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EXHIBIT 10.2
FORM OF
TRANSITIONAL SERVICES AGREEMENT
BETWEEN
THE SOUTHERN COMPANY
AND
SOUTHERN ENERGY, INC.
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TABLE OF CONTENTS
Page
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ARTICLE 1 DEFINITIONS.............................................................................................1
1.1 Additional Services.......................................................................................1
1.2 Ancillary Agreements......................................................................................1
1.3 Claims....................................................................................................1
1.4 Confidential Disclosure Agreement.........................................................................1
1.5 Distribution Date.........................................................................................1
1.6 Engineering and Technical Services........................................................................1
1.7 Impracticable.............................................................................................1
1.8 Master Separation And Distribution Agreement..............................................................1
1.9 Separation Date...........................................................................................1
1.10 Service(s)...............................................................................................2
1.11 Subsidiary...............................................................................................2
1.12 Warranty.................................................................................................2
ARTICLE 2 TRANSITION SERVICE SCHEDULES............................................................................2
ARTICLE 3 SERVICES................................................................................................2
3.1 Services Generally........................................................................................2
3.2 Service Parameters........................................................................................3
3.3 Impracticability..........................................................................................3
3.4 Additional Resources......................................................................................3
3.5 Additional Services.......................................................................................3
3.6 Further Obligations As To Services........................................................................3
3.7 Service Representatives...................................................................................3
ARTICLE 4 TERM....................................................................................................4
ARTICLE 5 COMPENSATION............................................................................................4
5.1 Charges For Services......................................................................................4
5.2 Payment Terms.............................................................................................5
5.3 Performance Under Ancillary Agreements....................................................................5
5.4 Error Correction; True-Ups; Accounting....................................................................5
5.5 Pricing Adjustments.......................................................................................5
ARTICLE 6 GENERAL OBLIGATIONS; STANDARD OF CARE...................................................................5
6.1 Performance Metrics.......................................................................................5
6.2 DISCLAIMER OF WARRANTIES..................................................................................5
6.3 Performance Metrics: Southern Energy......................................................................6
6.4 Transitional Nature Of Services; Changes..................................................................6
6.5 Responsibility For Errors; Delays.........................................................................6
6.6 Good Faith Cooperation; Consents..........................................................................6
ARTICLE 7 TERMINATION.............................................................................................7
7.1 Early Termination.........................................................................................7
7.2 Survival..................................................................................................7
ARTICLE 8 RELATIONSHIP BETWEEN THE PARTIES........................................................................7
ARTICLE 9 SUBCONTRACTORS..........................................................................................7
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ARTICLE 10 INTELLECTUAL PROPERTY..................................................................................8
ARTICLE 11 ENGINEERING AND TECHNICAL SERVICES.....................................................................8
11.1 Engineering and Technical Services.......................................................................8
11.2 Professional Responsibility Regarding Engineering and Technical Services.................................8
11.3 Applicable Laws and Regulations..........................................................................9
11.4 Insurance................................................................................................9
11.5 Reuse of Documents.......................................................................................9
11.6 Non-Restrictive Relationship.............................................................................9
ARTICLE 12 CONFIDENTIALITY........................................................................................9
ARTICLE 13 LIMITATION OF LIABILITY...............................................................................10
ARTICLE 14 FORCE MAJEURE.........................................................................................10
ARTICLE 15 DISPUTE RESOLUTION....................................................................................10
15.1 Mediation...............................................................................................10
15.2 Arbitration.............................................................................................11
15.3 Court Action............................................................................................11
15.4 Continuity Of Service And Performance...................................................................11
ARTICLE 16 MISCELLANEOUS.........................................................................................11
16.1 Entire Agreement........................................................................................11
16.2 Existing Services Agreements............................................................................11
16.3 Governing Law...........................................................................................11
16.4 Descriptive Headings....................................................................................12
16.5 Notices.................................................................................................12
16.6 Nonassignability; Third-Party Beneficiaries.............................................................12
16.7 Severability............................................................................................13
16.8 Failure Or Indulgence Not Waiver; Remedies Cumulative...................................................13
16.9 Amendment...............................................................................................13
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TRANSITIONAL SERVICES AGREEMENT
THIS TRANSITIONAL SERVICES AGREEMENT (the "Agreement") dated [________,
2000], between The Southern Company, a Delaware corporation ("Southern"),
having an office at 000 Xxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx 00000 and Southern
Energy, Inc., a Delaware corporation ("Southern Energy"; Southern Energy and
Southern each being referenced herein individually as a "Party," and
collectively as the "Parties"), having an office at 000 Xxxxxxx Xxxxxxx, Xxxxx
000, Xxxxxxx, Xxxxxxx 00000.
ARTICLE 1
DEFINITIONS
For the purpose of this Agreement, the following capitalized terms shall
have the following meanings:
1.1 Additional Services. "Additional Services" shall have the meaning set
forth in Section 3.5.
1.2 Ancillary Agreements. "Ancillary Agreements" shall have the meaning set
forth in the Master Separation and Distribution Agreement.
1.3 Claims. "Claims" shall have the meaning set forth in Section 11.6.2.
1.4 Confidential Disclosure Agreement. "Master Confidential Disclosure
Agreement" shall mean that certain Master Confidential Disclosure Agreement
between Southern and Southern Energy.
1.5 Distribution Date. "Distribution Date" shall have the meaning set forth
in the Master Separation and Distribution Agreement.
1.6 Engineering and Technical Services. "Engineering and Technical
Services" shall have the meaning set forth in Section 11.1.
1.7 Impracticable. "Impracticable" shall have the meaning set forth in
Section 3.3.
1.8 Master Separation And Distribution Agreement. "Master Separation and
Distribution Agreement" shall mean that certain Master Separation and
Distribution Agreement between Southern and Southern Energy.
1.9 Separation Date. Unless otherwise provided in this Agreement, or in any
agreement to be executed in connection with this Agreement, the effective time
and date of each action or agreement in connection with the Separation shall be
[12:01 a.m., Eastern Time, July 1, 2000] or such other date as may be fixed by
the Board of Directors of Southern (the "Separation Date").
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1.10 Service(s). "Service(s)" shall have the meaning set forth in Section
3.1 and includes the Engineering and Technical Services.
1.11 Subsidiary. "Subsidiary" of any Party means a corporation or other
organization whether incorporated or unincorporated of which at least a majority
of the securities or interests having by the terms thereof ordinary voting power
to elect at least a majority of the board of directors or others performing
similar functions with respect to such corporation or other organization is
directly or indirectly owned or controlled by such Party or by any one or more
of its Subsidiaries, or by such Party and one or more of its Subsidiaries;
provided, however, that no Party that is not directly or indirectly wholly-owned
by any other Party shall be a Subsidiary of such other Party unless such other
Party controls, or has the right, power or ability to control, that Party. For
purposes of this Agreement, Southern Energy shall be deemed not to be a
subsidiary of Southern.
1.12 Warranty. "Warranty" shall have the meaning set forth in Section
11.2.1.
ARTICLE 2
TRANSITION SERVICE SCHEDULES
This Agreement will govern individual transitional services as requested by
Southern Energy and its Subsidiaries and provided by Southern and its
Subsidiaries, the details of which shall be set forth in the Transition Service
Schedules attached to this Agreement. Each Service shall be covered by this
Agreement upon execution of a transition service schedule in the form attached
hereto (each transition service schedule, a "Transition Service Schedule").
The Parties shall set forth the terms for each Service on the applicable
Transitional Service Schedule, which may include, but are not limited to, the
time period during which the Service will be provided if different from the term
of this Agreement determined pursuant to Article 4 hereof, a summary of the
Service to be provided; a description of the Service; and the estimated
charge(s), if applicable, for the Service and any other terms applicable thereto
on the Transition Service Schedule. Obligations under each Transition Service
Schedule shall be effective upon the later of the execution of this Agreement or
the execution of the respective Transition Services Schedule. This Agreement
shall be deemed to include all the Transition Service Schedules wherever
reference to it is made.
ARTICLE 3
SERVICES
3.1 Services Generally. Except as otherwise provided herein, for the term
determined pursuant to Article 4 hereof, Southern shall provide or cause to be
provided to Southern Energy the service(s) described in the Transition Service
Schedule(s) attached hereto, beginning on the Separation Date (the "Effective
Date"). The service(s) described on a single Transition Service Schedule shall
be referred to herein as a "Service." Collectively, the services described
on all the Transition Service Schedules (including Additional Services and
Engineering and Technical Services) shall be referred to herein as "Services."
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3.2 Service Parameters. (i) Southern shall provide the Services only to the
extent and under the personnel availability conditions such Services are being
provided by Southern for Southern Energy immediately prior to the Effective
Date; and (ii) the Services will be available only for purposes of conducting
the business of Southern Energy substantially in the manner it was conducted
prior to the Effective Date.
3.3 Impracticability. Southern shall not be required to provide any Service
to the extent the performance of such Service becomes "Impracticable" as a
result of a cause or causes outside the reasonable control of Southern, or to
the extent the performance of such Services would require Southern to violate
any applicable laws, rules or regulations or would result in the breach of any
agreement or other applicable contract.
3.4 Additional Resources. In providing the Services, Southern
shall not be obligated to: (i) hire any additional employees; (ii) maintain the
employment of any specific employee; (iii) purchase, lease or license any
additional equipment or materials; or (iv) pay any costs related to the transfer
or conversion of Southern Energy's data to Southern Energy or any alternate
supplier of Services.
3.5 Additional Services. From time to time after the Effective Date, the
Parties may agree to identify additional Services that Southern will provide to
Southern Energy in accordance with the terms of this Agreement (the "Additional
Services"). In such event, the Parties shall execute additional Transition
Service Schedules for such Additional Services pursuant to Article 2. Except as
set forth in Section 3.6, the Parties may agree in writing on Additional
Services during the term of this Agreement.
3.6 Further Obligations As To Services. Subject to the provisions of
Sections 3.2, 3.3 and 3.4 and otherwise except as set forth in the next
sentence, Southern shall perform, at a charge determined using the principles
for determining fees under Section 5.1, any Service that: (a) was provided by
Southern immediately prior to the Separation Date and which was inadvertently or
unintentionally omitted from the list of Services included in Transition Service
Schedules executed at the time of execution of this Agreement, or (b) is
essential to effectuate an orderly transition under the Master Separation and
Distribution Agreement unless such performance would significantly disrupt
Southern's operations or materially increase the scope of its responsibility
under this Agreement. If Southern reasonably believes the performance of
Services requested under subparagraphs (a) or (b) would significantly disrupt
its operations or materially increase the scope of its responsibility under this
Agreement, Southern and Southern Energy shall negotiate in good faith to
establish terms under which Southern can provide such Services, but Southern
shall not be obligated to provide such Services if, following good faith
negotiation, it is unable to reach agreement on such terms.
3.7 Service Representatives. The Parties shall each appoint a
representative with respect to each Service (each a "Service Representative"),
which Service Representative shall coordinate the requesting, coordination,
scheduling and delivery of such Service. Unless
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otherwise indicated on the Transition Service Schedule for a Service, the
Party's respective Service Representatives for such Service shall be the persons
set forth on Schedule 3.7 as being responsible for such Service and certain
other related Services (each such person being a "Senior Representative"). Each
Senior Representative shall additionally be responsible for the replacement or
substitution, as necessary, of any Service Representatives for such Senior
Representative's assigned Services, and shall coordinate any requests for
changes in the scope of such Services, or for the provision of any additional
related Services, with such Senior Representative's counterpart with the other
Party. Either Party may nominate a substitute Service Representative for itself
with respect to a Service at any time upon reasonable notice to the other Party.
Any request for a Service made by Southern Energy through any person other than
Southern Energy's Senior Representative or Service Representative with respect
to such Service shall not be binding upon Southern.
ARTICLE 4
TERM
The term of this Agreement shall commence on the Effective Date and shall
remain in effect until two (2) years after the Effective Date (the "Expiration
Date"), unless earlier terminated under Article 7. This Agreement may be
extended by the Parties in writing, either in whole or with respect to one or
more of the Services; provided, however, that such extension shall only apply to
the Services for which the Agreement was extended. At least six (6) months prior
to the Expiration Date, Southern Energy shall give Southern written notice, in
accordance with the provisions of Section 16.4, of Southern Energy's request to
extend the term of the Agreement in respect of any Services. In addition, the
Parties shall be deemed to have extended this Agreement with respect to a
specific Service if the Transition Service Schedule for such Service specifies a
completion or termination date beyond the aforementioned Expiration Date. The
Parties may agree on an earlier expiration date respecting a specific Service by
specifying such date on the Transition Service Schedule for that Service.
Services shall be provided up to and including the date set forth in the
applicable Transition Service Schedule, subject to earlier termination as
provided herein.
ARTICLE 5
COMPENSATION
5.1 Charges For Services. Charges for Services shall be based upon the
greater of (a) the full cost of providing the Services, including direct costs
and indirect costs, or (b) the market value of such Services. Southern Energy
shall pay Southern the charges, if any, set forth on the Transition Service
Schedules for each of the Services listed therein as adjusted, from time to
time, in accordance with the processes and procedures established under Section
5.4 and Section 5.5 hereof. The Parties shall use good faith efforts to discuss
any situation in which the actual charge for a Service is reasonably expected to
exceed the estimated charge, if any, set forth on a Transition Service Schedule
for a particular Service; provided, however, that the incurrence of charges in
excess of any such estimate on such Transition Service Schedule shall not
justify stopping the provision of, or payment for, Services under this
Agreement.
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5.2 Payment Terms. Southern shall xxxx Southern Energy monthly for all
charges pursuant to this Agreement. Such bills shall be accompanied by
reasonable documentation or other reasonable explanation supporting such
charges. Southern Energy shall pay Southern for all Services provided hereunder
within thirty (30) days after receipt of an invoice therefor. Late payments
shall bear interest at the lesser of 18% per annum or the maximum rate allowed
by law.
5.3 Performance Under Ancillary Agreements. Notwithstanding anything to the
contrary contained herein, Southern Energy shall not be charged under this
Agreement for any obligations that are specifically required to be performed
under the Master Separation and Distribution Agreement or any other Ancillary
Agreement and any such other obligations shall be performed and charged for (if
applicable) in accordance with the terms of the Master Separation and
Distribution Agreement or such other Ancillary Agreement.
5.4 Error Correction; True-Ups; Accounting. The Parties shall reasonably
agree on a process and procedure for conducting internal audits and making
adjustments to charges as a result of the movement of employees and functions
between Parties, the discovery of errors or omissions in charges, as well as a
true-up of amounts owed. In no event shall such processes and procedures extend
beyond two (2) years after completion of a Service.
5.5 Pricing Adjustments. In the event of a tax or regulatory audit
adjustment relating to the pricing of any or all Services provided pursuant to
this Agreement in which it is determined by a taxing or regulatory authority
that any of the charges, individually or in combination, did not result in an
arm's-length payment, as determined under internationally accepted arm's-length
standards, then the Parties, including any Southern subcontractor providing
Services hereunder, may agree to make corresponding adjustments to the charges
in question for such period to the extent necessary to achieve arm's-length
pricing. Any adjustment made pursuant to this Section 5.5 at any time during the
term of this Agreement or after termination of this Agreement shall be reflected
in the Parties' legal books and records, and the resulting underpayment or
overpayment shall create, respectively, an obligation to be paid in the manner
specified in Section 5.2, or shall create a credit against amounts owed under
this Agreement.
ARTICLE 6
GENERAL OBLIGATIONS; STANDARD OF CARE
6.1 Performance Metrics: Southern. Subject to Sections 3.2, 3.3, 3.4 and
any other terms and conditions of this Agreement, Southern shall perform its
obligations hereunder in a commercially reasonable manner. Specific performance
metrics for Southern for a specific Service may be set forth in the
corresponding Transition Service Schedule. Where none is set forth, Southern
shall use reasonable efforts to provide Services in accordance with its
policies, procedures and practices in effect before the Effective Date and shall
exercise the same care and skill as it exercises in performing similar services
for itself.
6.2 DISCLAIMER OF WARRANTIES. EXCEPT AS OTHERWISE SET FORTH HEREIN SOUTHERN
MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, INCLUDING BUT NOT LIMITED TO
THE IMPLIED WARRANTIES OF
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MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO THE
SERVICES OR OTHER DELIVERABLES PROVIDED BY IT HEREUNDER.
6.3 Performance Metrics: Southern Energy. Specific performance metrics for
Southern Energy for a specific Service may be set forth in the corresponding
Transition Service Schedule. Where none is set forth, Southern Energy shall use
reasonable efforts, in connection with receiving Services, to follow the
policies, procedures and practices in effect before the Effective Date including
providing information and documentation sufficient for Southern to perform the
Services as they were performed before the Effective Date and making available,
as reasonably requested by Southern, sufficient resources and timely decisions,
approvals and acceptances in order that Southern may accomplish its obligations
hereunder in a timely manner.
6.4 Transitional Nature Of Services; Changes. The Parties acknowledge the
transitional nature of the Services and agree that Southern may make changes
from time to time in the manner of performing the Services if Southern is making
similar changes in performing similar services for itself and its subsidiaries
and if Southern furnishes to Southern Energy thirty (30) days written notice
regarding such changes.
6.5 Responsibility For Errors; Delays. Southern's sole responsibility to
Southern Energy:
(a) for errors or omissions in Services (except for Engineering and
Technical Services provided for in Article 11), shall be to furnish correct
information, payment and/or adjustment in the Services, at no additional cost or
expense to Southern Energy; provided, Southern Energy must promptly advise
Southern of any such error or omission of which it becomes aware after having
used reasonable efforts to detect any such errors or omissions in accordance
with the standard of care set forth in Section 6.3; and
(b) for failure to deliver any Service because of Impracticability,
shall be to use reasonable efforts, subject to Section 3.2, 3.3 and Section 3.4,
to make the Services available and/or to resume performing the Services as
promptly as reasonably practicable.
6.6 Good Faith Cooperation; Consents. The Parties will use good faith
efforts to cooperate with each other in all matters relating to the provision
and receipt of Services. Such cooperation shall include exchanging information,
performing true-ups and adjustments, and obtaining all third party consents,
licenses, sublicenses or approvals necessary to permit each Party to perform its
obligations hereunder (including by way of example, not by way of limitation,
rights to use third party software needed for the performance of Services). The
costs of obtaining such third party consents, licenses, sublicenses or approvals
shall be borne by Southern Energy. Each Party will maintain, in accordance with
its standard document retention procedures, documentation supporting the
information relevant to cost calculations and cooperate with each other in
making such information available as needed in the event of a tax audit, whether
in the United States or any other country.
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ARTICLE 7
EARLY TERMINATION
7.1 Early Termination. Southern Energy may terminate this Agreement, either
with respect to all or with respect to any one or more of the Services provided
to Southern Energy hereunder, for any reason or for no reason, at any time upon
one hundred eighty (180) days prior written notice to Southern. Southern may
terminate this Agreement if Southern Energy fails to pay any amount which is due
and payable in respect of any Service in accordance with the provisions of
Section 5.2 hereof, and Southern Energy does not cure such breach within ten
(10) days after being given notice of such breach. In addition, subject to the
provisions of Article 15 below, either Party may terminate this Agreement with
respect to a specific Service if the other Party materially breaches a material
provision with regard to that particular Service (other than for nonpayment) and
does not cure such breach (or does not take reasonable steps required under the
circumstances to cure such breach going forward) within sixty (60) days after
being given notice of the breach; provided, however, that the non-terminating
Party may request that the Parties engage in a dispute resolution negotiation as
specified in Article 15 below prior to termination for breach.
7.2 Survival. Those Sections of this Agreement that, by their nature, are
intended to survive termination will survive in accordance with their terms.
Notwithstanding the foregoing, in the event of any termination with respect to
one or more, but less than all Services, this Agreement shall continue in full
force and effect with respect to any Services not terminated hereby.
ARTICLE 8
RELATIONSHIP BETWEEN THE PARTIES
The relationship between the Parties established under this Agreement is
that of independent contractors and neither Party is an employee, agent,
partner, or joint venturer of or with the other. Southern will be solely
responsible for the payment of any employment-related taxes, insurance premiums
or other employment benefits in respect of the performance of Services by
Southern personnel under this Agreement. Southern Energy agrees to grant
Southern personnel access to sites, systems and information (subject to the
provisions of confidentiality in Article 12 below) as necessary for Southern to
perform its obligations hereunder. Southern Energy shall inform Southern
personnel of, and Southern personnel agree to obey, any and all security
regulations and other published policies of Southern Energy.
ARTICLE 9
SUBCONTRACTORS
Southern may engage a "Subcontractor" to perform all or any portion of
Southern's duties under this Agreement, provided that any such Subcontractor
agrees in writing to be bound by confidentiality obligations at least as
protective as the terms of Article 13 regarding confidentiality below, and
provided further that Southern remains responsible for the performance of such
Subcontractor. As used in this Agreement, "Subcontractor" will mean any
individual, partnership, corporation, firm, association, unincorporated
organization, joint venture, trust or other entity engaged to perform hereunder,
other than Southern and its Subsidiaries.
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ARTICLE 10
INTELLECTUAL PROPERTY
Except as otherwise set forth herein, the terms of the Technology and
Intellectual Property Ownership and License Agreement between the Parties, a
copy of which is attached as an exhibit to the Master Separation and
Distribution Agreement, shall govern the use and ownership of any Technology (as
defined therein) and any patents, trademarks, or other intellectual property
transferred, licensed used or created in connection with the Services or
otherwise under this Agreement.
ARTICLE 11
ENGINEERING AND TECHNICAL SERVICES
11.1 Engineering and Technical Services. Pursuant to the terms of this
Agreement, Southern shall provide certain engineering, technical and consulting
Services to Southern Energy from time to time in connection with the
development, construction, ownership, maintenance and operation of electric
generating, transmission and distribution facilities, including, but not limited
to, technical and field services, engineering and generation technical services,
fuel procurement and related services and environmental services (the
"Engineering and Technical Services"); provided, however, that Southern shall
not be required to provide any Engineering and Technical Service if the
provision of such Engineering and Technical Service, in Southern's reasonable
discretion, would be in violation of Southern's fiduciary duties to its
shareholders or customers.
11.2 Professional Responsibility Regarding Engineering and Technical
Services.
11.2.1 Standard of Care/Warranty. In the performance of Engineering
and Technical Services under this Agreement, Southern shall exercise due
care to assure that the Services are provided in a workmanlike manner, and
that such Services meet the standards and specifications set forth in the
applicable Transitional Service Schedule. Southern hereby warrants that all
Engineering and Technical Services provided hereunder will comply with the
foregoing standard of care (the "Warranty").
11.2.2 Warranty Cure. If Southern Energy discovers that any part of
the Engineering and Technical Services fail to meet the Warranty, Southern
Energy will notify Southern of such failure. Southern's sole obligation for
failing to meet the Warranty shall be to reperform the Engineering and
Technical Services thereunder at cost (direct cost plus indirect costs)
such that it fully complies with the Transitional Service Schedule and
applicable laws and regulations. Southern Energy will bear all costs and
expenses incurred by Southern in association with curing any Warranted
Engineering and Technical Services, except where the failure to meet the
Warranty with respect to any Engineering and Technical Services is due to
any willful misconduct on the part of Southern or its employees, agents,
contractors or subcontractors, in which case such costs and expenses shall
be borne by Southern. Southern makes no other
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warranties with respect to its performance of the Services, and Southern
Energy agrees to accept such services without further warranties of any
nature.
11.3 Applicable Laws and Regulations. Southern shall comply with all
national, federal, provincial, state and local laws, decrees, regulations and
ordinances (including without limitation those of any local jurisdiction in
which Engineering and Technical Services are performed) including, without
limitation, those pertaining to the environment, health, safety, sanitary
facilities, waste disposal and other matters applicable to or affecting the
performance of Engineering and Technical Services that are published and in
effect at the time particular Engineering and Technical Services are rendered.
Southern Energy shall inform Southern of, and Southern shall ensure that its
employees, agents and subcontractors comply with, site rules and regulations
while on the premises of any Southern Energy property or project.
11.4 Insurance. During the course of performance of any Engineering and
Technical Services following the Distribution Date, Southern will obtain and
maintain in full force and effect insurance substantially in accordance with,
and meeting the requirements set forth in, Schedule 11.4 attached hereto.
Promptly after the execution hereof Southern shall furnish Southern Energy with
a written certificate from its insurers, addressed to Southern Energy,
indicating the existence of Southern's insurance coverage, the amount and nature
of such coverage, and the expiration date(s) of each policy. The certificate
also shall include a provision requiring Southern's insurers to give Southern
Energy at least thirty (30) days' written notice prior to the cancellation,
nonrenewal or material alteration of any policy.
11.5 Reuse of Documents. All documents, including drawings and
specifications, prepared and furnished by Southern to Southern Energy pursuant
to this Agreement shall be the property of Southern Energy; provided, however,
that such documents are not intended or represented to be suitable for reuse by
Southern Energy or others on any other project. Southern Energy may not reuse or
adapt such documents on or for other projects without the written consent of
Southern; provided, further, that any such reuse or adaption by Southern Energy,
with the consent of Southern, will be at Southern Energy's sole risk and without
liability or legal exposure to Southern.
11.6 Non-Restrictive Relationship. Nothing in this Agreement will be
construed to preclude Southern Energy from independently developing, acquiring
or obtaining Engineering and Technical Services or related documents which may
perform the same or similar functions as the Engineering and Technical Services
or related documents provided by Southern.
ARTICLE 12
CONFIDENTIALITY
The terms of the Confidential Disclosure Agreement between the Parties
shall apply to any Confidential Information (as defined therein) which is the
subject matter of this Agreement.
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ARTICLE 13
LIMITATION OF LIABILITY
NEITHER PARTY WILL BE LIABLE TO THE OTHER FOR ANY LOST PROFITS, LOSS OF
DATA, LOSS OF USE, COST OF COVER, BUSINESS INTERRUPTION OR OTHER SPECIAL,
INCIDENTAL, INDIRECT, PUNITIVE OR CONSEQUENTIAL DAMAGES, HOWEVER CAUSED, UNDER
ANY THEORY OF LIABILITY, ARISING FROM THE PERFORMANCE OF, OR RELATING TO, THIS
AGREEMENT.
ARTICLE 14
FORCE MAJEURE
Each Party will be excused for any failure or delay in performing any of
its obligations under this Agreement, other than the obligations of Southern
Energy to make payments to Southern pursuant to Article 5 hereof for services
rendered, if such failure or delay is caused solely by Force Majeure. "Force
Majeure" includes, without limitation, any act of God or the public enemy; any
accident, explosion, fire, ice, earthquake, lightning, tornado, hurricane, or
other severe weather condition or calamity; any civil disturbance, labor
dispute, or labor or material shortage; any sabotage or acts of terrorism; any
acts of a public enemy, uprising, insurrection, civil unrest, war or rebellion;
any action or restraint by court order or public or governmental authority or
lawfully established civilian authorities, or any other circumstance or event
beyond the reasonable control of the Party relying upon such circumstance or
event.
ARTICLE 15
DISPUTE RESOLUTION
15.1 Mediation. If a dispute, controversy or claim ("Dispute") arises
between the Parties relating to the interpretation or performance of this
Agreement or the Ancillary Agreements, or the grounds for the termination
hereof, appropriate senior executives (e.g. director or vice president level) of
each Party who shall have the authority to resolve the matter shall meet or
confer (in person or by telephone) to attempt in good faith to negotiate a
resolution of the Dispute prior to pursuing other available remedies. The
initial meeting or conference between the appropriate senior executives shall be
referred to herein as the "Dispute Resolution Commencement Date." Discussions
and correspondence relating to trying to resolve such Dispute shall be treated
as confidential information developed for the purpose of settlement and shall be
exempt from discovery or production and shall not be admissible in any
proceeding relating to the subject matter of the Dispute. If the senior
executives are unable to resolve the Dispute within thirty (30) days from the
Dispute Resolution Commencement Date, and either Party wishes to pursue its
rights relating to such Dispute, then the Dispute will be mediated by a mutually
acceptable mediator appointed pursuant to the mediation rules of JAMS/Endispute
within thirty (30) days after written notice by one Party to the other demanding
non-binding mediation. Neither Party may unreasonably withhold consent to the
selection of a mediator or the location of the mediation. Both Parties will
share the costs of the mediation equally, except that each Party shall bear its
own costs and expenses, including attorney's fees, witness fees, travel
expenses, and preparation costs. The Parties may also agree to replace mediation
with some other form of non-binding or binding alternative dispute resolution
("ADR").
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15.2 Arbitration. Any Dispute which the Parties cannot resolve through
mediation within ninety (90) days of the Dispute Resolution Commencement Date,
unless otherwise mutually agreed, shall be submitted to final and binding
arbitration under the then current Commercial Arbitration Rules of the American
Arbitration Association ("AAA"), by three (3) arbitrators in Dekalb County,
Georgia. Such arbitrators shall be selected by the mutual agreement of the
Parties or, failing such agreement, shall be selected according to the aforesaid
AAA rules. The arbitrators will be instructed to prepare and deliver a written,
reasoned opinion stating their decision within thirty (30) days of the
completion of the arbitration. The prevailing Party in such arbitration shall be
entitled to expenses, including costs and reasonable attorneys' and other
professional fees, incurred in connection with the arbitration (but excluding
any costs and fees associated with prior negotiation or mediation). The decision
of the arbitrator shall be final and non-appealable and may be enforced in any
court of competent jurisdiction. The use of any ADR procedures will not be
construed under the doctrine of laches, waiver or estoppel to adversely affect
the rights of either Party.
15.3 Court Action. Any Dispute regarding the following is not required to
be negotiated, mediated or arbitrated prior to seeking material relief from a
court of competent jurisdiction: breach of any obligation of confidentiality;
infringement, misappropriation, or misuse of any intellectual property right;
any other claim where interim relief from the court is sought to prevent serious
and irreparable injury to one of the Parties or to others. However, the Parties
to the Dispute shall make a good faith effort to negotiate and mediate such
Dispute, according to the above procedures, while such court action is pending.
15.4 Continuity Of Service And Performance. Unless otherwise agreed in
writing, the Parties will continue to provide service and honor all other
commitments under this Agreement and each Ancillary Agreement during the course
of dispute resolution pursuant to the provisions of this Article 15 with respect
to all matters not subject to such dispute, controversy or claim.
ARTICLE 16
MISCELLANEOUS
16.1 Entire Agreement. This Agreement, the Master Separation and
Distribution Agreement and the other Ancillary Agreements and the Exhibits and
Schedules referenced or attached hereto and thereto constitute the entire
agreement between the Parties with respect to the subject matter hereof and
thereof and shall supersede all prior written and oral and all contemporaneous
oral agreements and understandings with respect to the subject matter hereof and
thereof.
16.2 Existing Services Agreement. The Parties acknowledge that Subsidiaries
of Southern are currently authorized to provide the services contracted for
herein to Southern Energy and its subsidiaries and, more specifically, that
Southern Company Services, Inc., a Subsidiary of Southern, is authorized to
provide the services identified herein directly, and, indirectly, to Southern
Energy and its Subsidiaries to Southern Energy Resources, Inc. (formerly known
as Southern Electric International, Inc.) pursuant to an Agreement dated July
17, 1981 (the "Existing Service Agreement"), all subject to certain conditions
established by applicable government regulations, orders, and approvals
("Existing Authority"). The Parties intend to implement this Agreement
consistent with and to the extent permitted by Existing Authority and to
cooperate toward obtaining and maintaining in effect such governmental agency
consents, orders or approvals as may be required in order to implement this
Agreement as fully as possible in accordance with its terms for the stated term.
After the Effective Date and upon receipt of and applicable regulatory
approvals and consents, the Existing Services Agreement shall be terminated and
superseded by this Agreement to the extent permitted under the Existing
Authority.
16.3 Governing Law. This Agreement shall be construed in accordance with
and all Disputes hereunder shall be governed by the laws of the State of
Georgia. Any state court sitting in Dekalb County, Georgia and/or the United
States District Court for the Northern District of Georgia shall have
jurisdiction and venue over all Disputes between the Parties that are permitted
to be brought in a court of law pursuant to Article 15 above.
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16.4 Descriptive Headings. The headings contained in this Agreement, in any
Exhibit or Schedule hereto and in the table of contents to this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Any capitalized term used in any Exhibit or
Schedule but not otherwise defined therein, shall have the meaning assigned to
such term in this Agreement. When a reference is made in this Agreement to an
Article or a Section, Exhibit or Schedule, such reference shall be to an Article
or Section of, or an Exhibit or Schedule to, this Agreement unless otherwise
indicated.
16.5 Notices. Notices, offers, requests, or other communications required
or permitted to be given by either Party pursuant to the terms of this Agreement
shall be given in writing to the respective Parties to the following addresses:
if to Southern :
The Southern Company
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: General Counsel
Fax: (000) 000-0000
if to Southern Energy:
Southern Energy, Inc.
000 Xxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: General Counsel
Fax: (000) 000-0000
or to such other address as the Party to whom notice is given may have
previously furnished to the other in writing as provided herein. Any notice
involving non-performance, termination, or renewal shall be sent by hand
delivery, recognized overnight courier or, within the United States, may also be
sent via certified mail, return receipt requested. All other notices may also be
sent by fax, confirmed by first class mail. All notices shall be deemed to have
been given and received on the earlier of actual delivery or three (3) days from
the date of postmark.
16.6 Nonassignability; Third-Party Beneficiaries. Except as specifically
permitted under Article 9 above, neither Party may, directly or indirectly, in
whole or in part, whether by operation of law or otherwise, assign or transfer
this Agreement, without the other Party's prior written consent, and any
attempted assignment, transfer or delegation without such prior written consent
shall be voidable at the sole option of such other Party. Without limiting the
foregoing, this Agreement will be binding upon and inure to the benefit of the
Parties and their permitted successors and assigns. This Agreement, including
the Transition Services Schedules and the other documents referred to herein,
shall be binding upon and inure solely to the benefit of each party hereto and
their legal representatives and successors, and nothing in this Agreement,
express or implied, is intended to confer upon any other Person any rights or
remedies of any nature whatsoever under or by reason of this Agreement.
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16.7 Severability. If any term or other provision of this Agreement is
determined by a court, administrative agency or arbitrator to be invalid,
illegal or incapable of being enforced by any rule of law or public policy, all
other conditions and provisions of this Agreement will nevertheless remain in
full force and effect so long as the economic or legal substance of the
transactions contemplated is not affected in any manner materially adverse to
any Party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the Parties shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the
Parties as closely as possible in an acceptable manner to the end that
transactions contemplated hereby are fulfilled to the fullest extent possible.
16.8 Failure Or Indulgence Not Waiver; Remedies Cumulative. No failure or
delay on the part of either Party hereto in the exercise of any right hereunder
shall impair such right or be construed to be a waiver of, or acquiescence in,
any breach of any representation, warranty or agreement herein, nor shall any
single or partial exercise of any such right preclude other or further exercise
thereof or of any other right. All rights and remedies existing under this
Agreement are cumulative to, and not exclusive of, any rights or remedies
otherwise available.
16.9 Amendment. No change or amendment will be made to this Agreement
except by an instrument in writing signed on behalf of each of the Parties to
such agreement.
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IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed in duplicate originals by its duly authorized representatives.
THE SOUTHERN COMPANY SOUTHERN ENERGY, INC.
By: By:
-------------------------------- ---------------------------------
Title: Title:
----------------------------- ------------------------------
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FORM OF TRANSITION SERVICE SCHEDULE TO TRANSITIONAL SERVICES AGREEMENT
1. Transition Service Schedule #:____________ (To be inserted by
representative)
2. Functional Area:_______________
3. Start/End Date: The Services start on the Effective Date of the
Transitional Services Agreement between The Southern Company ("Southern")
and Southern Energy, Inc. ("Southern Energy") to which this Transition
Service Schedule is attached and end on [__________] unless otherwise
indicated below.
Indicate below if other start/end date:
Start Date:
----------------------------
End Date:
------------------------------
If Start and End dates vary by service and/or location, please indicate in
Section 5 below.
4. Summary of Services (Describe the service to be provided in appropriate
detail.
Service Name Description
5. List of services to be provided per location and site: (List all the
services to be provided at each site. Enter Start Date and End Date if
different from Section 3 above.)
Location Site Service(s) Start Date End Date
6. Performance parameters/Service level: (State minimum performance expected
from each service, if applicable.):
7. Estimated Total Compensation
8. Describe cost methodology and cost drivers affecting Estimated Total
Compensation (Describe on an individual service basis if necessary):
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9. Describe the process by which the cost of services will be adjusted in the
instance of an increase/reduction in the services provided: (Describe on an
individual service basis if necessary.)
10. Software: Will software be used or included with the Services to be
provided under this Transition Service Schedule: ____ Yes ____ No
List software/licenses to be provided, if any:
11. Contract Administrators. List Service Representatives from Southern and
Southern Energy:
Upon execution of this Transition Service Schedule by both Parties, this
Transition Service Schedule is hereby deemed incorporated into and made part of
that certain Transitional Services Agreement between The Southern Company and
Southern Energy, Inc.
THE SOUTHERN COMPANY SOUTHERN ENERGY, INC.
By: By:
-------------------------------- ---------------------------------
(Authorized Signature) (Authorized Signature)
Date: Date:
------------------------------ -------------------------------
Name: Name:
------------------------------ -------------------------------
Title: Title:
----------------------------- ------------------------------
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Schedule 3.7
Senior Service Representatives
Southern Energy
Service Senior Representative (Title)
------- -----------------------------
Engineering and Technical Services Chief Technical Officer
Intellectual Property/
Information Technology Chief Information Officer
All other Services Senior Vice President of Administration
and External Affairs
Southern
Service Senior Representative (Title)
------- -----------------------------
Engineering and Technical Services;
Procurement President of Southern Company Generation
Intellectual Property/
Information Technology Chief Information Officer
Human Resources Senior Vice President of Human Resources,
Legal General Counsel
External Affairs Vice President of External Affairs
Finance and Risk Management Chief Financial Officer
Accounting Senior Vice President - Chief Accounting
Officer
Internal Auditing Director of Internal Auditing
System Aircraft Vice President, System Aircraft
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Schedule 16.2
Existing Engineering Services Agreements
