
otherwise provided by the Devco Group, and to provide all employees as may
be
reasonable
and necessary to perform the Services. Devco recognizes that BreitBurn
Management is concurrently providing Services to the MLP.
Section
2.2 Scope
of Services.
The
"Services" shall consist of such services consistent with past service levels
which Pro GP determines may be reasonable
and necessary to operate the Business, including, without limitation, any
G&A Services
and those services described on Schedule I hereto. BreitBurn Management
hereby covenants
and agrees that the Services will be performed in accordance with (i) applicable
material
Governmental Approvals and Laws and (ii) industry standards.
Section
2.3 Exclusion
of Services.
Pro
GP
may temporarily or permanently exclude any particular service from the scope
of
the Services upon 30 days' notice to BreitBurn Management; provided, however,
that any such exclusion shall not result in a reduction of the Fixed Fee during
2008 (or an extension thereof pursuant to the last sentence of Section 4.1(b))
.
Section
2.4 Performance
of Services by Affiliates and Third Parties.
The
Parties hereby agree that in discharging its obligations hereunder, BreitBurn
Management
may engage any of its Affiliates or any qualified third party to perform the
Services (or
any
part of the Services) on its behalf and that the performance of the Services
(or
any part of the
Services) by any such Affiliate or third party shall be treated as if BreitBurn
Management performed
such Services itself. Notwithstanding the foregoing, nothing contained herein
shall relieve BreitBurn Management of its obligations hereunder.
Section
2.5 Intellectual
Property.
(a) Any
(i)
inventions, whether patentable or not, developed or invented, or (ii)
copyrightable material (and the intangible rights of copyright therein)
developed, by BreitBurn
Management, its Affiliates or its or their employees in connection with the
performance
of the Services shall be the property of BreitBurn Management; provided,
however, that
the
Devco Group shall be granted an irrevocable, royalty-free, non-exclusive
right
and
license to use such inventions or material; and further provided,
however, that
the
Devco Group shall only be granted such a right and license to the extent such
grant does
not
conflict with, or result in a breach, default, or violation of a right or
license to use such inventions
or material granted to BreitBurn Management by any Person other than an
Affiliate of BreitBurn
Management. Notwithstanding the foregoing, BreitBurn Management will use all
commercially
reasonable efforts to grant such right and license to the Devco Group. BreitBurn
Management covenants not to, at any time, make any claim to or attempt to
prohibit the Devco Group from using any process, technical knowledge, invention,
technology or equipment used in respect of the Business and the assets of the
Devco Group, and acknowledges that all property-specific (including general
reservoir characterization studies) technical knowledge and processes used
in
connection with the Business and the assets of Devco shall be the property
of
Devco. For certainty this covenant in the foregoing sentence shall survive
the
termination of this Agreement.
BREITBURN
ENERGY COMPANY L.P
AMENDED
& RESTATED ADMINISTRATIVE
SERVICES AGREEMENT
-
8 -
(b) Pro
GP
and Devco hereby grant to BreitBurn Management
and its Affiliates an irrevocable, royalty-free, non-exclusive and
non-transferable right
and
license to use, during the term of this Agreement, any intellectual property
provided by the Devco Group to BreitBurn Management or its Affiliates, but
only
to the extent such use is necessary for the performance of the Services.
BreitBurn Management agrees that it and its Affiliates
will utilize such intellectual property solely in connection with the
performance of the Services.
Section
2.6 Appointment
of Independent Accounting Firm and Independent Petroleum Engineer.
Notwithstanding
anything to the contrary in this Agreement, the Parties hereby recognize
and
agree
that Pro GP shall have the exclusive authority to appoint an independent
accounting
firm to audit the financial statements of Devco and an independent petroleum
engineer to provide reports to Pro GP relating to estimates of reserves
for
applicable securities laws and other reporting purposes.
ARTICLE
III
BOOKS,
RECORDS AND REPORTING
Section
3.1 Books
and Records.
BreitBurn
Management shall maintain accurate books and records regarding the performance
of the Services and its calculation of the Payment Amount, and shall maintain
such books
and
records for the period required by applicable accounting practices or
law.
Section
3.2 Audits.
Devco
shall have the right, upon reasonable notice, and at all reasonable times during
usual business hours, to audit, examine and make copies of the books and records
referred to
in
Section 3.1. Such right may be exercised through any agent or employee of the
Devco Group
designated in writing by it or by an independent public accountant, engineer,
attorney or other
agent so designated. Devco shall bear all costs and expenses incurred in any
inspection,
examination or audit. BreitBurn Management shall review and respond in a timely
manner
to
any claims or inquiries made by Devco regarding matters revealed by any
such
inspection, examination or audit.
BREITBURN
ENERGY COMPANY L.P
AMENDED
& RESTATED ADMINISTRATIVE
SERVICES AGREEMENT
-
9 -
Section
3.3 Reports.
BreitBurn
Management shall prepare and deliver to Devco any reports provided for
in
this Agreement and such other reports as Devco may reasonably request from
time
to
time
regarding the performance of the Services.
ARTICLE
IV
PAYMENT
AMOUNT
Section
4.1 Payment
Amount.
(a) Devco
shall pay BreitBurn Management a monthly fee of Seven Hundred and Seventy-Five
Thousand Dollars ($775,000) for the performance of the Services through December
31, 2008 (the "Fixed
Fee").
Devco
shall also reimburse BreitBurn Management on a monthly basis for: a) third
party
costs incurred by
BreitBurn Management on behalf of Devco
relating
specifically to the Business or the assets of Devco outside of the ordinary
course of business consistent with past practice(the "Third
Party Costs")
b) all
costs associated with Devco LTIP or incentive plans (the “LTIP Costs”), and c)
all costs and expenses of every type, including labor, materials, and equipment
incurred directly in the operation of any property owned by Devco(“Direct
Costs”) (the Fixed Fee, LTIP Costs, Direct Costs and the Third Party Costs shall
be herein collectively referred to as the "Payment
Amount").
For
certainty there shall be no duplication in the categories of fees and costs
set
forth in the foregoing.
For
certainty the Payment Amount shall constitute payment for both Services and
Transition Services (defined below)provided during the period in which the
Fixed
Fee is payable. However any Transition Services provided during any period
during which the Fixed fee is not applicable shall be charged at a reasonable
hourly rate basis that reflects cost on a no loss/no gain basis.
(b) Provided,
that in the event that BreitBurn Management continues to provide Services
pursuant to this Agreement after December 31, 2008, Devco and BreitBurn
Management shall meet and determine the scope of Services to be supplied by
BreitBurn Management to Devco for the ensuing year and agree to negotiate in
good faith to determine a methodology for determining the Fixed Fee Portion
of
the Payment Amount for such services, which Payment Amount shall represent
the
costs incurred by BreitBurn Management in providing such Services. In the event
that the Parties are unable to agree upon a methodology for determining the
Fixed Fee portion of such costs, the issue shall be determined pursuant to
the
dispute resolution procedures set forth in Article X below. The Devco Group
shall, however, have the option to extend the existing fee arrangement and
Payment Amount as set out in the first paragraph of this section for three
(3)
months following December 31, 2008 if a transaction has not been closed with
respect to the sale of the Devco Group or substantially all of its assets on
or
before December 1, 2008.
BREITBURN
ENERGY COMPANY L.P
AMENDED
& RESTATED ADMINISTRATIVE
SERVICES AGREEMENT
-
10 -
(c) Notwithstanding
anything to the contrary in this Section, with respect to the Pre-Existing
Equity Plans Obligations as defined pursuant to Section 5.7 of that certain
Purchase Agreement by and among Pro LP Corp., Pro GP and BreitBurn Energy
Partners L.P. dated June 16, 2008 for the purchase and sale of all the limited
liability interests of BreitBurn Management Company (the “Purchase Agreement”),
the Devco Group shall reimburse BreitBurn Management for the cost of the portion
of the Pre-Existing Plans Obligations allocated to the Devco Group pursuant
to
Section 5.7 of the Purchase Agreement, and the MLP shall reimburse BreitBurn
Management for the cost of the portion of the Pre-Existing Plans Obligations
allocated to the MLP pursuant to Section 5.7 of the Purchase Agreement. Neither
Devco nor the MLP nor any of their respective affiliates shall be responsible
for the cost of the Pre-Existing Equity Plans Obligations except as provided
in
the preceding sentence. Devco and the MLP shall respectively reimburse BreitBurn
Management for a portion of the cost of all other awards granted under the
Equity Plans (as defined in the Purchase Agreement) on or after the Closing
(as
defined in the Purchase Agreement) but prior to the termination of this
Agreement pursuant to this Section, as applicable. BreitBurn Management agrees
not to make any new grants of employee incentive rights for which the Devco
Group would bear any portion of the costs without the prior consent of the
Devco
Group, which consent will not be unreasonably withheld. Notwithstanding anything
to the contrary herein, the provisions of this Section 4.1(c) shall survive
any
termination of this Agreement.
(d) Should
the Devco Group during the term hereof reduce the Services it requires under
this Agreement, Devco and BreitBurn Management shall meet and identify which
BreitBurn Management employees who are listed on schedule 11.3 hereof will
need
to be terminated by BreitBurn Management as a result of such reduction of
Services. If Breitburn Management does not authorize Devco to make an offer
of
employment to such Person Devco shall have no liabillity to reimburse Breitburn
Management for severance costs in respect of that person. If Breitburn
Management authorizes Devco to offer employment to such Person and Devco chooses
not to offer such person a position Devco shall be responsible for the
appropriate portion of the severance obligations relating to such person as
is
reflected by the portion of such persons time devoted to Devco matters as set
out in Schedule 11.3 . The Devco Group shall not be liable for severance
obligations not resulting from a reduction of Services. Should the Devco Group
reimburse BreitBurn Management for any severance amounts above such amounts
shall be repaid to the Devco group if BreitBurn Management rehires the relevant
employee within one year of such employees termination.
Section
4.2 Payment
of Payment Amount.
BreitBurn
Management shall invoice Devco on or before the 25th day of each month
for
the estimated Payment Amount for the next succeeding month, plus or minus any
adjustment
necessary to correct prior estimated xxxxxxxx to actual xxxxxxxx. Subject to
Section 4.3, all
invoices shall be due and payable, in immediately available funds, on the last
day of the month
to
which the invoice relates. Upon the request of Devco, BreitBurn Management
shall
furnish a reasonable detail of the Services provided and charges assessed during
any month.
BREITBURN
ENERGY COMPANY L.P
AMENDED
& RESTATED ADMINISTRATIVE
SERVICES AGREEMENT
-
11 -
Section
4.3 Disputed
Charges.
DEVCO
MAY, WITHIN 120 DAYS AFTER RECEIPT OF A CHARGE FROM
BREITBURN MANAGEMENT, TAKE WRITTEN EXCEPTION TO SUCH CHARGE,
ON THE GROUND THAT THE SAME WAS NOT A REASONABLE COST INCURRED
BY BREITBURN MANAGEMENT OR ITS AFFILIATES IN CONNECTION WITH
THE
SERVICES. DEVCO SHALL NEVERTHELESS PAY BREITBURN MANAGEMENT
IN FULL WHEN DUE THE FULL PAYMENT AMOUNT OWED TO BREITBURN
MANAGEMENT. SUCH PAYMENT SHALL NOT BE DEEMED A WAIVER OF
THE
RIGHT OF DEVCO TO RECOUP ANY CONTESTED PORTION OF ANY
AMOUNT SO PAID. HOWEVER, IF THE AMOUNT AS TO WHICH SUCH WRITTEN
EXCEPTION IS TAKEN, OR ANY PART THEREOF, IS ULTIMATELY DETERMINED
NOT TO BE AN APPROPRIATE COST INCURRED BY BREITBURN MANAGEMENT
OR ITS AFFILIATES UNDER THIS AGREEMENT IN CONNECTION WITH ITS PROVIDING THE
SERVICES
HEREUNDER, SUCH AMOUNT OR PORTION THEREOF (AS THE CASE MAY
BE)
SHALL BE REFUNDED BY BREITBURN MANAGEMENT TO DEVCO
TOGETHER WITH INTEREST THEREON AT THE DEFAULT RATE DURING
THE PERIOD FROM THE DATE OF PAYMENT BY DEVCO TO THE
DATE
OF REFUND BY BREITBURN MANAGEMENT.
Section
4.4 Set
Off.
In
the
event that BreitBurn Management owes Devco a sum certain in an uncontested
amount under any other agreement, then any such amounts may be aggregated and
Devco
and
BreitBurn Management may discharge their obligations by netting those
amounts
against any amounts owed by Devco to BreitBurn Management under this
Agreement.
If Devco or BreitBurn Management owes the other party a greater aggregate
amount, that Party may pay to the other Party the difference between the amounts
owe.
Section
4.5 BreitBurn
Management's Employees.
The
obligations under Sections 4.1 and 4.2, to the extent they relate to Services
provided by
employees of BreitBurn Management or its Affiliates, shall be limited to payment
to BreitBurn
Management for expenses in connection with its or its Affiliates' employees
engaged in the provision of Services hereunder, and Devco shall not be obligated
to pay to BreitBurn
Management's or its Affiliates' employees directly any compensation, salaries,
wages, bonuses,
benefits, social security taxes, workers' compensation insurance, retirement
and
insurance
benefits, training and other such expenses; provided, however, that Devco may,
at its option, compensate such employees under Devco's Long-Term Incentive
Plan
for
the provision of Services hereunder; and provided further, however, that if
BreitBurn Management
fails to pay any employee, with the exception of employee claims for amounts
owed
that
BreitBurn Management disputes in good faith, within 30 days of the date such
employee's
payment is due:
BREITBURN
ENERGY COMPANY L.P
AMENDED
& RESTATED ADMINISTRATIVE
SERVICES AGREEMENT
-
12 -
(a) Devco
may
(i) pay such employee directly, (ii) employ such employee
directly, (iii) notify BreitBurn Management and begin to pay all employees
providing service
to Devco directly, or (iv) notify BreitBurn Management that this Agreement
is
terminated
and employ all employees directly; and
(b) BreitBurn
Management shall reimburse Devco, as the case may be,
the
amount Devco paid to BreitBurn Management for employee services that
BreitBurn
Management did not pay to any such employee.
Section
4.6 Approval
of Expenses.
BreitBurn
Management acknowledges that all charges for Services assessed by BreitBurn
Management
and included in the Payment Amount must be approved by the persons authorized
to
approve such Payment Amount pursuant to Devco's governance and delegation-of
-authority
process. Additionally, BreitBurn Management acknowledges that the Audit
Committee of
Pro
GP's Board of Directors may at any time review the Payment Amounts and the
levels of Services and, as a result, may direct Devco to decrease the level
of
Services or
to
dispute a prior invoice pursuant to Section 4.3. In addition to the information
BreitBurn Management
is obligated to provide pursuant to Section 4.2, BreitBurn Management shall
provide
such other information as reasonably necessary to determine the veracity or
appropriateness
of any Payment Amount hereunder.
ARTICLE
V
FORCE
MAJEURE
Section
5.1 Force
Majeure.
A
Party's
obligation under this Agreement shall be excused when and to the extent its
performance
of that obligation is prevented due to Force Majeure; provided,
however, that
a
Party
shall not be excused by Force Majeure from any obligation to pay money. The
Party that is
prevented from performing its obligation by reason of Force Majeure shall
promptly notify the other
Parties of that fact and shall exercise due diligence to end its inability
to
perform as promptly
as practicable. Notwithstanding the foregoing, a Party is not required to settle
any strike,
lockout or other labor dispute in which it may be involved; provided,
however, that,
in
the event
of
a strike, lockout or other labor dispute affecting BreitBurn Management,
BreitBurn Management
shall use reasonable efforts to continue to perform all obligations hereunder
by
utilizing
its management personnel and that of its Affiliates.
BREITBURN
ENERGY COMPANY L.P
AMENDED
& RESTATED ADMINISTRATIVE
SERVICES AGREEMENT
-
13 -
ARTICLE
VI
ASSIGNMENTS
AND SUBCONTRACTS
Section
6.1 Assignments.
(a) Other
than as permitted herein, without the prior consent of BreitBurn Management,
none of Devco
or
the other members of the Devco Group may sell, assign, transfer or convey
any
of
its rights, or delegate any of its obligations, under this Agreement to any
Person.
(b) Without
the prior consent of the Devco, BreitBurn Management may not
sell,
assign, transfer or convey any of its rights, or delegate any of its
obligations, under this Agreement to any Person, other than the delegation
of
performance of Services to an Affiliate of BreitBurn
Management or a qualified third party as permitted by Section 2.4 and the sale,
assignment,
transfer or conveyance of its rights hereunder to any such
Affiliate.
Section
6.2 Other
Requirements.
Subject
to the other provisions hereof:
(a) All
materials and workmanship used or provided in performing the Services
shall be in accordance with applicable specifications and
standards.
(b) BreitBurn
Management shall exercise reasonable diligence to obtain the most
favorable terms or warranties available from vendors, suppliers and other third
parties, and where
appropriate, BreitBurn Management shall assign such warranties to
Devco.
(c) In
rendering the Services, BreitBurn Management shall not discriminate against
any employee or applicant for employment because of race, creed, color,
religion, sex, national
origin, age or handicap, and shall comply with all applicable provisions of
Executive Order
11246 of September 24, 1965, and any successor order thereto. Subject to the
above, BreitBurn
Management shall, to the extent practicable, engage employees who reside in
or
whose
businesses are located in the local area or state where the Services are
performed.
(d)
BreitBurn
Management agrees to exercise reasonable diligence to ensure that,
during the term of this Agreement, it shall not employ unauthorized aliens
as
defined in the Immigration
Reform and Control Act of 1986, or any successor law.
BREITBURN
ENERGY COMPANY L.P
AMENDED
& RESTATED ADMINISTRATIVE
SERVICES AGREEMENT
-
14 -
ARTICLE
VII
TERMINATION
Section
7.1 Termination
by Devco on behalf of the Devco Group.
(a)
Upon
the
occurrence of any of the following events, Devco, on behalf
of
the Devco Group, may terminate this Agreement by giving written notice of such
termination
to BreitBurn Management:
(i) Provident
Energy Trust and its Affiliates cease to maintain a direct or indirect
controlling interest in Pro GP or Devco; or
(ii) BreitBurn
Management's failure to pay any employee within thirty (30)
days
of the date such employee's payment is due, subject to the limitations described
in Section 4.5.
Any
termination under this Section 7.1(a) shall become effective immediately upon
delivery of the
notice first described in this Section 7.1(a).
(b)
In
addition to its rights under Section 7.1(a), Devco may terminate
this Agreement at any time by giving notice of such termination to BreitBurn
Management.
Any termination under this Section 7.1(b) shall become effective 90 days after
delivery of such notice. For certainty any reduction of Services including
a
reduction of Services down to nil shall not be considered a termination of
this
Agreement for the purposes of Devco's ability to continue to receive Transition
Services as long as the Transition Period (as defined below) has commenced
before the Services are reduced to nil.
(c)
In
the
event that BreitBurn Management becomes Bankrupt or involuntarily dissolves
or
involuntarily
commences liquidation or winding-up, this Agreement shall automatically
terminate without notice
to
BreitBurn Management.
Section
7.2 Termination
by BreitBurn Management.
(a)
BreitBurn
Management may terminate this Agreement by giving written notice
of
such termination to Devco in the event that Provident Energy Trust and its
Affiliates
cease to maintain a direct or indirect controlling interest in Pro GP or
Devco.
Any termination under this Section 7.2(a) shall become effective immediately
upon delivery of the notice first described in this Section 7.2(a). A
termination under this subsection shall not terminate the obligation to provide
Transition Services or the right of the Devco Group to request the Transition
Services.
(b) In
addition to its rights under Section 7.2(a), after December 31, 2008, BreitBurn
Management may
terminate this Agreement at any time by giving notice of such termination to
Devco. Any
termination under this Section 7.2(b) shall become effective 180 days after
delivery of such notice
by
BreitBurn Management.
Section
7.3 Effect
of Termination.
If
this
Agreement is terminated in accordance with Section 7.1 or 7.2, all rights and
obligations
under this Agreement shall cease except for (a) obligations that expressly
survive termination of this Agreement; (b) liabilities and obligations that
have
accrued prior to such termination,
including the obligation to pay any amounts that have become due and payable
prior to such termination, and (c) the obligation to pay any portion of the
Payment Amount that has accrued
prior to such termination, even if such portion has not become due and payable
at that time.
BREITBURN
ENERGY COMPANY L.P
AMENDED
& RESTATED ADMINISTRATIVE
SERVICES AGREEMENT
-
15 -
ARTICLE
VIII
CONFIDENTIAL
INFORMATION
Section
8.1 Nondisclosure.
Each
of
BreitBurn Management and the Devco Group agrees that (i) it will not
disclose
to any third party or use any Confidential Information disclosed to it by the
other except as
expressly permitted in this Agreement, and (ii) it will take all reasonable
measures to maintain the
confidentiality of all Confidential Information of the other Party in its
possession or control, which
will in no event be less than the measures it uses to maintain the
confidentiality of its own information
of similar type and importance.
Section
8.2 Permitted
Disclosure.
Notwithstanding
the foregoing, each Party may disclose Confidential Information (i) to the
extent required by a court of competent jurisdiction or other governmental
authority or otherwise as required by law, including without limitation
disclosure obligations imposed under the
federal securities laws, provided that such Party has given the other Party
prior notice of such requirement
when legally permissible to permit the other Party to take such legal action
to
prevent
the disclosure as it deems reasonable, appropriate or necessary, or (ii) to
its
consultants, legal counsel, Affiliates, accountants, banks and other financing
sources and their advisors.
ARTICLE
IX
LIMITATION
OF LIABILITY; INDEMNIFICATION
Section
9.1 Limitation
of Liability.
Except
as
may be provided in Section 9.2 below, BreitBurn Management and its controlling
persons, directors, officers, employees, agents and permitted assigns (each,
a
"BreitBurn
Management Party") shall not be liable to the Devco Group and their respective
directors,
officers, employees, agents or permitted assigns (each, a "Devco Group Party")
for
any
liabilities, claims, damages, losses or expenses, including, but not limited
to,
any special, indirect, incidental or consequential damages, of a Devco Group
Party arising in connection with
this
Agreement and the Services provided hereunder.
Section
9.2 Indemnification.
BREITBURN
ENERGY COMPANY L.P
AMENDED
& RESTATED ADMINISTRATIVE
SERVICES AGREEMENT
-
16 -
(a) BreitBurn
Management shall indemnify, defend and hold harmless each of the Devco
Group Parties from and against all liabilities, claims, damages, losses and
expenses (including,
but not limited to, court costs and reasonable attorneys' fees)(collectively
referred to as
"Damages") of any kind or nature, of third parties unrelated to any Devco Group
Party, caused
by
or arising in connection with the gross negligence or willful misconduct of
BreitBurn Management
in connection with the performance of the Services, except to the extent that
Damages
were caused directly or indirectly by acts or omissions of any Devco Group
Party.
(b) From
and
after the Effective Date and except for those matters for which BreitBurn
Management has indemnity obligations pursuant to Section 9.2(a). the Devco
Group
shall indemnify, defend and hold harmless each BreitBurn Management
Party
from and
against all liabilities, claims, damages, losses and expenses (including,
but not limited to, court costs and reasonable attorneys' fees)(collectively
referred to as
"Damages") of any kind or nature, arising from or related to the Business,
the
Services or their performance by BreitBurn Management under this
Agreement.
ARTICLE
X
DISPUTE
RESOLUTION
If
the
Parties are unable to resolve any dispute regarding the validity or terms of
this Agreement
or its termination, service or performance issues, there is a material breach
of
this Agreement
that has not been corrected within thirty (30) days of receipt of notice of
such
breach or any other dispute between the parties related to this Agreement,
either party hereto may refer the
matter to an arbitrator selected in accordance with the rules of JAMS in Los
Angeles County, California
as the exclusive remedy for any such dispute, and in lieu of any court action,
which is hereby
waived. The only exception shall be a claim by either Party for injunctive
relief pending arbitration.
ARTICLE
XI
TRANSITION
SERVICES
11.1 The
Devco
Group shall have the right at any time to request commercially reasonable
transitional services (the "Transition Services") from BreitBurn Management.
Such Transition Services shall provide for the orderly, efficient and timely
transition to the Devco Group of the responsibility for the administrative
services previously provided by BreitBurn Management hereunder. The Transition
Services shall be provided for up to a six (6) month period (the "Transition
Period") commencing on the written request by the Devco Group to BreitBurn
Management for the Transition Services to commence; provided, however, that
such
Transition Services shall not extend beyond the termination of this Agreement
otherwise provided for herein. Transition Services shall at the request of
the
Devco Group include, without limitation, the following:
BREITBURN
ENERGY COMPANY L.P
AMENDED
& RESTATED ADMINISTRATIVE
SERVICES AGREEMENT
-
17 -
|
(a)
|
BreitBurn
Management shall segregate all books, records and data that relate
to
Business or the assets of the Devco Group and provide the Devco Group
with
a listing of all such books, records and data. BreitBurn Management
shall
take all such steps, including using reasonable commercial efforts
to
obtain any applicable approvals, consents, or waivers, as are necessary
or
appropriate to transfer such books, records and data to the Devco
Group.
|
|
(b)
|
BreitBurn
Management shall take all necessary or appropriate steps to transfer
and
to transition to the Devco Group the information, knowledge and systems
data relating to the Services currently provided by Devco under this
Agreement, including without limitation, banking arrangements, taxation
matters, lease, land, conveyancing and real estate administration
matters,
treasury matters, insurance coverage matters, information systems
matters,
human resource matters, marketing matters, operations, development,
exploration and geological and geophysical matters, and accounting
and
audit matters.
|
|
(c)
|
BreitBurn
Management shall take all necessary or appropriate steps, including
using
reasonable commercial efforts to obtain any applicable approvals,
consents
or waivers, to transfer all contracts applicable to the Business
and the
assets of the Devco Group.
|
|
(d)
|
BreitBurn
Management shall take all reasonably necessary or appropriate steps,
including using reasonable commercial efforts to obtain any applicable
consents, approvals or waivers, in order to transfer all data for
all
systems relating to the Business and the assets of the Devco Group.
The
Devco Group shall be entitled to use BreitBurn Management systems,
software and hardware until such time as such data is transferred
to the
Devco Group and the Devco Group systems are fully functional. The
transition of such data shall, without limitation, include the data
on the
systems described on Schedule 11.1 hereto. To the extent software
systems
can be duplicated at no cost to BreitBurn Management a copy shall
be
provided to Devco, and to the extent software systems relate solely
to the
assets of the Devco Group, they shall be transferred to
Devco.
|
|
(e)
|
BreitBurn
Management shall take all reasonably necessary or appropriate steps,
including using reasonable commercial efforts to obtain any applicable
consents, appraisals or waivers, to transfer all technical data and
knowledge, studies, reports, working papers, logs and interpretations
related to the Business or the assets of the Devco Group to the Devco
Group.
|
11.2 The
Devco
Group shall be entitled to have access to BreitBurn Management and its staff
during any period during which Transition Services are being provided, which
for
certainty shall not last beyond the term hereof. The Devco Group shall also
during the Transition Period have access to all books, records, data, systems
relating to the Business and the assets of the Devco Group. The Devco Group
shall be permitted to have employees or representatives in each of the areas
of
the services being provided attend at the offices of BreitBurn Management during
normal business hours during the Transition Period and BreitBurn Management
shall provide such persons with reasonable working areas comparable with
BreitBurn Management employees.
BREITBURN
ENERGY COMPANY L.P
AMENDED
& RESTATED ADMINISTRATIVE
SERVICES AGREEMENT
-
18 -
11.3 For
certainty, the Transition Services shall at all time include reasonable access
to the appropriate individual at BreitBurn Management and its affiliates for
the
purpose of providing the Devco Group with data, consultations and history
reasonably related to the matters being transitioned. The staff of BreitBurn
Management that the Devco Group shall have access to shall include, without
limitation, those employees listed on Schedule 11.3 hereto.
11.4 The
Devco
Group shall be entitled during the Transition Period to offer employment or
service contracts to those employees of BreitBurn Management who are field
workers or officed at the Xxxxxx Field Office. BreitBurn Management agrees
to
use commercially reasonable efforts to assist the Devco Group in obtaining
the
transfer of the employment of such personnel to the Devco Group. BreitBurn
Management and the Devco Group agree to meet and discuss whether it would be
appropriate for other employees of BreitBurn Management who spend a material
amount of time on Devco Group matters to transfer their employment to the Devco
Group at the end of the Transition Period.
BREITBURN
ENERGY COMPANY L.P
AMENDED
& RESTATED ADMINISTRATIVE
SERVICES AGREEMENT
-
19 -
11.5 BreitBurn
Management and the Devco Group will take all reasonably necessary or appropriate
steps, (including using reasonable commercial efforts to cause its affiliates
to
take necessary or appropriate steps and reasonably commercial efforts to obtain
applicable consents, approvals and waivers) to segregate any employee plans
and
the obligations thereunder such that the Devco Group will only have liability
under the employee plans relating to it. BreitBurn Management agrees that it
will use all reasonable commercial efforts to ensure that BreitBurn Energy
Partners L.P. continues to hold at least 50% of the capital of BreitBurn
Management for as long as the Devco Group continues to have employee awards
outstanding under its LTIP Plans.
11.6 BreitBurn
Management acknowledges that Provident Energy Ltd. may sell all or any portion
of the Devco Group, or all or a portion of its assets and therefore the Devco
Group shall be entitled to assign the rights it has to obtain the Transition
Services hereunder to any purchaser of the Devco Group, any part thereof, or
any
of its assets.
11.7 The
request for, and the provision of, Transition Services hereunder shall for
certainty not affect payment amounts under Section 4.1 for as long as the Fixed
Fee in the first paragraph of Section 4.1 is applicable. If Transition Services
are required after the period during which the Fixed Fee in the first paragraph
of Section 4.1 is applicable they will be provided at cost on a no loss/no
gain
basis.
11.8 For
a one
year period after the Devco Group first notifying BreitBurn Management, in
writing, that it wishes BreitBurn Management to commence providing Transition
Services, BreitBurn Management hereby acknowledges and agrees to make available
to the Devco Group, upon receipt of written notice therefrom, such information
and records regarding the Services previously provided pursuant hereto.
BreitBurn Management also agrees to provide, on the request of the Devco Group,
Services relating to the preparation of historical financial statements or
other
historical statements necessary for any purchaser of the Devco Group, any part
of the Devco Group or all or any portion of the assets of the Devco
Group.
ARTICLE
XI1
GENERAL
PROVISIONS
Section
12.1 Notices.
All
notices or other communications required or permitted under, or otherwise in
connection
with, this Agreement must be in writing and must be given by depositing same
in
the mail,
addressed to the Person to be notified, postpaid and registered or certified
with return receipt
requested or by transmitting by national overnight courier or by transmitting
by
national overnight
courier or by delivering such notice in person or by facsimile to such Party.
Notice given
by
mail, national overnight courier or personal delivery shall be effective upon
actual receipt.
Notice given by facsimile shall be effective upon confirmation of receipt when
transmitted
by facsimile if transmitted during the recipient's normal business hours or
at
the beginning
of the recipient's next business day after receipt if not transmitted during
the
recipient's
normal business hours. All notices to be sent to a Party pursuant to this
Agreement shall
be
sent to or made at the address, in each case as follows:
BREITBURN
ENERGY COMPANY L.P
AMENDED
& RESTATED ADMINISTRATIVE
SERVICES AGREEMENT
-
20 -
if
to Pro
GP:
Pro
GP
Corp.
0000,
000-0xx
Xxxxxx
X.X.
Xxxxxxx,
XX X0X 0X0
Attention:
Xxxxxx X. Xxxxxxxx
Fax:
(000)
000-0000
if
to
Devco:
0000,
000-0xx
Xxxxxx
X.X.
Xxxxxxx,
XX X0X 0X0
Attention:
Xxxxxx X. Xxxxxxxx
Fax:
(000)
000-0000
if
to
BreitBurn Management:
BreitBurn
Management Company LLC
000
Xxxxx
Xxxxxx Xxxxxx, Xxxxx 0000 Xxx
Xxxxxxx, XX 00000
Attention:
Xxxxxxx X. Xxxxxxxx
Fax:
(000) 000-0000
Section
12.2 Further
Action.
The
Parties shall execute and deliver all documents, provide all information and
take or refrain from taking action as may be necessary or appropriate to achieve
the purposes of this Agreement.
Section
12.3 Binding
Effect.
This
Agreement shall be binding upon and inure to the benefit of the Parties hereto
and their heirs, executors, administrators, successors, legal representatives
and permitted assigns.
Section
12.4 Integration.
This
Agreement constitutes the entire Agreement among the Parties hereto pertaining
to the subject matter hereof and supersedes all prior agreements and
understandings pertaining thereto.
BREITBURN
ENERGY COMPANY L.P
AMENDED
& RESTATED ADMINISTRATIVE
SERVICES AGREEMENT
-
21 -
Section
12.5 Creditors.
None
of
the provisions of this Agreement shall be for the benefit of, or shall be
enforceable
by, any creditor of Devco.
Section
12.6 Waiver.
No
failure by any party to insist upon the strict performance of any covenant,
duty, agreement
or condition of this Agreement or to exercise any right or remedy consequent
upon a breach
thereof shall constitute waiver of any such breach of any other covenant, duty,
agreement or
condition.
Section
12.7 Counterparts.
This
Agreement may be executed in counterparts, all of which together shall
constitute an agreement
binding on all the Parties hereto, notwithstanding that all such Parties are
not
signatories
to the original or the same counterpart. Each Party shall become bound by this
Agreement
immediately upon affixing its signature hereto.
Section
12.8 Applicable
Law.
This
Agreement shall be construed in accordance with and governed by the laws of
the
State
of
Delaware, without regard to the principles of conflicts of law.
Section
12.9 Invalidity
of Provisions.
If
any
provision of this Agreement is or becomes invalid, illegal or unenforceable
in
any respect,
the validity, legality and enforceability of the remaining provisions contained
herein shall
not
be affected thereby.
Section
12.10 Amendment
or Restatement.
This
Agreement may be amended or restated only by a written instrument executed
by
each
of
the Parties; provided, however, that BreitBurn Management may not, without
the
prior approval of
its
Conflicts Committee, agree to any amendment or modification of this Agreement
that the Conflicts
Committee determines will adversely affect the holders of common units
representing limited
partner interests in the MLP.. The Parties hereto agree that, for purposes
of
this Section
12.10, any material change in the nature, quantity or duration of the Services
to be provided
under this Agreement prior to December 31, 2008 (but not thereafter) shall
constitute a modification of this Agreement.
Section
12.11 Directly
or Indirectly.
BREITBURN
ENERGY COMPANY L.P
AMENDED
& RESTATED ADMINISTRATIVE
SERVICES AGREEMENT
-
22 -
Where
any
provision of this Agreement refers to action to be taken by any Party, or
which
such Party is prohibited from taking, such provision shall be applicable whether
such action
is
taken directly or indirectly by such Party, including actions taken by or on
behalf of any Affiliate
of such Party.
Section
12.12 Prior
Services.
Nothing
in this Agreement is intended to change, affect or supercede the provisions
of
the prior Administrative Services Agreement amended hereby and the parties
each
remain responsible for all obligations, costs, liabilities and benefits provided
for under that prior agreement through the Effective Date of this Restated
and
Amended Agreement (and for such extended periods as may have been provided
for
thereunder, as applicable).
BREITBURN
ENERGY COMPANY L.P
AMENDED
& RESTATED ADMINISTRATIVE
SERVICES AGREEMENT
-
23 -
Exhibit
10.5
IN
WITNESS WHEREOF, the Parties have executed this Agreement on, and effective
as
of,
the
Effective Date.
|
By:
|
/s/ Xxxxxx X. Xxxxxxxx
|
|
Name:
|
Xxxxxx X. Xxxxxxxx |
|
Title:
|
President |
|
BREITBURN
ENERGY COMPANY L.P. By: Pro GP
Corp.,
its General Partner
|
|
|
By:
|
/s/ Xxxxxx X. Xxxxxxxx
|
|
Name:
|
Xxxxxx X. Xxxxxxxx |
|
Title:
|
President |
|
BREITBURN
MANAGEMENT COMPANY, LLC
|
|
|
By:
|
/s/ Xxxxx X. Xxxxxxx |
|
Name:
|
Xxxxx
X. Xxxxxxx
|
|
Title:
|
Chief Financial
Officer
|
SCHEDULE
I
SERVICES
PROVIDED BY BREITBURN MANAGEMENT TO
DEVCO
| 1. |
Accounting
|
| 2. |
Information
Technology
|
| 3. |
Real
Property
|
| 4. |
Legal
|
| 5. |
Operations/Reservoir
Engineering/Geology/Geophysics
|
| 6. |
Administrative
Services
|
| 7. |
Financial
Services
|
| 8. |
Insurance
Service
|
| 9. |
Risk
Management
|
| 10. |
Corporate
Development
|
| 11. |
Commercial
and Marketing
|
| 12. |
Treasury
|
| 13. |
Tax
|
| 14. |
Audit
|
| 15. |
SOX
|
| 16. |
Investor
Relations
|
| 17. |
EH
& S
|
| 18. |
HR
|
| 19. |
Regulatory
Compliance
|
| 20. |
Land
Administration
|
For
certainty, the Services shall include such services as are necessary to carry
on
the Business in accordance with the applicable budgets approved by the board
of
directors Pro GP Corp, shall be consistent in scope to the Services that have
historically been provided hereunder, and shall be provided in accordance with
the more detailed descriptions attached as Annex A to this Schedule 1.
ANNEX
A
to
Schedule 1 of the Administrative Services Agreement dated June 16,
2008.
Land
Administration Services
BreitBurn
Management will provide services relating to:
|
(a)
|
Administering
and maintaining in force all oil and gas properties of the Devco
Group
(the "Oil and Gas Properties");
|
|
(b)
|
Maintaining
and updating all lease, ownership, contract, and property records
and
databases relating to the Oil and Gas
Properties;
|
|
(c)
|
Maintaining
and updating all royalty payment and division order reports and
databases;
|
|
(d)
|
Identifying,
paying, and appropriately invoicing all rentals, surface damage payments,
right of way payments, shut in payments, and other payments required
by
the Oil and Gas Properties;
|
|
(e)
|
Maintaining
all land, contract, division of interest, lease files, and other
files
relating to the subject land administration functions;
and
|
|
(f)
|
Such
other administrative services as the Devco Group may reasonably deem
necessary or advisable to administer or maintain the Oil and Gas
Properties including with respect to suspense
accounts.
|
|
(g)
|
BreitBurn
Management agrees to keep the Devco Group fully apprised in a timely
manner of every circumstance, action, occurrence or event occurring
or
arising that would be relevant and material to the Devco
Group.
|
Real
Estate Services
BreitBurn
Management will provide such real estate services to the Devco Group in order
to
maintain protect and promote all real estate entities currently held by DevCo.
Among others, this would specifically relate to office leases, the apartment
buildings in West Pico and all activities at Xxxxxx (including the ongoing
North
Hill development and permits).
Legal
Services
BreitBurn
Management will provide such legal services to the Devco Group as are necessary
in order to maintain and protect the Business and the assets of the Devco Group.
Operational
Services
BreitBurn
Management shall:
|
(a)
|
Continue
to carry out planned budget/forecast activities and indicate any
significant deviations to the plan.
|
|
(b)
|
Ongoing
technical work (engineering/reservoir/G&G) required to support ongoing
planned development of assets.
|
|
(c)
|
Maintain,
apply for and renew all regulatory permitting and licensing to
maintain current operations and activity or development included
in the
budget/forecast.
|
SOX
Services
BreitBurn
Management shall remain in compliance with and ensure the Devco Group remains
in
compliance with the requirements of Section 404 of the Xxxxxxxx-Xxxxx Act of
2002. This includes ensuring that entity, activity and general computer controls
have been designed appropriately and are operating effectively.
Accounting
Services
BreitBurn
Management shall:
|
(d)
|
Continue
to provide payroll/benefit services for Houston and Lynchberg employees
of
Kinetic Resources U.S.A.
|
|
(e)
|
Continue
to remit U.S. withholding taxes on instructions for remittance for
midstream operations on a timely
basis.
|
|
(f)
|
Continue
to pay royalties on West Pico, on a timely basis (and other
areas).
|
|
(g)
|
Continue
to administer and manage the real estate development
activities.
|
|
(h)
|
Continue
to provide reporting in accordance with the
following:
|
|
Provident
reporting requirement
|
Business
day of
the month following the period being reported on |
||
|
a)
Regular Month-ends
|
|||
|
Item #
|
Description
|
||
|
1
|
KUSA
Payroll amounts
|
3
|
|
|
2
|
Proholdco
Consolidated Balance Sheet & Income Statement (YTD and
MTD)
|
9
|
|
|
3
|
Non-Controlling
Interest Reconciliation
|
9
|
|
|
4
|
Proholdco
Consolidated Capital Spending Summary that ties into Change in
PPE
|
9
|
|
|
5
|
Revenue
& Royalty breakdown for Month and YTD
|
9
|
|
|
6
|
Intercompany
transaction detail (Proholdco and Devco)
|
9
|
|
|
7
|
PHC
Distribution summary (in months of Distribution or
adjustment)
|
9
|
|
|
8
|
Details
of "Capital" or retained earnings changes (in months of
change)
|
9
|
|
|
9
|
Proholdco
"Other payables" detail- Looking for taxes payable and currently
that is
where it is booked
|
9
|
|
|
10
|
Breakdown
of Management Fees (how much is with Provident and how much is third
party)
|
9
|
|
|
11
|
Breakdown
of Tax provision on P&L (how much is current and how much is
future)
|
9
|
|
|
12
|
Interest
expense breakdown- Realized, unrealized and interest
expense
|
9
|
|
|
13
|
Monthly
& YTD production
|
9
|
|
|
14
|
Option
expense Models with Summary sheets
|
9
|
|
|
15
|
Summary
of ARO change in the month
|
9
|
|
|
16
|
Summary
of Acquisition transactions including cash paid, non cash items recorded
and breakdown of assets acquired (PPE, AR, AP etc.)
|
9
|
|
|
b)
Quarter-ends
|
|||
|
17
|
Full
cost depletion adjustment (if reserves are in, if not an
estimate)
|
9
|
|
|
18
|
Capital
Accrual balance
|
9
|
|
|
19
|
Balance
of townlot accrued liability.
|
9
|
|
|
20
|
Production
volumes by area- QTD and YTD
|
11
|
|
|
21
|
Capital
Spending broken down by area- Should tie back to Capital Spending
summary
|
11
|
|
|
22
|
Listing
of letters of credit and changes to debt borrowing base
|
11
|
|
|
23
|
Any
cash taxes paid (Income and withholding taxes)
|
11
|
|
|
c)
Annual
|
|||
|
24
|
Summary
of Commitments (leases, etc.)
|
11
|
|
-
3
-
Approval
Levels
Other
than pursuant to commitments set forth in Devco's annual budget of capital
expenditures, operating expenses and general and administrative expenses as
supplemented by forecast updates thereto, BreitBurn Management shall not cause
Devco to directly or indirectly do any of the following without the prior
approval of a designated representative of Pro GP Corp: (i) sell, pledge,
dispose of or encumber any assets, except in the ordinary course of business
for
a consideration in excess of $250,000 in aggregate or incur any capital
expenditure for the period following the date hereof in excess of $50,000
individually or $250,000 in aggregate, or except for the sale of petroleum
substances in the ordinary course of business and consistent with Devco's
current marketing practices; (ii) acquire by merger, amalgamation, consolidation
or acquisition of shares or assets) any corporation, partnership or other
business organization or division thereof, or, except for investments in
securities for hedging purposes made in the ordinary course of business and
in
any event not in excess of $250,000, make any investment either by purchase
of
shares or securities, contributions of capital, property transfer, or, except
in
the ordinary course of business, purchase of any property or assets of any
other
individual or entity; (iii) enter into any material joint venture, farm-out
or
other partnering arrangement; (iv) incur any indebtedness for borrowed money
or
any other material liability or obligation or issue any debt securities or
assume, guarantee, endorse or otherwise as an accommodation become responsible
for, the obligations of any other individual or entity, or make any loans or
advances; (v) pay, discharge or satisfy any material claims, liabilities or
obligations other than the payment, discharge or satisfaction in the ordinary
course of business, consistent with past practice, of liabilities reflected
or
reserved against in its financial statements or incurred in the ordinary course
of business consistent with past practice; (vi) authorize, recommend or propose
any release or relinquishment of any material contract right; (vii) waive,
release, grant or transfer any rights of material value or modify or a change
in
any material respect any existing license, lease, contract, production sharing
agreement, government land concession, development plan or other document;
(viii) enter into or terminate any interest rate swaps, currency swaps, xxxxxx
or any other rate fixing agreement for a financial transaction or enter into
any
hedge, put or call arrangement of any sort or any forward sale agreement for
commodities; (ix) authorize or propose any of the foregoing, or enter into
or
modify any contract, agreement, commitment or arrangement to do any of the
foregoing except as permitted above; or make any payments under any employee
incentive plans for which Devco is responsible.
-
4
-
Schedule
11.1
-
5
-
Schedule
11.3
