Exhibit 10.11
Batesville
MANAGEMENT SERVICES AGREEMENT
This MANAGEMENT SERVICES AGREEMENT is made as of August 24, 1998, by and
between LS POWER MANAGEMENT, LLC, a Delaware limited liability company
("Manager"), and LSP ENERGY LIMITED PARTNERSHIP, a Delaware limited partnership
("Owner").
RECITALS
WHEREAS, Owner is in the business of developing, constructing, owning
and operating an electric power plant in Batesville, Mississippi (the
"Facility");
WHEREAS, Owner and BVZ Power Partners-Batesville (the "Contractor") have
entered into a Turnkey Engineering, Procurement and Construction Agreement dated
as of July 22, 1998, (as amended, modified or otherwise supplemented from time
to time, the "Construction Contract") whereby Contractor shall design and
construct the Facility;
WHEREAS, Owner and Cogentrix Batesville Operations, LLC (the "Operator")
have entered into an Operation and Maintenance Agreement [dated as of August 24,
1998 (as amended, modified or otherwise supplemented from time to time, the
"Operating Agreement") whereby Operator shall operate and maintain the Facility;
WHEREAS, Owner desires to engage Manager to manage the general business
affairs of the Owner, in accordance with the terms and conditions set forth
herein; and
WHEREAS, Manager wishes to so perform such management services.
NOW THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
1. Definitions. As used in this Agreement, unless otherwise defined in the
text, the terms set forth below shall have the following meanings:
1.1. Agreement: This Management Services Agreement between Owner and
Manager as amended, modified or otherwise supplemented from time
to time.
1.2. Credit Facilities: The senior loan financing agreements relating
to the Facility entered into by Owner and the senior lenders
party thereto as amended, supplemented and modified and any
subsequent refinancing agreements related thereto.
1.3. Escalation Factor: The ratio of GDP-IP August Previous Year over
GDP-IP August 1998, where "GDP-IP August Previous Year" equals
the published index value in August of the operating year
immediately preceding the operating year
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for which the adjustment is due, "GDP-IP August 1998" equals the
published index for August 1998 and "GDP-IP" means the final
published Implicit Price Deflator for Gross Domestic Product as
determined quarterly and reported monthly by the Bureau of
Economic Analysis of the U.S. Department of Commerce in the
Publication "Survey of Current Business". In the event this
index is discontinued or its basis is substantially modified,
Owner and Manager shall agree on a substitute index.
1.4. Infrastructure Use Agreement: The Infrastructure Use Agreement
to be entered into among the Mississippi Department of Economic
and Community Development, the Mississippi Business Finance
Corporation, the Mississippi Major Economic Impact Authority,
Panola County, Mississippi, the City of Batesville, the Panola
Partnership, a Mississippi corporation, the Industrial
Development Authority of the Second Judicial District of Panola
County, Mississippi, and the Owner.
1.5. Management Account(s): Any bank account(s) opened by Manager at
the direction of and on behalf of Owner with a licensed
financial institution on which Manager will be permitted to draw
checks in payment of Management Expenses.
1.6. Management Expenses: The reasonable and necessary direct
out-of-pocket expenses incurred by Manager on Owner's behalf in
performance of the Services, including, but not limited to,
usual and customary costs of managing the business affairs of
the Owner as herein set forth. Such expenses shall not include
any costs or expenses owed by Owner to any third party unless
and to the extent the Manager shall have paid or satisfied such
costs or expenses from its own funds. Management expenses shall
generally include the cost of supplies required by Manager,
travel, lodging, subsistence of Management Personnel incurred in
connection with the performance of services and fees for
independent contractors that are hired by Manager, with the
approval of Owner, to assist it in performing the Services
hereunder. Management Expenses shall not include the Management
Fee or Reimbursable Management Costs or any other amounts in the
nature of overhead or general and administrative expenses of
Manager.
1.7. Management Fee: The fixed compensation to be paid by Owner to
Manager for the performance of the Services in accordance with
Section 9 of this Agreement.
1.8. Management Personnel: The personnel employed by Manager to
perform the Services, provided, that such personnel are not also
compensated by Owner to perform the same or similar services for
Owner. Management Personnel may be employed on a full-time,
flexi-time or part-time basis. In no event shall Management
Personnel include Xxxxxxx Xxxxx.
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1.9. Notice: A written communication delivered personally or sent by
registered mail, postage prepaid, or by nationally recognized
overnight courier service, as follows:
Owner: LS Power Energy Limited Partnership
c/o LS Power, LLC
Xxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxx Xxxxxxxxx, XX 00000
Attn: General Counsel
Manager: LS Power Management, LLC
c/o LS Power, LLC
Xxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxx Xxxxxxxxx, XX 00000
or to such other address as shall be furnished by Notice from
time to time by any party hereto. Such Notice shall be deemed to
have been given as of the date personally delivered or on the
third day after being so mailed or sent by nationally recognized
courier unless otherwise specified herein.
1.10. Notice to Proceed: The written Notice to Proceed issued by Owner
to Contractor under the Construction Contract.
1.11. Partnership Agreement: Amended and Restated Limited Partnership
Agreement of Owner dated as of August 24, 1998.
1.12. Power Purchase Agreements: (i) the Power Purchase Agreement
dated as of May 18, 1998, as modified by the First Amendment to
the Power Purchase Agreement dated as of July 22, 1998 and the
Second Amendment to the Power Purchase Agreement dated as of
August 11, 1998, by and between Owner and Virginia Electric and
Power Company, as amended, modified or otherwise supplemented
from time to time, (ii) the Power Purchase Agreement dated as of
May 21, 1998, as modified by the letter agreement dated as of
July 16, 1998 among Owner, Aquila Power Corporation and
Utilicorp United Inc., as amended, modified or otherwise
supplemented from time to time and (iii) any other agreement for
the sale of all or a portion of the net electric capacity and
generation from the Facility entered into by Owner from time to
time.
1.12.1. Prudent Utility Practice: At any given time, any of the
practices, methods and acts generally engaged in or approved by
the electric power generation industry at the time the decision
was made to utilize such practices, methods or acts or any of
the practices, methods and acts that, in the exercise of
reasonable judgment in light of the facts known at the time when
the decision was made, would have reasonably been expected to
accomplish the desired result at a reasonable cost consistent
with reasonable reliability, safety, expedition and
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protection of the environment, but in any event a "Prudent
Utility Practice" shall comply with the requirements of the
Power Purchase Agreements and the Operating Agreement. "Prudent
Utility Practice" is not intended to be limited to the optimum
practice, method or act to the exclusion of all others, but
rather to a spectrum of possible practices, methods or acts
having due regard for, among other things, manufacturers'
warranties, engineering and operating considerations, and the
requirements of governmental authorities and the requirements of
all material documents relating to the Services to be rendered
hereunder to which Owner is party.
1.13. Reimbursable Management Costs: The properly allocable portion of
annual direct salaries of Management Personnel, which costs
shall be based upon actual payrolls (showing the time expended
by employees in providing services under this Agreement), costs
of holidays, taxes, fringe benefits, vacations and other
statutory contributions (including, but not limited to, workers'
compensation insurance) as a percentage allowance, an allocation
for overhead pertaining to Management Personnel, relocation
expenses, travel and transportation and other expenses which are
reasonable and necessary for the management of the business
affairs of Owner. Reimbursable Management Costs shall be
consistent with (a) the levels of staffing set forth in Appendix
A, together with other employees who may be added from time to
time on an "as needed" basis in respect of particular or
discrete matters and (b) levels of compensation, benefits and
expense reimbursement applicable in arms-length employment
arrangements in the independent power industry for employees of
similar stature, seniority and experience. Reimbursable
Management Costs shall not include the Management Fee or
Management Expenses.
1.14. Services: All of the management services to be provided by
Manager pursuant to this Agreement.
2. Engagement of Manager. Owner hereby engages Manager to perform the
Services with such powers, authorities and duties as are specified in
this Agreement. Manager shall act at all times pursuant to and under the
specific control and direction of the general partner of the Owner.
Manager agrees to act as Manager under the terms and conditions, and for
the period specified herein.
3. Management Services. Manager shall perform certain tasks related to
managing the business affairs of the Owner in accordance with Prudent
Utility Practice and in all cases standards at least as high as those
Manager would employ for the management of its own business affairs.
Such Services shall include, but not be limited to, the following:
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3.1. Perform all bookkeeping and other handling of financial matters
for Owner.
3.2. Perform all accounting tasks necessary to maintain accurate
financial records of the business of Owner in accordance with
generally accepted accounting principles, including, but not
limited to, the obligations required under Article V of the
Partnership Agreement.
3.3. In connection with an independent public accounting firm,
prepare and file all necessary tax returns for Owner.
3.4. Prepare and submit all filings of any nature which are required
to be made by Owner under any laws, regulations, ordinances or
otherwise applicable to Owner or the Facility.
3.5. Cause to be procured and maintained all governmental approvals
of any nature required for Owner to carry out its business
affairs, including, but not limited to, any permits required for
the operation of the Facility (excluding any such approvals
which are expressly the responsibility of a third party (other
than Owner) under any documents relating to the Facility).
3.6. Engage and supervise such independent contractors as Manager may
deem necessary and Owner shall approve in advance in writing for
assisting in the performance of the Services.
3.7. Purchase any materials, supplies and equipment necessary for the
performance of the Services.
3.8. Keep accurate records of all business transactions entered into
by Manager in connection with the Services.
3.9. Procure and maintain all insurance required to be maintained by
Owner (but not the Contractor or Operator) pursuant to the Power
Purchase Agreement, the Construction Contract, the Operating
Agreement, or any agreement providing financing for the Facility
and all insurance required to be maintained by the Manager
pursuant to Section 15 of this Agreement.
3.10. Supervise and monitor Owner's and each counterparty's compliance
with, and, to the extent within its control, ensure Owner's
compliance with, the terms and conditions of all contracts under
which Owner has any obligations or rights (except this
Agreement), including, but not limited to, the Construction
Contract, the Operating Agreement, the Credit Facilities, any
other agreement providing for financing of the Facility and the
Power Purchase Agreements.
3.11. Manager shall provide Owner with identifiable office space at
Manager's principal place of business in East Brunswick, New
Jersey.
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3.12. Prepare, or cause to be prepared, all documents required to be
submitted pursuant to the Credit Facilities.
3.13. Do any and all other activities as directed in writing by Owner.
4. Term. The Manager's services under this Agreement shall commence on the
date of the delivery of the Notice to Proceed and shall extend for the
period ending on the twenty seventh (27th) anniversary of the
Commencement Date (as defined in the Operating Agreement), subject to
the provisions of Section 14. Such Notice shall be delivered
contemporaneously with the Notice to Proceed under the Construction
Contract.
5. Manager's Covenants.
5.1. Manager shall perform the Services in a proper and businesslike
manner in accordance with Prudent Utility Practice.
5.2. Manager shall, at all times, perform the Services in accordance
with the terms of this Agreement, the requirements of the Credit
Facilities, all Project Documents (as defined pursuant to the
Credit Facilities documentation) relating to the Facility and in
compliance with instructions provided by Owner.
5.3. Manager shall comply in all material respects with all
applicable federal, state, and local laws, rules and regulations
in the performance of the Services.
5.4. Manager shall take such action as may be necessary or
appropriate to ensure that the business of the Owner relating to
the Facility is conducted in accordance with all applicable
material federal, state and local laws, rules and regulations
and permits, including environmental laws, as well as all
contracts under which Owner has any rights or material
obligations, including but not limited to, the Power Purchase
Agreements, the Construction Contract, the Operating Agreement,
the Credit Facilities, and any other material agreement
providing for financing of the Facility.
5.5. The Manager shall perform, as and to the extent requested by
Owner, the Owner's obligations under the Infrastructure Use
Agreement.
6. Owner's Covenants.
6.1. Owner shall, upon Manager's reasonable request, promptly provide
to any third party any necessary evidence of Manager's authority
to act pursuant to this Agreement.
6.2. Owner shall fund the Management Account in amounts sufficient to
permit Manager to make the payments and transfers contemplated
by this Agreement.
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7. Authority to Contract.
7.1. Manager shall, subject to the following limitations, be
authorized to enter into contracts and amendments to contracts
on behalf of Owner which contracts are necessary for the
performance of the Services; provided (i) any such contract or
amendment, as the case may be, shall be in writing and in the
name of Owner; (ii) any such contract or amendment, as the case
may be, shall be approved in advance by Owner in writing; (iii)
any necessary consents under, or conditions specified in,
Owner's financing and project documents relative to the
execution by Owner of such contract or amendment, as the case
may be, shall have been obtained and satisfied; and (iv) a true
copy of each such contract shall be maintained by Manager.
8. Negative Covenants of Manager. Manager shall not, without prior written
authorization from Owner, do or perform any of the following:
8.1. Borrow or lend money on behalf of Owner or create any lien or
encumbrance on the Facility.
8.2. Do any act or fail to take any action which, if performed or
omitted by Owner, would be a breach of any agreement in any
material respect relating to the business of the Owner.
8.3. Retain the services of any attorney, or certified public
accountant on behalf of Owner, without Owner's prior written
consent.
8.4. Make any relinquishment of its rights as Manager or appoint any
sub-manager.
8.5. Pay any amounts in excess of One Thousand Dollars ($1,000.00) in
the settlement of any claim for injury or death of persons or
for loss of or damage to property.
8.6. Sell, hypothecate, mortgage or otherwise encumber or dispose of
any property of Owner.
9. Payments to Manager.
9.1. During the term of this Agreement, Owner shall pay to Manager
(i) monthly, its Management Expenses and the Reimbursable
Management Costs incurred by Manager during the preceding month
in accordance with the Management Budget and (ii) monthly,
beginning on the date of the Notice to Proceed, a Management Fee
in the amount of Thirty Three Thousand Three Hundred
Thirty-three Dollars and Thirty-three Cents ($33,333.33) during
the operation of the Facility, each such amount expressed in
0000 Xxxxxx Xxxxxx dollars; provided, that if the Commencement
Date (as defined in the Operating Agreement) shall not have
occurred on or prior to the Scheduled
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Commencement Date (as defined in the Operating Agreement), no
Management Fee shall be payable for the period commencing on the
Scheduled Commencement Date and ending on the Commencement Date.
Such fee shall compensate Manager for the time expended by the
executive officers of Manager while performing the Services.
Late payments shall incur interest at a rate equal to 1% per
month. The aforementioned Management Fee shall be escalated each
year at a rate equivalent to the Escalation Factor.
9.2 Manager shall submit a statement to Owner at the end of each
month itemizing the Management Expenses and Reimbursable
Management Costs incurred by Manager during the preceding month,
together with any invoices, bills of sale or other appropriate
documentation evidencing the payment due. Manager shall provide
such additional documentation evidencing the payment due as
Owner shall reasonably request.
10. Management Budgets.
10.1. A written estimate of Management Expenses and Reimbursable
Management Costs, including a schedule of the costs of
management personnel (the "Management Budget") for the period
ending December 31, 1998 is attached hereto as Appendix B.
Manager shall prepare and submit to Owner for its review and
approval on or before October 1 of each year during the term of
this Agreement, commencing with October 1, 1998, a Management
Budget for the following year. Owner shall approve such
Management Budget or shall promptly provide Manager with
comments on such Management Budget. Manager shall promptly
incorporate or jointly with Owner resolve such comments. Owner's
right to approve the Management Budget shall not operate to
relieve Manager of its obligations under this Agreement;
provided however, that Manager shall not be obligated to
undertake any activity or provide any service which is to be
paid for by Owner hereunder and which is not provided for in the
Management Budget or otherwise authorized for payment by Owner.
In the event of any dispute over the Management Budget
applicable to any year which is not resolved prior to the
commencement of such year, then until resolution of such dispute
the Management Budget applicable to such year shall be the prior
year's Management Budget escalated by the lesser of (i) the
percentage increase in GDP-IP from January 1 to December 31 of
the prior year or (ii) the additional incremental amount that
has been requested for the Management Budget for each year over
the past year by Manager.
10.2. Manager shall provide its Services to Owner as defined herein
each year within the Management Budget. Should Manager determine
that the monthly Management Expenses or Reimbursable Management
Costs may exceed the amount for any month set forth in the
Management Budget, Manager shall notify
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Owner within ten (10) days of such determination and shall
follow Owner's instructions regarding future expenditures on
Owner's behalf.
11. Employment Relations. Manager shall have sole and exclusive control over
Management Personnel. Manager shall pay all wages, benefits, withholding
taxes and insurance relating to such employment.
12. Supplies. All supplies purchased for performance of the Services shall
be the sole property of Owner and purchased as such on behalf of Owner
by Manager.
13. Audit and Records. Manager shall, upon request, furnish to Owner
invoices and other documents and records substantiating all Management
Expenses and Reimbursable Management Costs billed to or paid by Manager
on behalf of Owner under this Agreement. The Owner shall have the right,
at Owner's expense, upon reasonable prior notice, to audit the records
of Manager relating to the Manager's obligations under this Agreement.
14. Termination.
14.1. Each party shall have the right to terminate this Agreement in
the event the other party materially breaches any obligation
hereunder and, in the case of obligations which are not curable
through the payment of money, fails to cure such a breach or
take reasonable steps toward curing said breach within thirty
(30) days of receiving Notice thereof except that (i) failure by
Owner to pay any disputed amount shall not constitute a breach
of Owner's obligations hereunder (provided that any such
disputed amounts not paid shall be placed by Owner into an
interest-bearing escrow account which provides for payment of
such amounts to Owner or Manager, as the case may be, upon
resolution of the dispute) and (ii) no cure period shall apply
to wilful defaults.
14.2. Manager shall have the right to terminate this Agreement for its
convenience after the first ten (10) years following completion
of construction of the Facility. Manager shall give Notice of
its intent to so terminate at least nine (9) months in advance
of the date of termination.
14.3. Owner, in addition to its other termination rights under this
Section 14, shall have the right to terminate this Agreement
forthwith upon the occurrence of an Event of Default (as defined
below).
14.4. Following the reduction of the aggregate direct or indirect
ownership interests of the Manager and its Affiliates in the
Partnership to a percentage less than or equal to 10% of the
total aggregate ownership interests thereof (other than due to a
foreclosure on Manager's or its Affiliates' interest in Owner or
the Facility), Owner shall, upon thirty (30) days written notice
thereof, be entitled to terminate this Agreement without
penalty, provided that for 12 months after the effectiveness of
any such termination, Owner shall be obligated to pay, and
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Manager shall be entitled to receive, the Management Fee that
would have been payable to Manager had this Agreement remained
in effect. Manager acknowledges that payment of such Management
Fees shall be subordinate to Owner's debt service payments under
the Credit Facilities.
15. Insurance. Manager shall, at Manager's expense, provide a fidelity bond
covering all Management Personnel who shall have authority to handle any
funds of the Owner.
16. Events of Default.
16.1. Manager shall fail to perform or observe in any material respect
any term, covenant or agreement contained in this Agreement on
its part to be performed or observed and, in the case of
obligations which are not curable through the payment of money,
such failure shall remain unremedied for 45 days (or such other
period as is specified in this Agreement) during which time
Manager shall be engaged in reasonably diligent efforts to cure
(except that no cure period shall apply to willful defaults).
16.2. There shall be a Bankruptcy of Manager; "Bankruptcy" shall mean
and refer to (i) the filing of any petition by such person to
commence a case under the Bankruptcy Code (title 11, U.S.C.) or
any other federal, state or foreign law for the relief of
debtors or the protection of creditors (any such law, a
"Bankruptcy Law"), (ii) the filing of a petition by any third
party with respect to such person under any Bankruptcy Law,
which petition is not opposed within 120 days after filing,
(iii) the failure or inability of such person to pay its debts
as they become due (or any admission in writing by such person
of any such failure or inability), (iv) the appointment of a
receiver or trustee for such person or any substantial portion
of the property of such person or (v) the making by such person
of any general assignment for the benefit of creditors.
16.3. There shall be an "Event of Default" under and as defined in the
Credit Facilities and the lenders under the Credit Facilities
shall have foreclosed on this Agreement and assumed the rights
and obligations of Owner hereunder.
17. Indemnity.
17.1. Manager shall indemnify, hold harmless and defend Owner, any
party providing senior debt financing for the Facility and any
affiliate of Owner (for the purposes of this Section 17, the
"Indemnitees") from and against any claims, demands, suits,
proceedings, liabilities, judgments, awards, losses, damages,
costs or expenses (including reasonable legal fees) ("Indemnity
Claim") whatsoever in connection with or arising out of acts or
omissions by Manager, whether or not brought or sought by or in
favor of a governmental agency, a third party or the Indemnitee,
and whether or not based on contract, tort (including
negligence),
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theory of strict contract, theory of strict liability, or
infringement of proprietary rights, for bodily injury, sickness,
death, injury to or destruction of third-party tangible property
arising out of or in any manner caused or occasioned, in whole
or in part, by any act, omission, error, fault or willful act or
gross negligence of Manager, or anyone acting on Manager's
behalf, including, without limitation, subcontractors and
vendors. Notwithstanding any provision in this Agreement to the
contrary, Manager's liability under this Agreement shall in no
event exceed $500,000.
17.2. Manager agrees to fully indemnify, save harmless and defend each
Indemnitee from claim, liabilities, expenses (including legal
fees), penalties, interest, demands and causes of action for
nonpayment of amounts due subcontractors, vendors or others as a
result of providing Services which amounts are payable by
Manager, provided Manager has been or will be paid by Owner, to
the extent Manager is entitled to receive such payment, in
accordance with-the provisions of this Agreement for such
Services.
17.3. Owner shall indemnify, hold harmless and defend Manager, its
affiliates and employees (for the purposes of this Section 17,
the "Indemnitees") from and against any claims, demands, suits,
proceedings, liabilities, judgments, awards, losses, damages,
costs or expenses (including reasonable legal fees) ("Indemnity
Claim") whatsoever in connection with or arising out of acts by
Owner, whether or not brought or sought by or in favor of a
governmental agency, a third party or the Indemnitee, and
whether or not based on contract, tort (including negligence),
theory of strict contract, theory of strict liability, or
infringement of proprietary rights, for bodily injury, sickness,
death, injury to or destruction of third-party tangible property
arising out of or in any manner caused or occasioned, in whole
or in part, by any act, omission, error, fault or negligence of
Owner, or anyone acting on Owner's behalf (including the Manager
by virtue of providing Services hereunder; provided that this
indemnity shall not extend to any act, omission, error, fault or
negligence of Manager that is caused or occasioned in whole or
in part, by (i) any breach by Manager of this Agreement, or (ii)
any gross negligence or wilful misconduct of Manager.
Notwithstanding any provision in this Agreement to the contrary,
Owner's liability under this Agreement shall in no event exceed
$500,000.
17.4. In the event that any Indemnitee seeking indemnification from
Manager or Owner, as the case may be, pursuant to this Section
17 is found to have actively contributed to the cause of the
loss for which it is seeking to be indemnified, such Indemnitee
shall bear its losses and costs arising out of such claim in
proportion to the degree to which it shall be found to have been
negligent in causing such loss.
17.5. The obligations of Manager and Owner referred to in this Section
17 shall be limited or reduced to the extent of the proceeds of
any insurance actually
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received (or any self-insurance retentions) by Owner or Manager,
respectively, as the case may be.
17.6. This Section 17 shall remain in full force and effect and shall
survive the termination of this Agreement until the later of (i)
the time during such a claim or cause of action may be brought
is barred by the applicable statute of limitations or (ii) the
satisfaction or payment of such claim or liability and of all
expenses and charges incurred by Indemnitee relating to the
enforcement of this Section.
18. Miscellaneous Provisions.
18.1. Governing Law. This Agreement shall be interpreted in accordance
with, and governed by, substantive and procedural law of the
State of New York. The parties hereby consent to the
jurisdiction of the courts of the State of New York in resolving
any dispute arising under or concerning this Agreement.
18.2. Subcontracts and Assignment. This Agreement may be freely
assigned by Owner at any time (including as collateral security
for financing). Manager may not assign this Agreement or
delegate, assign, or subcontract all, or any part of its duties
under this Agreement without the express written consent of
Owner.
18.3. Integration. This Agreement constitutes the entire agreement
between the parties pertaining to the subject matter hereof;
supersedes all prior agreements and understandings, whether oral
or written, which the parties may have in connection herewith
and may not be modified except by written agreement of the
parties.
18.4. Severability. If any provision of this Agreement is determined
by a court of competent jurisdiction to be void or unenforceable
in whole or in part, such determination shall not affect or
impair the enforceability or validity of this Agreement.
Notwithstanding any provision to the contrary herein, Section
14.4 shall survive a termination of this Agreement.
18.5. Limitation on Liability. In no event shall Manager be liable to
Owner for any consequential or incidental damages of any nature,
including, but not limited to, lost profits or revenues which
may arise in any manner as a result of Manager's performance of
its duties hereunder, whether based upon a claim for a breach of
contract or in tort. In no event shall Owner be liable to
Manager for any consequential or incidental damages of any
nature, including, but not limited to, lost profits or revenues
which may arise in any manner as a result of Owner's performance
of its duties hereunder, whether based upon a claim for a breach
of contract or in tort. No recourse for the payment of any sums
or the performance of any obligations hereunder, or for any
claim based thereon or otherwise in respect therefor relating
thereto, shall be had against any employee, incorporation,
shareholder, officer or director, past, present or future, of
any
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general or limited partner or member of either of Owner or
Manager, each in its capacity as such.
18.6. Dispute Resolution and Arbitration.
(a) In the event a dispute arises between Owner and Manager
regarding the application or interpretation of any
provision of this Agreement and such dispute involves
matters of accounting treatment, the aggrieved party
shall promptly notify the other party to this Agreement
of the dispute within two (2) days after such dispute
arises. Manager shall immediately appoint its own third
party accountant who, together with the Owner's
accountant, shall choose a third accountant. Said three
accountants shall jointly review such evidence as they
deem necessary and shall render a decision (concurrence
of two of the three accountants) on such dispute within
ten (10) days. Such decision shall be binding on the
Owner and the Manager.
(b) In the event a dispute arises between Owner and Manager
regarding the application or interpretation of any
provision of this Agreement (other than disputes over
matters referred to in Section 18.6(a)), the aggrieved
party shall promptly notify the other party to this
Agreement of the dispute within ten (10) days after such
dispute arises. If the parties shall have failed to
resolve the dispute within ten (10) days after delivery
of such notice, each party, within five (5) days
thereafter, nominate a senior officer of its management
to meet at the Facility, or any other mutually agreed
location, to resolve the dispute. Should the parties be
unable to resolve the dispute to their mutual
satisfaction within twenty (20) days after such
nomination, each party shall have the right to pursue
any legal remedies which may exist or may, with the
concurrence of the other party, refer such matter for
arbitration.
(c) Except as expressly provided elsewhere in this
Agreement, any controversy, claim or dispute arising out
of or relating to this Agreement shall in the first
instance be presented by written notice to the party
against or from whom relief or corrective action is
desired. Thereafter, within ten days of receipt of said
notice, the receiving party shall respond in writing to
the other party setting forth its position on the issue.
Thereafter, without further effort to resolve the
matters privately, either party may pursue its other
legal remedies.
18.7. The provisions of Section 17 and Section 18.5 hereof shall
survive termination of this Agreement.
18.8. Proprietary Information. Manager shall maintain as secret and
treat as confidential all proprietary information supplied by
Owner and may not disclose
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such information to a third party (other than to a party or
parties providing financing for the Facility) without Owner's
prior consent. Proprietary information shall be deemed to
include any and all information on the business affairs of Owner
or any partner of Owner, which is not otherwise available in
public. Manager shall return to Owner any proprietary
information upon Owner's request.
18.9. The terms of this Agreement may not be modified or waived orally
but only by an instrument in writing signed by the parties
hereto.
18.10. The headings of the several sections of this Agreement are
inserted for convenience only and shall not in any way affect
the meaning or construction of any provisions of this Agreement.
18.11. Notwithstanding any provision of this Agreement to the contrary,
any payment which is due pursuant to any provision of this
Agreement on any day which is a Saturday, Sunday or legal
holiday or on any day on which banking institutions in New York
City are authorized or required by law to close, shall be paid
on the next succeeding day.
18.12. Each party represents and warrants to the other party that: (i)
such party has the full power and authority to execute, deliver
and perform this Agreement and to carry out the transactions
contemplated hereby; (ii) the execution and delivery of this
Agreement by such party and the carrying out by such party of
the transactions contemplated hereby have been duly authorized
by all requisite corporate (or, if applicable, partnership)
action, and this Agreement has been duly executed and delivered
by such party and constitutes the legal, valid and binding
obligation of such party, enforceable against it in accordance
with the terms hereof, subject as to enforceability of remedies
to limitations imposed by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or
affecting the enforcement of creditors rights generally and
general principles of equity; (iii) no authorization, consent,
approval or order, or notice to or registration, qualification,
declaration or filing with any Governmental Authority is
required for the execution, delivery and performance by such
party of this Agreement or the carrying out by such party of the
transactions contemplated hereby, other than regulatory and
similar approvals needed with respect to the operation and
maintenance of the Facility; and (iv) none of the execution,
delivery and performance by such party of this Agreement, the
compliance with the terms and provisions hereof, and the
carrying out of the transaction contemplated hereby, conflicts
or will conflict with or result in a breach or violation of any
of the terms, conditions, or provisions of any law, governmental
rule or regulation or the charter document (or partnership
agreement, if applicable), as amended, supplemented, or
otherwise modified, or bylaws, as amended, supplemented, or
otherwise modified, of such party or any applicable order, writ,
injunction, judgment or decree of any court or
14
Governmental Authority against such party or by which it or any
of its properties is bound, or any loan agreement, indenture,
mortgage, bond, note, resolution, contract or other agreement or
instrument to which such party is a party or by which it or any
of its properties is bound, or constitutes or will constitute a
default thereunder or will result in the imposition of any lien
upon any of its properties.
15
IN WITNESS WHEREOF, the parties have executed this Agreement by their
duly authorized officers with the intent to be legally bound.
LS POWER MANAGEMENT, LLC
By:/s/ Xxxxxxx Xxxxx
---------------------------------
Name: Xxxxxxx Xxxxx
Title: President
LSP ENERGY LIMITED PARTNERSHIP
By: LSP Energy, Inc.,
its general partner
By:/s/ Xxxxx Xxxxxxxxxxx
---------------------------------
Name: Xxxxx Xxxxxxxxxxx
Title: Senior Vice President and Secretary
16
Appendix A to Management Services Agreement
Project Staffing
Number of
Persons Title
------- -----
1 General Manager
1 Project Manager
1 Controller
1 Administrative Assistant
Note 1: Job titles are for information only. Actual titles and duties may vary.
Note 2: Additional LS Power personnel will be available on an as-needed basis
as permitted under the Management Services Agreement.
00
Xxxxxxxx X to Management Services Agreement
Management Budget
[To be Attached]
18
