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EXHIBIT 10.3
TECHNICAL
SERVICES AGREEMENT
between
RELIANT ENERGY, INCORPORATED
and
RELIANT RESOURCES, INC.
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TECHNICAL SERVICES AGREEMENT
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS................................................................................1
1.1 Additional Services........................................................................1
1.2 Effective Date.............................................................................1
1.3 Computer Systems Services..................................................................1
1.4 Environmental and Safety Services..........................................................1
1.5 Genco Assets...............................................................................1
1.6 Xxxxx XX...................................................................................1
1.7 Genco Option Agreement.....................................................................2
1.8 Impracticable..............................................................................2
1.9 Information Technology Services............................................................2
1.10 Liability..................................................................................2
1.11 Option Closing Date........................................................................2
1.12 Option Expiration Date.....................................................................2
1.13 Providing Company..........................................................................2
1.14 Receiving Company..........................................................................2
1.15 REI Group..................................................................................2
1.16 Representative.............................................................................2
1.17 Resources Group............................................................................2
1.18 Service....................................................................................2
1.19 Subsidiary.................................................................................2
1.20 Technical Services.........................................................................2
ARTICLE II SERVICES...................................................................................3
2.1 Services...................................................................................3
(a) Initial Services...................................................................3
(b) Additional Services................................................................3
(c) Exhibits...........................................................................3
(d) Services Performed by Others.......................................................3
2.2 Charges and Payment........................................................................4
(a) Charges for Services...............................................................4
(b) Special Provisions Applicable to Computer Systems Services.........................4
(c) Budgeting..........................................................................4
(d) Charges for Additional Services....................................................5
(e) Payment Terms......................................................................5
(f) Performance under Ancillary Agreements.............................................5
(g) Error Correction; True-Ups; Accounting.............................................5
2.3 General Obligations; Standard of Care......................................................5
(a) Performance Metrics: Providing Company............................................5
(b) Performance Metrics: Receiving Company............................................6
(c) Transitional Nature of Services; Changes...........................................6
(d) Responsibility for Errors; Delays..................................................6
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(e) Good Faith Cooperation; Consents...................................................7
2.4 Certain Limitations........................................................................7
(a) Service Boundaries and Scope.......................................................7
(b) Impracticability...................................................................7
(c) Sale, Transfer, Assignment.........................................................7
2.5 Confidentiality............................................................................7
(a) Information Subject to Other Obligations...........................................7
(b) All Information Confidential.......................................................7
(c) Internal Use; Title, Copies, Return................................................8
2.6 Term; Early Termination....................................................................8
(a) Term...............................................................................8
(b) Termination by Receiving Company of Specific Service Categories....................8
(c) Termination of Less than All Services..............................................9
2.7 Disclaimer of Warranties, Limitation of Liability and Indemnification......................9
(a) Disclaimer of Warranties...........................................................9
(b) Limitation of Liability; Indemnification of Receiving Company......................9
(c) Limitation of Liability; Indemnification of Providing Company.....................10
(d) Subrogation of Rights vis-a-vis Third Party Contractors...........................10
2.8 Representatives...........................................................................10
ARTICLE III MISCELLANEOUS.............................................................................11
3.1 Taxes.....................................................................................11
3.2 Laws and Governmental Regulations.........................................................11
3.3 Relationship of Parties...................................................................11
3.4 References................................................................................11
3.5 Modification and Amendment................................................................12
3.6 Inconsistency.............................................................................12
3.7 Resolution of Disputes....................................................................12
3.8 Successors and Assignment.................................................................12
3.9 Notices...................................................................................12
3.10 Governing Law.............................................................................12
3.11 Severability..............................................................................12
3.12 Counterparts..............................................................................13
3.13 Rights of the Parties.....................................................................13
3.14 Reservation of Rights.....................................................................13
3.15 Entire Agreement..........................................................................13
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TECHNICAL SERVICES AGREEMENT
THIS TECHNICAL SERVICES AGREEMENT, dated as of December 31, 2000 (the
"Effective Date"), is between Reliant Energy, Incorporated, a Texas corporation
("REI") acting through its Reliant Energy HL&P Division and Reliant Resources,
Inc., a Delaware corporation ("Resources"). Capitalized terms used herein and
not otherwise defined shall have the respective meanings assigned to them in
Article I hereof or as assigned to them in the Separation Agreement (as defined
below).
WHEREAS, the Board of Directors of REI has determined that it is in
the best interests of REI and its shareholders to separate REI's existing
businesses into two independent business groups;
WHEREAS, in order to effectuate the foregoing, REI and Resources have
entered into a Master Separation Agreement, dated as of December 31, 2000 (the
"Separation Agreement"); and
WHEREAS, the Separation Agreement provides, among other things, for
REI and Resources to enter into this Agreement in order to set forth the terms
on which Resources will provide to REI the Services described herein.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, the parties, intending to be legally
bound, agree as follows:
ARTICLE I
DEFINITIONS
For the purpose of this Agreement the following terms shall have the
following meanings:
1.1 ADDITIONAL SERVICES. "Additional Services" has the meaning set
forth in Section 2.1(b).
1.2 EFFECTIVE DATE. "Effective Date" means the date of this Agreement.
1.3 COMPUTER SYSTEMS SERVICES. "Computer Systems Services" has the
meaning assigned to that term in Section 2.1(a)(iii).
1.4 ENVIRONMENTAL AND SAFETY SERVICES. "Environmental and Safety
Services" has the meaning assigned to that term in Section 2.1(a)(ii).
1.5 GENCO ASSETS. "Genco Assets" has the meaning assigned to that term
in Section 1.15 of the Separation Agreement.
1.6 XXXXX XX. "Xxxxx XX" has the meaning assigned to that term in the
Genco Option Agreement.
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1.7 GENCO OPTION AGREEMENT. "Genco Option Agreement" means the Texas
Genco Option Agreement dated as of December 31, 2000 between REI and Resources.
1.8 IMPRACTICABLE. "Impracticable" (and words of similar import) has
the meaning set forth in Section 2.4(b).
1.9 INFORMATION TECHNOLOGY SERVICES. "Information Technology Services"
has the meaning assigned to that term in Section 2.1(a)(iv).
1.10 LIABILITY. "Liability" has the meaning assigned to that term in
the Separation Agreement.
1.11 OPTION CLOSING DATE. "Option Closing Date" has the meaning
assigned to that term in the Genco Option Agreement.
1.12 OPTION EXPIRATION DATE. "Option Expiration Date" has the meaning
assigned to that term in the Genco Option Agreement.
1.13 PROVIDING COMPANY. "Providing Company" means Resources.
1.14 RECEIVING COMPANY. "Receiving Company" means REI or a permitted
assignee under Section 2.4(c), including Genco.
1.15 REI GROUP. "REI Group" means REI and its Subsidiaries excluding
Resources and other members of the Resources Group.
1.16 REPRESENTATIVE. "Representative" of any party means a managerial
level employee appointed by such party to have the responsibilities and
authority set forth in Section 2.8.
1.17 RESOURCES GROUP. "Resources Group" means Resources and its
Subsidiaries.
1.18 SERVICE. "Service" has the meaning set forth in subsection
2.1(b).
1.19 SUBSIDIARY. "Subsidiary" means, with respect to REI or Resources,
a corporation, partnership, limited liability company or other entity more than
50% of the voting common stock or other interests entitled to vote generally for
the election of directors (or comparable governing body) is owned, directly or
indirectly, by REI or Resources, respectively.
1.20 TECHNICAL SERVICES. "Technical Services" has the meaning assigned
to that term in Section 2.1(a)(i).
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ARTICLE II
SERVICES
2.1 SERVICES.
(a) INITIAL SERVICES. Except as otherwise provided herein, during the
applicable term determined pursuant to Section 2.6 hereof the following
"Initial Services" shall be provided by Resources to Receiving Company:
(i) TECHNICAL SERVICES consist of engineering and technical support
services required to support operation and maintenance of the Genco Assets,
including betterment and reliability analysis, surveillance, testing,
calibrations, diagnostic analysis and water technology services, all as
more particularly described in Exhibit 2.1(a)(i);
(ii) ENVIRONMENTAL AND SAFETY SERVICES consist of environmental,
safety and industrial health services in support of the operation and
maintenance of the Genco Assets, all as more particularly described in
Exhibit 2.1(a)(ii);
(iii) COMPUTER SYSTEMS SERVICES consist of the provision of computer
systems (software and hardware) used for economic dispatch, QSE scheduling,
QSE settlement, ISO settlement and communication, and related functions
associated with the operation and maintenance of the Genco Assets,
including technical, programming, consulting support, and hardware
maintenance services (but excluding the provisions of any plant-specific
hardware, which will be purchased by the Receiving Company), all as more
particularly described in Exhibit 2.1(a)(iii); and
(iv) INFORMATION TECHNOLOGY SERVICES consist of the provision of
information technology services associated with the operation and
maintenance of the Genco Assets, all as more particularly described in
Exhibit 2.1(a)(iv).
(b) ADDITIONAL SERVICES. From time to time after the Effective Date,
the parties may, by mutual agreement, identify additional services that one
party will provide to the other party in accordance with the terms of this
Agreement (the "Additional Services" and, together with the Initial Services,
the "Services"). In such case, the parties shall create an Exhibit for each
Additional Service setting forth a description of the Service, the time period
during which the Service will be provided, the charge for the Service and any
other terms applicable thereto.
(c) EXHIBITS. To the extent not affixed at the date of this Agreement,
Exhibits 2.1(a)(i) through (iv) shall be established by agreement of the parties
and, upon such agreement, shall be affixed and made a part hereof.
(d) SERVICES PERFORMED BY OTHERS. At its option, Resources may cause
any Service it is required to provide hereunder to be provided by another member
of the Resources Group or by any other Person that is providing, or may from
time to time provide, the same or similar services for members of the Resources
Group.
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Resources shall remain responsible, in accordance with the terms of this
Agreement, for performance of any Service it causes to be so provided by others.
2.2 CHARGES AND PAYMENT.
(a) CHARGES FOR SERVICES. Subject to Section 2.2(b), Resources will
charge for the Services, and the Receiving Company will pay for them on the
following basis:
(i) Resources will charge the Receiving Company for its direct
operating costs incurred in providing the Services, including, but not
limited to, allocable salary and wages, incentives, paid absences, payroll
taxes, payroll additives (insurance premiums, social security, health care
and retirement benefits and the like) and similar expenses, and
reimbursement of out-of-pocket third party costs and expenses; and
(ii) Resources will also charge the Receiving Company for its indirect
costs of providing the services, including, but not limited to, allocable
charges for management, payroll, procurement, legal, risk management,
accounting, tax, audit, human Resources and the like, and similar expenses.
It is the intent of the parties that the charges for the Services will be based
on Resources' fully allocated direct and indirect costs of providing the
Services, but without any element of profit, and that the Services under this
Agreement and similar services provided by Resources to entities within the
Resources Group will be charged for on a basis that allocates the costs charged
out on a fair and nondiscriminatory basis.
(b) SPECIAL PROVISIONS APPLICABLE TO COMPUTER SYSTEMS SERVICES. Costs
incurred by Resources in providing Computer Systems Services that constitute
capital investment shall be charged to the Receiving Company in the form of a
base service rate on an installed megawatt basis, using the same methodology by
which capital costs are allocated by Resources to Resources' generation
operations in regions outside the territory served by the business conducted
with the Genco Assets. Capital additions that benefit both the operations
conducted with the Genco Assets and Resources' generation operations in other
regions will be allocated on an installed megawatt basis. Capital additions that
benefit only the operation of the Genco Assets or only Resources' other
generation operations will be charged directly to the entity that benefits from
those additions, and use by others shall be prohibited.
(c) BUDGETING. In advance of each calendar year, Resources shall
prepare and deliver to the Receiving Party a proposed budget for Services to be
performed during that year, taking into account such information as may be
provided by Receiving Company for the specification of the scope of the Services
to be performed during that year and any changes in the scope of work from that
theretofore provided, and including budgetary parameters for the use of third
party service providers. Resources will also prepare on a monthly basis forward
budgetary forecasts for the Services, including an analysis of variances from
previously budgeted amounts.
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(d) CHARGES FOR ADDITIONAL SERVICES. Receiving Company shall pay
Resources the charges, if any, set forth on each Exhibit hereafter created for
each of the Additional Services listed therein. Notwithstanding the foregoing
the agreement of a party to provide or receive any Additional Service at any
given rate or charge shall be at the sole discretion of such party.
(e) PAYMENT TERMS. Resources shall xxxx Receiving Company monthly for
all charges pursuant to this Agreement and Receiving Company shall pay Resources
for all Services within thirty days after receipt of an invoice therefor.
Charges shall be supported by reasonable documentation (which may be maintained
in electronic form) consistent with past practices. Late payments shall bear
interest at the lesser of the prime rate as announced and in effect from time to
time at The Chase Manhattan Bank plus two percent (2%) per annum or the maximum
non-usurious rate of interest permitted by applicable law.
(f) PERFORMANCE UNDER ANCILLARY AGREEMENTS. Notwithstanding anything
to the contrary contained herein, Receiving Company shall not be charged under
this Agreement for any Services that are specifically required to be performed
under the Separation Agreement or any other Ancillary Agreement and any such
other Services shall be performed and charged for in accordance with the terms
of the Separation Agreement or such other Ancillary Agreement.
(g) ERROR CORRECTION; TRUE-UPS; ACCOUNTING. Resources shall make
adjustments to charges as required to reflect the discovery of errors or
omissions in charges. Resources and Receiving Company shall conduct a true-up
process at least annually and more frequently if necessary to adjust charges
based on a reconciliation of amounts charged and costs incurred. It is the
intent of the parties that such true-up process will be conducted using
substantially the same process, procedures and methods of review as have been
heretofore in effect. Resources will maintain such books and records as are
necessary to support the charges for Services, in sufficient detail as may be
necessary to enable REI to satisfy applicable regulatory requirements. Services
under this Agreement and charges therefor shall be subject to the provisions of
Section 10.5 of the Separation Agreement (Audit Rights).
2.3 GENERAL OBLIGATIONS; STANDARD OF CARE.
(a) PERFORMANCE METRICS: PROVIDING COMPANY. The Providing Company
shall maintain sufficient resources to perform its obligations hereunder and
shall perform such obligations in a commercially reasonable manner. Specific
performance metrics for the Providing Company may be set forth in Exhibits
referred to herein. Where none is set forth, the Providing Company shall provide
Services in accordance with the policies, procedures and practices in effect for
the provision of similar services in support of the operation and maintenance of
the Genco Assets before the date of this Agreement and shall exercise the same
care and skill as it exercises in performing similar services hereafter for
generation operations conducted by members of the Resources Group and shall not,
in situations in which common personnel, equipment or facilities are used in
performing Services hereunder and such similar Services for
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members of the Resources Group, favor either a Receiving Company or a member of
the Resources Group.
(b) PERFORMANCE METRICS: RECEIVING COMPANY. Specific performance
metrics for the Receiving Company may be set forth in Exhibits referred to
herein. Where none is set forth, the Receiving Company shall, in connection with
receiving Services, follow the policies, procedures and practices in effect
before the date of this Agreement including providing information and
documentation sufficient for the Providing Company to perform the Services as
they were performed before the date of this Agreement and making available, as
reasonably requested by the Providing Company, sufficient resources and timely
decisions, approvals and acceptances in order that Providing Company may
accomplish its obligations hereunder in a timely manner. In connection with the
provision of Information Technology Services, Receiving Company will use
hardware and software configurations conforming to Resources' standards when
reasonably practicable. If Receiving Company elects to use different standards,
Resources will use commercially reasonable efforts to provide services
consistent with such standards, but shall have no responsibility for the
functionality of the nonconforming configurations, and Receiving Company shall
be responsible for all costs incurred by Resources in adapting to the different
standards.
(c) TRANSITIONAL NATURE OF SERVICES; CHANGES. The parties acknowledge
the transitional nature of the Services and that Providing Company may make
changes from time to time in the manner of performing the Services if Providing
Company is making similar changes in performing similar services for members of
the Resources Group and if Providing Company furnishes to Receiving Company
substantially the same notice Providing Company shall provide members of the
Resources Group respecting such changes.
(d) RESPONSIBILITY FOR ERRORS; DELAYS. Providing Company's sole
responsibility to Receiving Company:
(i) for errors or omissions in Services, shall be to furnish correct
information and/or adjustment in the Services, at no additional cost or
expense to Receiving Company; provided, Receiving Company must promptly
advise Providing Company of any such error or omission of which it becomes
aware after having used commercially reasonable efforts to detect any such
errors or omissions in accordance with the standard of care set forth in
Section 2.3(b); and provided, further, that the responsibility to furnish
correct information or an adjustment of services at no additional cost or
expense to the Receiving Company shall not be construed to require
Providing Company to make any payment or incur any Liability for which it
is not responsible, or with respect to which it is provided indemnity,
under Section 2.7; and
(ii) for failure to deliver any Service because of Impracticability,
shall be to use commercially reasonable efforts, subject to subsection
2.4(b), to make the Services available and/or to resume performing the
Services as promptly as reasonably practicable.
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(e) 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,
providing electronic access to systems used in connection with Services to the
extent the systems in use are designed and configured to permit such access,
performing true-ups and adjustments and obtaining all consents, licenses,
sublicenses or approvals necessary to permit each party to perform its
obligations hereunder. The parties will cooperate with each other in making such
information available as needed in the event of a tax audit or Regulatory
Proceeding, whether in the United States or any other country.
2.4 CERTAIN LIMITATIONS.
(a) SERVICE BOUNDARIES AND SCOPE. Except as provided in an Exhibit for
a Service, the Services will be available only for purposes of conducting the
generation business of REI and its Subsidiaries substantially in the manner as
the generation business of the Reliant Energy HL&P Division of REI was conducted
prior to the Effective Date.
(b) IMPRACTICABILITY. Providing Company 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 Providing Company including unfeasible technological requirements, or to the
extent the performance of such Services would require Providing Company to
violate any applicable laws, rules or regulations or would result in the breach
of any software license or other applicable contract.
(c) SALE, TRANSFER, ASSIGNMENT. No Receiving Company may sell,
transfer, assign or otherwise use the Services provided hereunder, in whole or
in part, for the benefit of any Person other than a member of the REI Group.
Without limitation, it is understood and agreed that REI may assign its rights
under this Agreement to Xxxxx XX.
2.5 CONFIDENTIALITY.
(a) INFORMATION SUBJECT TO OTHER OBLIGATIONS. Providing Company and
Receiving Company agree that all Information regarding the Services, including,
but not limited to, price, costs, methods of operation and software, shall be
maintained in confidence and shall be subject to Sections 10.3 and 10.15 of the
Separation Agreement.
(b) ALL INFORMATION CONFIDENTIAL. Providing Company's systems used to
perform the Services provided hereunder are confidential and proprietary to
Providing Company or third parties. Receiving Company shall treat these systems
and all related procedures and documentation as confidential and proprietary to
Providing Company or its third party vendors.
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(c) INTERNAL USE; TITLE, COPIES, RETURN. Subject to the applicable
provisions of the Intellectual Property Agreement governing the ownership, use,
and licensing of Intellectual Property, Receiving Company agrees that:
(i) all systems, procedures and related materials provided to
Receiving Company are for Receiving Company's internal use only and only as
related to the Services or any of the underlying systems used to provide
the Services;
(ii) title to all systems used in performing the Services provided
hereunder shall remain in Providing Company or its third party vendors; and
(iii) upon the termination of any of the Services, Receiving Company
shall return to Providing Company, as soon as practicable, any equipment or
other property of Providing Company relating to the Services which is owned
or leased by it and is or was in Receiving Company's possession or control.
2.6 TERM; EARLY TERMINATION.
(a) TERM. The term of this Agreement shall commence on the date hereof
and shall remain in effect through the earlier of (i) the Option Closing Date,
(ii) the sale or disposition by REI, directly or indirectly, of Xxxxx XX or of
all or substantially all of the Genco Assets, and (iii) May 31, 2005 or until
such earlier time as all Services are terminated as provided in this Section.
Notwithstanding the foregoing, if the Genco Option is not exercised prior to the
Option Expiration Date, Receiving Company may extend the term of this Agreement
until December 31, 2005 (or such earlier time as Xxxxx XX or all or
substantially all of the Genco Assets are disposed of as provided in clause (ii)
of the preceding sentence). 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 Service for which
the Agreement was extended. Services shall be subject to earlier termination as
provided herein. In the event that any Genco Asset is sold or otherwise disposed
of other than through exercise of the Genco Option, Services shall no longer be
provided with respect to the Genco Asset that is sold or otherwise disposed of
and the charges for services shall be adjusted to take the same into account. In
the event a change is made to the Option Expiration Date pursuant to Section
12.1 of the Genco Option Agreement, corresponding changes shall automatically be
made to the May 31, 2005 and December 31, 2005 dates in this paragraph.
(b) TERMINATION BY RECEIVING COMPANY OF SPECIFIC SERVICE CATEGORIES. A
Receiving Company may terminate this Agreement either with respect to all, or
with respect to any one or more, of the Services provided hereunder at any time
and from time to time, for any reason or no reason, by giving written notice to
the Providing Company as follows:
(i) for Technical Services, except to the extent otherwise provided in
Exhibit 2.1(a)(i), a terminated category of Services must include all
Services
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included in one of the service categories specified in Exhibit 2.1(a)(i),
and notice of termination thereof must be given at least 90 days in advance
of the effective date of the termination.
(ii) for Environmental and Safety Services, except to the extent
otherwise provided in Exhibit 2.1(a)(ii), a terminated category of Services
must include all of the Services included in one of the service categories
specified in Exhibit 2.1(a)(ii), and notice of termination thereof must be
given at least 90 days in advance of the effective date of the termination.
(iii) for Computer Systems Services, except to the extent otherwise
provided in Exhibit 2.1(a)(iii), a terminated category of Services must
include all of the Services included in one of the service categories
specified in Exhibit 2.1(a)(iii), and notice of termination thereof must be
given at least 90 days in advance of the effective date of the termination.
(iv) for Information Technology Services, except to the extent
otherwise provided on Exhibit 2.1(a)(iv), a terminated category of Services
must include all of the Services included in one of the service categories
specified in Exhibit 2.1(a)(iv), and notice of termination thereof must be
given at least 90 days in advance of the effective date of the termination.
(c) TERMINATION OF LESS THAN ALL SERVICES. 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.
2.7 DISCLAIMER OF WARRANTIES, LIMITATION OF LIABILITY AND
INDEMNIFICATION.
(a) DISCLAIMER OF WARRANTIES. RESOURCES DISCLAIMS ALL WARRANTIES,
EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO THE
SERVICES. RESOURCES MAKES NO REPRESENTATIONS OR WARRANTIES AS TO THE QUALITY,
SUITABILITY OR ADEQUACY OF THE SERVICES FOR ANY PURPOSE OR USE.
(b) LIMITATION OF LIABILITY; INDEMNIFICATION OF RECEIVING COMPANY.
Resources and its Subsidiaries shall have no Liability to any Receiving Company
with respect to its furnishing any of the Services hereunder except for
Liabilities arising out of or resulting from the gross negligence or willful
misconduct occurring after the Effective Date of Resources or any member of the
Resources Group. Resources will indemnify, defend and hold harmless each
Receiving Company in respect of all such Liabilities arising out of or resulting
from such gross negligence or willful misconduct. Such indemnification
obligation shall be a Liability of Resources for purposes of the Separation
Agreement and the provisions of Article III of the Separation Agreement with
respect to indemnification shall govern with respect thereto. IN NO EVENT SHALL
RESOURCES OR ANY MEMBER OF THE RESOURCES GROUP HAVE ANY LIABILITY UNDER
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THIS AGREEMENT OR OTHERWISE ARISING OUT OF OR RESULTING FROM THE PERFORMANCE OF,
OR THE FAILURE TO PERFORM, SERVICES FOR LOSS OF ANTICIPATED PROFITS BY REASON OF
ANY BUSINESS INTERRUPTION, FACILITY SHUTDOWN OR NON-OPERATION, LOSS OF DATA OR
OTHERWISE OR FOR ANY INCIDENTAL, INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES,
WHETHER OR NOT CAUSED BY OR RESULTING FROM NEGLIGENCE, INCLUDING GROSS
NEGLIGENCE, AND WHETHER OR NOT RESOURCES OR ANY MEMBER OF THE RESOURCES GROUP
WAS INFORMED OF THE POSSIBILITY OF THE EXISTENCE OF SUCH DAMAGES. IN NO EVENT
SHALL RESOURCES OR ANY MEMBER OF THE RESOURCES GROUP HAVE ANY LIABILITY
HEREUNDER OR OTHERWISE ARISING OUT OF OR RESULTING FROM THE PERFORMANCE OF, OR
FAILURE TO PERFORM, SERVICES IN AN AGGREGATE AMOUNT EXCEEDING THE TOTAL CHARGES
PAID OR PAYABLE TO RESOURCES HEREUNDER.
(c) LIMITATION OF LIABILITY; INDEMNIFICATION OF PROVIDING COMPANY. REI
and each other Receiving Company shall indemnify and hold harmless Resources in
respect of all Liabilities arising out of or resulting from Resources'
furnishing or failing to furnish the Services to such Receiving Company provided
for in this Agreement, other than Liabilities arising out of or resulting from
the gross negligence or willful misconduct of Resources or any other member of
the Resources Group. The provisions of this indemnity shall apply only to losses
which relate directly to the provision of Services. Such indemnification
obligation shall be a Liability of REI for purposes of the Separation Agreement
and the provisions of Article III of the Separation Agreement with respect to
indemnification shall govern with respect thereto. IN NO EVENT SHALL REI OR ANY
MEMBER OF THE REI GROUP HAVE ANY LIABILITY UNDER THIS AGREEMENT OR OTHERWISE
ARISING OUT OF OR RESULTING FROM ITS RECEIPT OF SERVICES HEREUNDER FOR LOSS OF
ANTICIPATED PROFITS OR FOR ANY INCIDENTAL, INDIRECT, SPECIAL OR CONSEQUENTIAL
DAMAGES, WHETHER OR NOT CAUSED BY OR RESULTING FROM NEGLIGENCE, INCLUDING GROSS
NEGLIGENCE, AND WHETHER OR NOT REI OR ANY MEMBER OF THE REI GROUP WAS INFORMED
OF THE POSSIBILITY OF THE EXISTENCE OF SUCH DAMAGES.
(d) SUBROGATION OF RIGHTS VIS-A-VIS THIRD PARTY CONTRACTORS. In the
event any Liability arises from the performance of Services hereunder by a third
party contractor, the Receiving Company shall be subrogated to such rights, if
any, as the Providing Company may have against such third party contractor with
respect to the Services provided by such third party contractor to or on behalf
of the Receiving Company. Subrogation under this Section 2.7(d) shall not affect
the obligation of Providing Company to perform Services under this Agreement.
2.8 REPRESENTATIVES. Each party shall by notice to the other appoint
one or more Representatives to facilitate communications and performance under
this Agreement. The maximum number of Representatives for each party shall be
four, one for Technical Services, one for Environmental and Safety Services, one
for Computer Systems Services and one for Information Technology Services. Each
party may treat an act of a Representative of another party as being authorized
by such other party without inquiring behind such act or ascertaining whether
such Representative had authority to so act. Each party shall have the right at
any time and from time to time to replace any of its Representatives by giving
notice in writing to the other party setting forth the name of (i) each
Representative to be replaced and (ii) the replacement, and certifying that the
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replacement Representative is authorized to act for the party giving the notice
in all matters relating to this Agreement (or matters relating to one category
of Services as aforesaid).
ARTICLE III
MISCELLANEOUS
3.1 TAXES. (a) GENERAL. The Receiving Company shall bear all taxes,
duties and other similar charges (and any related interest and penalties),
imposed as a result of its receipt of Services under this Agreement, including
any tax which Receiving Company is required to withhold or deduct from payments
to Providing Company, except any net income tax imposed upon Providing Company
by the country of its incorporation or any governmental entity within its
country of incorporation.
(b) SALES TAX LIABILITY AND PAYMENT. Notwithstanding Section 3.1(a),
each Receiving Company is liable for and will indemnify and hold harmless any
Providing Company from all sales, use and similar taxes (plus any penalties,
fines or interest thereon) (collectively, "Sales Taxes") assessed, levied or
imposed by any governmental or taxing authority on the providing of Services by
the Providing Company to the Receiving Company. The Providing Company shall
collect from the Receiving Company any Sales Tax that is due on the Service it
provides to such Receiving Company and shall pay such Sales Tax so collected to
the appropriate governmental or taxing authority.
3.2 LAWS AND GOVERNMENTAL REGULATIONS. Receiving Company shall be
responsible for (i) compliance with all laws and governmental regulations
affecting its business and (ii) any use Receiving Company may make of the
Services to assist it in complying with such laws and governmental regulations.
The provision of Services shall comply, to the extent applicable, with REI's
Internal Code of Conduct. Providing Company shall comply with all laws and
governmental regulations applicable to the provision of Services.
3.3 RELATIONSHIP OF PARTIES. Nothing in this Agreement shall be deemed
or construed by the parties or any third party as creating the relationship of
principal and agent, partnership or joint venture between the parties, it being
understood and agreed that no provision contained herein, and no act of the
parties, shall be deemed to create any relationship between the parties other
than the relationship of independent contractor nor be deemed to vest any
rights, interest or claims in any third parties.
3.4 REFERENCES. All reference to Sections, Articles, Exhibits or
Schedules contained herein mean Sections, Articles, Exhibits or Schedules of or
to this Agreement, as the case may be, unless otherwise stated. When a reference
is made in this Agreement to a "party" or "parties", such reference shall be to
a party or parties to this Agreement unless otherwise indicated. Whenever the
words "include", "includes" or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation". The use of the
singular herein shall be deemed to be or include the plural (and vice versa)
whenever appropriate. The use of the words "hereof", "herein",
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"hereunder", and words of similar import shall refer to this entire Agreement,
and not to any particular article, section, subsection, clause, paragraph or
other subdivision of this Agreement, unless the context clearly indicates
otherwise. The word "or" shall not be exclusive; "may not" is prohibitive and
not permissive.
3.5 MODIFICATION AND AMENDMENT. This Agreement may not be modified or
amended, or any provision waived, except in the manner set forth in the
Separation Agreement.
3.6 INCONSISTENCY. In the event of any Inconsistency between the terms
of this Agreement and any of the Exhibits hereto, the terms of this Agreement,
other than charges, shall control.
3.7 RESOLUTION OF DISPUTES. If a dispute, claim or controversy results
from or arises out of or in connection with this Agreement or the performance
of, or failure to perform, the Services, the parties agree to use the procedures
set forth in Article IX of the Separation Agreement, in lieu of other available
remedies, to resolve the same.
3.8 SUCCESSORS AND ASSIGNMENT. This Agreement shall be binding upon
and inure to the benefit of the parties and their respective successors and
permitted assigns. Except as contemplated by Section 2.4(c), no party shall
assign this Agreement or any rights herein without the prior written consent of
the other party, which may be withheld for any or no reason.
3.9 NOTICES. Unless expressly provided herein, all notices, claims,
certificates, requests, demands and other communications hereunder shall be in
writing and shall be deemed to be duly given (i) when personally delivered or
(ii) if mailed registered or certified mail, postage prepaid, return receipt
requested, on the date the return receipt is executed or the letter refused by
the addressee or its agent or (iii) if sent by overnight courier which delivers
only upon the signed receipt of the addressee, on the date the receipt
acknowledgment is executed or refused by the addressee or its agent or (iv) if
sent by facsimile or other generally accepted means of electronic transmission,
on the date confirmation of transmission is received (provided that a copy of
any notice delivered pursuant to this clause (iv) shall also be sent pursuant to
clause (ii) or (iii)), addressed to the attention of the addressee's General
Counsel at the address of its principal executive office or to such other
address or facsimile number for a party as it shall have specified by like
notice.
3.10 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Texas.
3.11 SEVERABILITY. Wherever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid under
applicable law. If any portion of this Agreement is declared invalid for any
reason, such declaration shall have no effect upon the remaining portions of
this Agreement, which shall continue in full force and effect as if this
Agreement had been executed with the invalid portions thereof deleted.
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3.12 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and all of which shall
constitute one and the same instrument.
3.13 RIGHTS OF THE PARTIES. Nothing expressed or implied in this
Agreement is intended or will be construed to confer upon or give any person or
entity, other than the parties and to the extent provided herein their
respective Subsidiaries, any rights or remedies under or by reason of this
Agreement or any transaction contemplated thereby.
3.14 RESERVATION OF RIGHTS. The waiver by either party of any of its
rights or remedies afforded hereunder or at law is without prejudice and shall
not operate to waive any other rights or remedies which that party shall have
available to it, nor shall such waiver operate to waive the party's rights to
any remedies due to a future breach, whether of a similar or different nature.
The failure or delay of a party in exercising any rights granted to it hereunder
shall not constitute a waiver of any such right and that party may exercise that
right at any time. Any single or partial exercise of any particular right by a
party shall exhaust the same or constitute a waiver of any other right.
3.15 ENTIRE AGREEMENT. All understandings, representations, warranties
and agreements, if any, heretofore existing between the parties regarding the
subject matter hereof are merged into this Agreement, which fully and completely
express the agreement of the parties with respect to the subject matter hereof.
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IN WITNESS WHEREOF, the parties have executed this Technical Services
Agreement as of the date first above written.
RELIANT ENERGY, INCORPORATED
By: /s/ Xxxxx X. XxXxxxxxxx
-----------------------------------
Xxxxx X. XxXxxxxxxx
Vice Chairman
RELIANT RESOURCES, INC.
By: /s/ X. X. Xxxxxxxxx
-----------------------------------
X. X. Xxxxxxxxx,
Chairman, President and
Chief Executive Officer
