Co-Ownership Agreement: Definition & Sample

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What is a Co-Ownership Agreement?

A co-ownership agreement is a legal document between two or more people who are the joint owners of property or asset. It includes all of the terms and conditions which govern how ownership will be shared, including what happens if one owner dies.

A co-ownership agreement may also include rules about what to do with any earnings that come from renting out a portion of the property or selling it. If you want to protect your investment in case anything should happen, you'll need this contract.

For co-owning a business, the agreement can cover many things, including how profits and losses are shared, what happens if one person wants to sell his or her share, or whether any shares can be transferred in the future.

Common Sections in Co-Ownership Agreements

Below is a list of common sections included in Co-Ownership Agreements. These sections are linked to the below sample agreement for you to explore.

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Co-Ownership Agreement Templates

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Co-Ownership Agreement Sample

FERC Electric Tariff Sixth Revised Volume No. 1 Original Service Agreement No. 2405

JOINT OWNERSHIP AGREEMENT

TRANS-ALLEGHENY INTERSTATE LINE COMPANY

VIRGINIA ELECTRIC AND POWER COMPANY

A PORTION OF THE 500 KV

MEADOWBROOK TO LOUDOUN TRANSMISSION LINE

TABLE OF CONTENTS

ARTICLE 1 DEFINITIONS; INTERPRETATION

ARTICLE 2 RELATIONSHIP OF THE PARTIES

ARTICLE 3 ADMINISTRATIVE COMMITTEE

ARTICLE 4 DISPUTE RESOLUTION

ARTICLE 5 DEVELOPMENT, OPERATION AND MAINTENANCE

Standard of Care 21

ARTICLE 6 COSTS

ARTICLE 7 REPRESENTATIONS AND WARRANTIES

ARTICLE 8 LIMITATION OF LIABILITY; RISK OF LOSS

ARTICLE 9 INDEMNIFICATION

ARTICLE 10 TRANSFER

Injunctive Relief 31

ARTICLE 11 TERM AND TERMINATION

ARTICLE 12 DEFAULT; REMEDIES

ARTICLE 13 INSURANCE; CASUALTY EVENTS

ARTICLE 14 CONFIDENTIALITY

ARTICLE 15 GENERAL PROVISIONS

Renegotiation 39

JOINT OWNERSHIP AGREEMENT

This Joint Ownership Agreement (the “ Agreement ”) is made and entered into this 29th day of January, 2010, by and between Trans-Allegheny Interstate Line Company (“ TrAILCo ”), a corporation organized under the laws of the Commonwealth of Virginia and the State of Maryland, and Virginia Electric and Power Company, doing business as Dominion Virginia Power (“ Dominion ”), a corporation organized under the laws of the Commonwealth of Virginia. TrAILCo and Dominion shall be referred to herein individually as a “ Party ” and collectively as the “ Parties ”.

WHEREAS, the Parties wish to undertake the joint development, construction, ownership, operation and maintenance of approximately 29.68 miles of 500 kV non-contiguous transmission lines (as more particularly defined in Exhibit A , the “ Transmission Line ”); and

WHEREAS, the Parties executed a Memorandum of Understanding (the “ MOU ”) dated as of May 15, 2007, setting forth certain fundamental principles regarding the development, construction, ownership, operation and maintenance of the Transmission Line that were to be incorporated into definitive agreements with respect thereto; and

WHEREAS, pursuant to the terms of the MOU, the Parties agreed that all costs associated with the design, engineering, construction, operation and maintenance of the Transmission Line would be shared between the Parties; and

WHEREAS, at the request of TrAILCo, Dominion has commenced engineering, permitting and right-of-way acquisition work related to the Transmission Line; and

WHEREAS, pursuant to the terms of the MOU, the Parties desire to set forth: (a) the terms and conditions pursuant to which the Parties shall (i) obtain and maintain Governmental Approvals for the development, construction, ownership, operation and maintenance of the Transmission Line, (ii) design, engineer and construct the Transmission Line, (iii) obtain and utilize the right-of-way on which the Transmission Line will be situated, (iv) operate and maintain the Transmission Line, and (v) own equal and undivided interests in the Joint Property; and (b) each Party’s rights and responsibilities with respect to the Transmission Line and the other Party.

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein, the Parties hereby agree as follows:

1.1 Definitions . For the purposes of this Agreement, the following capitalized terms shall have the meanings set forth below or in the provision of this Agreement specified below, regardless of any potential conflict between the meanings set forth herein and any definitions of the same terms set forth in any agreements applicable to the Parties, including the PJM OATT.

AAA : The American Arbitration Association.

Additional Contribution : Section 12.1.

Administrative Committee : Section 3.1.

Affiliate : Any Person who, directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such Person. For purposes of this definition and the definition of “Controlling Parent,” “control” of a Person, including the terms “controls,” “is controlled by,” and “under common control with,” means the possession, directly or indirectly through one or more intermediaries, of: (a) a voting interest of more than fifty percent (50%) in such Person; or (b) the power to either (i) elect a majority of the directors (or Persons with equivalent management power) of such Person, or (ii) direct or cause the direction of the management or policies of such Person, whether through the ownership of securities or partnership, membership or other ownership interests, by contract, by operation of law or otherwise.

Affiliates’ Outside Activities : Section 15.2(c).

Agreement : The preamble to this Agreement.

Annual Budget : Each annual budget of Project-related capital and operating costs, in a form acceptable to, and as approved by, the Administrative Committee.

Appalachian Trail Portion : Exhibit A .

Assignment Agreement : That certain Assignment of Easements and Rights-of-Way to be executed by the Parties in the form of Exhibit C .

Bankruptcy Event : With respect to a Party:

Business Day : Any day other than Saturday, Sunday, or any day on which banks located in Richmond, Virginia are authorized or obligated to close.

Change of Control : With respect to a Party: (a) the consolidation with, or merger into, any other Person by such Party or by any Special Purpose Parent of such Party (other than any consolidation with, or merger into, an Affiliate of such Party); or (b) a direct assignment, conveyance, transfer, lease, exchange, conversion or other disposition of the equity interests in such Party or any Special Purpose Parent of such Party (other than to an Affiliate of such Party) or the voting rights with respect thereto; in either case, as a result of which the Controlling Parent of such Party changes.

Code : The Internal Revenue Code of 1986, as amended.

Confidential Information : Any information that is appropriately marked as “CONFIDENTIAL” and provided by a Disclosing Party to a Recipient pursuant to this Agreement, including any of the following kinds of information, if so marked: (a) business operations, customer technology and risk management information; (b) personnel, benefits and human resource information; (c) information regarding information systems or intellectual property; (d) legal information; (e) supplier and vendor information; (f) information concerning sources or terms of financing or credit; (g) supply chain information and processes; (h) tax, financial and market analysis information; (i) technical, process and product information; (j) service information; (k) pricing information, formulae and formulations; (l) technical and product specifications, equipment descriptions, plans, layouts, drawings and computer programs; (m) assembly, quality control, installation and operating procedures; (n) operating or maintenance manuals, instructions and other user documentation; and (o) technical and marketing information, designs and data; provided, however , that notwithstanding the foregoing, Confidential Information shall not include, and all obligations regarding Confidential Information shall not apply to, information that the Recipient can prove:

Controlling Parent : With respect to any Party, the Person that controls (directly or indirectly) such Party but is not itself controlled by any Person.

Dispute : Section 4.1(a).

Dispute Notice : Section 4.1(a).

Default Rate : An interest rate equal to the greater of: (a) the prime rate as published from time to time in The Wall Street Journal (or any successor publication) plus five percent (5%); or (b) eighteen percent (18%); but in no case higher than the highest rate permitted by applicable state usury Law.

Defaulting Party : Section 12.1.

Development Costs : All costs and expenses reasonably incurred by a Party (excluding any reimbursement and indemnity payments from one Party to the other pursuant to this Agreement) in accordance with Good Utility Practice in order to develop the Transmission Line and initially place it into service, including costs incurred for siting, permitting, engineering, design, selection and procurement of material, equipment and the Rights-of-Way, and the construction of the Transmission Line, but excluding any costs incurred in connection with the negotiation of the MOU or this Agreement.

Disclosing Party : A Party or any of such Party’s Affiliates that discloses Confidential Information to a Recipient.

Dominion : The preamble to this Agreement.

Effective Date : January 31, 2010 or such other date as shall be determined by FERC to be the effective date of this Agreement.

Existing Rights-of-Way : All rights-of-way, easements and other interests in real property on which the Transmission Line is or will be built that were owned by Dominion on or before May 15, 2007.

Federal Power Act : 16 U.S.C. §§ 824 et. seq .

FERC : The Federal Energy Regulatory Commission and any successors thereto.

Force Majeure : Any cause beyond the control of the affected Party, including acts of God, flood, drought, earthquake, storm, fire, lightning, epidemic, war, riot, civil disturbance or disobedience, labor dispute, labor or material shortage, sabotage, acts of a public enemy, explosions, orders, regulations or restrictions imposed by governmental, military or lawfully established civilian authorities, which, in any of the foregoing cases, by exercise of due diligence such Party could not reasonably have been expected to avoid, and which, by the exercise of due diligence, it has been unable to overcome. Force Majeure does not include: (a) a failure of performance that is due to an affected Party’s own negligence or intentional wrongdoing; (b) any removable or remediable causes (other than settlement of a strike or labor dispute) which an affected Party fails to remove or remedy within a reasonable time; or (c) economic hardship of an affected Party.

Good Utility Practice : Any of the practices, methods and acts engaged in or approved by a significant portion of the electric utility industry during the relevant time period, or any of the practices, methods and acts which, in the exercise of reasonable judgment in light of the facts known at the time the decision was made, could have been expected to accomplish the desired result at a reasonable cost consistent with good business practices, reliability, safety and expedition. Good Utility Practice is not intended to be limited to the optimum practice, method or act to the exclusion of all others, but rather to be acceptable practices, methods or acts generally accepted in the region, including those practices required by Federal Power Act Section 215(a)(4).

Governmental Approval : Any license, certificate, permit, franchise, order, approval, determination or authorization from a Governmental Authority that is necessary for the engineering, design, construction, ownership, operation or maintenance of the Transmission Line.

Governmental Authority : Any federal, state, county, municipal or local government or any political subdivision thereof, or any other governmental, quasi-governmental, executive, legislative, administrative, regulatory, judicial, public or statutory department, body, instrumentality, agency, ministry, court, commission, bureau, board, or other governmental authority having jurisdiction over all or any portion of the Joint Property or a Party (in connection with the Joint Property).

In-Service Date : The date on which the Transmission Line is energized other than for test purposes.

Indemnified Person : Section 9.1(a).

Indemnifying Party : Section 9.1(a).

Invoicing Party : A Party in its capacity as the issuer of an invoice for any amount owed pursuant to this Agreement.

Joint Property : The Transmission Line and the Rights-of-Way.

Law : Any applicable constitutional provision, statute, act, code, law, rule, regulation, ordinance, order, decree, ruling, judgment or decision of a Governmental Authority.

Loss : Any loss, liability, damage, judgment, award, fine, penalty, expense or cost (including reasonable attorney’s fees and expenses) incurred by a Person, whether based in tort, breach of contract or any other cause of action; provided, however , Loss shall not include any Party-Specific Tax.

Mortgage : As a verb, to mortgage, pledge, encumber or the like; and as a noun, a mortgage, deed of trust, pledge, encumbrance, hypothecation, lien or other security interest.

Mortgaging Party : Section 10.5(a).

MOU : The Recitals.

NERC : The North American Electric Reliability Corporation.

New Rights-of-Way : All rights-of-way, easements and other interests in real property, other than the Existing Rights-of-Way and REC Rights-of-Way, on which the Transmission Line is or will be built that were purchased or acquired by Dominion between May 16, 2007 and the Effective Date or that are in the process of being acquired pursuant to a condemnation action initiated by Dominion prior to the Effective Date.

Non-Defaulting Party : Upon a default pursuant to Section 12.1, the Party other than the Defaulting Party.

Non-Invoicing Party : The Party that receives an invoice from an Invoicing Party.

Non-Mortgaging Party : Section 10.5(a).

Non-Transferring Party : Section 10.2(a).

O&M Costs : All costs and expenses reasonably incurred by a Party (excluding any reimbursement and indemnity payments from one Party to the other pursuant to this Agreement) in accordance with Good Utility Practice in connection with the operation, maintenance, repair or restoration of the Joint Property or the Existing Rights-of-Way or to satisfy its obligations under this Agreement after the In-Service Date, including costs incurred to comply with applicable Law or to make additions or improvements to, or replacements of, facilities comprising the Transmission Line and any charges, assessments, fines and penalties imposed by any Governmental Authority with respect to the operation or maintenance of the Transmission Line, but excluding Development Costs.

Ownership Share : The undivided, tenant-in-common interest of a Party in the Joint Property, which initially shall be fifty percent (50%) with respect to Dominion and fifty percent (50%) with respect to TrAILCo, as such interest may be adjusted pursuant to Section 12.2(a)(ii).

Party or Parties : The preamble to this Agreement.

Party-Specific Tax : Any Tax that is: (a) under applicable Law, associated with or imposed upon a Party with respect to its ownership, use, operation or maintenance of its Ownership Share of the Joint Property; or (b) imposed, based upon or calculated with reference to the income or receipts of a Party, including federal and state income taxes and/or state franchise taxes.

Person : An individual, Governmental Authority or other legal entity, including a corporation, joint stock company, business trust, general or limited partnership (including a limited liability partnership) or limited liability company.

PJM : PJM Interconnection, L.L.C.

PJM Agreements : The: (a) Amended and Restated Operating Agreement of PJM Interconnection, L.L.C., dated as of June 2, 1997, as amended from time to time; (b) the Consolidated Transmission Owner Agreement dated as of December 15, 2005, as amended from time to time; and (c) the PJM OATT.

PJM OATT : The PJM Open Access Transmission Tariff on file with FERC, as such tariff may be revised from time to time.

Prescribed Rate : An interest rate equal to the lesser of: (a) the prime rate as published from time to time in The Wall Street Journal (or any successor publication) plus three percent (3%); or (b) the highest rate permitted by applicable state usury Law.

Project : The process of developing, siting, constructing, operating and maintaining the Transmission Line and all work necessary in connection therewith, including: (a) equipment procurement, engineering, construction, operation and maintenance; (b) selection and procurement of the Joint Property; (c) obtaining the REC Rights-of-Way; and (d) obtaining and maintaining all Governmental Approvals.

Project Budget : The budget of estimated Project-related costs, in a form acceptable to, and as approved by, the Administrative Committee.

REC Rights-of-Way : All rights-of-way, easements and other interests in real property on which the Transmission Line is or will be built that have been assigned to Dominion by Rappahannock Electric Cooperative.

Recipient : A Party, an Affiliate thereof or any of their respective managers, directors, officers, employees or agents, in each case, that receives Confidential Information.

Representative : Section 3.1.

Required Consents : Consents from the grantors of the New Rights-of-Way and the Existing Rights-of-Way and from the original grantors of the REC Rights-of-Way that are required pursuant to the terms of such Rights-of-Way or applicable Law in order for Dominion to assign such Rights-of-Way to TrAILCo in accordance with the terms of the Assignment Agreement.

Rights-of-Way : All rights-of-way, easements and other interests in real property on which the Transmission Line is or will be built, including New Rights-of-Way, Existing Rights-of-Way and REC Rights-of-Way.

Special Purpose Parent : With respect to any Party, any Person all or substantially all of the assets of which consist of equity interests in such Party or another Special Purpose Parent of such Party.

Tax : Any tax, surtax, charge, fee, levy or other assessment imposed by any Governmental Authority, including income, excise, property, sales, transfer, franchise, special franchise, payroll, recording, withholding, social security or other tax, or any liability for any tax incurred by reason of joining in the filing of any consolidated, combined or unitary tax returns, in each case including any interest, penalty or addition attributable thereto.

Third Party Claim : A claim, demand, cause of action or proceeding made or brought by a Person that is not a Party or an Affiliate of a Party.

TrAILCo : The preamble to this Agreement.

Transfer : A sale, transfer, conveyance, assignment, exchange or other disposition by a Party of its Ownership Share in the Joint Property; provided, however , that a Transfer shall not include: (a) a conversion of a Party into another type of entity; (b) a distribution of assets in connection with the dissolution, liquidation, winding-up or termination of a Party; or (c) the creation of a Mortgage.

Transferring Party : Section 10.2.

Transmission Line : The recitals to this Agreement.

VEPCO Mortgage : The Indenture of Mortgage of Virginia Electric and Power Company dated November 1, 1935, as the same has been or may hereafter be supplemented, amended, modified or amended and restated.

Western Demarcation : Exhibit A .

1.2 Interpretation . The following rules of construction shall apply when interpreting this Agreement:

RELATIONSHIP OF THE PARTIES

2.1 Joint Development . Subject to the other provisions of this Agreement, the Parties agree to undertake the joint development of the Transmission Line, including the acquisition of the Rights-of-Way (other than the Existing Rights-of-Way and the REC Rights-of-Way) and the engineering, procurement and construction of the Transmission Line. TrAILCo acknowledges that Dominion, in order to facilitate the Parties’ meeting the In-Service Date, has commenced acquisition of certain Joint Property prior to the Effective Date, which property Dominion is obligated to assign to TrAILCo in accordance with the terms hereof.

2.2 Joint Ownership . The Parties shall own the Joint Property as tenants-in-common with undivided interests in accordance with their respective Ownership Shares. Each Party shall have the right to use the Joint Property as permitted pursuant to this Agreement.

2.3 No Partnership . No Party shall hold itself out to any Person as a partner of, or principal trustee or agent for, the other Party, except to the extent expressly authorized in Article 5. The Parties do not intend to create, and this Agreement shall not be construed to create, a partnership or joint venture between the Parties. No Party shall have the right to share, in whole or in part, the income and profits from, or be responsible for the losses and expenses with respect to, the other Party’s Ownership Share in the Joint Property. The income and profits produced by each Party’s undivided Ownership Share in the Joint Property shall belong solely to such Party.

2.4 Disclaimer of Certain Duties . Neither Party nor any of its Affiliates shall owe a fiduciary duty or duty of loyalty to the other Party or any of its Affiliates in connection with this Agreement, the Project or the exercise, granting or withholding of its voting, consent or approval rights under this Agreement. To the maximum extent permitted by applicable Law, each Party hereby releases and forever discharges the other Party and its Representative(s) from all liabilities based on a breach or violation of any fiduciary duty or duty of loyalty.

2.5 No Partition . Each Party hereby waives any right it may have with respect to the partition of the Joint Property or any part or interest thereof or therein.

2.6 Liability to Third Parties . The debts, obligations and liabilities of each Party pursuant to this Agreement or otherwise in connection with the Project, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of such Party (which may be allocated to the Parties based on their respective Ownership Shares pursuant to the terms of this Agreement).

2.7 Tax Election . Each Party shall elect, pursuant to Section 761(a) of the Code and the regulations promulgated thereunder, to exclude this Agreement and all undertakings pursuant to this Agreement with respect to the Joint Property from all of the provisions of Subchapter K, Chapter 1, Subtitle A of the Code. The Parties shall take all steps necessary and appropriate to evidence this election, including timely filing the statement described in Treas. Reg. Section 1.761-2(b)(2)(i). In making such election, each Party agrees and shall state that the income derived by it from the operation of the Transmission Line or otherwise in connection with the Joint Property or this Agreement can be adequately determined without the computation of partnership taxable income.

3.1 Establishment . Management of the Project is fully reserved to a committee (the “ Administrative Committee ”) comprised of two individuals (each, a “ Representative ”), one of whom shall be appointed by each Party.

Notice of, and an agenda for, all meetings of the Administrative Committee (including special meetings) shall be circulated to the Representatives at least five (5) Business Days prior to the date of each meeting. If minutes of the previous Administrative Committee meeting have not been previously ratified, such notice shall include a copy of the proposed minutes for such meeting; provided, however , that a failure to provide proposed minutes shall not render a meeting notice ineffective; and provided further , that the five (5) Business Day notice period shall be waived: (i) by attendance of a Representative at a meeting (except

3.5 Powers and Responsibilities . The Administrative Committee shall have authority to determine any matter concerning the Project; provided, however , that the Administrative Committee shall not have authority to modify or amend this Agreement. All resolutions within the Administrative Committee’s power are binding on both Parties as from the effective date of such resolution and each Party is obligated to carry each resolution into effect in accordance with its terms. Without limiting the generality of the foregoing, the Administrative Committee shall have the power to: (a) approve any development, operating or capital budget for the Project, including any change thereto or expenditure in excess thereof; and (b) request a Party to provide any report regarding the Project as the Administrative Committee deems necessary and appropriate.

4.1 Informal Dispute Resolution .

4.2 Arbitration . If a Dispute is not resolved by executive officers of the Parties in accordance with Section 4.1 within fifteen (15) days of issuance of a Dispute Notice, either Party may propose that the Dispute be submitted to arbitration pursuant to Section 4.3; provided, however , that: (a) an arbitration proceeding to resolve a Dispute may only be commenced pursuant to Section 4.3 upon the mutual agreement of the Parties; and (b) if the Parties initiate an arbitration proceeding pursuant to Section 4.3, neither Party shall be entitled to initiate any litigation or other dispute resolution process during the pendency of such arbitration proceeding and such proceeding may only be terminated by mutual agreement of the Parties.

4.3 Arbitration Procedures .

4.4 Arbitration Decisions .

4.5 Costs . Each Party shall be responsible for its costs incurred in connection with any informal dispute resolution or arbitration, including the cost of its Party-appointed arbitrator; provided, however , that the cost of a third arbitrator or a single arbitrator selected jointly by the Parties shall be shared equally by the Parties.

4.6 Continued Performance . The Parties shall continue to perform under this Agreement during the pendency of any Dispute.

4.7 FERC Jurisdiction . Subject to the limitations set forth in Section 4.2, nothing contained in this Agreement shall preclude either Party from exercising its rights under Federal Power Act Sections 205 and 206 to file for a change in any rate, term, condition or service provided under this Agreement.

DEVELOPMENT, OPERATION AND MAINTENANCE

5.1 Governmental Approvals .

5.2 Engineering, Design and Construction of Transmission Line .

5.4 Interconnections . Each Party shall grant (or shall cause its Affiliates to grant) such access to its or their transmission facilities as may be reasonably necessary, in accordance with Good Utility Practice, to interconnect the Transmission Line with such facilities.

5.5 Operation and Maintenance . Subject to the terms and conditions of this Agreement (including TrAILCo’s rights pursuant to Section 12.2(b)), Dominion shall operate and maintain the Transmission Line in accordance with the PJM Agreements and applicable Law. Without limiting the generality of the foregoing, no later than October 1 of each year, Dominion shall

prepare and submit to the Administrative Committee a proposed annual operating and maintenance plan (including any required capital expansions and replacements) for the following calendar year. Dominion shall periodically revise any such annual plan as reasonably necessary; provided, however , that Dominion shall promptly notify TrAILCo of any such revisions. Notwithstanding the foregoing, a Party shall not be considered in default as to any obligation under this Section 5.5 if prevented from fulfilling the obligation due to an event of Force Majeure. However, a Party whose performance under this Section 5.5 is hindered by an event of Force Majeure shall make all reasonable efforts to perform its obligations hereunder.

5.6 Standard of Care . Each Party shall perform development, operation, and maintenance tasks undertaken by it pursuant to this Agreement in accordance with Good Utility Practice.

5.7 Cooperation . Each Party agrees that it will not take, and it will cause its Affiliates not to take, any action that would frustrate the development, construction, ownership, operation or maintenance of the Transmission Line; provided, however , that nothing herein shall preclude a Party from exercising any rights expressly granted it under this Agreement or taking any action (or having its Affiliates take any action) with respect to any other transmission project, including any such project that may compete with the Transmission Line. Each Party agrees to undertake all acts and execute all further agreements, documents and instruments as may reasonably be required to give effect to the purpose of this Agreement.

5.8 Monthly Reports . For the period prior to the In-Service Date, Dominion shall prepare and deliver to TrAILCo on a monthly basis, reasonably detailed status reports regarding the implementation of the Project.

5.9 NERC Reliability Standards . Notwithstanding anything to the contrary in this Agreement, each operation and maintenance plan, including any revisions thereto, shall be developed so that the Transmission Line and the Parties shall be, and the Parties shall operate and maintain the Transmission Line, in compliance with all applicable NERC requirements. Dominion shall register with NERC as the “Transmission Owner” of the Transmission Line and shall fulfill the obligations of a NERC “Transmission Owner” with respect to the Transmission Line.

6.1 Development, Operating and Maintenance Costs . Each Party shall be responsible for, and shall pay, its Ownership Share of all Development Costs and O&M Costs; provided however , neither Party shall be entitled to reimbursement for any portion of any Development Cost or O&M Cost which is incurred other than in accordance with an approved Project Budget or Annual Budget unless (i) such Party has reasonably determined that the incurrence of such cost or expense is necessary or appropriate pursuant to Good Utility Practice, or (ii) the incurrence of such cost or expense is approved by the other Party.

6.2 Compensation for Existing Rights-of-Way .

6.4 Invoices, Estimates and Payments .

For each month ending after the Effective Date, each Party shall provide to the other Party: (i) a good faith estimate (without supporting documentation) of Development Costs and O&M Costs, if any, to be incurred by such Party during such month no later than the twenty-second (22 nd ) day of such month or, if such day is not a Business Day, the next Business Day; and (ii) an updated, good faith estimate of such costs (without supporting documentation) no later than three (3) Business Days after the end of such month.

6.5 Late Payments . Any amounts not paid by a Non-Invoicing Party when due shall accrue interest at the Prescribed Rate for the first thirty (30) days from the date due, and at the Default Rate thereafter, until the date paid; provided, however , that no interest shall be owed with respect to disputed amounts paid into an escrow account pursuant to Section 6.6 and later determined to have been owed. Any amounts invoiced by an Invoicing Party that are paid by the Non-Invoicing Party to the Invoicing Party but later determined not to have been owed shall be repaid within thirty (30) days of issuance of an invoice therefor, with interest at the Prescribed Rate accrued from the date paid by such Non-Invoicing Party until the date repaid.

6.6 Payment Disputes . If a Non-Invoicing Party wishes to dispute all or any portion of an invoice issued hereunder by an Invoicing Party, it shall: (a) provide the Invoicing Party with a reasonably detailed written explanation of the basis of the dispute; and (b) pay (or have previously paid) the disputed amount either to the Invoicing Party (which payment shall automatically be subject to a reservation of its right to obtain reimbursement of amounts determined not to be owed) or, at its option, into an interest bearing escrow account; provided, however , that in the event the Non-Invoicing Party pays any disputed amounts into an escrow account (i) such escrow account shall be established by the Non-Invoicing Party at an independent financial institution and under terms, both of which are reasonably acceptable to the Invoicing Party, and (ii) the escrowed funds (including any interest accrued thereon) shall be released to the Party determined to be entitled to such funds no later than five (5) Business Days after resolution of the dispute. A Non-Invoicing Party may dispute all or any portion of an invoice issued hereunder by an Invoicing Party no later than: (a) two (2) years after the In-Service Date with respect to an invoice for any Development Costs; or (b) two (2) years after the date of such invoice for any other costs.

6.7 Party-Specific Taxes .

6.8 Books and Records .

Each Party shall maintain complete and accurate books, records and accounts related to the Project, including all documentation of transactions related to the Project and any books and records related to the Project that are required to be maintained by applicable Law. Without limiting the generality of the foregoing, Dominion shall be responsible for maintaining complete and accurate books,

REPRESENTATIONS AND WARRANTIES

7.1 Representations and Warranties of the Parties . Each Party represents and warrants to the other Party as of the Effective Date that:

LIMITATION OF LIABILITY; RISK OF LOSS

8.1 Several Liability . The liability of each Party hereunder or with respect to the Project shall be several and not joint or collective. Except to the extent provided otherwise pursuant to Section 9.1, the Parties shall be responsible for, and shall pay, any and all Losses resulting from Third Party Claims based on their respective Ownership Shares regardless of whether the Parties are held to be jointly or jointly and severally liable in connection with any such Third Party Claim.

8.2 No Consequential Damages . No Party, nor any of its Affiliates nor any of their respective directors, officers, employees or agents shall be liable to the other Party, its Affiliates or any of their respective directors, officers, employees or agents for any punitive, exemplary, consequential or special damages in connection with the Project, regardless of the negligence, gross negligence, willful misconduct, strict liability or other fault or responsibility of any such Person; provided, however , that this Section 8.2 shall not prevent recovery of a claim for indemnification that includes punitive, exemplary, consequential or special damages that are an element of a Third Party Claim against an Indemnified Person for which indemnification is otherwise available hereunder.

8.3 Risk of Loss . Except for occurrences for which a Party is liable pursuant to the terms and conditions of this Agreement, each Party shall maintain the risk of loss of its Ownership Share of the Joint Property.

9.1 General Indemnity .

9.2 Defense of Indemnified Claims .

Assumption of the defense of a Third Party Claim by an Indemnifying Party shall not constitute a waiver by such Indemnifying Party of its right to claim at a later date that such Third Party Claim for which the defense was assumed is not a proper matter for indemnification pursuant to Section 9.1; provided, however , that if an Indemnifying Party at any time determines that a Third Party Claim is not a

9.3 Effect of Workers’ Compensation and Similar Acts . An Indemnifying Party’s obligations under this Agreement shall not be limited in any way by any provision of any workers’ compensation, disability benefits, payroll or other employee benefits laws; provided, however, that nothing herein shall limit or restrict any defense a Party may be entitled to assert with respect to a Third Party Claim, including a defense based on the status of such Party as a statutory employer EACH PARTY HEREBY SPECIFICALLY AND EXPRESSLY WAIVES ANY AND ALL DEFENSES IT MAY HAVE TO AN INDEMNIFICATION OBLIGATION TO THE OTHER PARTY PURSUANT TO THIS AGREEMENT BASED ON ANY IMMUNITY TO WHICH SUCH PARTY MAY BE ENTITLED UNDER ANY WORKERS’ COMPENSATION, DISABILITY BENEFITS, PAYROLL OR EMPLOYEE BENEFITS LAWS.

9.4 Subrogation . In the event that an Indemnifying Party pays all or any portion of a Third Party Claim, the Indemnifying Party shall be subrogated to any and all defenses, claims, or other matters which the Indemnified Person asserted or could have asserted against the Person making such Third Party Claim, and all related cross-claims that the Indemnified Person asserted or could have asserted against other Persons. The Indemnified Person shall execute and deliver to the Indemnifying Party (at the Indemnifying Party’s expense) such documents as may be reasonably necessary to establish, by way of subrogation, the ability of the Indemnifying Party to assert such defenses, claims, cross-claims or other matters.

10.1 General Restrictions . Neither Party shall Transfer all or any portion of its Ownership Share in the Joint Property without having complied with all of the applicable requirements of this Agreement. Any attempted Transfer by a Party of its Ownership Share in the Joint Property other than in strict compliance with the terms of this Agreement, shall be, and is hereby declared, null and void ab initio .

10.2 Transfer Restrictions . Neither Party shall Transfer less than all of its Ownership Share in the Joint Property. Neither Party shall Transfer its Ownership Share in the Joint Property unless and until such Party (the “ Transferring Party ”):