Agreement No. ____________________
CONSTRUCTION AGREEMENT
This agreement ("Agreement") is made and entered into as of the 20th day
of June, 1996 (the "Effective Date"), by and between: Morgan Associates, Inc.,
a Kansas corporation, hereinafter referred to as "MORGAN", and Enron Liquids
Pipeline Operating Limiting Partnership, a Delaware limited partnership,
hereinafter referred to as "ELPOLP".
WITNESSETH THAT:
WHEREAS, MORGAN desires the performance by an independent contractor of
certain Work pertaining to the engineering, procurement, management, and
construction of a certain Odessa Lateral and Meter facility (the "Facilities").
NOW, THEREFORE, in consideration of the amount(s) of money to be paid by
MORGAN to ELPOLP, and other mutual covenants, agreements and obligations of the
parties hereinafter set forth, the parties do hereby agree as follows:
1. Scope of Work. ELPOLP shall furnish and pay for all costs and expenses
associated with the acquisition of MORGAN's Premises, and any labor,
supervision, tools, technical capability, transportation, materials,
supplies, and all other items or accessories necessary for ELPOLP to
perform and accomplish the Work defined and described in Exhibit "A" and in
accordance with the terms, conditions, and standards of this Agreement,
including the Plans and Specifications in Exhibit "B" (the "Work"). As part
of the Work, ELPOLP shall prepare and deliver to MORGAN all design,
construction, operation and maintenance information, including, but not
limited to, "as-built" drawings, schematics and flow diagrams as MORGAN
may reasonably require for the ongoing operation and maintenance of the
Facilities.
2. Rights of Way. ELPOLP will research title and prepare the documents
required to obtain and acquire on behalf of MORGAN all Work places, land,
rights of way grants, permits, easements, surface easements, fee property
(including all land) necessary for the Facilities (hereinafter collectively
defined as "MORGAN's Premises"), which MORGAN's Premises shall include,
without limitation: (a) permanent easement rights pursuant to the Pipeline
Easement (the "Southdown Easement") dated November 29, 1995, from
Southdown, Inc., aka Southwestern Portland Cement Company, over the real
property described therein; (b) permanent easement rights pursuant to the
Pipeline Easement (the "P&C Easement") dated November 28, 1995, from
Pevehouse & Christensen Ranch Corporation, over the real property described
therein, and (c) permanent real
property interests as necessary to accommodate the metering facilities to
be constructed as part of the Facilities (the "Meter Easement"). ELPOLP's
title research and document preparation in connection with acquisition of
MORGAN's Premises shall be in accordance with ELPOLP's internal standards
and practices for acquisition of similar rights of way, easements, etc.
ELPOLP will supply MORGAN with information pertaining to title research
and document preparation in connection with MORGAN's Premises. MORGAN may
request additional title research or changes to the documents as MORGAN may
feel necessary. Should ELPOLP be unable to acquire the necessary rights of
way at a reasonable cost, or if escalated, at a cost acceptable to MORGAN,
on or before June 15, 1996, this agreement and all further obligations
hereunder shall terminate. Unless otherwise approved in writing by MORGAN,
ELPOLP will acquire on behalf of MORGAN permanent rights to MORGAN's
Premises by the payment of a one-time lump sum amount for each respective
right of way, easement, etc. (such lump sum payments to be included as
part of the Contract Price hereunder), and there will be no requirement
for payment of periodic fees (e.g., lease or royalty payments) for
retaining rights to or use of MORGAN's Premises.
3. Term. This Agreement shall commence on the Effective Date and shall
automatically terminate upon MORGAN's acceptance of the Work and MORGAN's
payment therefore to ELPOLP as described herein.
4. Price. MORGAN as total consideration for the Work to be performed, shall
pay ELPOLP the total accumulated costs of supervision, engineering,
procurement services, costs of the acquisition of MORGAN's Premises,
materials, costs of rights of way, rights of temporary ingress and egress,
damages to landowners, fees, bonds, insurance, losses not compensated by
insurance, inspection services, direct and contract and subcontracted
labor, transportation and living expenses, use of furnished equipment,
commissioning, permitting, project documentation, taxes, supplies,
equipment and services, interest incurred from initial expenditure until
final payment has been received, and all other costs and expenses incurred
by ELPOLP in the performance and completion of the Work, not to exceed
$2,000,000.00 (the "Contract Price"). In the event that ELPOLP determines
that the total costs and expenses which it has or will incur in the
performance and completion of the Work (i.e., in order to complete the
Facilities pursuant to the standards defined and described in Exhibits A
and B hereto) will exceed $2,000,000.00, ELPOLP will promptly notify MORGAN
of such circumstance, providing reasonable details regarding the basis for
such increased costs and expenses and the total expected cost and expense
for completion of the Facilities. Upon receiving such written notice of
expected cost increase, MORGAN may elect to either (i) approve the cost
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increase, in which event the "Contract Price" shall thereafter mean the
revised amount that has been designated by ELPOLP as the cost for
completing the Work, or (ii) elect not to proceed with the construction of
the Facilities or completion of the Work, and in such event, MORGAN shall
convey to ELPOLP, without any warranties, title to MORGAN's Premises and to
all Work in process, completed Work, supplies, and other materials produced
or acquired for the Work, and ELPOLP shall refund and reimburse to MORGAN
any and all amounts which MORGAN has paid or advanced hereunder.
Should MORGAN authorize ELPOLP to perform additional Work which is not
within the scope and intent of this Agreement, such Extra Work shall be
reimbursed in accordance with Paragraph 11 of this Agreement.
5. General Payment Conditions.
(a) Following completion of the Work (but not earlier than July 1, 1996),
ELPOLP shall prepare an invoice (the "Invoice") for the total amount
accrued to ELPOLP for the Work (but which may not be more than the Contract
Price unless agreed to as provided in Paragraph 4). MORGAN shall pay ELPOLP
the amount accrued as shown by the Invoice, less any amounts reflecting
payment that may have been made on previous invoices, within thirty (30)
days after receipt of the Invoice by MORGAN. Submission of the Invoice by
ELPOLP to MORGAN shall constitute ELPOLP's acknowledgement and agreement
that the "Initial Transportation Date" has occurred under that certain
Transportation Agreement between MORGAN and ELPOLP related to the
Facilities and that all conditions precedent to such "Initial
Transportation Date" have been satisfied.
(b) MORGAN's payment of the Invoice or MORGAN's earlier shipment of carbon
dioxide through the Facilities shall constitute MORGAN'S acceptance of the
Work. Acceptance by ELPOLP of such final payment shall constitute a waiver
by it of all claims against MORGAN related to or arising out of this
Agreement. Such final acceptance and payment by either party hereto shall
not, however, release either party from any unperformed obligations
hereunder.
(c) It is understood and the parties hereto agree that the sums to be paid,
as set forth above, shall be the entire consideration to be received by
ELPOLP from MORGAN for the Work performed hereunder, and that said sums
shall include any and all taxes and contributions as set forth in Paragraph
14 hereinbelow. ELPOLP shall, where applicable, separately list on its
invoices all valid sales taxes on services provided hereunder.
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6. Notices. All notices, consents, requests, invoices or statements provided
for or permitted to be given under this Agreement must be in writing and
are effective on actual receipt by the intended recipient or by delivery to
the address, or facsimile number during working hours (8:00 a.m. to 5:00
p.m. CST) for the recipient listed below:
TO ELPOLP: TO MORGAN
Enron Liquids Pipeline Morgan Associates, Inc.
Operating Limited Partnership Attn: William V. Morgan
Attn: Russell Martin Plaza Time Building
P.O. Box 1188 411 Nichols Road, Suite 225
Houston, Texas 77251-1188 Kansas City, Missouri 64112
Telephone: 713-853-3589 Telephone: 816-931-5750
Fax: 713-646-5824 Fax: 816-931-9170
All notices, invoices, and other communications ("Notices") shall be sent
to the parties at their respective addresses in writing and as set forth
above. Notices sent through the mail shall be deemed to have been received
on the third (3rd) day after post marking.
7. Tax Identification Number. ELPOLP hereby designates no. 76-0380015 as its
tax identification number for all purposes which may require MORGAN to
report to taxing authorities moneys paid to ELPOLP for Work provided
hereunder.
8. Exhibits. This Agreement consists of the following Exhibits, all of which
are attached hereto and by this reference made a part hereof:
Exhibit A - Scope of Work
Exhibit B - Plans and Specifications
9. Inspection of the Work. MORGAN's Representative shall at all times have
access to the Work wherever it is in preparation or progress, and to any
other location where equipment or material for the Work, if any, is being
fabricated or stored by ELPOLP or its subcontractors, provided, however,
that no inspection or suggestion by MORGAN Representative or MORGAN
employees or agents shall operate to control the method of performance of
the Work hereunder, the manner and method of performing the same being
under the sole control and direction of ELPOLP, MORGAN having interest only
in the results obtained, and ELPOLP shall perform all Work hereunder as an
independent contractor with full control and detailed manner and means of
performance.
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10. Representations, Warranties and Guarantees. With respect to this Agreement,
ELPOLP covenants, warrants, guarantees and represents to MORGAN that:
(a) The Work will be accomplished in good and workmanlike manner with
approved practices and standards of the industry, and with all plans and
specifications made a part of this Agreement. ELPOLP shall employ such
methods, tools, equipment, and subcontractors in the performance of the
Work under this Agreement as will ensure Work of reasonable accuracy.
(b) ELPOLP has authority to do business in the state in which the Work is
to be performed.
(c) ELPOLP shall comply with all valid applicable federal, state and local
laws, ordinances and regulations thereunder, issued or promulgated by units
of government and regulatory bodies with jurisdiction over any aspect of
the Work.
(d) Upon completion of the Work, the site as it relates to the Work
performed by ELPOLP will comply with the requirements of all permits and
all valid and applicable statutes, ordinances, orders, rules and
regulations of the federal, state, and local governments having
jurisdiction thereof.
(e) During the "Warranty Period" (hereinafter defined), ELPOLP shall repair
or correct at its expense any defects due to ELPOLP's faulty workmanship.
In any event, ELPOLP's liability therefor shall be limited to the Contract
Price. ELPOLP's sole obligation to MORGAN with regard to repair or
corrective Work required of any supplier of equipment or materials provided
by ELPOLP hereunder and not manufactured by ELPOLP shall be to assign to
MORGAN the warranty or guarantee of such supplier and to cooperate and
assist MORGAN in MORGAN's enforcement of its remedies and if requested by
MORGAN to perform any such repair or corrective Work at cost less such
credits as are recovered from such supplier. ELPOLP guarantees the
workmanship for a period of twelve (12) months from MORGAN's acceptance of
the Work (the "Warranty Period"). EXCEPT AS SPECIFICALLY WARRANTED BY
ELPOLP UNDER THIS AGREEMENT, ELPOLP MAKES NO OTHER WARRANTY, EXPRESS OR
IMPLIED, INCLUDING ANY WARRANTY OF FITNESS OR MERCHANTABILITY, AND ANY
STATUTORY WARRANTIES OR REMEDIES INCONSISTENT WITH THIS CONTRACT ARE
EXPRESSLY WAIVED. THE FOREGOING SHALL BE APPLICABLE EVEN IF THE LIABILITY
ASSERTED IS BASED ON THE NEGLIGENCE (WHETHER ACTIVE OR PASSIVE) OR OTHER
FAULT OR STRICT LIABILITY OF THE PARTY TO BE INDEMNIFIED, AND REGARDLESS OF
WHETHER THE ACTION OR CLAIM IS BASED IN CONTRACT, TORT, WARRANTY, STATUTE
OR OTHERWISE.
11. Extra Work - Changes. MORGAN may require ELPOLP to perform work or furnish
materials or equipment, or the use thereof, in
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connection with the Work which are not included in this Agreement
(hereinafter referred to as "Extra Work"). Extra Work may be occasioned by
major changes in pipeline specifications or routing requiring additional
work or materials of a materially different nature, kind and cost from that
contemplated at the time of execution of this Agreement, or the
performance of other or additional work incident to the completion of the
project or facilities herein involved, but not in contemplation of the
parties at the time of execution of this Agreement.
ELPOLP shall not perform any Extra Work without first having secured
written authorization from MORGAN which shall be signed by MORGAN's
Representative. Such authorization shall describe the Work to be done and
specify the price to be paid therefor, or the basis on which such price
shall be calculated.
12. Termination and Interruption.
(a) In the event that the Work may be delayed due to any federal, state, or
other regulatory authority taking any action, or refraining from doing an
act, or should any other condition arise from such authorities which may
cause a delay of the Work, ELPOLP shall make all reasonable efforts to
resolve such a delay. However, in the event such efforts do not satisfy
said authorities (or the cause of such delay) and the Work is therefore
indefinitely delayed, which, in ELPOLP's or MORGAN's reasonable judgment,
shall make it unreasonable for ELPOLP to proceed with all or any part of
the Work under this Agreement, MORGAN and ELPOLP may terminate the Work by
giving the other party five (5) days written Notice of such partial or
complete cancellation or termination.
If Work is so terminated after commencement of any Work hereunder, MORGAN
shall pay ELPOLP for Work which has been satisfactorily performed to the
date of termination for which ELPOLP has not previously been paid by
MORGAN, in accordance with this Agreement, including ELPOLP's costs
associated with proposal preparation, the purchase of equipment or
materials or supplies, the acquisition of rights of way and rights of
ingress and egress, the hiring of Subcontractors, and the hiring or
reassignment of employees assigned to the Work and any other charges or
costs associated with the cessation of the Work.
(b) Upon notice of termination pursuant to this Paragraph:
1. ELPOLP shall discontinue further Work so terminated.
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2. ELPOLP and/or its contractors and subcontractors shall have the
right to remove its equipment, tool sand appliances from the site
of the Work (and in either case its personnel).
3. ELPOLP shall transfer title and deliver to
MORGAN the Work in process, completed Work,
supplies, and other materials produced or
acquired for the Work terminated, as well as
the completed or partially completed plans,
Drawings, information, and other property
that, if the Agreement had been completed,
would be required to be furnished to MORGAN.
"Drawings" as used herein shall mean all graphs, depictions, and
other visual layouts prepared by ELPOLP to describe the Work.
4. Morgan shall thereafter assume all
obligations, commitments and other
liabilities that ELPOLP has therefore
incurred or made in connection with its
performance of the Work and for which ELPOLP
has not been paid and released; provided,
however, that MORGAN shall not be required
to make any payments to ELPOLP in excess of
the Contract Price.
Failure of MORGAN or ELPOLP to exercise any of the rights given it
under this paragraph in any instance or instances shall not be
deemed or adjudged a waiver of such right in other instances.
Termination of this Agreement shall not relieve any party from any
obligation accruing or accrued to the date of such termination,
nor deprive a party not in default of any remedy otherwise
available to it. The indemnification provisions of this Agreement
shall survive such termination relative to all claims and other
indemnified matters, discovered or undiscovered, arising out of,
in connection with, or incident to this Agreement.
(c) MORGAN or ELPOLP may temporarily interrupt or shut down all or a
portion of the Work hereunder upon reasonable advance Notice, if any state,
federal, or other regulatory authority shall take any action or shall fail
to issue or shall withhold any authorization, which shall make proceeding
with the Work inadvisable or imprudent. If all or a portion of the Work is
thus temporarily shut down, ELPOLP shall be paid its unrecoverable costs
and expenses incurred directly applicable to such interruption.
13. Force Majeure. No delays in or failure or omission in the performance
of any obligation under this Agreement by ELPOLP or MORGAN, other than
payment of money, shall constitute
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default under this Agreement if and to the extent such delay or failure of
performance is caused by occurrences beyond the control of ELPOLP or
MORGAN, and which by the exercise of due diligence such party shall not
have been able to avoid or overcome, including, but not limited to: acts of
God or the public enemy; expropriation or confiscation of facilities;
compliance with any order or request of any governmental authority; fires,
floods, explosion, accidents; strikes, walkouts or other concerted work
stoppages. In the event that ELPOLP has not secured all easements, permits
and licenses required of it in order to proceed with the construction phase
of the Work, or in the event of any other force majeure condition, which
force majeure condition prevents ELPOLP from commencing construction of the
facilities contemplated herein, the construction of such facilities shall
not begin until such easements, permits, and licenses are secured. If such
time delay or other force majeure condition causes an increase to ELPOLP's
labor, equipment, or material costs to complete the Work by the Date stated
herein, or such later date if force majeure causes delay to construction,
ELPOLP shall furnish to MORGAN supporting documentation evidencing such
increase in costs, and ELPOLP shall be paid such increase in costs. In the
event of a force majeure occurrence, the party whose performance is
prevented by such occurrence shall notify the other party, in writing, as
soon as reasonably possible and give full particulars thereof and shall
reasonably endeavor to remedy the situation as soon as possible.
14. Taxes and Other Payments.
(a) Sales and Use Taxes
ELPOLP agrees that the total consideration to be paid for Work performed
under this Agreement includes any such sales, use, gross receipts or like
taxes on materials, supplies, equipment or services furnished by ELPOLP and
on services performed by ELPOLP. ELPOLP shall obtain the necessary permits
and licenses to remit sales, use, gross receipts and like taxes to the
applicable taxing authority. ELPOLP agrees to be responsible for all taxes,
penalties and interest resulting from ELPOLP's failure to properly remit
itemized taxes to the applicable taxing authority. Upon written notice to
ELPOLP, MORGAN may elect to directly remit sales, use, gross receipts or
like taxes to the taxing authority to whom such taxes are due and directly
payable. If MORGAN exercises such election, MORGAN shall provide ELPOLP
with written evidence, as required by applicable taxing authority, prior to
ELPOLP's procurement or payment of taxable purchases.
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(b) Other
ELPOLP assumes full responsibility for and agrees to pay for, and agrees
that the price to be paid by MORGAN as set herein shall be fully inclusive
of, all labor, including overtime as legally required,all overhead, and all
contributions and taxes payable under federal and state social security
acts, old age pension, worker's compensation laws, unemployment
compensation laws and income tax laws and any other applicable laws as to
all of its employees and agents engaged in the performance of the Work
hereunder, and ELPOLP hereby agrees to be responsible for any failure by
ELPOLP or any of its subcontractors to pay or withhold taxes, charges or
compensation due on behalf of its employees or agents involved in the Work.
15. General Indemnity. ELPOLP AND MORGAN AGREE TO INDEMNIFY, DEFEND AND
HOLD HARMLESS THE OTHER PARTY FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS,
LOSSES, DAMAGES, CAUSES OF ACTION, SUITS AND LIABILITIES OR EVERY KIND,
INCLUDING ALL EXPENSES OF LITIGATION, COURT COSTS, AND ATTORNEY'S FEES, FOR
INJURY TO OR DEATH OF ANY PERSON, OR FOR LOSS OR DAMAGE TO ANY PROPERTY
CAUSED BY THE NEGLIGENT ACT OR OMISSION OF ANY EMPLOYEE, AGENT OR
SUBCONTRACTOR OF THE INDEMNIFYING PARTY IN THE PERFORMANCE OF THE
INDEMNIFYING PARTY'S OBLIGATIONS HEREUNDER. IN THE EVENT ANY INJURY TO OR
DEATH OF ANY PERSON, OR LOSS OR DAMAGE TO ANY PROPERTY IS CAUSED BY THE
CONCURRENT NEGLIGENCE OF BOTH PARTIES HERETO OR OF EITHER PARTY HERETO AND
A THIRD PARTY, THE INDEMNIFYING PARTY HERETO SHALL INDEMNIFY THE OTHER
PARTY ONLY TO THE EXTENT ITS NEGLIGENCE CONTRIBUTED TO SUCH DAMAGE OR
INJURY. NEITHER PARTY SHALL HAVE LIABILITY FOR ANY CLAIM, DAMAGE OR CAUSE
OF ACTION RESULTING FROM THE WILLFUL MISCONDUCT, BAD FAITH OR NEGLIGENT
ACTS OR OMISSIONS OF THE OTHER PARTY'S EMPLOYEES, AGENTS OR CONTRACTORS OR
SUBCONTRACTORS.
NOTWITHSTANDING ANY PROVISION OF THIS PARAGRAPH 15, WHERE PERSONAL INJURY,
DEATH, OR LOSS OF OR DAMAGE TO PROPERTY RESULTS FROM THE JOINT OR
CONCURRENT NEGLIGENCE OR WILLFUL MISCONDUCT OF BOTH ELPOLP AND MORGAN, THE
PARTIES' DUTY OF INDEMNIFICATION SHALL BE IN PROPORTION TO EACH PARTY'S
ALLOCABLE SHARE OF JOINT OR CONCURRENT NEGLIGENCE OR WRONGFUL MISCONDUCT
EVEN IF ONE OF THE PARTIES IS MORE THAN FIFTY PERCENT (50%) AT FAULT.
16. Limitation of Liability. NOTWITHSTANDING ANYTHING HEREIN TO THE
CONTRARY, IN NO EVENT SHALL ELPOLP OR MORGAN BE LIABLE TO THE OTHER PARTY
HERETO FOR ANY LOST OR PROSPECTIVE PROFITS OR ANY OTHER SPECIAL, PUNITIVE,
EXEMPLARY, CONSEQUENTIAL, INCIDENTAL OR INDIRECT LOSSES OR DAMAGES (IN
TORT, CONTRACT OR OTHERWISE), UNDER OR IN RESPECT HERETO HOWSOEVER CAUSED,
WHETHER OR NOT ARISING FROM ELPOLP'S OR MORGAN'S SOLE, JOINT OR CONCURRENT
NEGLIGENCE.
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17. Safety Precautions. ELPOLP shall be responsible for and take all
necessary and proper safety precautions to protect from accident or injury,
all persons, including its employees and its subcontractors' employees, who
may be at or on MORGAN's Premises where the Work is being performed. ELPOLP
shall establish and enforce adequate, reasonable, prudent and proper safety
rules and procedures and emergency procedures necessary for safe completion
of the Work.
18. Compliance With Laws and Regulations. ELPOLP certifies that unless
specifically exempted, all products, or services furnished under this
Agreement have been furnished in compliance with all applicable laws and
regulations.
19. Environmental Waste. Notwithstanding any provisions
contained to the contrary, in the event that the Work
requires ELPOLP to remove or handle hazardous
materials, waste or soils or materials contaminated
with such materials, waste or substances ("Waste"),
except for Wastes that are brought onto MORGAN's
Premises by ELPOLP or its subcontracts or are present
upon MORGAN's Premises arising from the negligence or
willful misconduct of ELPOLP or its subcontractors or
first generated by ELPOLP or its subcontractors at
their own premises, MORGAN SHALL REMAIN RESPONSIBLE
FOR SUCH WASTES AND FOR ANY POLLUTION EMANATING FROM
MORGAN'S PREMISES AND SHALL DEFEND,INDEMNIFY AND HOLD
ELPOLP HARMLESS FROM AND AGAINST ANY LOSS, COST,
CLAIM, DAMAGE, LIABILITY, FINE OR PENALTY INCURRED BY
ELPOLP WHICH RESULTS OR IS ALLEGED TO RESULT FROM
ELPOLP'S PERFORMANCE OF SUCH WORK, HOWEVER ARISING;
PROVIDED, HOWEVER, THAT THE FOREGOING INDEMNITY SHALL
NOT APPLY WITH RESPECT TO ANY SUCH LOSSES, COSTS,
CLAIMS, DAMAGES, LIABILITIES, FINES OR PENALTIES
ARISING FROM THE NEGLIGENCE OR WILLFUL MISCONDUCT OF
ELPOLP OR ITS SUBCONTRACTORS. Waste as used herein
shall include, but not be limited to, any garbage,
refuse, sludge and other present or discarded
material, including solid, liquid, semisolid, or
contained gaseous materials resulting from
industrial, commercial, mining and agricultural
activities or from community or individual
activities, and including all waste classified as
"hazardous" pursuant to the Resource Conservation and
Recovery Act, as amended; "toxic waste" pursuant to
the Toxic Substances Control Act, as amended; or
asbestos. ELPOLP shall notify MORGAN of any
discovery of any Waste associated with the Work, but
ELPOLP shall not be required to arrange for the
disposal or off-site removal of such Waste unless (i)
specifically agreed upon in writing by a duly
authorized officer of ELPOLP, or (ii) such Waste was
brought onto MORGAN's Premises by ELPOLP or its
subcontractors or is present upon MORGAN's Premises
arising from the negligence or willful misconduct of
ELPOLP or its subcontractors.
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20. Compliance With DOT Anti-Drug and Alcohol Misuse
Regulations. MORGAN under 49 CFR Parts 199 and 40,
is required by law to ensure compliance with the
pipeline safety regulations for drug and alcohol
testing applicable to its contractors, subcontractors
and their agents, performing operations, maintenance,
or emergency response functions on a pipeline or LNG
facility subject to Parts 191, 192, 193 and 195 of
Title 49 of the Code of Federal Regulations. ELPOLP
agrees to comply with such requirements and will
require compliance by its employees, agents,
contractors and subcontractors.
21. Independent Contractor. The parties hereto agree
that the Work rendered by ELPOLP in the fulfillment
of the terms and obligations of this Agreement shall
be as an independent contractor, and this Agreement
does not create an employer/employee relationship
between MORGAN and ELPOLP. ELPOLP is not entitled to
the benefits provided by MORGAN or its parent,
subsidiaries or affiliates to their employees, and
ELPOLP is not an agent, partner, or joint venturer of
MORGAN, its parent or any subsidiary or affiliate.
ELPOLP shall act at its own risk and expense in its
fulfillment of the terms and obligations of this
Agreement and agrees to employ and direct any persons
performing any Work hereunder. ELPOLP shall not
represent itself to third persons to be other than an
independent contractor of MORGAN, nor shall ELPOLP
offer to agree to incur or assume any obligations or
commitments in the name of MORGAN.
22. Governing Law. Unless otherwise specified, this
Agreement and the rights and duties of the parties
arising out of this Agreement shall be governed by
and construed in accordance with the laws of the
State of Texas, except provisions of that law
referring to governance or construction of the laws
of another jurisdiction. Any action arising out of
this Agreement or the rights and duties of the
parties arising out of this Agreement may be brought,
if at all, only in the courts of Texas. Venue shall
be proper in Harris County.
23. Subcontracting. ELPOLP shall cause each
subcontractor to assume and satisfy all obligations
of ELPOLP hereunder to the full extent same may be
applicable to the portions of the Work
subcontracted. ELPOLP shall be liable for all acts
and omissions of any subcontractor or any of their
employees or agents, as if performed or omitted by
ELPOLP.
24. Contractual Rights. The terms and provisions of this
Agreement shall inure to the benefit of and be
binding upon the successor, assigns and
representatives of the parties hereto. The
provisions of this Agreement shall not impart rights
enforceable by any person, firm or organization not a
party or not bound as a party, or not a permitted
successor or assignee of a party bound to this
Agreement.
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25. Assignability. Neither party may assign its rights
under this Agreement without the prior written
consent of the other party, which shall not be
unreasonably withheld. Written consent to assign
said rights shall not be necessary when this
Agreement is assigned in whole or in part to a wholly
owned subsidiary or affiliate, or by: (i) name
change, or (ii) merger, or (iii) formation of a new
company, or (iv) stock purchase. If and in the event
MORGAN desires to sell the Facilities then MORGAN
shall give at least thirty (30) days notice to ELPOLP
setting forth the name of the potential buyer and
ELPOLP shall, within said thirty (30) day period,
elect to either terminate this Agreement or to
approve MORGAN's assignment of this agreement to the
potential buyer.
26. General. The terms and provisions of this Agreement
are intended to supersede any conflicting terms or
conditions in any other agreement between the
parties. This Agreement contains the entire
agreement between the parties and shall not be
modified or supplemented except by written instrument
duly executed by both parties. If any provision of
this Agreement shall, for any reason, be held
violative of any applicable law, and so much of said
Agreement is held to be unenforceable, then the
invalidity of such a specific provision herein shall
not be held to invalidate any other provisions
herein, which other provisions shall remain in full
force and effect unless removal of said invalid
provision destroys the legitimate purposes of this
Agreement, in which event this Agreement shall be
canceled. The terms and provisions of Paragraphs 2,
10, 15, 19, 22, 23 and 27 shall survive the
termination of this Agreement. No waiver of any of
the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provisions
hereof (regardless of whether similar), nor shall any
such waiver constitute a continuing waiver unless
otherwise expressly provided.
27. Claims. MORGAN shall assert any and every "Claim" of
any kind or nature whatsoever under this Agreement
("Claim" to include, without limitation, any Claim
relating to, associated with, arising out of or in
any way incidental to the Work or the execution,
inducement to enter into, performance, non-
performance, or breach of this Agreement) exclusively
against ELPOLP and not against any one or more of its
partners nor the general partner, Enron Liquids
Pipeline Company, nor their officers, directors,
employees, or agents nor entities affiliated with it
by common ownership or control, nor any of them
individually or collectively; and MORGAN shall
enforce or attempt to enforce against the assets of
ELPOLP and not against the assets of any partner,
general partner, affiliated entity, nor any of their
officers, directors, employees or agents, except the
general partner's interest in ELPOLP.
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28. Cooperation. The parties shall take such reasonable
further actions, execute such further documents and
otherwise cooperate and assist one another in any
manner reasonably necessary to give effect to and
carry out the provisions hereof.
IN WITNESS WHEREOF, this Agreement is executed on the day and year first above
written, but is effective on the Effective Date.
"ELPOLP" "MORGAN"
Enron Liquids Pipeline
Operating Limited Partnership
by Enron Liquids Pipeline
Company, its General Partner Morgan Associates, Inc.
By: /s/ Ray Kaskel By: /s/ William V. Morgan
Title: President Title: President
Witness/Attest Attest:
By: /s/ Thomas P. Tosoni By:
Title: Assistant Secretary Title:
(SEAL (SEAL)
14
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EXHIBIT "A"
OCS ROSWELL
PROJECT COST ESTIMATE
5/2/96
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CUSTOMER COMPANY NAME: ENRON LIQUIDS
PROJECT NAME: 6" SO. ODESSA LAT.
W.O. NUMBER:
PROJECT MANAGER: JOE MILLS
REVISION NUMBER: ALLIANCE ESTIMATE
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PROJECT SCOPE
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CO2 PIPELINE: INSTALL 11.1 MILES OF PIPELINE, SIDE VALVE AND METER
STATION FACILITY
1) PIPING WILL BE 6" AND MATCH GRADE AND WALL IN DESIGN
2) LOCATION WILL BE BETWEEN PENWELL AND ODESSA, TX.
3) LINE WILL TIE IN AT THE CENTRAL BASIN PIPELINE PIG LAUNCHER/RECEIVERS
NEAR PENWELL
4) THE LINE PROCEEDS APPROXIMATELY DUE EAST TO A DELIVERY POINT TO
PHILLIPS
BEST WORST MOST PROB.
COST FOR ESTIMATE/CO2 PIPELINE $ 1,238,840 $ 1,587,989 $1,402,532
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Page 1
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OCS ROSWELL
PROJECT COST ESTIMATE
5/2/96
- - - -------------------------------------------------------------------------
CUSTOMER COMPANY NAME: ENRON LIQUIDS
PROJECT NAME: 6" SO. ODESSA LAT.
W.O. NUMBER:
PROJECT MANAGER: JOE MILLS
REVISION NUMBER: ALLIANCE ESTIMATE
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NOTES AND ASSUMPTIONS
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1) PROJECT IS FOR 11.1 MILES OF 6 INCH PIPELINE
2) PROJECT REQUIRES SIDE VALVE SETTING ON PIPELINE
3) MEASUREMENT STATION WILL BE INSTALLED WITH PIPELINE
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Page 2
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OCS ROSWELL
PROJECT COST ESTIMATE
5/2/96
- - - --------------------------------------------------------------------------------------------------------------------
CUSTOMER COMPANY NAME: ENRON LIQUIDS
PROJECT NAME: 6" SO. ODESSA LAT.
W.O. NUMBER:
PROJECT MANAGER: JOE MILLS
REVISION NUMBER: ALLIANCE ESTIMATE
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MATERIAL AND EQUIPMENT COSTS
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MOST
BEST CASE WORST CASE PROBABLE
DESCRIPTION COST COST COST
Qty. Unit Unit Cost ESTIMATE ESTIMATE ESTIMATE
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P.U. NO.
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340-06 6" PIPE (E) (.1) (.1)(.2)(.7) 58600 FT $ 6.37 $ 354,530 $ 410,200 $ 373,282
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534-01 4" METER RUN (E) (.1) (.1)(.2)(.7) 1 EA $ 9,000 $ 8,100 $ 9,900 $ 9,000
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520-01 EFM (E) (.1) (.1)(.1)(.8) 1 EA $ 4,500 $ 4,050 $ 4,950 $ 4,500
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120-01 VSAT (E) (.1) (.1)(.2)(.8) 1 EA $ 15,000 $ 13,500 $ 16,500 $ 15,000
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714-01 STRAINER (E) (.1) (.1)(.2)(.7) 1 EA $ 2,700 $ 2,500 $ 3,000 $ 2,700
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120-00 UPS (E) (.1) (.1)(.1)(.8) 1 EA $ 4,500 $ 4,050 $ 4,950 $ 4,500
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521-01 TRANSMITTERS (E) (.1) (.1)(.1)(.8) 4 EA $ 1,000 $ 3,600 $ 4,400 $ 4,000
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920-04 BALL VALVES (E) (.1) (.1)(.2)(.7) 1 LT $ 18,000 $ 16,000 $ 20,000 $ 18,000
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672-00 3" CONTROL VALVE (E)(.1) (.1)(.2)(.7) 1 EA $ 3,600 $ 3,300 $ 4,000 $ 3,600
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972-04 4" CHECK VALVE (E) (.1) (.1)(.2)(.7) 1 EA $ 2,100 $ 1,900 $ 2,300 $ 2,100
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131-01 AIR COMPRESSOR (E) (.1) (.2)(.1)(.7) 1 EA $ 2,300 $ 1,900 $ 2,600 $ 2,300
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086-01 BUILDING (E) (.1) (.2)(.1)(.7) 1 EA $ 6,000 $ 5,400 $ 6,600 $ 6,000
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237-01 AREA LIGHTING (E) (.7) (.1)(.4)(.5) 1 EA $ 1,000 $ 1,000 $ 1,500 $ 1,200
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235-01 TRANSFORMER (E) (.1) (.1)(.2)(.7) 1 EA $ 1,000 $ 1,000 $ 1,500 $ 1,100
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104-01 TEST STATIONS (E) (.7) (.1)(.4)(.5) 50 EA $ 50 $ 4,000 $ 6,000 $ 5,000
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340-00 PIPELINE MARKERS (E)(.1) (.1)(.2)(.7) 50 EA $ 20 $ 800 $ 1,200 $ 1,000
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941-06 OTHER MATERIALS (E) (.4) (.1)(.3)(6) 1 LT $ 9,000 $ 7,000 $ 10,000 $ 9,000
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346-00 SRINKSLEEVES (B&H) (.1) (.3)(.2)(.5) 1 LT $ 6,500 $ 10,000 $ 9,130
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269-01 H-BRACES (B&H) (.1) (.3)(.2)(.5) 6 SET $ 1,750 $ 3,000 $ 2,000
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269-02 GATES (B&H) (.1) (.3)(.2)(.5) 6 EA $ 1,700 $ 2,600 $ 2,000
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340-00 EXPENDABLES (B&H) (.1) (.2)(.2)(.6) 1 LT $ 1,800 $ 4,000 $ 3,000
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340-00 PIGS (B&H) (.7) (.3)(.3)(.4) 1 LT $ 1,500 $ 3,000 $ 2,000
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238-01 ELECTRICAL (E) (.3) (.2)(.3)(.5) 1 LT $ 1,500 $ 3,000 $ 2,000
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904-01 TAX 7.25% $ 32,435 $ 38,802 $ 34,975
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903-00 FREIGHT 4.5% $ 20,132 $ 24,084 $ 21,709
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MATERIALS AND EQUIPMENT COSTS SUB-TOTAL $499,947 $ 598,086 $ 539,095
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Page 3
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OCS ROSWELL
PROJECT COST ESTIMATE
5/2/96
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CUSTOMER COMPANY NAME: ENRON LIQUIDS
PROJECT NAME: 6" SO. ODESSA LAT.
W.O. NUMBER:
PROJECT MANAGER: JOE MILLS
REVISION NUMBER: ALLIANCE ESTIMATE
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FIELD DIRECT COSTS
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MOST
BEST CASE WORST CASE PROBABLE
DESCRIPTION COST COST COST
Qty. Unit Unit Cost ESTIMATE ESTIMATE ESTIMATE
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P.U. NO.
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900-00 DISTRICT LABOR (E) (.2) (.3)(.2)(.5) 176 HR $ 5,600 $ 6,720 $ 6,160
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901-00 PIPE AND COATING INSP(.2) (.3)(.2)(.5) $ 6,500 $ 7,000 $ 6,500
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901-00 X-RAY (E) (.2) (.3)(.2)(.5) 1 LT $ 15,000 $ 29,000 $ 20,000
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901-00 INSPECTION (E) (.3) (.1)(.3)(.6) 46 DAY $ 300 $ 13,200 $ 18,000 $ 13,800
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901-00 SURVEY (E) (.1) (.1)(.2)(.7) 15 DAY $ 500 $ 13,000 $ 14,000 $ 18,000
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901-00 ARCHY (E) (.1) (.1)(.2)(.7) 1 LT $ 4,000 $ 7,000 $ 5,000
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504-03 R-O-W (E) (.1) (.1)(.2)(.7) $ 80,000 $ 95,000 $ 85,000
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504-13 LAND SERVICES (E) (.1) (.1)(.2)(.7) $ 7,000 $ 8,500 $ 7,500
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901-00 MOB. CHARGE (B&H) (.2) (.3)(.1)(.6) 1 LT $ 14,000 $ 20,000 $ 18,000
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901-00 FENCES (B&H) (.1) (.1)(.2)(.7) 6 EA $ 7,500 $ 13,500 $ 9,000
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901-00 ROW PREP (B&H) (.2) (.3)(.2)(.5) 1 LT $ 9,700 $ 13,500 $ 11,600
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901-00 DITCH (B&H) (.6) (.3)(.3)(.4) 58600 FT $ 37,000 $ 45,000 $ 41,000
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901-00 HAUL/STRING (B&H) (.2) (.1)(.2)(.7) 1 LT $ 6,600 $ 9,800 $ 8,200
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901-00 SETUP (B&H) (.2) (.1)(.2)(.7) 1 LT $ 6,400 $ 9,600 $ 8,000
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901-00 LAY & WELD (B&H) (.6) (.3)(.3)(.4) 1 LT $ 41,000 $ 51,000 $ 44,000
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901-00 COAT & LOWER IN (B&H)(.3) (.2)(.2)(.6 1 LT $ 7,200 $ 12,800 $ 11,000
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901-00 TIE-IN (B&H) (.6) (.3)(.3)(.4) 1 LT $ 45,000 $ 60,000 $ 55,000
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901-00 CLEAN UP (B&H) (.2) (.3)(.2)(.5) 1 LT $ 13,600 $ 15,400 $ 15,000
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901-00 RESEED (B&H) (.2) (.2)(.2)(.6) 1 LT $ 6,100 $ 7,500 $ 6,800
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901-00 HYDRO-TEST (B&H) (.6) (.2)(.3)(.5) 1 LT $ 8,500 $ 11,400 $ 9,500
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901-00 SPREAD BOSS (B&H) (.1) (.2)(.1)(.7) 1 LT $ 22,400 $ 28,800 $ 25,650
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901-00 ELECTRICAL (B&H) (.1) (.2)(.2)(.6) 1 LT $ 2,000 $ 3,000 $ 2,500
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901-00 WELDER Q. TEST (B&H)(.4) (.2)(.2)(.6) 8 EA $ 2,700 $ 3,600 $ 3,000
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901-00 FAB-3 SITES (B&H) (.4) (.2)(.2)(.6) 1 LT $ 7,500 $ 10,000 $ 8,700
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269-03 FENCE 10X10 (B&H) (.1) (.2)(.1)(.7) 1 LT $ 540 $ 660 $ 600
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269-04 FENCE 100X50 (B&H) (.1) (.2)(.1)(.7) 1 LT $ 3,400 $ 4,200 $ 3,800
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N/A ENRON FDC COST $144,300 $185,220 $161,960
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N/A B&H FDC $241,140 $319,760 $281,350
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901-00 B&H OVERHEAD 23% $ 55,462 $ 73,545 $ 64,711
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N/A B&H TOTAL $296,602 $393,305 $346,061
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FIELD DIRECT COSTS SUB-TOTAL $440,902 $578,525 $508,021
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Page 4
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OCS ROSWELL
PROJECT COST ESTIMATE
5/2/96
- - - --------------------------------------------------------------------------------------------------------------------
CUSTOMER COMPANY NAME: ENRON LIQUIDS
PROJECT NAME: 6" SO. ODESSA LAT.
W.O. NUMBER:
PROJECT MANAGER: JOE MILLS
REVISION NUMBER: ALLIANCE ESTIMATE
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PROJECT SUPPORT COSTS
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MOST
BEST CASE WORST CASE PROBABLE
DESCRIPTION Unit COST COST COST
Qty. Unit Cost ESTIMATE ESTIMATE ESTIMATE
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P.U.NO. INSTALLATION COSTS
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TOTAL M&E COST $ 499,947 $ 598,086 $ 539,095
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TOTAL FD COST $ 440,902 $ 578,525 $ 508,021
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PROJECT SUPPORT COSTS
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901-00 ENGINEERING SVCS (PDI)(.1)(.15).15)(.7) $ 12,000 $ 18,000 $ 15,000
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990-01 ENGINEERING RECORDS 2% $ 18,817 $ 23,532 $ 20,942
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990-01 OCS (1)(.2)(.2)(.6) $ 7,200 $ 10,800 $ 9,000
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316-01 CO2 LINE PACK (E) (.1)(.2)(.1)(.7) 10,652 MCF $ 0.65 $ 6,924 $ 10,386 $ 6,924
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990-01 PURCHASING (DUANE MOODY) (E) $ 2,000 $ 5,000 $ 2,500
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901-00 M&H PROJ MGMT (E) (.1)(.2)(.1)(.7) $ 28,000 $ 39,200 $ 33,600
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OVERHEADS
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- ELP RATE 0% $ - $ - $ -
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- GROUP RATE 0% $ - $ - $ -
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- AFUDC (10.58% x 3 MON) 0% $ - $ - $ -
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RISK FUNDS & PROFITS
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RISK FUNDS $ 135,550 $ 304,460 $ 214,950
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901-00 B&H RANGE $ 87,500 $ - $ 52,500
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PDI RANGE
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TOTAL ESTIMATED COST $ 1,238,840 $ 1,587,989 $1,402,532
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ESTIMATED PROBABILITY OF OCCURRENCE 30% 20% 50%
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Page 5
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OCS ROSWELL
PROJECT COST ESTIMATE
5/2/96
- - - --------------------------------------------------------------------------------------------------------------------
CUSTOMER COMPANY NAME: ENRON LIQUIDS
PROJECT NAME: 6" SO. ODESSA LAT.
W.O. NUMBER:
PROJECT MANAGER: JOE MILLS
REVISION NUMBER: ALLIANCE ESTIMATE
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RISK FACTORS
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SEE "RISK FUNDS"
===================================================================================================================================
Page 6
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OCS ROSWELL
PROJECT COST ESTIMATE
5/2/96
- - - --------------------------------------------------------------------------------------------------------------------
CUSTOMER COMPANY NAME: ENRON LIQUIDS
PROJECT NAME: 6" SO. ODESSA LAT.
W.O. NUMBER:
PROJECT MANAGER: JOE MILLS
REVISION NUMBER: ALLIANCE ESTIMATE
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PROJECT CONTACT LIST
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NAME OFFICE Mobile PAGER
Joe Mills M&H 505/627-8153 800/327-9957
Jack Moody Enron Liquids
Rick Miller Enron Liquids
Earl Chanley Transwestern 505/625-8031
Page 7
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OCS ROSWELL
PROJECT COST ESTIMATE
5/2/96
- - - --------------------------------------------------------------------------------------------------------------------
CUSTOMER COMPANY NAME: ENRON LIQUIDS
PROJECT NAME: 6" SO. ODESSA LAT.
W.O. NUMBER:
PROJECT MANAGER: JOE MILLS
REVISION NUMBER: ALLIANCE ESTIMATE
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RISK FUNDS
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MOST
BEST CASE WORST CASE PROBABLE
DESCRIPTION COST COST COST
Qty. Unit Unit Cost ESTIMATE ESTIMATE ESTIMATE
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P.U.NO.
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900-00 MATL. DELV. (E) (.4)(.3)(.3)(.4) 1 LT $ 1,000 $ 12,000 $ 10,000
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900-00 SURVEY (E) (.3)(.4)(.1)(.5) 1 LT $ 1,000 $ 20,000 $ 10,000
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900-00 SCOPE CHANGES (E) (.2)(.3)(.1)(.6) 1 LT $ 5,000 $ 20,000 $ 10,000
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901-00 ROCK (B&H) (.9)(.3)(.3)(.4) 1 LT $ 86,100 $ 125,460 $ 104,550
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901-00 PAD (B&H) (.9)(.3)(.3)(.4) 1 LT $ 14,750 $ 19,000 $ 17,700
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901-00 WEATHER (B&H) (.2)(.3)(.1)(.6) 1 LT $ 5,000 $ 20,000 $ 10,000
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901-00 FIELD BENDS (B&H) (.1)(.1)(.1)(.8) 1 LT $ 500 $ 1,500 $ 1,000
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901-00 LABOR AVIB. (B&H) (.2)(.4)(.1)(.5) 1 LT $ 500 $ 7,500 $ 5,000
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901-00 REWORK (B&H) (.8)(.2)(.1)(.7) 1 LT $ 5,000 $ 30,000 $ 15,000
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901-00 HYD/MATL FAIL (B&H)(.2)(.2)(.1)(.7) 1 LT $ 750 $ 7,500 $ 1,500
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901-00 GRUBBING (B&H) (.3)(.4)(.1)(.5) 1 LT $ 100 $ 10,000 $ 5,000
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901-00 EXCAV. UNKNO (B&H)(.8)(.3)(.1)(.6) 1 LT $ 1,000 $ 5,000 $ 2,500
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901-00 ROAD TO METER SITE(.9)(.3)(.3)(.4) 1 LT $ 7,375 $ 9,500 $ 8,850
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901-00 ROAD TO TAKE OFF (B)(.9)(.3)(.3)(.4) 1 LT $ 7,375 $ 9,500 $ 8,850
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901-00 CON. DWG. (PDI) (.1)(.1)(.1)(.8) 1 LT $ 100 $ 7,500 $ 5,000
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SUBTOTALS
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900-00 ENRON RISK FUNDS $ 7,000 $ 52,000 $ 30,000
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901-00 B&H RISK FUNDS $ 128,450 $ 244,960 $ 179,950
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901-00 PDI RISK FUNDS $ 100 $ 7,500 $ 5,000
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RISK FUND $ 135,000 $ 304,460 $ 214,950
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Page 1
JOINT LENGTH
====================================================================================================================================
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60' VS 40' ECONOMICS
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PRICE/FT
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NET HAUL
SHRINK WELDING PRICE FROM
UP TO SLEEVE SAVINGS STRUNG ODESSA
JT LENGTH ROW TO RAILYD STRING SAVINGS (25%) ON ROW TOTAL
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40 $6.37 $0.05 $6.42 $2,930
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57 $6.46 $0.05 $6.51 $2,930
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57 $6.31 $0.11 ($0.04) ($0.17) $6.21 $6,600
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====================================================================================================================================
Page 1
EXHIBIT "B"
Engineering Specifications
The following Index of Project Specifications represents, but does not limit,
the ENRON Engineering Specifications to be used:
ELPOLP shall comply with all applicable Specifications. The following
Specifications should cover the majority of the "Work". Engineering Standards #
7503, 4701, 4732, 4736, 4742, 4747, 4915, 6601, 6625, 6634, 6637, 6639, 6651,
6660, 6700, 6710, 6720, 8100, 8101, 8110, 8116, 8125, 8126, 8155, 8301, 8308,
8310, 8312, 8315, 8360, 8362, 8375, 8405, 8415, and 8475.