Agreement No. ______________________
OPERATING & MAINTENANCE AGREEMENT
This Agreement, ("Agreement") 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 Limited Partnership, a Delaware limited partnership, hereinafter
referred to as "ELPOLP".
WITNESSETH THAT:
WHEREAS, MORGAN will own that certain Odessa Lateral and Meter facility
located in Ector County, Texas, as more fully described in Exhibit "A"
(hereinafter referred to as the "Facility"); and
WHEREAS, MORGAN desires that ELPOLP, as an independent contractor, operate
and maintain the Facility on behalf of and as agent for MORGAN; and
WHEREAS, the parties desire to set forth their rights and responsibilities
with regard to the operation and maintenance of the Facility.
NOW, THEREFORE, in consideration of the terms and conditions hereinafter
set forth, the parties agree as follows:
ARTICLE I
RESPONSIBILITIES
1.1 Designation of ELPOLP. This Agreement shall be effective upon the Effective
Date designated above, but the parties' respective duties and
responsibilities for payment hereunder shall commence upon the "Initial
Transportation Date" under that certain Transportation Agreement between
MORGAN and ELPOLP related to the Facility (the "Commencement Date").
1.2 Responsibilities and Rights of ELPOLP. As operator of the Facility, ELPOLP
shall provide all operations, maintenance, administration, construction,
engineering and emergency services necessary to operate and maintain the
Facility in good operating condition and in accordance with all applicable
laws and regulations (the "Operations and Maintenance"). ELPOLP shall
operate and maintain the Facility pursuant to and consistent with (i) sound
and prudent carbon dioxide pipeline industry practices, (ii) the laws,
rules, or regulations of the DOT, Local, State, Federal or other
appropriate jurisdictional body, and (iii) such reference documents,
including: a) Engineering Standards Enron Gas Pipeline Group
(Vols. I, II, III); b) Central Basin Pipeline
Operating Procedures Manual; and c) Enron Liquids
Pipeline Company Environmental Policy and Procedures
Manual. MORGAN shall provide, for use by ELPOLP,
design, construction, operation and maintenance
information, including, but not limited to,
"as-built" drawings, schematics, and flow diagrams as
applicable, as ELPOLP may reasonably request from
time to time, to allow ELPOLP to perform its
obligations hereunder.
1.3 Services Provided ELPOLP. ELPOLP as agent for MORGAN shall provide the
following services for MORGAN relative to the Facility:
(a) Operations and Maintenance Services. ELPOLP
shall procure and furnish all materials,
equipment, services, supplies, and labor
necessary for the operation and maintenance of
the Facility, including, but not limited to, the
following:
(1) Communications, corrosion control,
monitoring, and measurement;
(2) Periodic testing, adjustment, external and internal inspection of
the Facility, and such maintenance, reconditioning, or overhaul as
may be necessary and appropriate to maintain valves, pipeline,
orifice, displacement and other meters, and such other facility as
may be required to operate and maintain the Facility;
(3) Cathodic protection of the Facility for the
control of corrosion and subsequent
monitoring as necessary;
(4) Equipment and facility repair, overhaul, and
replacement, as necessary;
(5) Administrative and supervisory services;
(6) Pay and discharge all costs and expenses incurred in connection
with the operation and maintenance of the Facility pursuant to
this Agreement;
(7) Protect all interests in real estate covering the Facility,
including, without limitation, rights-of-way, easements,
leaseholds, permits, licenses, fee lands and any other real estate
interests associated with the Facility; comply with all the terms
and conditions of the rights-of-way documents; refer all
rights-of-way landowner matters to MORGAN when received; notify
MORGAN of
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all encroachments upon the rights-of-way as soon as reasonably
practical after ELPOLP discovers such encroachments, and cooperate
fully with MORGAN in the resolution of all such matters; MORGAN
shall timely provide ELPOLP notice of all correspondence,
communications, or other information it receives related to and
any changes regarding MORGAN's interest in the rights-of-way;
(8) Provide all consumable supplies and
materials necessary for the operation and
maintenance of the Facility;
(9) Provide technical services as required for
maintenance of the Facility;
(10) Maintain logs and regulatory records relating to the operation and
maintenance of the Facility including, without limitation,
Department of Transportation records required under the Hazardous
Liquids Pipeline Safety Act and regulations promulgated
thereunder;
(11) Notify MORGAN, as expeditiously as possibly, of all incidents
relating to the Facility which are reportable under the laws or
regulations of the Railroad Commission of Texas, Department of
Transportation, or other governmental agency with jurisdiction;
(12) Respond to and follow as expeditiously as possible all of MORGAN's
directions relating to the volumes of carbon dioxide which are to
be received into and shipped out of the Facility;
(13) Obtain, if necessary, and maintain all required environmental
permits and other authorizations (including, without limitation,
air emissions, water use, or water discharge permits,
collectively, "Permits") necessary to operate and maintain the
Facility, make all required reports under the Permits, and operate
at all times in compliance with all environmental rules,
regulations, orders and laws;
(14) Notify MORGAN, as expeditiously as possible, of all accidents or
incidents arising out of the operation and maintenance of the
Facility resulting in death or personal injury or damage to the
Facility or third party property; notify MORGAN of all claims
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received by ELPOLP relating to such
accidents or incidents;
(15) Assure that all carbon dioxide delivered into MORGAN shall conform
to the minimum specifications established by MORGAN (as may be
amended from time to time) for such carbon dioxide if at any time
the carbon dioxide tendered for delivery shall fail to conform to
such quality specifications and is not remedied within a
reasonable length of time, ELPOLP shall notify MORGAN of the lack
of conformity. The current version of carbon dioxide
specifications as established by MORGAN are attached hereto and
incorporated hereby as Exhibit "B";
(16) Perform all carbon dioxide measurement activities for the Facility
as specified by MORGAN, and preserve all test data, charts, and
other required data pertaining to the measurement of carbon
dioxide for a period of three (3) years or such other period as
may be prescribed by regulatory authorities with jurisdiction; and
(17) Collect appropriate information and prepare and deliver periodic
invoices to those persons for whom MORGAN has, from time to time,
any agreement for the transportation of carbon dioxide through the
Facility. Such invoicing shall be done in accordance with the
terms and requirements of the agreements between MORGAN and such
persons for whom carbon dioxide is transported, including such
requirements regarding the frequency of invoicing and invoicing
for minimum transportation, "take or pay" or similar requirements.
MORGAN will deliver copies of any such agreements or arrangements
to ELPOLP as may be reasonably required in order to facilitate its
invoicing function hereunder.
(b) Emergency Services. In the case of an explosion, fire, storm, or other
emergency which might threaten life or property or render the Facility
or any part thereof incapable of continued operation, ELPOLP shall
immediately take such steps and incur such expenses as are required to
deal with such emergency including, without limitation, employment of
third parties. MORGAN shall reimburse ELPOLP each calendar year for
expenditures incurred during such year for payment of said expenses.
1.4 DOT/Rights-of-Way Costs. ELPOLP shall be responsible
for payment of all periodic payments to DOT or other
governmental
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authority with respect to operation or ownership of the Facility or
payments due under the rights-of-way documents and all damages which may be
due on the rights-of-way which arise out of the operation and maintenance
of the Facility (collectively the "Periodic Costs"), including, without
limitation, the costs of moving and removing facilities as required by the
rights-of-way documents. MORGAN shall reimburse ELPOLP each calendar year
for that portion of the Periodic Costs incurred during such year that
exceed $1,000.00, except that MORGAN shall not be required to reimburse
ELPOLP for any portion of the Periodic Costs (e.g., rights-of-way damages)
that are caused by ELPOLP's negligence, willful misconduct or breach of the
requirements of this Agreement.
1.5 Additions or Modifications. As MORGAN's agent, with no ownership interest
in the facility, ELPOLP shall make no additions or major modifications to
the Facility without the prior written consent of MORGAN. All such
additions and modifications shall be constructed in accordance with normal
industry standards and the requirements of 49 CFR Part 195, as applicable,
and shall conform to MORGAN's designated standard operating procedures as
provided in the manuals provided ELPOLP as stated in Article 1, Section
1.2. ELPOLP shall be solely responsible for the construction, operation,
and maintenance of such additions during the term hereof. MORGAN will
reimburse ELPOLP the total amount for capital expenditures incurred
during such year.
1.6 Subcontracting. It is understood and agreed that MORGAN shall not contract
with any third party for the performance of ELPOLP's duties to operate and
maintain the Facility hereunder, or any part thereof, nor assign its
rights, duties, or obligations hereunder, unless mutually agree. ELPOLP
shall have the right to contract with third parties for routine operation,
maintenance, or construction services such as, and including, but not
limited to, painting, x-ray, chart integration, measurement, accounting, or
other similar type services. 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 Operations and Maintenance
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.
1.7 Costs and Expenses. Commencing on the Commencement Date, ELPOLP shall
provide all operating services provided for hereunder in exchange for an
annual fee of $75,000, payable and due quarterly in the amount of
$18,750.00 on the first day of each quarter (calendar quarters starting on
January 1, April 1, July 1 and October 1). ELPOLP agrees to promptly pay
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all its vendors and contractors to insure that no liens are filed against
the Facility for the providing of goods or services relating to the
Facility, and ELPOLP shall immediately take appropriate remedial action to
have such liens released if they are filed. If ELPOLP fails to take such
action, MORGAN may take whatever action is necessary to have such liens
released, including the payment of the claimed indebtedness, and ELPOLP
shall reimburse MORGAN for all costs, expenses, and payments made to have
such liens released.
ARTICLE II
PERFORMANCE OF OPERATOR'S OBLIGATIONS
2.1 Morgan's Right to Inspect. At all times during the term of this Agreement,
MORGAN shall have the right to inspect, or cause to be inspected, the
Facility and the performance of ELPOLP's duties hereunder, and the right to
consult with ELPOLP to assure that ELPOLP is properly performing its
duties. The duties to be performed hereunder by ELPOLP shall be performed
as MORGAN's agent, and ELPOLP shall have the right to select the means,
methods, and manner of performing its duties hereunder in accordance with
this Agreement. MORGAN shall not have the right to direct, supervise, or
control ELPOLP or its servants or employees in the performance of its
duties hereunder, or as to the means, manner, and methods in which its
duties are performed except as required under this Agreement.
2.2 Failure to Meet Standards. In the event that ELPOLP is notified of a
failure to meet applicable operating requirements, whether of the DOT,
Local, State, Federal or other appropriate jurisdictional body, and if
ELPOLP does not correct such failure in ninety (90) days, and continues to
operate and maintain the Facility not in accordance with Paragraphs 1.2 and
1.3 of this Agreement and the standards set forth therein, MORGAN shall
have the option of (1) requiring such compliance by a suit for specific
performance; (2) performing the required actions itself or by a third party
subject to reimbursement by ELPOLP; and/or (3) terminating this Agreement
and seeking such other relief as may be provided by law.
ARTICLE III
GENERAL
3.1 Independent Contractor. The parties hereto agree
that the Operations and Maintenance rendered by
ELPOLP in the fulfillment of the terms and
obligations of this Agreement shall be as an
independent contractor, and this Agreement does
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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 fulfill-
ment of the terms and obligations of this Agreement and agrees to employ
and direct any persons performing any Operations and Maintenance 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.
3.2 Insurance. ELPOLP agrees to maintain policies and programs of
self-insurance sufficient to protect from liabilities that ELPOLP may be
responsible for under this Agreement. MORGAN shall be responsible for
property insurance protection coverages (e.g., fire, lightning, earthquake)
for the Facility.
3.3 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 OF EVERY KIND,
INCLUDING ALL, EXPENSES OF LITIGATION, COURT COSTS, AND ATTORNEYS' FEES,
FOR INJURY TO OR DEATH OF ANY PERSON, OR FOR LOSS OR DAMAGE TO ANY PROPERTY
CAUSED BY 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 3.3, 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.
3.4. Limitation of Liability. NOTWITHSTANDING ANYTHING
HEREIN TO THE CONTRARY, IN NO EVENT SHALL ELPOLP OR
MORGAN BE LIABLE TO
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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.
3.5 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 Operations and Maintenance 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 any such Claim
(whether liquidated or unliquidated, or by suit, lien, judgment, execution
or otherwise) exclusively 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.
3.6 Environmental Waste. Notwithstanding any provisions contained to the
contrary, in the event that the Operations and Maintenance 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
subcontractors 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 OPERATIONS AND MAINTENANCE, 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 spent or discarded material,
including solid, liquid, semisolid, or contained gaseous materials
resulting from industrial, commercial, mining and agricultural activities
or from community or individual
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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. The
Operations and Maintenance provided hereunder shall in no event include the
disposal or off site removal of Waste unless (i) specifically agreed upon
in writing by a duly authorized officer of ELPOLP, or (ii) such Waste was
brought on to Morgan's premises by ELPOLP or its subcontractors or are
present upon Morgan's premises arising from the negligence or willful
misconduct of ELPOLP or its subcontractors.
3.7 Force Majeure. No delays in or failure or omission in the performance or
any obligation under this Agreement by ELPOLP or MORGAN, other than payment
of money, shall constitute 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 a 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, breakage or accident to
machinery or lines of pipe, the necessity for making repairs, tests or
alterations to machinery or lines of pipe, freezing of lines of pipe,
inability to obtain necessary material, supplies, permits, or right-of-way.
If such time delay or other force majeure condition causes an increase to
ELPOLP's labor, equipment, or material costs to operate the Facilities,
ELPOLP shall furnish to MORGAN supporting documentation evidencing such
increase in costs, and ELPOLP shall be entitled to a fair and equitable
adjustment to ELPOLP's total price for operating the Facilities as stated
herein. 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. It is understood and agreed that the settlement of strikes or
lockouts shall be entirely within the discretion of the party having the
difficulty, and the above requirement that any force majeure shall be
remedied with all reasonable dispatch shall not require the settlement of
strikes or lockouts by acceding to demands when such course is inadvisable
in the discretion of the party having the difficulty.
3.8 Ownership of Records and Materials. All records, materials and documents of
whatever kind or nature, including but not limited to, reports, plans,
designs, studies, data, maps, drawings, specifications, construction
records, engineering
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records, accounting records, right-of-way and easement records, permit
records, and purchasing records, relating to the Facility and prepared or
obtained by ELPOLP as agent in performing the Operations and Maintenance
hereunder, shall be the property of MORGAN and shall be held in temporary
custody by ELPOLP. Upon the request of MORGAN, all or any portion of the
aforesaid records, materials, documents, including documents, records, or
materials previously provided to ELPOLP by MORGAN (and all copies thereof),
shall be delivered to MORGAN in a manner reasonably requested by MORGAN;
such obligation shall survive termination of this Agreement. The records,
materials, and documents provided to ELPOLP as agent for MORGAN hereunder
or prepared or obtained by ELPOLP in performing the services hereunder and
all information which ELPOLP receives or becomes familiar with relating to
the operation and maintenance of the Facility, shall be kept confidential,
and shall be disclosed to third parties only with the prior consent of
MORGAN. ELPOLP's obligations as regards confidential material shall not
apply to (a) information already in the possession of ELPOLP and not
subject to a confidentiality obligation at the time of execution hereof;
(b) information which, at the time of disclosure, was in the public domain
or which, after disclosure, becomes a part of the public domain through no
fault of ELPOLP; and (c) information which was acquired by ELPOLP without
violation of any confidentiality obligation from a source other than
MORGAN.
3.9 Safety. 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 Operations and Maintenance 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 Operations and Maintenance.
3.10 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.
3.11 General. The terms and provisions of this Agreement
are intended to supersede any conflicting terms or
conditions in
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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. Termination or expiration of this Agreement
shall not relieve or release either party from any breach or default
occurring prior to such termination or expiration; and the terms and
provisions of Paragraphs 1.5, 3.3, 3.16 and 3.13 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.
3.12 Descriptive Headings. The descriptive headings of
the provisions of this Agreement are formulated and
used for convenience only and shall not be deemed to
affect the meaning or construction of any provision.
3.13 Governing Law. Unless otherwise specified, this Agreement and the rights
and duties of the parties arising out of the 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.
3.14 Non-waiver of Future Default. No waiver by any party of any one or more
defaults by the other in performance of any of the provisions of this
Agreement shall operate or be construed as a waiver of any other existing
or future default or defaults, whether of a like or different character.
3.15 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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3.16 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.
ARTICLE IV
TERM
4.1 Term. Subject to all other provisions and conditions contained herein, this
Agreement shall be deemed operative and in full force and effect as of the
Effective Date and shall continue for a primary term of twenty (20) years
from the Commencement Date, and shall extend forward from month to month
thereafter, unless and until terminated by either party giving at least
ninety (90) days' prior written notice to the other party. Notwithstanding
anything herein to the contrary, Morgan shall have the right to terminate
this Agreement at any time effective upon notice of such termination to
ELPOLP in the event of the termination or expiration of that certain
Transportation Agreement between Morgan and ELPOLP related to the Facility;
and Morgan may elect to extend this Agreement upon the same terms and
conditions provided herein (excepting prices) in the event that ELPOLP or
its successors or assigns elects to extend or require that Morgan transport
any Carbon Dioxide for ELPOLP or its successors or assigns following the
"Primary Term" of the Transportation Agreement.
ARTICLE V
NOTICES
5.1 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:
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To ELPOLP: To MORGAN:
Enron Liquids Pipeline Morgan Associates, Inc.
Operating Limited Partnership Attention: William V. Morgan
Attention: 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.
IN WITNESS WHEREOF, this Agreement is executed on the day and year first
above written.
"ELPOLP" "MORGAN"
Enron Liquids Pipeline Operating Morgan Associates, Inc.
Limited Partnership
by Enron Liquids Pipeline Company,
its General Partner
By: /s/ Ray Kaskel By: /s/ William V. Morgan
Title: President Title: President
Witness/Attest
By: /s/ Thomas P. Tosoni By:_____________________________
Title: Assistant Secretary Title:__________________________
(SEAL) (SEAL)
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EXHIBIT "A"
Odessa Lateral and Meter Facility
The 6 inch pipeline with its origin at mile marker 98.15 on the Central Basin
Pipeline running easterly, approximately 11.2 miles in length, and meter
facility, with its terminus at the delivery point of Phillips' South Cowden Unit
enhanced oil recovery project, all located in the T. & P. RR Co. Survey, Block
42, 43, and 44, all Township 3 South, Ector County, Texas.
EXHIBIT "B"
Product delivered at the Origination Point shall meet the following
specifications, which herein are collectively called "Quality Specifications":
(a) Water. Product shall contain no free water, and shall not contain more
than thirty (30) pounds of water per MMcf in the vapor phase.
(b) Hydrogen Sulphide. Product shall not contain
more than twenty (20) parts per million, by
weight, of hydrogen sulphide.
(c) Carbon Dioxide. Product shall contain at least
ninety-five mole percent (95%) of molecules
containing one (1) atom of carbon and two (2)
atoms of oxygen.
(d) Total Sulfur. Product shall not contain more
than thirty-five (35) parts per million, by
weight, of total sulfur.
(e) Temperature. Product shall not exceed a
temperature of one hundred twenty degrees
Fahrenheit. (120(degree)F).
(f) Nitrogen. Product shall not contain more than
four mole percent (4%) of nitrogen.
(g) Hydrocarbons. Product shall not contain more than five mole percent
(5%) of hydrocarbons and the dew point of Product (with respect to such
hydrocarbons) shall not exceed minus twenty degrees Fahrenheit
(-20(degree)F).
(h) Oxygen. Product shall not contain more than ten
(10) parts per million, by weight, of oxygen.
(i) Other. Product shall not contain more than 0.3 (three tenths) gallons
of glycol per MMcf and at no time shall such glycol be present in a
liquid state at the pressure and temperature conditions of the
pipeline.