EXHIBIT 10.1
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IT CONSOLIDATION AND OPERATIONS
SERVICES AGREEMENT
BY AND BETWEEN
DUKE ENERGY BUSINESS SERVICES, LLC
AND
DUKE ENERGY FIELD SERVICES, LP
DATED AS OF JULY 30, 2003
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TABLE OF CONTENTS
<Table>
ARTICLE I
THE SERVICES
SECTION 1.1 THE SERVICES....................................................................................1
SECTION 1.2 MODIFICATION OF SERVICES........................................................................2
ARTICLE II
COSTS AND EXPENSES
SECTION 2.1 CHARGES FOR SERVICES............................................................................2
SECTION 2.2 PER UNIT RATE INCREASES.........................................................................2
SECTION 2.3 INVOICES........................................................................................3
SECTION 2.4 AUDIT OF EXPENSES...............................................................................3
SECTION 2.5 ADDITIONAL EQUIPMENT, TECHNOLOGY OR THIRD PARTY SERVICES........................................3
SECTION 2.6 TAXES...........................................................................................3
ARTICLE III
TERM OF AGREEMENT
SECTION 3.1 TERM............................................................................................4
SECTION 3.2 EARLY TERMINATION...............................................................................4
ARTICLE IV
REPRESENTATIVES
SECTION 4.1 REPRESENTATIVES................................................................................4
ARTICLE V
PERFORMANCE STANDARDS
SECTION 5.1 PERFORMANCE STANDARDS...........................................................................4
ARTICLE VI
INDEMNIFICATION
SECTION 6.1 INDEMNIFICATION.................................................................................5
SECTION 6.2 LIMITATION OF DAMAGES...........................................................................5
ARTICLE VII
SCOPE OF AGREEMENT
SECTION 7.1 RELATIONSHIP OF PARTIES.........................................................................5
SECTION 7.2 ACCESS TO OFFICES...............................................................................5
SECTION 7.3 REASONABLE AVAILABILITY OF PERSONNEL............................................................5
SECTION 7.4 SCOPE OF DUKE'S AUTHORITY.......................................................................5
SECTION 7.5 INSURANCE.......................................................................................6
SECTION 7.6 COMPLIANCE WITH AFFILIATE RULES.................................................................6
ARTICLE VIII
CONFIDENTIALITY
SECTION 8.1 CONFIDENTIALITY.................................................................................6
ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION 9.1 COUNTERPARTS....................................................................................7
SECTION 9.2 GOVERNING LAW; JURISDICTION AND FORUM; WAIVER OF JURY TRIAL.....................................7
SECTION 9.3 ENTIRE AGREEMENT................................................................................7
SECTION 9.4 NOTICES.........................................................................................7
SECTION 9.5 SUCCESSORS AND ASSIGNS..........................................................................8
</Table>
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<Table>
SECTION 9.6 HEADINGS; DEFINITIONS...........................................................................8
SECTION 9.7 AMENDMENTS AND WAIVERS..........................................................................8
SECTION 9.8 SEVERABILITY....................................................................................8
SECTION 9.9 INTERPRETATION..................................................................................9
SECTION 9.10 SPECIFIC PERFORMANCE............................................................................9
SECTION 9.11 NO THIRD PARTY BENEFICIARIES....................................................................9
SECTION 9.12 FURTHER ASSURANCES..............................................................................9
SECTION 9.13 FORCE MAJEURE...................................................................................9
SECTION 9.14 ALTERNATIVE DISPUTE RESOLUTION.................................................................10
SECTION 9.15 CONFLICTS OF INTEREST..........................................................................11
SECTION 9.16 CONSTRUCTION...................................................................................11
APPENDIX 1 - IT TRANSFER SERVICES............................................................................___
APPENDIX 2 - IT SERVICES.....................................................................................___
APPENDIX 3 - DISASTER RECOVERY SERVICES......................................................................___
APPENDIX 4 - FINANCIAL AGREEMENT.............................................................................___
APPENDIX 5 - REPRESENTATIVES AND ROLES.......................................................................___
APPENDIX 6 - ENTERPRISE SERVICE MEASURES AND REPORTING.......................................................___
</Table>
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IT CONSOLIDATION AND OPERATIONS
SERVICES AGREEMENT
This IT CONSOLIDATION AND OPERATIONS SERVICES AGREEMENT (this
"Agreement") is made as of the 30th day of July, 2003, by and between Duke
Energy Business Services LLC ("Duke") and Duke Energy Field Services, LP (the
"Company") (each, a "Party", and together the "Parties").
RECITALS:
WHEREAS, Duke has agreed to assist the Company in transferring
and consolidating its information technology operations into Duke's information
technology operations and provide future ongoing information technology services
to the Company, on such terms as set forth in this Agreement; and
WHEREAS, the Parties believe that the provisions of this
Agreement as a whole are fair.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound hereby, the Parties
hereby agree as follows:
ARTICLE I
THE SERVICES
Section 1.1 The Services.
(a) Duke agrees to provide the support and services associated
with the transfer and consolidation of the Company's information technology
operations from Denver, Colorado to Duke's information technology operations in
Charlotte, North Carolina, all as described in Appendix 1 (the "IT Transfer
Services").
(b) Duke agrees to provide to the Company the information
technology services described in Appendices 2 and 3 (together with the IT
Transfer Services referred to herein as the "Services"), for the term described
in Section 3.1.
(c) Duke shall perform the Services for the Company with the
same degree of care, skill and prudence customarily exercised by it for its own
operations, consistent with industry practices, in compliance with statutory and
regulatory requirements.
(d) If Duke is unable to perform the Services in accordance
with Section 1.1(a) and (b), then Duke shall hire the personnel required to
provide such Services. Duke is authorized to provide any part of the Services
either from its own resources and employees, or, by a subcontractor(s).
Subcontractor(s) shall be made subject to no less stringent performance
requirements than Duke is required to comply with under this Agreement,
including confidentiality and compliance with statutory and regulatory
requirements.
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(e) In accordance with the terms and conditions of this
Agreement and the Services described in Appendices 1, 2 and 3, Duke shall
provide records, financial information, or other information that is reasonably
requested by the Company to support the Services which may not have been kept or
reported in the ordinary course of business by Duke, even if not provided to the
Company prior to the date hereof. Notwithstanding the foregoing, in the event
that the records, financial information or other information requested by the
Company is not contemplated by the Services or the rate sheet, then Duke and the
Company will negotiate in good faith the terms whereby such information will be
provided.
Section 1.2 Modification of Services. During the term of this
Agreement, the Company shall have the right to enter into other contracts with
third parties in connection with the Services described in this Agreement,
provided the Company receives Duke's prior written consent, which consent shall
not be unreasonably withheld. If the Company and Duke mutually agree, after a
reasonable transition period, the Parties may terminate any Services provided
for in this Agreement. Any changes in the scope of the Services and associated
changes in the applicable rates shall be in writing signed by an authorized
representative of each Party prior to implementation or effectiveness of such
changes.
ARTICLE II
COSTS AND EXPENSES
Section 2.1 Charges for Services. Duke shall charge the
Company for the Services provided under this Agreement in accordance with the
rates described in Appendices 2, 3 and 4; provided, however, if any personnel or
assets of Duke Power ("Duke Power"), a division of Duke Energy Corporation and a
public utility regulated by the North Carolina Utilities Commission ("NCUC"),
the South Carolina Public Service Commission ("SCPSC") and the Federal Energy
Regulatory Commission ("FERC"), are used in the provision of the Services, Duke
shall charge the Company and the Company shall pay Duke in accordance with
Duke's North Carolina and FERC Codes of Conduct and any other applicable
regulatory rules governing affiliate transactions. Notwithstanding the
foregoing, in no event shall the Company be responsible for directly paying any
salaries, wages, benefits, withholding, severance payments or any other
compensation or payments with respect to the employees of Duke.
Section 2.2 Per Unit Rate Increases. The per unit rates
charged for the Services shall remain in effect for each calendar year during
the term of this Agreement. During the term of this Agreement, the rates may be
adjusted once annually, provided that no increase in the per unit rate listed in
Appendices 2, 3 and 4 shall exceed the most recent yearly increase in the
Consumer Price Index ("CPI") over the prior calendar year (calendar year 2002
shall be used to establish 2004 rates and calendar year 2003 shall be used to
establish 2005 rates). For purposes of this Section 2.2, the CPI shall be a
change in the CPI, U.S. City Average, All Items. Duke shall provide the Company
with written notice of any proposed increase in the per unit rates by October 15
of the calendar year prior to the year when such increase is to become effective
(the "Fee Notice"). The Parties shall come to a final agreement on any such
increase in the per unit rates within 30 days following the Company's receipt of
the Fee Notice. In addition, Duke agrees that during the term of this Agreement
neither changes in Duke's per unit rate calculation algorithms for the Services
nor changes in the way Duke establishes per unit rates, will increase the cost
of previously offered services.
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Section 2.3 Invoices. Duke shall prepare and deliver to the
Company a monthly invoice by the twenty-fifth day of the month following the
service month that describes the Services provided by Duke and the amount
charged to the Company hereunder. Each invoice shall be due and payable within
20 days after receipt by the Company. Duke shall use its reasonable efforts to
invoice all Services no later than 60 days after the performance of such
Services. The Company shall promptly and diligently pay all amounts due to Duke
under this Agreement and any amounts due and owed to Duke which are over 30 days
past due during the first two billing periods or 20 days past due after the
first two billing periods shall accrue late fees calculated at the average of
the Prime Rates as reported in the Wall Street Journal during such past due
payment period. In the event of the early termination of any Services hereunder,
the Company shall pay Duke for only those Services and costs (or portions
hereof) that have been (i) properly performed prior to such termination and (ii)
properly committed to in writing by Duke prior to the receipt of such
termination notice.
Section 2.4 Audit of Expenses. Duke shall maintain complete
and accurate records of and supporting documentation for all amounts billable to
the Company hereunder and shall retain such records for a period of at least two
years following the date of the inclusion in any invoice sent to the Company.
Duke agrees to provide the Company with documentation and other information with
respect to each invoice as may be reasonably requested by the Company to verify
that Duke's charges to the Company are accurate, correct and valid in accordance
with the provisions of this Agreement. The Company and its representatives shall
have access to such records for purposes of verifying all amounts billable to
and payments made by the Company hereunder upon reasonable notice during normal
business hours during the term of this Agreement and such subsequent period for
which Duke is required to maintain such records. If such examination reveals any
inaccuracy in any billing made hereunder, the necessary adjustment in such
billing and payments shall be made promptly, provided that no adjustment for any
billing or payment shall be made after the lapse of two years from the date of
invoice hereof unless challenged in writing prior thereto. If any of the
Services hereunder are performed using Duke Power employees or assets, then the
Company agrees to provide Duke with records and other information necessary for
an internal or external audit of affiliate transactions. Duke and its
representatives shall have access to such records and information during normal
business hours during the term of this Agreement and for the same period after
termination of this Agreement that Duke is required to retain similar records
hereunder.
Section 2.5 Additional Equipment, Technology or Third Party
Services. If additional equipment, software, technology or third party services
are employed by Duke to perform the Services and the costs associated with such
are not identified in Appendices 1, 2, 3 or 4, then the Company shall pay the
cost of such additional equipment, software, technology or third party services
only if previously approved in writing by the Company. To the greatest extent
feasible, charges for equipment, software, technology and third party services
will be billed directly to the Company. In the case of any emergency, prior
written approval of such expenses shall not be required; provided however, that
Duke shall obtain the Company's consent to such emergency services as soon as
reasonably practicable.
Section 2.6 Taxes. The Company shall pay all taxes, fees or
similar levies imposed on the Services provided hereunder (other than taxes
imposed on Duke's net income, including alternative minimum taxable income,
gain, excess profits or franchise taxes imposed on the capital or net income of
Duke and other than employment taxes imposed with respect to Duke's employees,
except to the extent such taxes are included in the rates designated in
Appendices 2, 3 and 4); and, in the event that Duke is required by law to pay
any of said taxes, fees or other similar levies, the Company shall reimburse
Duke for such payments.
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ARTICLE III
TERM OF AGREEMENT
Section 3.1 Term. The term of this Agreement shall begin as of
the date first set forth above and remain in effect until December 31, 2005, and
shall automatically renew each December 31 thereafter and continue year to year,
unless terminated earlier as provided in Section 3.2 below.
Section 3.2 Early Termination. Either Party may terminate this
Agreement at any time for any reason upon one hundred eighty (180) days prior
written notice to the other Party, provided that Duke may not terminate this
Agreement under this provision until after December 31, 2005 unless the
ownership percentage of the Company by an affiliate of Duke Energy Corporation
goes below fifty percent (50%) or an affiliate of Duke Energy Corporation is no
longer responsible for the operation of the Company. Following notice of
termination, Duke and the Company will work together cooperatively to plan and
execute the migration of all Services covered in this Agreement from Duke within
a reasonable and expeditious time. Notwithstanding any such termination, Company
shall continue to be obligated to pay for any Services performed and expenses
incurred before such termination date.
ARTICLE IV
REPRESENTATIVES
Section 4.1 Representatives. The Parties shall each appoint
one or more representatives (each, a "Representative") to facilitate
communications and performance under this Agreement. Each Party may treat an act
of the Representative of the other Party as being authorized by such other Party
without inquiring behind such act or ascertaining whether such Representative
had authority to so act. The initial Representatives are named in Appendix 5
hereto as well as their initial roles and responsibilities. Each Party shall
have the right at any time and from time to time to replace its Representative
by giving notice in writing to the other Party setting forth the name of (i) the
Representative to be replaced and (ii) the replacement, and certifying that the
replacement Representative is authorized to act for the Party giving notice in
all matters relating to this Agreement.
ARTICLE V
PERFORMANCE STANDARDS
Section 5.1 Performance Standards. Duke shall provide the
Services in accordance with the service standards and terms set forth in this
Agreement and APPENDIX 6.
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ARTICLE VI
INDEMNIFICATION
Section 6.1 Indemnification. DUKE HEREBY AGREES TO INDEMNIFY AND HOLD
HARMLESS THE COMPANY AND ITS RESPECTIVE SUCCESSORS, ASSIGNS, AFFILIATES, AND ALL
OF THE COMPANY'S DIRECTORS, OFFICERS, EMPLOYEES, REPRESENTATIVES AND AGENTS
(EACH, AN "INDEMNIFIED PARTY") FROM AND AGAINST ANY AND ALL DAMAGES, EXPENSES
(INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS' FEES), LOSSES, ACTIONS,
CLAIMS, SUITS, LIABILITIES AND COSTS INCURRED BY ANY INDEMNIFIED PARTY RESULTING
FROM THE GROSS NEGLIGENCE, OR WILLFUL MISCONDUCT OF DUKE TO THE EXTENT RELATING
TO DUKE'S PERFORMANCE OF (OR FAILURE TO PERFORM) THE SERVICES UNDER THIS
AGREEMENT.
Section 6.2 Limitation of Damages. No Party shall be liable for any
special, indirect, incidental, consequential or punitive damages of any
character resulting from, arising out of, or in any way incident to any act or
omission hereunder, irrespective of whether claims or actions for such damages
are based upon contract, warranty, negligence, gross negligence, strict
liability or any other remedy at law or equity.
ARTICLE VII
SCOPE OF AGREEMENT
Section 7.1 Relationship of Parties. Duke shall act as
independent contractor hereunder, and nothing herein shall at any time be
construed to create the relationship of employer and employee, partnership,
principal and agent, broker or finder or joint venturers as between Duke and the
Company.
Section 7.2 Access to Offices. Employees of the Company shall
be freely allowed to enter and leave the buildings and offices of Duke, subject
to any guidelines imposed by Duke. Employees of Duke shall be freely allowed to
enter and leave the buildings and offices of the Company, subject to any
guidelines imposed by the Company.
Section 7.3 Reasonable Availability of Personnel. The Company
acknowledges that Duke's employees are involved in the conduct of business for
Duke and may not be required to dedicate the entirety of their business days to
the performance of the Services; provided, however, that Duke agrees to use all
reasonable efforts to have its employees made available at the reasonable
request of the Company throughout the term of this Agreement, and the Parties
agree to make all reasonable efforts to cooperate mutually with each other so as
to achieve the intents and purposes of this Agreement.
Section 7.4 Scope of Duke's Authority. Without the prior
written consent of the Company, Duke, in performing the Services, shall not
borrow or lend money, except for short-term borrowings (such as commercial
paper) initiated through Duke's Corporate Cash Management in the ordinary course
of business; create any lien or encumbrance; execute, terminate, or amend any
contract in the name of or on behalf of the Company or its subsidiaries;
purchase or sell any asset of the Company or its subsidiaries; execute any
indemnification for the benefit of any party; or take any other action not in
the ordinary course of business of Duke or the Company. When performing this
Agreement, Duke shall receive the Company's written approval before incurring
any third party
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expense not identified in Appendices 1, 2 , 3 or 4; provided, however, Duke
shall not be obligated to obtain the Company's prior written consent for any
third party expense which is less than two-thousand dollars ($2,000.00).
Section 7.5 Insurance. During the term of this Agreement, Duke
shall be required to maintain the following types of insurance, as appropriate
to the Services provided: (a) Workers' Compensation Insurance as required by
state or federal law where the work is being performed; (b) General Liability
Insurance against claims for bodily injury and/or death of and property damage
to third parties; and (c) Business Automobile Liability Insurance against claims
of bodily injury, death and property damage to third parties covering all owned,
leased, and non-leased, and non-owned and hired vehicles.
Section 7.6 Compliance with Affiliate Rules. The performance
of this Agreement shall be in compliance with all applicable provisions of the
various Codes and Standards of Conduct to which Duke Energy Corporation and its
affiliates are subject by various energy and utility regulatory commissions,
including Duke Energy Corporation's North Carolina Code of Conduct, FERC Code of
Conduct with respect to the relationship between power marketing affiliates and
the electric utility and FERC Standards of Conduct for relations between
interstate pipelines and their marketing affiliates. Any term or condition of
this Agreement that is not in compliance with the various Codes and Standards of
Conduct noted above shall be renegotiated by the Parties.
ARTICLE VIII
CONFIDENTIALITY
Section 8.1 Confidentiality.
(a) Each Party shall (and each Party shall ensure that its
employees, contractors, subcontractors, agents and affiliates who perform or
receive Services under this Agreement shall) treat as strictly confidential (and
shall not disclose) all information received or obtained as a result of this
Agreement that relates to the other Party or any aspect of its business or
operations.
(b) A Party may disclose information that would otherwise be
confidential if and only to the extent: (i) required by applicable law or legal
process, provided that the disclosing Party has notified the other Party in
writing prior to disclosure; (ii) required by any securities exchange or agency
to which the Party is subject, wherever situated, whether or not the requirement
has the force of law, provided that the disclosing Party has taken all
practicable legal steps to prevent such disclosure and notified the other Party
in writing prior to disclosure; (iii) disclosed on a confidential basis to the
professional advisers or auditors of the Party or to any actual or potential
bankers or financiers of that Party; (iv) that the information has come into the
public domain through no fault of that Party or its employees, affiliates,
officers, directors, representatives, agents, or assigns; (v) that the other
Party has given prior approval to such disclosure; (vi) necessary to enforce,
comply with or perform any of the terms of this Agreement or the other
agreements contemplated hereby or thereby; or (vii) received from a third party,
unless, to the knowledge of the Party that would otherwise be subject to this
Section 8.1 or its employees, affiliates, officers, directors, representatives,
agents, or assigns, such third party is subject to an independent obligation to
keep such information confidential.
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ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.1 Counterparts. This Agreement may be executed in
one or more counterparts, all of which shall be considered one and the same
agreement, and shall become effective when one or more counterparts have been
signed by each of the Parties hereto and delivered (including by facsimile) to
the other Parties.
Section 9.2 Governing Law; Jurisdiction and Forum; Waiver of
Jury Trial.
(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without reference to the
choice of law principles thereof.
(b) Each Party hereto irrevocably submits to the jurisdiction
of any Delaware state court or any federal court sitting in the State of
Delaware in any action arising out of or relating to this Agreement, and hereby
irrevocably agrees that all claims in respect of such action may be heard and
determined in such Delaware state or federal court. Each Party hereto hereby
irrevocably waives, to the fullest extent it may effectively do so, the defense
of an inconvenient forum to the maintenance of such action or proceeding. The
Parties hereto further agree, to the extent permitted by law, that final and
unappealable judgment against any of them in any action or proceeding
contemplated above shall be conclusive and may be enforced in any other
jurisdiction within or outside the United States by suit on the judgment, a
certified copy of which shall be conclusive evidence of the fact and amount of
such judgment.
(c) To the extent that any Party hereto has or hereafter may
acquire any immunity from jurisdiction of any court or from any legal process
(whether through service or notice, attachment prior to judgment, attachment in
aid of execution, execution or otherwise) with respect to itself or its
property, each Party hereto hereby irrevocably waives such immunity in respect
of its obligations with respect to this Agreement.
(d) Each Party hereto waives, to the fullest extent permitted
by applicable law, any right it may have to a trial by jury in respect of any
action, suit or proceeding arising out of or relating to this Agreement. Each
Party hereto certifies that it has been induced to enter into this Agreement by,
among other things, the mutual waivers and certifications set forth above in
this Section 9.2.
Section 9.3 Entire Agreement. This Agreement, together with
the exhibits hereto, constitutes the entire agreement of the Parties with
respect to the services and arrangements described herein, and supercedes all
prior contracts or agreements between the Parties solely with respect to the
subject matter hereof, whether written or oral. This Agreement is not intended
to confer upon any person not a party hereto (or their successors and assigns)
any rights or remedies hereunder.
Section 9.4 Notices. All notices and other communications to
be given to any Party hereunder shall be sufficiently given for all purposes
hereunder if in writing and delivered by hand, courier or overnight delivery
service or three days after being mailed by certified or registered
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mail, return receipt requested, with appropriate postage prepaid, or when
received in the form of a telegram or facsimile and shall be directed, if to a
Party hereunder, to the address or facsimile number set forth below (or at such
other address or facsimile number as such Party shall designate by like notice):
(a) If to Duke:
Duke Energy Corporation
422 South Church Street (CS02A)
Charlotte, North Carolina 28202-1904
Attention: C. K. Beam
Fax No.: 704-382-1037
(b) If to the Company:
Duke Energy Field Services, LP
370 17th Street, Suite 900
Denver, Colorado 80202
Attention: Allan Skov
Fax No.: 303-595-0480
Section 9.5 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the Parties hereto and their respective
successors and permitted assigns; provided, however, that (a) no Party hereto
will assign its rights or delegate any or all of its obligations under this
Agreement without the express prior written consent of the other Party hereto,
and (b) any assignment of the obligations of either Party hereto shall not
relieve that Party of its obligations under any and all of the provisions of
this Agreement. Notwithstanding the foregoing, any Party may assign its rights
or delegate any or all of its obligations under this Agreement to an affiliate
of such Party without the prior written consent of the other Party.
Section 9.6 Headings; Definitions. The section and article
headings contained in this Agreement are inserted for convenience of reference
only and will not affect the meaning or interpretation of this Agreement. All
capitalized terms defined herein are equally applicable to both the singular and
plural forms of such terms.
Section 9.7 Amendments and Waivers. This Agreement may not be
modified or amended except by an instrument or instruments in writing signed by
both Parties, except that the Appendices hereto may be amended in writing by the
Parties to add, delete or modify the Services, change the rates on the rate
sheet or replace the Representatives. The Company may, only by an instrument in
writing, waive compliance by Duke with any term or provision of this Agreement
on the part of Duke. The waiver by either Party hereto of a breach of any term
or provision of this Agreement shall not be construed as a waiver of any
subsequent breach. Except as otherwise expressly provided herein, no failure to
exercise, delay in exercising or single or partial exercise of any right, power
or remedy by any Party, and no course of dealing between the Parties, shall
constitute a waiver of any such right, power or remedy.
Section 9.8 Severability. If any provision of this Agreement
shall be held invalid, illegal or unenforceable, the validity, legality or
enforceability of the other provisions of this Agreement shall not be affected
thereby, and there shall be deemed substituted for the provision at issue a
valid, legal and enforceable provision as similar as possible to the provision
at issue.
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Section 9.9 Interpretation. In the event an ambiguity or
question of intent or interpretation arises with respect to this Agreement, this
Agreement shall be construed as if it was drafted jointly by the Parties, and no
presumption or burden of proof shall arise favoring or disfavoring any Party by
virtue of the authorship of any provisions of this Agreement.
Section 9.10 Specific Performance. The Parties hereto agree
that irreparable damage would occur in the event that any Party fails to
consummate the transactions contemplated by this Agreement in accordance with
the terms of this Agreement and that the Parties shall be entitled to specific
performance in such event, in addition to any other remedy at law or in equity,
including temporary restraining orders or temporary or permanent injunctions.
Section 9.11 No Third Party Beneficiaries. Except as expressly
provided herein, nothing in this Agreement shall entitle any person other than
Duke or the Company or their respective successors and assigns permitted hereby
to any claim, cause of action, remedy or right of any kind.
Section 9.12 Further Assurances. Upon the terms and subject to
the conditions hereof, each of the Parties hereto shall use its reasonable best
efforts to take, or cause to take, all appropriate action, and to do or cause to
be done, all things necessary, proper or advisable under applicable laws and
regulations to make effective the transactions contemplated in this Agreement.
Notwithstanding the foregoing, the Company shall be responsible for providing
the information to Duke that is necessary for Duke to perform the Services.
Section 9.13 Force Majeure.
(a) No failure or omission to carry out or to observe any of
the terms, provisions or conditions of this Agreement, except the failure to
make payment for sums due hereunder, shall give rise to any claim by a Party
against another, or be deemed a breach of this Agreement, if the same shall have
been or shall be caused by or arise out of any event of force majeure, which
term as used herein shall include (but only to the extent that the affected
Party is unable to perform due to causes and events that are beyond the
reasonable control of the affected Party), but not be limited to, war,
hostilities, acts of the public enemy or of belligerents, sabotage, blockage,
revolution, insurrection, riot or disorder, requisitions or rationing, whether
imposed by law, decree or regulations or by voluntary cooperation of industry at
the insistence or request of any governmental authority or person purporting to
act therefor; compliance with allocation programs, voluntary or mandatory,
including reduction or cessation of production by reason of imposition by any
governmental authority or person purporting to act with government authority,
acts of God, fire, frost, earthquake, storm, or lightning, epidemic, quarantine,
strikes or combination of workmen lockouts or other labor disturbances,
explosion, accidents by fire or otherwise to pipe, storage facilities,
installations, machinery, unanticipated plant outages, delays in acquiring or
inability to acquire permits or licenses necessary to enable the Parties hereto
to perform, lack of adequate fuel, power, raw materials, labor, containers or
transportation facilities, delays or shortages caused by breakdowns, failures or
unavailability of materials or equipment, breakage, mechanical breakdowns or
accident to machinery; delay, breakdown, or destruction of a plant, terminal, or
equipment; provided, however, that the Party so affected thereby will exercise
reasonable efforts pursuant to prudent industry practice to prevent the
occurrence of the force majeure event and to cure the event of force majeure as
quickly as possible so that the Party so affected will be able to carry out and
observe all of the terms, provisions, and conditions of this Agreement, but such
Party shall not be required to settle any labor disputes giving rise to an event
of force majeure hereunder.
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(b) If a Party hereunder is prevented from or delayed in
performing any of its obligations under this Agreement by a force majeure event,
the Party affected shall promptly notify the other in writing of the
circumstances constituting the force majeure event, indicating the performance
obligations which are thereby delayed or prevented and the length of the
resulting delay expected.
(c) In the event that Duke is excused from supplying a Service
in accordance with the terms of this Section, then the Company shall be free to
acquire the Services from any substitute source, for such period as the Company
deems necessary or expedient, and if so acquired, the Company shall not be
obligated to pay Duke for such Services during such period.
Section 9.14 Alternative Dispute Resolution. Any dispute
arising out of or relating to this Agreement shall be resolved in accordance
with the procedures specified below.
(a) Negotiations Between Executives. The Parties shall attempt
in good faith to resolve any dispute arising out of or relating to this
Agreement promptly by negotiation between executives who have authority to
settle the controversy and who are at a higher level of management than the
persons with direct responsibility for administration of this Agreement. Either
Party may give the other party written notice of any dispute not resolved in the
normal course of business. Within 15 days after delivery of the notice, the
receiving Party shall submit to the other a written response. The notice and the
response shall include a statement of each Party's position and a summary of
arguments supporting that position, and the name and title of the executive who
will represent that Party and of any other person who will accompany the
executive. Within 30 days after delivery of the initial notice, the executives
of both Parties shall meet at a mutually acceptable time and place, and
thereafter as often as they reasonably deem necessary, to attempt to resolve the
dispute. All reasonable requests for non-privileged and/or non-proprietary
information made by one Party to the other will be honored. All negotiations
pursuant to this clause shall be considered confidential and shall be treated as
compromise and settlement negotiations for purposes of applicable rules of
evidence.
(b) Rights of Parties. Notwithstanding the foregoing, nothing
contained in this Agreement shall limit or restrict in any way the right or
power of a Party at any time (1) to commence and prosecute a proceeding for a
preliminary or temporary injunction or other temporary order pending mediation
or arbitration under this Agreement (i) to restrain a Party from breaching this
Agreement or (ii) for specific enforcement of this Section 9.14, or (2) to
consult with the other Party in an attempt to negotiate a resolution of the
dispute. The Parties agree that any legal remedy available to them with respect
to a breach of this Section will not be adequate and that, in addition to all
legal remedies, each party is entitled to an order specifically enforcing this
Section 9.14.
(c) Mediation. If the dispute has not been resolved by
negotiation described in Section 9.14(a) within 45 days after the receipt of the
initial notice by the other Party, the Parties shall endeavor to settle the
dispute by mediation conducted in the English language under the then current
Center For Public Resources' CPR Model Mediation Procedure for Business
Disputes. The mediation will be conducted at a site agreed upon by the Parties.
All mediation costs are to be borne equally by the Parties. Each Party shall be
responsible for its own attorney's fees and costs.
(d) Arbitration. If a dispute or controversy shall arise
between the Parties with respect to any matter covered by this Agreement that
has not been resolved pursuant to either Section 9.14(a) or (c) above, any Party
involved in such controversy shall have the option of
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submitting the matter to arbitration in the English language pursuant to the
guidelines set forth below. Demand and submission to arbitration as provided in
this Agreement must, unless otherwise agreed, be made in writing by the
requesting Party within the later of 1.) ten (10) days after negotiations and
mediation held pursuant to Sections 9.14(a) and (c) above have failed, and such
notifying Party intends to submit the matter for arbitration, and 2.) 60 days
following the effective date of notice of the dispute or controversy. The
failure to timely submit the matter to arbitration shall constitute a waiver of
the Parties to submit their dispute to arbitration. If submitted to arbitration,
the arbitration shall be binding on the Parties and the dispute shall be settled
in accordance with the Commercial Arbitration Rules of the American Arbitration
Association (the "AAA Rules"), and judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction thereof. If a
dispute involves an amount in controversy of $100,000 or less, there shall be
one arbitrator. If a dispute involves an amount in controversy in excess of
$100,000 or a request for preliminary injunction, there shall be three
arbitrators. All arbitration proceedings shall be conducted in Houston, Texas.
Section 9.15 Conflicts of Interest. The Company and Duke
understand that conflicts of interest may arise during the course of Duke
providing the Services hereunder. The Company and Duke shall in good faith
cooperate in establishing reasonable guidelines for the Parties to follow in
order to minimize any unavoidable conflicts.
Section 9.16 Construction. Unless the context requires
otherwise: (a) the gender (or lack of gender) of all words used in this
Agreement includes the masculine, feminine and neuter; (b) references to
Articles and Sections refer to Articles and Sections of this Agreement; (c)
references to Appendix refer to the Appendices attached to this Agreement; (d)
references to laws refer to such laws as they may be amended from time to time,
and references to particular provisions of a law include any corresponding
provisions of any succeeding law; (e) references to money refer to legal
currency of the United States of America; and (f) the word "including" means
"including, without limitation."
IN WITNESS WHEREOF, each of the undersigned has caused this
Agreement to be duly executed and delivered on the date first set forth above.
DUKE ENERGY BUSINESS SERVICES LLC
By: /s/ A. R. Mullinax
-------------------------------
Name: A. R. Mullinax
Title: Executive Vice President
DUKE ENERGY FIELD SERVICES, LP
By: /s/ Rose M. Robeson
-------------------------------
Name: Rose M. Robeson
Title: Vice President and
Chief Financial Officer
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