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EXHIBIT 10.40
CORPORATE SERVICES AGREEMENT
THIS CORPORATE SERVICES AGREEMENT (this "Agreement") dated as of June
25, 1999, is entered into by and between NRG Energy, Inc., a Delaware
Corporation (the "Provider"), and Astoria Gas Turbine Power LLC, a Delaware
limited liability company (the "Company").
RECITALS
1. The Company has obtained the rights to acquire, own and
operate Astoria Gas Turbines (the"Facility") located in Queens, New York.
2. The Company desires to employ the services of the Provider to
assist in its operation of the Facility and related business functions; and
3. The Provider agrees to provide various services to the Company
in support of the operations of the Facility as provided in this Agreement.
AGREEMENT
In consideration of the premises and the covenants, conditions, and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledge, the parties hereto
agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. Whenever used in this Agreement with initial
capitalization, the following terms shall have the meanings specified or
referred to in this Article 1.
"Affiliate" means, with respect to any person or entity, (i) each
entity that such person or entity Controls, (ii) each person or entity that
Controls such person or entity, and (iii) each entity that is under common
Control with such person or entity.
"Agreement" shall have the meaning provided in the introductory
paragraph hereof.
"Effective Date" means the date of this Agreement.
"Outsource" means to cause a Service to be provided by a third-party
provider which is not an Affiliate of the Provider.
"Outsourced Services" shall means those Services which the Provider
Outsources to third-party providers which are not Affiliates of the Provider.
"Services" means the performance of any work, direction of work,
technical or commercial information, data, consulting, staff augmentation or any
other corporate business function performed for or on behalf of the Company by
the Provider in functional areas such as but not limited to: human resources,
accounting, finance, treasury, tax, office administration, information
technology, engineering, construction management, environmental, legal and
safety.
1.2 Terminology. Unless the context of this Agreement clearly
requires otherwise, (a) pronouns, wherever used herein, and of whatever gender,
will include natural persons and corporations and associations of
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every kind and character, (b) the word "included" or "including" will mean
"including without limitation", (c) the word "or" will have the inclusive
meaning represented by the phrase "and/or", (d) the words "hereof," "herein,"
"hereunder," and similar terms in this Agreement will refer to this Agreement as
a whole and not any particular section or article in which such words appear and
(e) all terms defined in this Agreement in the singular will have the same
meaning when used in the plural and vice versa. The section, article and other
headings in this Agreement are for reference purposed and will not control or
affect the construction of this Agreement or the interpretation hereof in any
respect. Article, section and subsection references are to his Agreement unless
otherwise specified.
ARTICLE 2
SERVICES
2.01 General. The Company hereby retains the Provider, and the
Provider accepts the obligation, to provide to the Company certain Services in
accordance with the terms of this Agreement. At the Provider's election, it may
cause one or more of its Affiliates or third-party contractors to provide the
Services; provided, however, that the Provider shall remain responsible for the
provision of the Services (including Outsourced Services) in accordance with the
terms of this Agreement.
2.2 Services. The Provider shall provide all Services to the
Company on an as-requested basis in support of the day-to-day business of the
Company. The Company shall use a letter, work order, purchase order or other
official document to authorize the performance of Services by Provider. Such
document shall state, as a minimum, the scope of Services to be performed,
schedule requirements, budget and a reference to this Agreement. The Provider
shall acknowledge requested Services in writing.
2.3 Personnel. The Provider shall provide as required by the
Company all technical, professional, supervisorial, managerial, administrative
and other personnel as are necessary to perform the Services. Such personnel
shall be qualified and experienced in the Services to which they are assigned.
The working hours, rates of compensation and all other matters relating to the
employment of individuals employed by the Provider or its Affiliates in the
performance of the Services shall be determined solely by the Provider or its
respective Affiliates.
2.4 Standards for Performance of Services. The Provider shall, and
shall cause its Affiliates and the providers of Outsourced Services to, perform
the Services with reasonable diligence and dispatch in a prudent, cost effective
and efficient manner, in accordance with all applicable laws, regulations,
codes, permits, licenses, and standards, and in accordance with the terms and
conditions of this Agreement. The Provider may determine in its sole discretion
whether or not to Outsource a Service.
2.5 Right to Request Instruction. At any time, the Provider may,
if it reasonably deems it to be necessary or appropriate, request written
instructions from the Company prior to the necessity for taking action with
respect to any matter contemplated by this Agreement, and may defer action
thereon pending the receipt of such written instructions.
ARTICLE 3
PAYMENT
3.1 Payment. The Company, in consideration for the performance of
the Services by the Provider, agrees to pay the Provider all pre-approved
charges, costs, expenses, taxes, fees and losses not compensated by insurance,
which are incurred by Provider in the performance of the Services hereunder.
These charges, costs, expenses, taxes, fees and losses shall include, but are
not limited to:
(a) Charges for the time of all personnel employed by the
Provider in the performance of the Services at the each person's
standard intracompany labor rate as set forth by personnel category on
Annex A hereto, which time charges include federal and state payroll
taxes and insurance, Provider benefit programs, overhead and an
arms-length, commercially reasonable xxxx-up. Such charges shall be
subject to appropriate adjustment for any changes in payroll taxes or
insurance, or changes in benefit programs.
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(b) Transportation, travel, hotel and living expenses,
including use of employees' personal cars at Provider's current
standard rates. All reasonable moving, relocation, travel and living
expenses incurred in connection with assignment of Provider's permanent
personnel to a location other than Provider's permanent offices and
from such location at the conclusion of assignment.
(c) Miscellaneous expenses, including but not limited to
telegrams, telex, telefacsimile, telephone services, postage and
similar miscellaneous items incurred in connection with the Services,
all at Provider's current standard rates.
(d) Reproduction costs of all drawings, manuals,
specifications, and other documents required for the Services; and
costs for the use of computer, all at Provider's current standard rates
or at actual cost to Provider if prepared by others.
(e) Cost of any permits, fees, licenses or royalties
required. Costs of any sales, use or similar taxes or fees imposed by a
federal, state, municipal or other government or agency thereof.
(f) Fees, costs, damages, or disbursements incurred in
connection with any labor, patent, or commercial litigation or any
third party claim, suit, or cause of action, arising out of or in
connection with the performance of the Services by Provider (except
disputes between Provider and the Company) or claims, suites or causes
of action pursued on behalf of the Company by Provider.
(g) Premiums and brokerage fees on all bonds and
insurance policies which may be required by Company in addition to
those listed herein, and any loss under the deductible features of any
insurance policies, whether furnished by Provider or Company.
3.2 Invoicing.
(a) The Provider shall invoice the Company by the
fifteenth (15th) day of each month for all Services performed with
respect to the preceding month and any adjustments that may be
necessary to correct prior invoices. All invoices shall reflect in
reasonable detail a description of the Services performed during the
preceding month and documentation available to the Provider backing up
invoiced charges and shall be due and payable within thirty (30) days
after its receipt. The Company shall pay all undisputed amounts on each
invoice, but shall be entitled to withhold payment of any amount in
dispute and shall notify the Provider within thirty (30) days from
receipt of the invoice of the disputed amount and the reasons each such
charge is disputed by the Company. The Provider shall promptly provide
the Company with records relating to the disputed amount so as to
enable the parties to resolve the dispute.
(b) Any statement or payment not disputed in writing by
either party within two years of the date of such statement or payment
shall be considered final and no longer subject to adjustment. The
Company shall not be obligated to pay for any changes for which
statements for payment are submitted more than two years after the
termination of this Agreement.
ARTICLE 4
LIMITED WARRANTY
4.1 Warranty. Provider warrants that the Services performed under
this Agreement will be in accordance with accepted professional standards and
practices existing as of the date that such Services are performed. The sole and
exclusive remedy for breach of this warranty shall be for Provider to re-perform
the portion of defective Services, written notice of which is promptly given by
Company to Provider within a period of one (1) year from the date that the
defective Service was performed under this Agreement. All costs of any
re-performance shall be reimbursed by Company to Provider but Provider shall
receive no additional profit thereon.
4.2 Disclaimer. There are no warranties other than the above,
either express or implied, including without limitation any warranties of
merchantability or fitness for particular purpose applicable to Providers
services performed under this Agreement.
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ARTICLE 5
LIMITATION OF LIABILITY
5.1 Limitation of Liability. Whether due to delay, breach of
contract or warranty, tort (including without limitation negligence), or any
other cause, neither Provider nor its Affiliates or subcontractors shall be
liable for any special, indirect, punitive, or consequential damages of any
nature, including without limitation loss of actual or anticipated profits,
revenues, or product, loss by reason of shutdown, nonoperation, or increased
expense of manufacturing or operation, or any costs, labor, or materials
required for reconstruction or repairs. Provider's maximum liability under or
arising out of this Agreement shall in no event exceed the value of the Services
performed during the calendar year prior to the cause giving rise to or creating
any such liability.
ARTICLE 6
TERM AND TERMINATION; EVENTS OF DEFAULT
6.01 Term. The term of this Agreement shall commence on the
Effective Date and shall continue until terminated in writing by the Company.
6.02 Events of Default. If one or more of the following events
occurs with respect to a party hereto, it will constitute an "Event of Default"
with respect to such party:
(a) Failure to Perform Obligations. Such party fails to
perform or observe any material obligation under this agreement and
such failure continues for more than thirty (30) days after the
non-defaulting party has given notice thereof to such party (or if the
nature of such default is such that it is not capable of being cured
within thirty (30) days, then the failure of such party to commence to
cure such default within thirty (30) days and to diligently and
continuously pursue the cure of such default thereafter, but in no
event may such extended cure period exceed one hundred eighty (180)
days);
(b) Bankruptcy. Such party becomes subject to a
bankruptcy or is declared insolvent.
6.03 Remedies; Exclusivity. At any time during the continuance of
an Event of Default, the non-defaulting party will have the right to (a) elect,
by giving notice to the defaulting party, not to be bound in any respect by the
provisions of this Agreement during such continuance, in which case such party
will have no obligations or liabilities hereunder during such period, (b)
terminate the Agreement upon giving notice of termination to the defaulting
party. No failure on the part of either Provider, the Company to exercise and no
delay in exercising, and no course of dealing with respect to, any right, power
or privilege under this Agreement will operate as a waiver thereof, nor will any
single or partial exercise of any right, power or privilege under this Agreement
preclude any other or further exercise thereof.
ARTICLE 7
MISCELLANEOUS
7.1 Severability. In the event any portion of this Agreement shall
be found by a court of competent jurisdiction to be unenforceable, that portion
of the Agreement will be null and void and the remainder of the Agreement will
be binding on the parties as if the unenforceable provisions had never been
contained herein. To the fullest extent permitted by Law, the remedies set forth
in this Section 6.3 are the exclusive remedies for a default hereunder; provided
that with respect to (i) disputed or unpaid invoices relating to services
rendered prior to any termination and (ii) claims for indemnity relating to
events that occurred prior to any termination each party shall also have all
rights and remedies contemplated herein in Sections 7.10 and 7.11 or otherwise
provided in Law or Equity.
7.2 Assignment. Except for the ability of the Provider to cause
one or more of the Services to be performed by one of its Affiliates or a
third-party provider, no party shall have the right to assign its rights or
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obligations under this Agreement without the consent of the other party.
7.3 Entire Agreement. This Agreement constitutes the entire
agreement of the parties relating to the performance of the Services. All prior
or contemporaneous written or oral agreements are merged herein.
7.4 Law. This Agreement shall be subject to and governed by the
laws of the State of New York, excluding any conflicts-of-law rule or principle
that might refer the construction or interpretation of this Agreement to the
laws of another state.
7.5 Amendment of Modification. This Agreement may be amended or
modified from time to time only by a written amendment signed by the parties
hereto.
7.6 Notices. Any notice, request, instruction, correspondence or
other document to be given hereunder by either party to the other (herein
collectively called "Notice") shall be in writing and delivered personally or
mailed, postage prepaid, or by telegram or telecopier, as follows:
(a) if to the Company, to:
Astoria Gas Turbine Power LLC
c/o NRG Energy, Inc.
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxxx, XX 00000
Attention: Vice President
(b) if to Provider, to:
NRG Energy, Inc.
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxxx, XX 00000
Attention: Vice President of Corporate Operating
Services
7.7 Insurance. The Company shall carry and keep in force, at all
times, Commercial General Liability insurance in such policy limits as are usual
and customary for its business and as it deems necessary to protect it from
risks of loss arising from the performance of Service under this Agreement. The
Company shall name the Provider as an additional insured on these policies and
shall indemnify Provider to the same extent. The Company waive all rights and
any subrogation rights such as it or its insurers may have against Provider its
vendors and subcontractors and their employees, agents, officers, directors, and
any of their affiliated or associated companies, for any losses or damages,
including without limitation all consequential damages resulting from any and
all risks and losses, however and whenever arising, from the Services performed
hereunder, or other risks covered under a Commercial General Liability insurance
policy.
7.8 Prosecution of the Work; Force Majeure. Provider shall
substantially perform the Services in accordance with a schedule mutually agreed
upon between the parties. Any completion dates specified are tentative only and
Provider shall have no liability to the Company for late completion. If the
prosecution of the Services is delayed or affected by any of the following force
majeure occurrences: acts or failures to act by the Company or any separate
contractors, engineers, vendors, or consultants employed by the Company or any
other party not in privity of this Agreement; acts of God or the elements; acts
or failures to act by government or any agency thereof; changes, inaccuracies,
incompleteness, or differences in site conditions or any data or information
supplied to the Provider; changes in laws or regulations; delays in permitting;
delays in receipt of engineering data or vendor drawings; fire; unusually sever
weather, natural disasters, or unavoidable casualties; riot; civil disorders;
labor shortages or disputes; strikes, picketing, or arbitration proceedings;
delays in transportation, material, or equipment deliveries; material,
equipment, or fuel shortages; or any other causes beyond the Provider's
reasonable control, the schedule shall be extended for the period of time
attributable to such delay and all fixed elements of pricing, if any, shall be
equitably adjusted.
7.9 No Third-Party Beneficiary. The provisions of this Agreement
are enforceable solely by the
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parties to this Agreement, and no other person shall have the right, separate
and apart from the Company or the Provider, to enforce any provision of this
Agreement or to compel any party to this Agreement to comply with the terms of
this Agreement.
7.10 Disputes. The Provider and the Company agree to negotiate in
good faith in an effort to resolve any dispute related to this Agreement that
may arise between the parties. If the dispute cannot be resolved promptly by
negotiation, at a senior management level the either party may give the other
party written notice that the dispute should be submitted to mediation. Promptly
thereafter, a mutually acceptable mediator shall be chosen by the parties. who
shall share the cost of mediation services equally. If the dispute has not been
resolved by mediation within ninety (90) days after the date of written notice
requesting mediation, then either party may initiate litigation and pursue any
and all remedies at law or at equity that such party is entitled to.
7.11 Indemnification.
(a) The Company agrees that it will indemnify and hold harmless
the Provider, its Affiliates and their respective directors, officers,
employees, and agents from and against any and all losses, claims, damages and
liabilities, joint or several, to which the Provider may become subject under
any applicable federal or state law, or otherwise, relating to or arising out of
the engagement of the Provider pursuant to, and the performance by the Provider
of the services contemplated by, this Agreement. The Company will reimburse the
Provider for all costs and expenses (including reasonable counsel fees and
expenses) as they are incurred in connection with the investigation of,
preparation of or defense of any pending or threatened claim or any action or
proceeding covered by such indemnity. The Company will not be liable under the
foregoing indemnification provisions to the extent that any loss, claim, damage,
liability or expense is found in a final judgment by a court to have resulted
primarily from the bad faith or gross negligence of the Provider or the relevant
Affiliate.
(b) The Provider agrees that it will indemnify and hold harmless
the Company and its directors, officers, employees, and agents from and against
any and all losses, claims, damages and liabilities, joint or several, to which
the Company may become subject under any applicable federal or state law, or
otherwise, relating to or arising out of the willful misconduct or gross
negligence of the Provider or its Affiliates. The Provider will reimburse the
Company for all costs and expenses (including reasonable counsel fees and
expenses) as they are incurred in connection with the investigation of,
preparation of or defense of any pending or threatened claim or any actions or
proceedings covered by such indemnity. The Provider will not be liable under the
foregoing indemnification provisions to the extent that any loss, claim, damage,
liability or expense is found in a final judgment by a court to have resulted
primarily from the bad faith or gross negligence of the Company.
7.12 The Company is Sole Beneficiary. The Company acknowledges that
the Services shall be provided only with respect to the businesses of the
Company. The Company shall request performance of any Services for the benefit
of any entity other than the Company.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed on their behalf by their duly authorized officers.
NRG ENERGY, INC.
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
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Title: Vice President
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ASTORIA GAS TURBINE POWER LLC
By: /s/ Xxxxx X. Xxxxxxxxxxx
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Name: Xxxxx X. Xxxxxxxxxxx
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Title: President
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