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1996 FORM 10-K
EXHIBIT 10.18
TREASURY SERVICES AGREEMENT
MEMORANDUM OF AGREEMENT with effect as of the 1st day of January, 1996.
A M O N G:
IPL ENERGY INC., a corporation incorporated
under the laws of Canada ("Energy")
OF THE FIRST PART
- and -
LAKEHEAD PIPE LINE COMPANY, INC., a
corporation incorporated under the laws of the
State of Delaware ("Lakehead")
OF THE SECOND PART
WHEREAS:
A. Energy has agreed to provide to Lakehead the treasury services
described in Schedule "A" hereto, with such deletions, additions or
modifications as the parties may agree upon (the "Treasury
Services");
B. Lakehead desires to obtain the Treasury Services and Energy is
prepared to make available and provide the Treasury Services to
Lakehead on the terms hereinafter set forth;
C. Energy incurs expenses (the "Treasury Expenses") to provide the
Treasury Services to its subsidiaries and affiliates including
Lakehead;
D. Lakehead agrees to pay its proportionate share of the Treasury
Expenses, on the terms and conditions set forth herein;
The parties hereto desire to reduce to writing the agreement pursuant to
which the Treasury Services will be provided and paid for hereunder.
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
premises and mutual covenants hereinafter contained, the parties hereto
agree as follows:
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ARTICLE I
PROVISION OF SERVICES
1.1 For each Lakehead fiscal year commencing January 1, 1996 Lakehead
shall pay to Energy an annual fee equal to the product of
Energy's total forecasted North American Treasury expenses for
Energy's corresponding fiscal year, multiplied by a percentage
amount equal to the following:
a) the percentage amount used in the prior year, which for the
1996 fiscal year has been deemed to be 28%; or
b) if either party proposes a variation to the percentage
amount from that used for the previous year, a percentage
amount mutually agreed upon by the Vice-President &
Treasurer of Energy and the Chief Accountant of Lakehead.
Such percentage amount will reflect a fair and reasonable
allocation to Lakehead of the total Treasury Expenses for the
applicable year.
If material, an adjustment will be made for the difference
between the year's actual Treasury Expenses compared to the
year's forecasted Treasury Expenses.
1.2 For 1996, Energy's total forecasted North American Treasury
expenses are $1,495,000 of which Lakehead's share pursuant to
Section 1.1 above is $420,000 subject to adjustment as provided
for in Section 1.1.
1.3 The fees to be paid pursuant to Section 1.1 hereof shall be paid
by Lakehead within 30 days of receiving a monthly invoice from
Energy for the Treasury Services.
1.4 The provisions of Article I of this Agreement will apply in
respect of Treasury Expenses until this Agreement is terminated
or amended in accordance with Section 2.1 or Section 2.18,
respectively.
1.5 All amounts payable under this Agreement are expressed in
Canadian dollars but payment may be made in equivalent U.S.
dollars.
ARTICLE II
MISCELLANEOUS
2.1 The obligations of a party hereto under this Agreement may be
terminated by such party upon 30 days written notice to the other
party. Such termination shall not relieve a terminating party of
its obligations up to and including the date of termination.
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2.2 This Agreement is not intended to create, and shall not be
construed as creating, any relationship of partnership, agency,
joint venture or association for profit between the parties.
2.3 Neither of the parties hereto shall have any fiduciary
obligations or duties to the other party by reason of this
Agreement. Either party may conduct any activity or business
for its own profit, whether or not such activity or business is
in competition with any activity or business of the other party.
2.4 In providing the Treasury Services, Energy shall not be liable
for damages to Lakehead for any delays or errors in providing
the Treasury Services or for loss of data or records save and
except where said delays or errors are the result of negligence
or a breach of this Agreement by Energy or its agents.
2.5 The Treasury Services shall be provided on the basis that Energy
does not make any warranties or representations, express or
implied, with respect to the Treasury Services save and except
that the Treasury Services shall be provided by qualified
personnel in a professional and timely manner.
2.6 Lakehead hereby releases Energy from any claims which it may
have with respect to the provision of the Treasury Services,
unless such claims are the result of the negligence of Energy or
a breach of this Agreement by Energy.
2.7 Lakehead shall indemnify and hold Energy harmless from and
against any loss, damage, claim, liability, debt, obligation or
expense (including reasonable legal fees and disbursements)
incurred or suffered by Energy and relating in any way to this
Agreement or the provision of the Treasury Services, excluding
any loss, damage, claim, liability, debt, obligation or expense
resulting from or arising from or in connection with a negligent
act or omission of Energy or a breach of this Agreement by
Energy.
2.8 If either party to this Agreement is rendered unable by force
majeure to carry out its obligations under this Agreement, other
than Lakehead's obligation to make payments to Energy as
provided for herein, that party shall give the other party
prompt written notice of the force majeure with reasonably full
particulars concerning it. Thereupon, the obligations of the
party giving the notice, so far as they are affected by the
force majeure, shall be suspended during, but no longer than the
continuance of, the force majeure. The affected party shall use
all reasonable diligence to remove or remedy the force majeure
situation as quickly as practicable.
The requirement that any force majeure situation be removed or
remedied with all reasonable diligence shall not require the
settlement of strikes, lockouts or other
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labour difficulty by the party involved, contrary to its wishes.
Rather, all such difficulties may be handled entirely within the
discretion of the party concerned.
The term "force majeure" means any one or more of:
(a) an act of God;
(b) a strike, lockout, labour difficulty or other industrial
disturbance;
(c) an act of a public enemy, war, blockade, insurrection or
public riot;
(d) lightning, fire, storm, flood or explosion;
(e) governmental action, delay, restraint or inaction;
(f) judicial order or injunction;
(g) material shortage or unavailability of equipment; or
(h) any other cause or event, whether of the kind specifically
enumerated above or otherwise, which is not reasonably
within the control of the party claiming suspension.
2.9 Each party shall from time to time, and at all times, do such
further acts and execute and deliver all such further deeds and
documents as shall be reasonably requested by the other party in
order to fully perform and carry out the terms of this Agreement.
2.10 Time is of the essence of this Agreement.
2.11 Any notice, request, demand, direction or other communication
required or permitted to be given or made under this Agreement to a
party shall be in writing and may be given by hand delivery to the
party to whom it is addressed or sent by telefax to such party at
its address noted below:
(a) in the case of Energy, to:
IPL ENERGY INC. 0000 Xxxxxx Trust Tower
000 - 0xx Xxx. X.X.
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Mr. J.R. Bird
Facsimile: (000) 000-0000
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(b) in the case of Lakehead, to:
LAKEHEAD PIPE LINE COMPANY, INC. 00 Xxxx Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, XX 00000
Attention: Mr. S.Q. DeVinck
Facsimile: (000) 000-0000
or at such other address of which notice may have been given
by such party in accordance with the provisions of this section.
Any such telefax shall, if a confirmation copy thereof is mailed by
first class mail from the office of the sender to the addressee of
such telefax at the foregoing address within 24 hours of the
transmission of such telefax, be deemed to have been received at
the opening of business at the premises of such addressee on the
first business day following the transmission of such telefax;
provided that, if at the time of mailing of any such confirmation
copy or, if during the seven (7) business days thereafter, there is
a strike, lock-out or other interruption relating to the mail
service of Canada or the United States, then such confirmation copy
shall be provided by personal delivery.
2.12 This Agreement may be executed in several counterparts, no one of
which needs to be executed by both of the parties. Each
counterpart, including a facsimile transmission of this Agreement,
shall be deemed to be an original and shall have the same force and
effect as an original. All counterparts together shall constitute
but one and the same instrument.
2.13 The provisions of this Agreement shall be construed in accordance
with the laws of the Province of Alberta and the laws of Canada
applicable therein.
2.14 This Agreement will enure to the benefit of and be binding upon the
parties hereto and their respective successors. This Agreement may
not be assigned by either of the parties hereto without the prior
written consent of the other party.
2.15 The division of this Agreement into Articles and Sections and the
insertion of headings are for convenience of reference only and
shall not affect the construction or interpretation of this
Agreement. The terms "this Agreement", "hereof", "hereunder" and
similar expressions refer to this Treasury Services Agreement and
not to any particular Section or other portion hereof and include
any agreement supplemental hereto. Unless something in the subject
matter or context is inconsistent therewith, references herein to
Articles and Sections are to Articles and Sections of this
Agreement.
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2.16 Words importing the singular number shall include the plural and
vice versa, words importing the masculine gender shall include the
feminine and neuter genders and vice versa, and words importing
persons shall include individuals, partnerships, associations,
trusts, unincorporated organizations and corporations and vice
versa.
2.17 In the event that one or more of the provisions contained in this
Agreement shall be invalid, illegal or unenforceable in any
respect under any applicable law, the validity, legality or
enforceability of the remaining provisions hereof shall not be
affected or impaired thereby. Each of the provisions of this
Agreement is hereby declared to be separate and distinct.
2.18 Subject to obtaining the necessary regulatory approvals, this
Agreement may not be modified or amended except by an instrument
in writing signed by each of the parties hereto or by their
respective successors or permitted assigns.
2.19 This Agreement constitutes the whole and entire agreement between
the parties hereto and supersedes any prior agreement,
undertaking, declarations, commitments, representations, verbal or
oral, in respect of the subject matter hereof.
IN WITNESS WHEREOF the parties hereto have executed this Agreement with effect
as of the date first above written.
LAKEHEAD PIPE LINE COMPANY, INC,
Terms SDL 10/18/96 S.Q. DeVinck
Name: Xxxxxx X. XxXxxxx
Description Title: Chief Accountant
Form SDL 10/18/96
IPL ENERGY INC.
IPL APPROVAL
Terms:_____________ J. R. Bird
Name: J. R. Bird
Title: Vice President and
Treasurer
Date:______________
Form: Sept. 24, 1996
Date: Sept. 26, 1991
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SCHEDULE "A"
Treasury Services to Lakehead (LAKEHEAD PIPELINE LP)
(a) Acting as primary interface between Lakehead and financial
markets.
(b) Short-term money management (investment of surplus funds and
short-term borrowing).
(c) Servicing long-term debt and equity obligations.
(d) Banking arrangements (compensation, operating lines of credit,
letters of credit, advice on banking and cash management issues).
(e) Advice relating to interest rate, foreign exchange, counterparty
credit risk management.
(f) Advice on major lease versus buy financing decisions, and project
financing as required.
(g) Advice on existing public and private debt and the structure and
arrangement of new debt and equity financing as required.
(h) Acting as primary interface with external credit rating agencies.
(i) Participation in preparation for rate hearings and planning,
corporate finance and cash management issues.
(j) Use of Platinum system for maintenance of treasury information
and generation of treasury transaction records.
