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Exhibit 10.6
CORPORATE SERVICES AGREEMENT
THIS CORPORATE SERVICES AGREEMENT (this "Agreement"), dated as of March
24, 2000, is entered into by and between NRG Energy, Inc., a Delaware
corporation (the "Provider"), and Louisiana Generating LLC, a Delaware limited
liability company (the "Company").
RECITALS
WHEREAS, the Company has obtained the rights to acquire, own and operate
certain electric generation assets located in New Roads, Louisiana (the
"Facility"); and
WHEREAS, the Company desires to employ the services of the Provider to
assist in its operation of the Facility and related business functions; and
WHEREAS, the Provider agrees to provide various services to the Company in
support of the operations of the Facility as provided in this Agreement.
NOW THEREFORE, 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 acknowledged, 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.
"Control" means the possession, directly or indirectly, through one or
more intermediaries, of (i) in the case of a corporation, a majority of the
outstanding voting securities thereof; (ii) in the case of a limited liability
company, partnership, limited
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partnership or venture, the right to more than 50% of the distributions
therefrom (including liquidating distributions); (iii) in the case of a trust or
estate, including a business trust, a majority of the beneficial interest
therein; and (iv) in the case of any other entity, a majority of the economic,
beneficial or voting interest therein.
"Effective Date" means March 24, 2000.
"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 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 purposes 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 this Agreement unless
otherwise specified.
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ARTICLE 2
SERVICES
2.1 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 primarily 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 written
document to authorize the performance of Services by the Provider. Such document
shall state, as a minimum, the scope of Services to be performed, schedule
requirements, a budget for such Services 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. Prior to the performance of any Services requested by the
Company, the Company, upon request to the Provider or its Affiliate as the case
may be, shall have the right to review and approve the Provider's staffing of
the assignment.
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.
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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 in a timely manner prior to 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 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 annual
adjustment for any changes in payroll taxes or insurance, or changes in
benefit programs. The Company shall be notified of any increase in labor
rates for each upcoming calendar year during the fourth quarter of the
then current calendar year.
(b) Transportation, travel, hotel and living expenses, including use
of employees' personal cars at the Provider's current standard rates. All
reasonable moving, relocation, travel and living expenses incurred in
connection with assignment of the Provider's permanent personnel to a
location other than the 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 the
Provider's current standard rates.
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(d) Reproduction costs of all drawings, manuals, specifications, and
other documents required for the Services; and costs for the use of
computers, all at the Provider's current standard rates or at actual cost
to the 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 the Provider (except disputes between the
Provider and the Company) or claims, suites or causes of action pursued on
behalf of the Company by the Provider.
(g) Premiums and brokerage fees on all bonds and insurance policies
which may be required by the Company in addition to those listed herein,
and any loss under the deductible features of any insurance policies,
whether furnished by the Provider or the 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 shall be due and payable
within thirty (30) days after its receipt. Documentation backing up
invoiced charges shall be made available to the Company upon request. 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.
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(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. The 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 the Provider to
re-perform the defective portion of the Services within a period of one (1) year
from the date that the defective Service was performed under this Agreement. The
Company shall promptly provide the Provider written notice of the performance of
defective Service. All costs of any re-performance shall be reimbursed by the
Company to the Provider but the 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 the Services
performed under this Agreement.
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 the 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. The 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.
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ARTICLE 6
TERM AND TERMINATION; EVENTS OF DEFAULT
6.1 Term. The term of this Agreement shall commence on the Effective Date
and shall continue until terminated in writing by the Company or terminated
pursuant to Section 6.3 hereof.
6.2 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 files a voluntary petition in bankruptcy,
makes an assignment for the benefit of creditors, is adjudicated a
bankrupt, or is declared insolvent.
6.3 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, or (b) terminate this
Agreement upon giving notice of termination to the defaulting party. No failure
on the part of either the Provider or 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 the exercise of any other such right, power or privilege or further
exercise thereof.
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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 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 the rights and
remedies contemplated in Sections 7.10 and 7.11 herein 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 obligations
under this Agreement without the consent of the other party; provided, however,
that the Company may transfer, sell, pledge, encumber or assign this Agreement
in connection with any financing or other financial arrangements by or for the
benefit of the Company or its Affiliate, NRG South Central Generating LLC
without the consent of the Provider.
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 (other than Section 5-1401 of the New York General Obligations
Law).
7.5 Amendment or 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
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by telegram or telecopier, as follow:
(a) if to the Company, to:
Louisiana Generating LLC
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxxx, XX 00000
Attention: President
(b) if to the 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 similar businesses in the independent power industry and as it
deems necessary to protect it from risks of loss arising from the performance of
Services under this Agreement. The Company shall name the Provider, its
directors, officers, employees and agents as additional insureds on these
policies. The Company waives all rights and any subrogation rights such as it or
its insurers may have against the 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 performance
of the Services is delayed or affected by any of the following force majeure
occurrences: acts or failures to act by any 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,
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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 severe 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 parties shall negotiate to extend the
schedule 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 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, then 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, managers, 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
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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, gross negligence or willful
misconduct of the Provider or the relevant Affiliate.
(b) The Provider agrees that it will indemnify and hold harmless the
Company and its directors, managers, 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 or any third parties engaged by
the Provider. 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, gross
negligence or willful misconduct 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 not request performance of any Services for the benefit of any
entity other than the Company.
7.13 Renegotiation of Commercial Terms. The parties acknowledge that the
commercial terms of this Agreement reflect the Affiliate relationship that
exists between the Company and the Provider. In the event that any portion of
the Company, its parent, NRG South Central Generating LLC ("NRG South Central"),
or NRG South Central's members (NRG Central U.S. LLC or South Central Generation
Holding LLC) is sold, transferred or conveyed to a non-Affiliate, the Company
and the Provider agree to renegotiate the commercial terms of this Agreement to
reflect an arms-length commercial arrangement.
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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. Xxxxxxxxxxx
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Name: Xxxxx X. Xxxxxxxxxxx
Title: Senior Vice President
LOUISIANA GENERATING LLC
By: /s/ Xxxxx X. Xxxxxxxxxxx
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Name: Xxxxx X. Xxxxxxxxxxx
Title: Vice President
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ANNEX A
NRG Energy, Inc.
2000 Standard Labor Rates for Intracompany Transactions
Fully Loaded Standard Rate
Category
Executive $ 210.00
Regional Manager $ 136.00
Sr. Attorney $ 113.00
Attorney $ 100.00
Exec. Dir. Bus. Dev. $ 113.00
Dir. Bus. Dev. $ 100.00
Mrg. Bus. Dev. $ 86.00
Exec. Dir. Finance/Tax $ 113.00
Dir. Finance/Tax $ 86.00
Sr. Financial Analyst $ 69.00
Financial Analyst $ 52.00
Exec. Dir. Ops. Tech. Supp. & Engineering $ 113.00
Dir. Ops. Tech. Supp. & Engineering $ 86.00
Mgr. Ops. Tech. Supp./Engineer $ 77.00
Sr. HR Generalist $ 100.00
HR Generalist $ 77.00
Sr. Accountant $ 52.00
Accountant $ 46.00
Administrative Support $ 35.00
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