ENGINEERING AND CONSTRUCTION AGREEMENT

Exhibit 10.3

 

Final Execution

ENGINEERING AND CONSTRUCTION AGREEMENT

between

DUKE ENERGY CAROLINAS, LLC, as Owner

and

SHAW NORTH CAROLINA, INC, as Contractor

for the

CONSTRUCTION OF A COMBUSTION TURBINE COMBINED CYCLE ELECTRICAL GENERATION FACILITY AT THE BUCK GENERATING FACILITY IN ROWAN COUNTY, NORTH CAROLINA

Dated May 5, 2008

Confidential

Table of Contents

 

 

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EXHIBITS

 

 

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ENGINEERING AND CONSTRUCTION AGREEMENT

This ENGINEERING AND CONSTRUCTION AGREEMENT (the “Agreement” ) is entered into as of the 5th day of May, 2008 (the “Effective Date” ), between DUKE ENERGY CAROLINAS, LLC, a North Carolina limited liability company having its principal place of business in Charlotte, North Carolina ( “Owner” ), and SHAW NORTH CAROLINA, INC., a North Carolina corporation having its principal place of business in Charlotte, North Carolina ( “Contractor” and, together with Owner, collectively the “Parties” and individually a “Party” ).

RECITALS

WHEREAS, Owner has announced its intent to procure, construct, install and commission a new nominally rated 620 MW combustion turbine combined cycle electric power plant at the Buck Generating Facility (the “Facility” ) in Rowan County, North Carolina, which will consist of (i) two combustion turbine generators, (ii) two natural circulation, duct fired, heat recovery steam generators and (iii) one reheat condensing steam turbine generator (the “Project” );

WHEREAS , Contractor is engaged in the business of designing, engineering, constructing and commissioning power generating facilities; and

WHEREAS , Owner has entered into the Owner Equipment Contracts for the supply of the Owner Equipment, which is intended to be installed and commissioned by Contractor;

NOW, THEREFORE , in consideration of the recitals, the mutual promises herein and other good and valuable consideration, the receipt and sufficiency of which the Parties acknowledge, the Parties, intending to be legally bound, stipulate and agree as follows:

1. DEFINITIONS

The following capitalized words and phrases used in this Agreement shall have the following meanings unless otherwise noted:

“Affiliate” shall mean, with respect to any Person, any other Person that, directly or indirectly, through one or more intermediaries, Controls, is Controlled by, or is under common Control with such first Person at such time, where “Control” shall mean (a) the possession, directly or indirectly, of the power to direct or cause the direction of management and policies of a Person, whether through the ownership of voting securities, as a trustee or executor, by contract or credit arrangement, or otherwise, or (b) the ownership, directly or indirectly, of fifty percent (50%) or more of the equity interest in a Person.

“Business Day” shall mean every Day other than Saturday, Sunday or a legal holiday recognized by the State.

“[*]” shall have the meaning set forth in Section 7.5(a) .

“Change” shall have the meaning set forth in Section 8.1 .

 

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“Change in Law” shall mean a change to a Law, or a change in the binding interpretation or application of a Law after the Effective Date that results in an increase in [*] for Contractor to perform the Work, which increase in [*] Contractor would not have incurred but for this Agreement; provided , however , that a “Change in Law” shall not include any change to a Law that is enacted by any Government Authority prior to the Effective Date but, by its terms, does not come into effect until after the Effective Date.

“Change Order” shall have the meaning set forth in Section 8.3 .

“[*]” shall have the meaning set forth in Section 12.1(b) .

“Combined Cycle Facility” shall mean that portion of the Facility that will be “tied into” the Simple Cycle Facility in order to complete the Facility, as described in the Specifications.

“Combined Cycle Mechanical Completion” shall mean that the Combined Cycle Facility shall have achieved all of the conditions set forth in Section 10.7 .

“Combined Cycle Substantial Completion” shall mean that the Combined Cycle Facility shall have achieved all of the conditions set forth in Section 10.8 .

“Combined Cycle Substantial Completion Date” shall mean the date on which Combined Cycle Substantial Completion actually occurs.

“Combined Cycle Tie-In” shall mean the process required to connect the Combined Cycle Facility to the interface points of the Simple Cycle Facility.

“Combined Cycle Tie-In Access Date” shall mean the date upon which Owner makes the Simple Cycle Facility available to Contractor for the Combined Cycle Tie-In.

“Commissioning” shall mean, with respect to each of the Simple Cycle Facility and the Combined Cycle Facility, the activities required to be conducted by Contractor pursuant to the terms of this Agreement in order to bring the Simple Cycle Facility or the Combined Cycle Facility (as applicable) from an inactive condition, when construction is essentially complete, to a state where the Simple Cycle Facility or the Combined Cycle Facility (as applicable) is ready for the commencement of operation, including pre-commissioning, start-up, individual system and integrated, functional verification and synchronization of all equipment within the Simple Cycle Facility or the Combined Cycle Facility (as applicable).

“Confidential Information” shall mean, with respect to any Party, all written, verbal, electronic and other information and documents such Party provides or makes available to the other Party relating in any way to this Agreement which are marked as being “Proprietary” to such Party at the time of disclosure, or for verbal information reduced to a writing and marked or designated as being “Proprietary” to a such Party within seven (7) Days after such verbal disclosure. “Confidential Information” shall not include any Documentation or any other information that: (a) was already known to the other Party at the time it was disclosed by such Party; (b) was available to the public at the time it was disclosed by such Party; (c) becomes available to the public after being disclosed by such Party through no wrongful act of, or breach of this Agreement by, the other Party; (d) is received by the other Party without restriction as to use or disclosure from a third party; or (e) is

 

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independently developed by the other Party without benefit of any disclosure of information by such Party.

[*]

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“Contract Price ” shall mean [*]

“Contractor” shall have the meaning set forth in the first paragraph above and shall include respective successors and permitted assigns.

“Contractor Default” shall have the meaning set forth in Section 23.2 .

“Contractor Permits” shall have the meaning set forth in Section 3.21 .

“ Contractor’s T&M Rate Sheet ” shall mean Contractor’s T&M Rate Sheet attached hereto as Exhibit J .

“Contractor’s Project Manager” shall mean the Person whom Contractor designates in Exhibit F to issue and receive communications on Contractor’s behalf under this Agreement.

“Contractor’s Site Representative” shall mean the Person whom Contractor designates in Exhibit F to represent Contractor at the Site.

[*]

“Cost Comparison Report” shall mean either, as the context may require:

(a) a report for a specified period which compares the [*] during such period against the [*] or such period, including a breakdown of [*]

 

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(b) a report for a specified period which compares the [*] such date against the [*],

in each case, together with evidence reasonably required in order for Owner to [*]

“Day” shall mean a calendar day, including Saturdays, Sundays, and holidays.

“Defects” shall have the meaning set forth in Section 13.4 .

“[*]” shall mean the [*] and the [*].

“[*]” shall mean:

(a) For Simple Cycle [*] of the Contract Price;

(b) For Combined Cycle [*] of the Contract Price; and

(c) For the combined aggregate of the [*] and [*] of the Contract Price.

“Design Documents” shall have the meaning set forth in Section 3.6 .

“Dispute” shall have the meaning set forth in Section 28.1 .

“Documentation” shall mean such materials in printed or electronic format that are or are to be delivered hereunder or otherwise agreed by the Parties to be delivered by Contractor to Owner, including Design Documents, specifications (including the Specifications), schedules (including the Schedule), schematics, drawings (including Final Completion “as built” drawings as specified in Exhibit A-3 ), blueprints, memoranda, letters, notes, isometrics, computer programs and software, flow charts, logic diagrams, graphs, studies, system descriptions, lists, charts, diagrams, standards, criteria, assumptions, measurements, procedures (including the Testing Procedure), instructions, reports, test data and results, analyses, calculations, formulas, computations, plans, empirical and other correlations, models, manuals (including software manuals and Facility Manuals) and training materials, that are necessary for the design, Commissioning, operation, maintenance, modification or decommissioning of the Facility.

“Effective Date” shall mean the date set forth in the first paragraph of this Agreement.

“Electrical Output” shall mean the net electrical power, as measured at the high side of the main step-up transformer, that is produced by the Simple Cycle Facility or the Combined Cycle Facility, as the case may be, in kilowatts (kW) during the Performance Testing, at the test specified operating conditions, and corrected to the base performance conditions set forth herein and in Exhibit A-2 .

[*]

 

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[*]

“[*] Payments” shall mean those payments which have been made or that are due and payable by Owner to Contractor prior to the Effective Date for those Services as more fully described in the [*].

“Equipment” shall mean any and all material, structure, buildings, apparatus, equipment, spare parts, hardware, goods, tools, supplies, and other personal property, all as intended to become a permanent part of the Facility, that Contractor furnishes, or is required to furnish, hereunder in accordance with this Agreement, including the Specifications, or otherwise for the Facility. “Equipment” includes all of the foregoing items that Contractor furnishes through a Subcontractor. For the purposes of this Agreement, “Equipment” shall not include any Owner Equipment.

“Equipment Warranty Period” shall have the meaning set forth in Section 13.2 .

[*]

“Facility” shall have the meaning set forth in the Recitals, provided that, as the context may require where the combustion turbine combined cycle electric power plant described in the Specifications has not been completed, “Facility” shall mean only the combustion turbine simple cycle electric power plant, as described in the Specifications.

“Facility Manuals” shall mean those manuals prepared by or on behalf of Contractor for use by Owner or its designated Facility operator in connection with the operation, maintenance of and training on the Facility that conform to the requirements of Exhibit A-1 .

[*]

“Final Completion” shall mean that the Facility shall have achieved all of the conditions set forth in Section 10.9 .

“Final Completion Date” shall mean the date on which Final Completion of the Facility occurs.

“Final Payment Invoice” shall have the meaning set forth in Section 7.6 .

[*]

 

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“Force Majeure” shall mean an unforeseeable event or cause that is beyond the reasonable control of a Party, including by way of example, but not limited to:

(a) acts of God, war, riots, insurrection, terrorism, rebellion, floods, hurricanes, tornadoes, earthquakes, lightning, pandemic, epidemics, and other natural calamities;

(b) explosions or fires;

(c) strikes, lockouts, or other labor disputes, but excluding strikes, lockouts or work stoppages involving only employees of Contractor;

(d) a Change in Law, but only to the extent such Change in Law delays a Party or increases its cost, as demonstrated by credible evidence, in its performance of its obligations under this Agreement;

(e) actions or inactions of any Government Authority; and

(f) delays in obtaining goods or services from any Subcontractor caused by the occurrence of any Force Majeure event;

provided , however , that an event or cause shall not be an event of Force Majeure unless it: (i) directly impacts the Work under this Agreement, (ii) is not attributable to an act or omission of, including a breach of this Agreement by, such Party, or its employees, officers, agents or Subcontractors, unless such act or omission is itself a result of Force Majeure, and (iii) cannot be cured, remedied, avoided, offset, or otherwise overcome by the prompt exercise of reasonable diligence by such Party (or any Person over whom such Party has control). For the avoidance of doubt, “Force Majeure” shall not include (i) changes in general economic conditions such as inflation, interest rates or other factors of general application, and Contractor shall not be entitled to equitable relief therefor, and (ii) Owner’s inability to meet any of its payment obligations for whatever reason when due, and Owner shall not be excused from such obligation.

“Full Notice to Proceed” shall mean the written notice that Owner gives to Contractor fully authorizing Contractor to proceed with the Work hereunder, which is anticipated to be given no later than [*]

“Government Authority” shall mean any federal, state, county, city, local, municipal, foreign or other government or quasi-governmental authority or any department, agency, subdivision, court or other tribunal of any of the foregoing.

“Government Approvals” shall mean all permits, licenses, authorizations, consents, decrees, waivers, privileges and approvals from and filings with any Government Authority required for or material to the development, financing, ownership, construction, operation or maintenance of the Facility in accordance with this Agreement, including the CPCN and other work permits, environmental permits, licenses and construction permits.

“Gross Negligence” shall mean a conscious and voluntary disregard of the need to use reasonable care, which is likely to cause foreseeable grave injury or harm to persons, property or both.

“Guaranteed Combined Cycle Substantial Completion Date” shall mean the date of [*] (as such date may be adjusted by Change Order), provided that such date shall be extended on a

 

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day- for-day basis to the extent Owner fails to issue a Full Notice to Proceed on [*] until such Day Owner issues such Full Notice to Proceed.

“Guaranteed Final Completion Date” shall mean the date of [*] (as such date may be adjusted by Change Order), provided that such date shall be extended on a day-for-day basis to the extent Owner fails to issue a Full Notice to Proceed on [*] until such Day Owner issues such Full Notice to Proceed.

“Guaranteed Simple Cycle Substantial Completion Date” shall mean the date of [*] (as such date may be adjusted by Change Order), provided that such date shall be extended on a day-for-day basis to the extent Owner fails to issue a Full Notice to Proceed on [*] until such Day Owner issues such Full Notice to Proceed.

“Guarantor” shall mean [*]

“Hazardous Materials” shall mean substances defined as “hazardous substances” pursuant to Section 101(14) Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986 (42 U.S.C. Sections 9601 et seq .); those substances defined as “hazardous waste” pursuant to Section 1004(5) of the Resource, Conservation and Recovery Act (42 U.S.C. Section 6901 et seq .); those substances designated as a “hazardous substance” pursuant to Section 311 (b )(2)(A) or as a “toxic pollutant” pursuant to Section 307(a)(1) of the Clean Water Act (33 U.S.C. Sections 1251 et seq.); those substances defined as “hazardous materials” pursuant to Section 103 of the Hazardous Materials Transportation Act (49) U.S.C. Sections 1801 et seq .); those substances regulated as a “chemical substance or mixture” or as an “imminently hazardous chemical substance or mixture” pursuant to Section 6 or 7 of the Toxic Substances Control Act (15 U.S.C. Sections 2601 et seq .); those substances defined as “contaminants” pursuant to Section 1401 of the Safe Drinking Water Act (42 U.S.C. Sections 300f et seq.), if present in excess of permissible levels; those substances regulated pursuant to the Oil Pollution Act of 1990 (33 U.S.C. Sections 2701 et seq .); those substances defined as a “pesticide” pursuant to Section 2(u) of the Federal Insecticide, Fungicide, and Rodenticide Act as amended by the Federal Environmental Pesticide Control Act of 1972 and by the Federal Pesticide Act of 1978 (7 U.S.C. Sections 136 et seq .); those substances defined as “toxic materials” or “harmful physical agents” pursuant to Section 6 of the Occupational Safety and Health Act (29 U.S.C. Section 651 et seq .); those substances defined as “hazardous air pollutants” pursuant to Section 112(a)(6), or “regulated substance” pursuant to Section 112(a)(2)(B) of the Clean Air Act (42 U.S.C. Sections 7401 et seq .); those substances defined as “extremely hazardous substances” pursuant to Section 302(a)(2) of the Emergency Planning & Community Right-to-Know Act of 1986 (42 U.S.C. Sections 11001 et seq .); and those other hazardous substances, hazardous wastes, toxic pollutants, hazardous materials, chemical substances or mixtures, imminently hazardous chemical substances or mixtures, contaminants, pesticides, by-product materials, toxic materials, harmful physical agents, air pollutants, regulated substances, or extremely hazardous substances defined in any regulations promulgated pursuant to any of the foregoing environmental Laws, and all other contaminants, toxins, pollutants, hazardous substances, substances, materials and contaminants, polluted, toxic and hazardous materials, the use, disposition, possession or control of which is regulated by one or more Laws.

“Heat Rate” shall mean the test calculated net heat rate in BTU/kW-hr in HHV for the Simple Cycle Facility or the Combined Cycle Facility, as the case may be, during the Performance Testing at the

 

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test specified operating conditions and corrected to the base performance conditions set forth in Exhibit A-2 .

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“Insolvent” shall mean, with respect to either Party, that such Party becomes insolvent, or fails generally to pay its debts as they become due, or admits in writing its inability to pay its debts as they become due, or makes a general assignment for the benefit of creditors; commences any case, proceeding or other action seeking reorganization, arrangement, adjustment, liquidation, dissolution or composition of itself or its debts or assets, or adopts an arrangement with creditors, under any bankruptcy, moratorium, rearrangement, insolvency, reorganization or similar law of the United States or any state thereof for the relief of creditors or affecting the rights or remedies of creditors generally.

“Key Contractor Schedule Milestone” shall mean a Milestone set forth in Exhibit B that is identified as a “Key Contractor Schedule Milestone.”

“Laws” shall mean, at any date of determination, all statutes, laws, codes, ordinances, orders, judgments, decrees, injunctions, licenses, rules, permits, approvals, agreements, and regulations, including all applicable codes, standards, rules and regulations of the State, in effect on such date, including all Government Approvals.

“Lien” shall mean any lien, mortgage, pledge, encumbrance, charge, security interest, defect in title, or other claim filed or asserted in connection with the Project by or through Contractor, a Subcontractor or any other third party under the control or supervision of Contractor or any Subcontractor against the Facility, the Site, the Equipment, the Owner Equipment or any other structure or equipment at the Site.

“[*]” shall mean the [*] and the [*].

“Limited Notice to Proceed” shall mean a written notice that Owner gives to Contractor authorizing Contractor to proceed with the Work hereunder in a limited manner.

“Major Subcontractor” shall mean any Subcontractor who is engaged by Contractor: (i) to perform any Services or provide any Equipment that exceeds or is expected to exceed, in the aggregate with all prior provision of Services or Equipment by that Subcontractor, $[*] or (ii) that, although not exceeding $[*] in the aggregate for Equipment or Services, is performing Services or providing Equipment that is expressly listed in the table attached hereto as Exhibit G-2 .

 

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“Make Right Performance Guarantees” shall mean those Performance Guarantees designated as such in Exhibit A-2 for which the payment of a Performance Liquidated damage as a remedy shall not be an option for Contractor, which shall include the Simple Cycle Performance Guarantees and the Permitted Emission Limits.

“Milestone” shall mean an event or series of events in the execution of the Work as set forth in Exhibit B .

“Minimum Performance Guarantees” shall mean:

(a) with respect to [*] the achievement by the [*] under the performance conditions set forth in Exhibit A-2 of (i) a [*] not exceeding [*] of the applicable Performance Guarantees (or [*]BTU/kW-hr HHV) and (ii) an [*] not less than [*] of the applicable Performance Guarantees (or [*]W) (both of which are achieved while meeting the Permitted Emission Limits); and

(b) with respect to [*], the achievement by the [*] under the performance conditions set forth in Exhibit A-2 of (i) a [*] not exceeding [*] of the applicable Performance Guarantees (or [*]BTU/kW-hr HHV), and (ii) an [*] not less than [*] of the applicable Performance Guarantees (or [*]W) (both of which are achieved while meeting the Permitted Emission Limits).

The Parties recognize and agree that the above guarantee values shall be [*]

“[*]” shall have the meaning set forth in Section 7.5(a) .

“[*] Payment Invoice” shall have the meaning set forth in Section 7.2(a) .

“Monthly Progress and Cost Report” shall mean the written report Contractor delivers to Owner each month describing the total amount of progress in the Work achieved during the prior month, as provided in Section 3.22(a) .

“OSHA” shall have the meaning set forth in Section 24.2 .

“OSHA Standards” shall have the meaning set forth in Section 24.2(a) .

“Owner” shall have the meaning set forth in the first paragraph above and shall include its successors and assigns.

“[*]” shall mean the [*] including specifically the following items:

(a) [*] and features from the [*];

(b) [*];

 

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(c) [*] from the [*]; and

(d) [*].

“Owner Equipment Contracts” shall mean, collectively, the [*] and any other contract executed between Owner and a third-party supplier of equipment, including the Owner Equipment, for the Project, as each contract may be updated and amended from time to time.

“Owner Permits” shall have the meaning set forth in Section 4.3 .

“Owner’s Project Director” shall mean the Person that Owner designates in writing to issue and receive communications on Owner’s behalf under this Agreement.

“Performance Guarantees” shall mean:

(a) with respect to the [*], the achievement by the [*] under the applicable performance conditions set forth in Exhibit A-2 of (i) a [*] not exceeding [*] and (ii) an [*] not less than [*] (both of which are achieved while meeting the Permitted Emission Limits); and

(b) with respect to the [*], the achievement by the [*] under the applicable performance conditions set forth in Exhibit A-2 of (i) a [*] not exceeding [*] and (ii) an [*] not less than [*]kW (both of which are achieved while meeting the Permitted Emission Limits).

The Parties recognize and agree that the above guarantee values shall be [*]

“[*]” shall mean, with respect to Combined Cycle operations, (a) [*] per each [*] measured as [*] over the applicable [*] for [*] and (b) [*] per each kW under the applicable [*] for [*]

“[*]” shall mean [*] of the Contract Price.

“Performance Testing” shall mean the tests, conducted in accordance with this Agreement, including the Testing Procedures, by which Contractor demonstrates that the Facility meets, for Simple Cycle Substantial Completion or Combined Cycle Substantial Completion, the applicable Minimum Performance Guarantees, or for Final Completion, the Performance Guarantees.

“Permitted Emission Limits” shall mean those specific emission limits for each regulated pollutant set forth in the Prevention of Significant Deterioration (PSD) construction permit issued by the North Carolina Department of Environment and Natural Resources (NCDENR) Division of Air Quality authorizing the construction and operation of the Facility and which specifies the methods of measurement, recordation, and compliance and which are designated as such and set forth in Exhibit A-2 .

 

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“Person” shall mean any individual, company, corporation, partnership, joint venture, association, joint stock company, limited liability company, trust, estate, unincorporated organization, Government Authority or other entity having legal capacity.

“[*]” shall mean [*].

[*] shall have the meaning set forth in Section 7.1 .

“[*]” shall have the meaning set forth in Section 7.1 .

“Prime Interest Rate” shall mean, as of a particular date, the prime rate of interest as published on that date in The Wall Street Journal , and generally defined therein as “the base rate on corporate loans posted by at least 75% of the nation’s 30 largest banks.” If The Wall Street Journal is not published on a date for which the interest rate must be determined, the prime interest rate shall be the prime rate published in The Wall Street Journal on the nearest-preceding date on which The Wall Street Journal was published. If The Wall Street Journal discontinues publishing a prime rate, the prime interest rate shall be the prime rate announced publicly from time to time by Bank of America, N.A. or its successor.

“Progress Meetings” shall have the meaning set forth in Section 3.22(b) .

“Project” shall have the meaning set forth in the Recitals.

“Prudent Industry Practice” shall mean those practices, methods, equipment, specifications and standards of safety and performance, as the same may change from time to time, as are commonly used, or are generally accepted, in construction or operations of electric power generation facilities similar to the Facility, which in the exercise of reasonable judgment and in light of the facts known at the time the decision was made, after due and diligent inquiry, are considered good, safe and prudent practices in connection with the engineering, design, construction, commissioning, testing, operation and maintenance of facilities similar to the Facility with commensurate standards of safety, performance, dependability, efficiency, and economy, and as are in accordance with generally accepted standards of professional care, skill, diligence, and competence applicable to engineering, design, construction, commissioning, testing, operation, maintenance and construction practices in the United States.

“Quality Assurance Plan” shall have the meaning as set forth in Section 3.7 .

[*]

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[*]

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[*]

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“Sales Tax” shall mean any current or future sales, use or similar tax imposed on Contractor, any Subcontractor or Owner with respect to the Work by the State or any other Government Authority.

“Schedule” shall mean the critical schedule of key dates and Milestones, including the Key Contractor Schedule Milestones, for completion of the Work, as set forth in Exhibit B , as modified or updated from time to time in accordance with the terms of this Agreement.

“Scope of Work” shall mean all Work on the Project as set forth in Exhibit A-1 .

“Screening Measures” shall mean all applicable immigration checks (including compliance with the Immigration Reform Control Act of 1986 and I-9 requirements), drug and alcohol tests in compliance with MICCS, a terrorist watch database search, a social security trace, criminal background checks (including but not limited to checks for any felony convictions for the past seven years) and such other screening measures as a reasonably prudent employer would deem appropriate; provided that, nothing shall require Contractor to perform any screening activities that violate the federal Fair Credit Reporting Act, Title VII of the Civil Rights Act of 1964 or any other applicable Law.

“Services” shall mean all labor, transportation, packaging, storage, designing, drawing, engineering, demolition, Site preparation, manufacturing, construction, commissioning, installation, testing, equipping, verification, training, procurement (whether procurement of Equipment, Documentation, licenses to intellectual property granted herein or otherwise) and other work, services and actions (including pursuant to any warranty obligations) to be performed by Contractor under this Agreement [*] (whether at the Site or otherwise) in connection with, or relating to, the Facility (or any component thereof, including any Equipment and any Owner Equipment). “Services” includes (a) all of the foregoing items that Contractor provides through a Subcontractor and (b) the services that Contractor provides with respect to Owner Equipment pursuant to Section 3.1(a)(ii) .

“Services Warranty Period” shall have the meaning set forth in Section 13.1 .

“[*]” shall have the meaning set forth in Section 12.1(a) .

“Simple Cycle Facility” shall mean that portion of the Facility necessary or prudent for the operation of a combustion turbine simple cycle electric power plant, as described in the Specifications.

“Simple Cycle Mechanical Completion” shall mean that the Simple Cycle Facility shall have achieved all of the conditions set forth in Section 10.2 .

 

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“Simple Cycle Substantial Completion” shall mean that the Simple Cycle Facility shall have achieved all of the conditions set forth in Section 10.6 .

“Simple Cycle Substantial Completion Date” shall mean the date on which Simple Cycle Substantial Completion actually occurs.

“Site” shall mean the physical location as described in Exhibit A-4 upon which Contractor shall construct the Facility and perform related Work.

“Specifications” shall mean the Facility specifications in Exhibit A-1 .

“[*]” shall have the meaning set forth in Section 16.3 .

“State” shall mean the State of North Carolina.

“Subcontractor” shall mean a Person, including any vendor, materialman or supplier, who has a contract (whether written or oral, a purchase order or otherwise) with Contractor or a contract with any Person hired by Contractor or with a Person of any lower tier to Contractor (e.g., a second- or third-tier subcontractor) to perform any of the Services or to furnish any Equipment, at the Site or elsewhere.

“Substantial Completion Punch List” shall mean the written list of items of Work (which Contractor prepares and with which Owner agrees prior to Simple Cycle Substantial Completion or Combined Cycle Substantial Completion (as applicable)) that remain to be completed by Contractor after Simple Cycle Substantial Completion or Combined Cycle Substantial Completion (as applicable) but prior to Final Completion and which shall not affect the safety, reliability, operability or mechanical or electrical integrity of the Facility.

“[*] Combined Cycle Substantial Completion Date” shall mean the date of [*] (as such date may be adjusted by Change Order), provided that such date shall be extended on a day-for-day basis to the extent Owner fails to issue a Full Notice to Proceed on [*] until such Days Owner issues such Full Notice to Proceed.

“[*] Simple Cycle Substantial Completion Date” shall mean the date of [*] (as such date may be adjusted by Change Order), provided that such date shall be extended on a day-for-day basis to the extent Owner fails to issue a Full Notice to Proceed on [*] until such Days Owner issues such Full Notice to Proceed.

[*]

“Taxes” shall mean all present and future license, documentation, recording and registration fees, all taxes (including income, gross receipts, unincorporated business income, payroll, sales, use, privilege, personal property (tangible and intangible), real estate, excise and stamp taxes), levies, imports, duties, assessments, fees (customs or otherwise), charges and withholdings of any nature whatsoever, and all penalties, fines, additions to tax, and interest imposed by any Government Authority.

 

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“Testing Procedures” shall mean those procedures prepared for the Performance Testing by Contractor in accordance with Exhibit A-2 and reasonably acceptable to Owner.

“Third Party Claim” shall mean any claim, demand or cause of action of every kind and character by any Person other than Owner or Contractor. For the avoidance of doubt, a claim, demand or cause of action by an employee of Owner or Contractor (unless made on behalf of Owner or Contractor) shall be considered a Third Party Claim hereunder.

“Warranty Period” shall mean, as the context may require, the Services Warranty Period or the Equipment Warranty Period, as each may be extended from time to time with respect to any Service or Equipment as provided in Section 13.3 .

“Work” shall mean, as the context may require, either (a) the Equipment and the Services or (b) the Equipment or the Services.

2. GENERAL PROVISIONS

2.1 Intent of Contract Documents . It is the intent of the Parties that Contractor provide the Equipment and perform the Services and all of its other obligations under this Agreement for the Contract Price, [*] which shall not be increased, except in accordance with Article 7 , Article 8 or as otherwise expressly set forth herein.

2.2 Independent Contractor . Contractor shall perform and execute the provisions of this Agreement as an independent contractor to Owner and shall not in any respect be deemed or act, or hold itself out, as an agent of Owner for any purpose or reason whatsoever, except as contemplated in Section 3.1(a)(ii) .

2.3 Subcontracting; Approved Subcontractors .

(a) The Parties have agreed upon the list of approved Subcontractors set forth in Exhibit G-1 for the Services and Equipment listed in Exhibit G-1 . Contractor shall have the right to have that portion of the Services identified in Exhibit G-1 performed by the approved Subcontractor for such Service, and the right to purchase Equipment identified in Exhibit G-1 from the approved Subcontractor for such Equipment. For all Major Subcontractors that are listed in Exhibit G-1 and for the scope of Services and Equipment that are listed in Exhibit G-2 , Contractor shall provide Owner with an opportunity to participate in Contractor’s bid process, including but not limited to, review of Contractor’s bid proposals, participation in vendor presentations and meetings, review of proposed subcontractor’s bid responses, review and participation in Contractor’s technical and commercial evaluations of bid responses, and participation in Contractor’s meetings to discuss bid selection. In addition, not less than [*] prior to such time as Contractor desires to award or execute a subcontract with a proposed Major Subcontractor, Contractor shall provide notice to Owner of such intention. If, prior to execution of a subcontract with such Major Subcontractor, Owner desires that Contractor engage an alternative Major Subcontractor in lieu of the Major Subcontractor that is preferred by Contractor, Owner shall consult in good faith with Contractor on the difference in value, if any, between the bid price of the Major Subcontractor desired by Owner and the Major Subcontractor preferred by Contractor, plus any additional impacts to Schedule or warranties attributable to selecting the alternative Major Subcontractor in lieu of the preferred Major Subcontractor. If desired by Owner, Contractor shall engage such alternative approved Major

 

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Subcontractor but shall be entitled to a Change Order for the schedule, cost, warranty or other impacts in selecting the alternative Major Subcontractor.

(b) If Contractor desires to engage a Subcontractor that is not identified in Exhibit G-1 as an approved Subcontractor that will be providing Equipment or Services, then Contractor shall provide Owner with an opportunity to participate in Contractor’s bid process, including but not limited to, review of Contractor’s bid proposals, participation in vendor presentations and meetings, review of proposed subcontractor’s bid responses, review and participation in Contractor’s technical and commercial evaluations of bid responses, and participation in Contractor’s meetings to discuss bid selection. Before Contractor enters into any contract with, or otherwise engages, such Subcontractor to perform such Services, Contractor shall deliver to Owner for Owner’s review and approval (w) the name of the Subcontractor that Contractor proposes to use in the performance of such on-Site Services, (x) a statement in reasonable detail of the reasons why the proposed Subcontractor is preferred over any approved Subcontractor, (y) a description of any impacts to Schedule, warranties, interconnection with other Equipment or otherwise attributable to selecting the Subcontractor and (z) the information (and any additional information as Owner may reasonably request) on which Contractor is basing its desire to engage such Subcontractor. Owner shall have the right to reject any such Subcontractor; provided that Owner’s rejection shall be reasonable and shall occur within ten (10) Business Days after Contractor submits to Owner all of the information noted in clauses (w) through (z) above.

(c) Contractor shall not allow any Subcontractor that Owner rejects to perform any portion of the Services. Unless otherwise mutually agreed in writing, no contractual relationship shall exist between Owner and any Subcontractor with respect to any of the Services or the Equipment. Contractor shall be fully responsible for all acts, omissions, failures and faults of all Subcontractors as fully as if they were the acts, omissions, failures and faults of Contractor. The exercise of this right by Contractor to subcontract shall not in any way increase the costs, expenses or liabilities of Owner.

2.4 Assignment of Subcontracts . All subcontracts between Contractor and its Subcontractors shall be in writing and shall, to the extent commercially reasonable, contain provisions, which Contractor shall not waive, release, modify or impair (a) obligating each Subcontractor that may receive access to any Owner Confidential Information, to protect such Owner Confidential Information in accordance with the provisions of this Agreement; (b) as applicable, sufficient to ensure that Contractor has the right to grant the intellectual property licenses and assignments that are granted to Owner herein; and (c) giving Contractor an unrestricted right to assign the subcontract and all benefits, interests, rights and causes of action arising under it to Owner, an Affiliate of Owner or an operator of the Facility, as designated by Owner. At the request of Owner, Contractor shall provide Owner with copies of all warranties of each Subcontractor relating to any of the Work, and Contractor shall comply with any request by Owner upon the termination of this Agreement pursuant to Article 23 or prior to the expiration of the Warranty Period to assign the benefit of any Subcontractor warranty to Owner, an Affiliate of Owner or an operator of the Facility, as designated by Owner; provided that , unless otherwise agreed, Contractor shall not be required to assign any rights to claims that Contractor may have against such Subcontractor at the time of the assignment of such benefit.

2.5 Interpretation .

 

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(a) Headings . The titles and headings in this Agreement are inserted for convenience only and shall not be used for the purposes of construing or interpreting this Agreement.

(b) References . References to natural persons include Persons. References to “Articles” and “Sections” are references to Articles and Sections of this Agreement. References to “Exhibits” are references to the Exhibits attached to this Agreement, including all attachments to and documents and information incorporated therein, and all Exhibits are incorporated into this Agreement by reference.

(c) Gender . Words importing one gender include the other gender.

(d) Without Limitation . The words “include” and “including” are not words of limitation and shall be deemed to be followed by the words “without limitation.”

(e) Amendments . All references in this Agreement to contracts, agreements or other documents shall be deemed to mean those contracts, agreements or documents as the same may be modified, supplemented or amended from time to time.

(f) Industry Meanings . Words and abbreviations not otherwise defined in this Agreement which have well-known technical or design, engineering or construction industry meanings in the United States are used in this Agreement in accordance with those recognized meanings.

(g) Agreement . Provisions including the word “agree”, “agreed” or “agreement” require the agreement to be recorded in writing.

(h) Written . Provisions including the word “written” or “in writing” mean hand-written, type-written, printed or electronically made and resulting in a permanent record.

(i) Drafting . Neither Contractor nor Owner shall assert or claim a presumption disfavoring the other by virtue of the fact that this Agreement was drafted primarily by legal counsel for the other, and this Agreement shall be construed as if drafted jointly by Owner and Contractor and no presumption or burden of proof will arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement.

(j) [*]

2.6 Inclusion; Order of Precedence . This Agreement (excluding the Exhibits) and the Exhibits shall be considered complementary, and what is required by one shall be binding as if required by all. The Parties shall attempt to give effect to all provisions. The failure to list a requirement specifically in one document, once that requirement is specifically listed in another, shall not imply the inapplicability of that requirement, and Contractor shall provide as part of its obligations hereunder all items required to conform the Work to the Specifications and the other standards in this Agreement. In the event of a conflict between this Agreement (excluding the Exhibits) and the

 

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Exhibits, this Agreement (excluding the Exhibits) shall control and the conflicting provisions shall be interpreted so as to accord with the provisions of this Agreement (excluding the Exhibits). Notwithstanding the foregoing, conflicts regarding Scope of Work matters shall be governed by Exhibit A-1 . Later dated amendments, Exhibits or Change Orders shall take precedence over earlier dated amendments, Exhibits or Change Orders.

2.7 Days . If a payment obligation falls due on a Day other than a Business Day, the obligation shall be deemed to be due on the next Business Day.

3. CONTRACTOR RESPONSIBILITIES

3.1 Performance of the Services; Commencement of Work .

(a) Performance of the Services .

(i) Scope of Services for Work . With respect to all Work, Contractor shall diligently, duly and properly perform and complete the Services in accordance with this Agreement; procure, provide and pay for all items (other than Owner Equipment) and services necessary for the proper execution and completion of the Services, whether temporary or permanent and whether or not incorporated or to be incorporated into the Facility, including all procurement, design and engineering services (except for such services for the Owner Equipment), all installation and construction services, administration, management, training and coordination, all Commissioning and verification services, and all labor, Equipment, construction aids, furnishings, equipment, supplies, insurance (other than Owner insurance), permits (other than Owner Permits), licenses, inspections, storage and transportation, Facility Manuals, and all other items, facilities and services necessary to perform or provide the Work and complete the Facility. Contractor shall design, construct and install the Equipment on an engineering and construction basis pursuant to this Agreement, including providing all necessary civil, structural, mechanical, and electrical engineering services, all control equipment necessary for the design, construction and operation of the Equipment, all interconnections set forth in the Specifications, and all equipment not specifically described in the Specifications (other than Owner Equipment) which is customary and necessary to meet the requirements of the Specifications and the Performance Guarantees. Work not specifically delineated in this Section or elsewhere shall be performed and provided by Contractor to the extent customary and necessary to complete the Facility (other than procurement, supply and provision of Owner Equipment) in accordance with Prudent Industry Practices. [*] Contractor shall execute the entire Services in a manner that will enable Contractor to achieve Simple Cycle Substantial Completion by the Guaranteed Simple Cycle Substantial Completion Date, Combined Cycle Substantial Completion by the Guaranteed Combined Cycle Substantial Completion Date and Final Completion by the Guaranteed Final Completion Date.

(ii) Scope of Services Relating to Owner Equipment . Owner shall be responsible for procuring, supplying and providing the Owner Equipment by the dates set forth in the Schedule. The Owner Equipment shall be provided pursuant to contracts between Owner and the suppliers of such Owner Equipment (collectively, the “ Owner Equipment Contracts ”). Owner shall provide Contractor with the relevant portions of the Owner Equipment Contract

 

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in order for Contractor to perform its obligations under this Section. With respect to such Owner Equipment, the Parties hereby agree as follows:

(A) Owner hereby authorizes Contractor to, and Contractor hereby agrees to, act as Owner’s agent for the purpose of generally administering the Owner Equipment Contracts on behalf of Owner and assuring compliance by Owner and suppliers with the terms thereof. Contractor shall perform such services in the manner that a reasonably prudent contractor experienced in the design and construction of combined cycle electric-generating facilities would perform if such contractor, instead of Owner, were a party to such Owner Equipment Contracts. Such agency services shall include but shall not be limited to reviewing design documents, obtaining design interface and delivery schedule information, coordinating and expediting delivery of such Owner Equipment, diligently asserting Owner’s rights, maintaining appropriate records, providing to Owner any notices delivered to Contractor by the supplier of the Owner Equipment, regularly updating Owner with respect to the status of the performance of the suppliers of the Owner Equipment, assisting Owner in pursuing available remedies against the suppliers of the Owner Equipment, including assistance to Owner in the administration and coordination of warranty claims for such Owner Equipment and enforcing the repair, replacement or refurbishment of such Owner Equipment as necessary, consulting with Owner with respect to any material issues, attending meetings and otherwise interfacing with the suppliers of the Owner Equipment, and carrying out the directions of Owner, all as necessary in order to ensure performance by the respective suppliers under the Owner Equipment Contracts in accordance with the terms and condition set forth in such Owner Equipment Contracts. Notwithstanding the foregoing, Contractor shall have no authority to, and shall not, take any of the following actions under or with respect to the Owner Equipment Contracts absent prior direction from Owner: (1) consent to any change order; (2) agree to or permit any amendment, modification, or supplement; (3) waive any of Owner’s rights or the obligations of the suppliers of the Owner Equipment; (4) increase any of Owner’s obligations or the rights of the suppliers of the Owner Equipment; (5) initiate or conduct any litigation or other similar proceedings; (6) take any action that would cause a default or breach by Owner of an Owner Equipment Contract; or (7) agree to or consent to termination or suspension of work or activities thereunder. Owner shall consult with Contractor on any performance or schedule concerns before making payments to the suppliers of the Owner Equipment after the Effective Date.

(B) In addition to the agency services set forth in Section 3.1(a)(ii)(A) , Contractor shall also provide timely review and response to all Owner Equipment designs, specifications and drawings, provide all on-site storage and transportation, provide on-site administration and coordination and reasonable office space, provide installation and integration services with respect to the Owner Equipment in accordance with the Schedule, perform inspections of such Owner Equipment, perform all installation, commissioning and Performance Testing for all such Owner Equipment, conduct quality surveillance and start-up of such Owner Equipment to the extent permitted under the Owner Equipment Contracts, coordinate training, incorporate Owner Equipment manuals into the Facility Manual, and provide other related services reasonably necessary to install and interconnect such Owner

 

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Equipment to the Equipment and the Facility as contemplated by Contractor’s Scope of Work.

(C) For the avoidance of doubt, notwithstanding anything to the contrary, Contractor shall have no liability to Owner for payment of any performance liquidated damages specified within the Owner Equipment Contracts for any shortfall in the performance of such Owner Equipment (including failure to meet performance guarantees) or for the payment of any delay liquidated damages specified within the Owner Equipment Contracts for the late delivery of such Owner Equipment. Contractor shall be entitled to a Change Order granting equitable relief from any impact on Contractor’s cost or schedule of performance under this Agreement attributable to a breach by the suppliers of the Owner Equipment of the terms of the Owner Equipment Contracts, except to the extent that such breach is caused by Contractor failing to fulfill its obligations under this Agreement.

(D) Owner and Contractor hereby acknowledge that the Work is only a portion of the work required for the completion of the entire Project and that the successful and timely completion of the Project will require the good faith, prompt and courteous coordination and collaboration among many contractors, subcontractors and other Persons, including Owner and the suppliers of Owner Equipment. Owner and Contractor also acknowledge that both parties are entering into this Agreement in material reliance on the agreement by each other to provide such good faith, prompt and courteous coordination and collaboration and to perform the Work in accordance with the terms and conditions set forth herein in order to achieve the successful and timely completion of the Project.

(b) Work Under Limited Notices to Proceed . From the Effective Date until such time that Owner issues a Full Notice to Proceed with respect to the Facility, Owner shall from time to time issue Limited Notices to Proceed for Contractor to perform certain portions of the Work with respect to the Facility as set forth in each such Limited Notice to Proceed. Such portions of the Work shall be performed for the price and in the manner set forth in such Limited Notice to Proceed. Each Limited Notice to Proceed shall expire upon the earlier of (i) the date set forth in such Limited Notice to Proceed, (ii) issuance of the Full Notice to Proceed or (iii) termination of this Agreement in accordance with Article 23 .

(c) Work After Full Notice to Proceed . Upon the issuance by Owner of the Full Notice to Proceed, such notice shall be deemed to be authorization for Contractor to commence the remainder of the Work relating to the Facility on the date set forth in such Full Notice to Proceed, which shall continue until such Work is completed unless this Agreement is earlier terminated in accordance with Article 23 . The Parties acknowledge that this Agreement sets forth a specific date for the anticipated delivery of the Full Notice to Proceed for the Facility. The failure by Owner to issue the Full Notice to Proceed by the date set forth in this Agreement will constitute a Change, with respect to which Article 8 shall apply. Contractor shall perform its obligations under this Agreement in accordance with the agreed upon Schedule, as such Schedule may be modified or updated from time to time in accordance with the terms of this Agreement.

3.2 Professional Standards . Contractor shall perform and complete the Services and its other obligations under this Agreement, and all Equipment shall be, in accordance with all applicable Laws, this Agreement and Prudent Industry Practices. In the event of any conflict between any of the

 

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authorities in the foregoing sentence, all applicable Laws shall control over the terms of this Agreement and Prudent Industry Practices, and the terms of this Agreement shall control over Prudent Industry Practices.

3.3 Sufficient Personnel . At all times during the term of this Agreement, Contractor shall employ a sufficient number of qualified Persons, who shall be licensed if required by applicable Laws, so that Contractor may complete the Services and Contractor’s other obligations under this Agreement in an efficient, prompt, economical and professional manner and in accordance with the Schedule. Without in any way limiting the foregoing, Contractor shall, for example, employ a sufficient number of qualified buyers, inspectors, and expediters necessary to provide all equipment, materials and supplies to be provided by Contractor hereunder in a timely manner consistent with the Schedule. Contractor shall provide all technical services and supervision for Commissioning and verification. Contractor shall also provide all construction services and craft personnel as required for system adjustments during Commissioning and verification. Owner shall provide and pay for its own operations and maintenance staff during Commissioning and verification.

3.4 Supervision and Discipline . Contractor shall supervise, coordinate and direct the Services using Contractor’s best skill, judgment and attention. Contractor shall enforce strict discipline and good order among Contractor’s employees, Subcontractors’ employees and all other Persons carrying out the Services. Contractor shall at all times take all necessary reasonable precautions to prevent any unlawful or disorderly conduct by or among its employees, employees of Subcontractors and other Persons performing the Services and for the preservation of the peace and the protection of Persons and property at, or in the immediate vicinity of, the Site. Contractor shall only permit the employment of Persons who are fit at the time they are employed and on each Day they perform the Services, who are skilled in the tasks assigned to them, and who are qualified to perform the tasks assigned to them. Contractor shall be responsible for labor peace on the Site and Contractor shall at all times implement policies and practices designed to avoid work stoppages, slowdowns, disputes and strikes where reasonably possible and practical under the circumstances.

3.5 Contractor’s Key Personnel . Exhibit F contains a list of Contractor’s key personnel who shall be responsible for supervising the performance of Contractor’s obligations under this Agreement. That list includes the designation of Contractor’s Project Manager and Contractor’s Site Representative. Any replacement of the key personnel listed in Exhibit F shall be subject to the prior written approval of Owner, which consent Owner shall not unreasonably withhold or delay. Contractor’s Project Manager shall act as Contractor’s liaison with Owner and shall have the authority (a) to administer this Agreement on behalf of Contractor, (b) to perform the responsibilities of Contractor under this Agreement, and (c) to bind Contractor as to the day-to-day project management operations under the Agreement. Contractor’s Site Representative or other Contractor supervisory personnel shall be present at the Site at all times when the Services are being performed at the Site.

3.6 Design and Engineering . Prior to the Effective Date, Contractor shall have scrutinized, and satisfied itself as to the adequacy of, the Specifications (including design criteria and calculations, if any) for completion of the Facility. Contractor shall be responsible for the design of the Facility and for the accuracy of the Specifications. Any data or information received by Contractor, from Owner or otherwise, shall not relieve Contractor from its responsibility for the design of the Facility and execution of the Services. Contractor shall engage all supervisors, engineers, designers, draftsmen and other Persons necessary for the preparation of all Documentation required for the Work. In connection with the Documentation, Contractor shall prepare working drawings and specifications

 

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setting forth in detail the requirements for the construction of the Facility in accordance with this Agreement (the “Design Documents” ). Contractor shall submit those Design Documents identified in Exhibit A-3 for Owner’s review, and Owner shall complete its review of, and provide any comments to Contractor with respect to, the Design Documents within ten [*] of receiving such Design Documents from Contractor (and such Design Documents shall be deemed reviewed without comment if Contractor does not receive any comments from Owner within such time period). If Owner notifies Contractor that the Design Documents fail to comply with this Agreement, Contractor shall correct such Design Documents and shall resubmit them for Owner’s prompt review within five (5) Business Days in accordance herewith. Owner shall be entitled, but not obligated, to review and comment on all other Design Documents not identified in Exhibit A-3 . Any review by Owner of any Design Documents pursuant to this Section shall not relieve Contractor from any obligation or responsibility under this Agreement. If errors, omissions, ambiguities, inconsistencies, inadequacies or other defects are found in the Design Documents, they and the Work shall be corrected as part of the [*] notwithstanding any prior consent or approval of Owner of any such Design Documents or Work.

3.7 Quality Assurance Plan . Contractor shall develop, implement and maintain a written plan for quality assurance of the Services (the “ Quality Assurance Plan ”), which shall include: work safety; security at the Site; fitness for duty; management and control of the design, engineering, and construction services; management and control of Subcontractors; and such other matters as Owner may reasonably request. Such plan shall meet Owner’s corporate and Site-specific policies and requirements and the requirements of all applicable Laws. Contractor shall deliver the plan to Owner within [*] after the Effective Date for Owner’s review and comment, and Contractor shall thereafter incorporate Owner’s reasonable comments therein. Following Owner’s review of and comment to such plan, Contractor shall have the right to rely on such plan in performing the Services. Contractor shall also require all Subcontractors to establish, implement and maintain appropriate quality control and safety programs with respect to their respective portions of the Services. Contractor shall provide Owner and its employees, agents, representatives and invitees with reasonable access to the Work wherever located for observation and inspection, including but not limited to auditing of all activities for conformance with the requirements of the plan and all requirements of the Agreement. Inspections and audits of Contractor’s Subcontractors will be coordinated with Contractor.

3.8 Safety Management Plan . Contractor shall develop, implement and maintain a written safety management plan that complies with the requirements set forth in Article 24 . Contractor shall deliver such plan to Owner for its review and approval (which approval shall not be unreasonably withheld or delayed) at least [*] prior to the date Contractor mobilizes to the Site.

3.9 Training . Contractor shall develop and implement a program to instruct and train Owner’s personnel adequately in accordance with the provisions of Exhibit A-1 . Contractor shall deliver to Owner in accordance with Section 3.15 substantially complete versions of the Facility Manuals that are sufficient for training Owner’s maintenance and operating personnel, and Contractor shall thereafter use the Facility Manuals to train such Owner personnel. The training, together with the Facility Materials and the training that any supplier of Owner Equipment is required to provide, will be sufficient, once provided, to enable Owner to develop operating procedures compliant with the requirements of Government Authorities.

3.10 Utility Use . Subject to Section 4.5 , from the Effective Date until Final Completion, Contractor shall be responsible in connection with its scope of Work and as part of the [*]

 

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to maintain and pay for all temporary construction utilities required to perform the Services, including electricity (from the designated Owner tie-in points), fuel (other than gas fuel used for Commissioning, Performance Testing and operation), communication systems for Contractor’s temporary office facilities (including telephones for Owner’s staff), water (potable and raw), construction waste disposal and wastewater disposal.

3.11 Spare Parts .

(a) Erection, Start-up and Commissioning Spare Parts . Owner and Contractor shall consult in good faith on an ‘open book’ basis to determine the nature and quantity of spare parts required for installation, erection, start-up, commissioning and performance testing for the Equipment for each of the Simple Cycle Facility and the Combined Cycle Facility, including all gases, gaskets, fuses, instruments, etc. and other consumable, expendable and engineered items that may be required during construction, start-up, commissioning or performance testing of such Equipment. Contractor shall recommend to Owner for approval the spare parts to be purchased by Contractor for such installation, erection, start-up and commissioning, with such Owner approval not to be unreasonably withheld or delayed. Owner shall own all such spare parts for which it has made payment, and, prior to Simple Cycle Substantial Completion or Combined Cycle Substantial Completion (as applicable), Contractor shall provide Owner with a complete list of all such spare parts (including manufacturer name and part number and other descriptive information) that were not used during construction, start-up, commissioning or performance testing of such Equipment.

(b) Recommended Operation and Maintenance (O&M) Spare Parts . At least ninety-days Days prior to Simple Cycle Substantial Completion, Contractor shall provide a list of spare parts that Contractor (or its Subcontractors) recommends as necessary for Owner to have on hand to maintain operability of the Equipment (taking into account the length of time required to obtain such spare parts) to enable prompt repair of the Equipment for the Simple Cycle Facility for a period of [*] following Simple Cycle Substantial Completion and to enable prompt repair of the Equipment for the Combined Cycle Facility for a period of [*] following Combined Cycle Substantial Completion. Summary and detailed information on each spare part shall be listed by Contractor in a format as reasonably requested by Owner. Each spare part listed shall include all items for which the spare part is intended to support. All spare parts shall comply with the requirements of the Specifications and shall be identical or equivalent to the original specified, including documentation identical in kind and format to that required for the original equipment or material. Pricing, delivery lead times and any limitations on shelf life shall be included for each spare part. Owner shall procure such spare parts as it determines in its sole discretion.

(c) Owner Equipment Spare Parts . Acting as Owner’s agent pursuant to Section 3.1(a)(ii)(A) , Contractor shall coordinate, expedite and manage delivery from each supplier of Owner Equipment a recommended list of spare parts required for Commissioning and start-up of such Owner Equipment at such times as shall be necessary to permit Contractor to remain in compliance with the Schedule. Owner shall timely acquire, pay and deliver for all such spare parts. Owner shall make available at no cost to Contractor to utilize for Owner Equipment during start-up and testing, spare parts acquired by Owner for the Owner Equipment.

3.12 Subcontractor Presence . Contractor shall be responsible for notifying and paying any Subcontractor representative that it deems necessary to be present for technical assistance at (a) any training session, (b) erection supervision, (c) Commissioning, or (d) the Performance Testing. Similarly, Owner, at its cost, shall ensure that an adequate number of qualified representatives from

 

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those suppliers supplying Owner Equipment are present for technical assistance at the above-listed events.

3.13 Current Records; Record Drawings . Contractor shall maintain in good order and make available to Owner, for inspection at the Site at all times, at least one record copy of the Documentation marked currently to record all material changes made during construction. Before, and as a condition to, Final Completion of the Facility, Contractor shall deliver to Owner the Documentation, including one set of reproducible as-built drawings listed in Exhibit A-3 (in hard copy and electronic formats (non-native files) reasonably requested by Owner), showing all material changes made during construction with respect to the Facility.

3.14 Transportation Costs . Contractor shall arrange and pay for all transportation, storage and transfer costs incurred in connection with the Work, except for the transportation and storage costs attributable to Owner Equipment, which transportation and storage costs shall be paid by Owner.

3.15 Facility Manuals . Contractor shall deliver to Owner substantially complete versions of the Facility Manuals relating to the Simple Cycle Facility no less than one hundred and twenty (120) Days prior to the Simple Cycle Substantial Completion Date in accordance with the requirements of this Agreement, with such first draft containing sufficient operational and technical information to allow Owner to develop Simple Cycle Facility operating and maintenance procedures in order for Contractor to provide operator training. Contractor shall deliver to Owner substantially complete versions of the Facility Manuals relating to the entire Facility no less than one hundred and twenty (120) Days prior to the Combined Cycle Substantial Completion Date in accordance with the requirements of this Agreement, with such first draft containing sufficient operational and technical information to allow Owner to develop Facility operating and maintenance procedures in order for Contractor to provide operator training. Contractor shall deliver to Owner the final version of the Facility Manuals, in hard copy and electronic format, prior to Final Completion of the Facility.

3.16 Control of Work . Contractor shall have care, custody and control over that portion of the Site at which it performs construction Work and shall be solely responsible for all construction means, methods, techniques, sequences, procedures, safety and quality assurance, and quality control programs in connection with the performance of the Services. Contractor shall, [*] provide all necessary security at that portion of the Site under Contractor’s care, custody and control, including a suitable fence around such portion of the Site, and the prohibition and prevention of access and entrance to such portion of the Site by all unnecessary and unauthorized Persons. Contractor shall strictly control the admission of Persons to such portion of the Site and no such Person (other than the employees, officers or directors of the Parties or their Affiliates) who is not required for the performance or supervision of the Services shall be admitted without the prior approval of Owner (such approval not to be unreasonably withheld or delayed). To the extent any damages to the Site or property thereon, including the Facility, are covered by Owner’s Builder’s Risk policy or other property insurance [*]. To the extent any damages to the Site or property thereon, including the Facility, are not covered by Owner’s Builder’s Risk policy or other property insurance and if such damages arise from theft or vandalism due to Contractor’s or its Subcontractor’s negligence, then Contractor shall be liable for such damages up to the amount of the loss incurred, which shall be included [*]

 

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[*]

3.17 Emergencies . In the event of any emergency endangering life or property, Contractor shall take all actions as may be reasonable and necessary to prevent, avoid or mitigate injury, damage or loss and shall promptly report each such emergency, and Contractor’s responses thereto, to Owner.

3.18 Local Conditions . Contractor has reviewed the Site and the access to the Site, all as described in Exhibit A-4 , and acknowledges that they are sufficient for the performance of the Services. Contractor warrants that it has taken all steps necessary to ascertain the nature and location of the Services and that it has investigated and satisfied itself as to the general and local conditions that can affect the Facility, the Site or the performance of the Services, including: (a) conditions bearing on access, egress, transportation, waste disposal, handling, lay down, parking and storage of materials; (b) the availability of labor, water, electric power, other utilities and roads needed for construction; (c) uncertainties of normal weather or other observable physical conditions at the Site; and (d) the character of equipment and facilities needed before and during the performance of the Services. For the avoidance of doubt, Contractor acknowledges that Contractor has included reasonable estimates in the [*] to account for the sub-surface Site conditions identified within the [*].

3.19 Use of Site; Owner Access . Contractor shall confine its operations at the Site to areas permitted by applicable Laws, this Agreement and the Exhibits hereto. Contractor shall prepare, implement and enforce written Site rules necessary for the safe, efficient and proper prosecution of the Work. Those rules shall, at a minimum, comply with Owner Environmental Health and Safety manual and all applicable Laws. Contractor shall provide Owner, the suppliers of the Owner Equipment, and their respective employees, agents, representatives and invitees with reasonable access to the Work wherever located for observation and inspection; provided , that Contractor may provide, and Owner, the suppliers of the Owner Equipment and shall accept, an escort or other safety measures that Contractor, in its reasonable discretion, deems necessary or advisable. As a [*] and as part of the [*] Contractor shall provide Owner and its Owner Equipment vendors with [*] office spaces on the Site which shall be outfitted in a customary manner (including a conference room) as more fully described in Exhibit A-1 . Those office facilities shall be connected to and serviced by the usual utilities, subject to Sections 3.10 and 4.5 .

3.20 Compliance with Laws . Contractor shall comply, and shall cause all Subcontractors to comply, with all applicable Laws and Change Orders that relate to Changes in Law relating to the Work or the Facility, and Contractor shall give all applicable notices with respect to, and in accordance with, any applicable Laws. Contractor shall ensure that the Facility, as designed and constructed, complies, and, when operated in accordance with Prudent Industry Practices, shall comply with all applicable Laws. Notwithstanding the foregoing, or anything else in this Agreement to the contrary, Contractor’s obligation with respect to water, air and other emissions of the Facility shall be limited to the requirements set forth in the Specifications. If not otherwise exempted by Title 48 and to the extent applicable, Contractor will make a good faith effort to comply with 48 CFR §52.219-8, Utilization of Small, Small Disadvantaged, and Women-Owned Small Business

 

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Concerns, and 48 CFR §52.219-9, Small, Small Disadvantaged, and Women-Owned Small Business Subcontracting Plan.

3.21 Permits and Approvals . Contractor shall be responsible for obtaining, renewing and maintaining all permits, licenses, approvals and certifications customary and necessary for Contractor to demolish, Site prepare, engineer, detail, fabricate, furnish, deliver, unload, store, erect, install, commission (but only those permits exclusively used for commissioning) and inspect the Work, all as described in Exhibit D (collectively, the “Contractor Permits” ). Contractor shall provide reasonable assistance and documents to Owner in connection with Owner’s efforts to obtain the Owner Permits. Contractor represents that, to the best of its knowledge, the Contractor Permits listed in Exhibit D are the customary permits, approvals and certifications required to be obtained by Contractor for its performance of the Services. Upon Contractor’s request, Owner shall provide Contractor reasonable cooperation and assistance in obtaining and maintaining Contractor Permits.

3.22 Periodic Reports and Meetings .

(a) Monthly Progress and Cost Report . Prior to or concurrently with the delivery of each Monthly Payment Invoice provided in accordance with Section 7.2(a) , Contractor shall prepare and submit to Owner a written status report covering the previous calendar month, which report shall be prepared in a manner and format (hard copy and electronic) reasonably acceptable to Owner and shall include (i) a detailed description of the progress of the Work, including an up-to-date Work Schedule depicting all critical path activities and Key Contractor Schedule Milestones and illustrating the progress which has been made against such activities and Key Contractor Schedule Milestones, (ii) if the description of the progress of the Work indicates that the Work does not comply with the Schedule, a brief description of the steps and actions that Contractor proposes to take in order to comply with the Schedule, (iii) a statement of any significant issues which remain unresolved and Contractor’s recommendations for resolving the same, (iv) a summary of any significant Facility events which are scheduled or expected to occur during the following thirty (30) Days, (v) a Cost Comparison Report for the previous calendar month and as of the end of such month and (vi) all additional information reasonably requested by Owner (the “Monthly Progress and Cost Report” ). Contractor shall provide copies of such documentation and materials as Owner may reasonably require to substantiate the amounts claimed by Contractor in such Cost Comparison Report.

(b) Attendance and Participation at Meetings . From the Effective Date until the Final Completion Date, Contractor shall attend and participate in regular meetings with Owner which shall occur monthly (or upon such other interval as the Parties agree in writing) for the purpose of discussing the status of the Work and anticipating and resolving any problems ( “Progress Meetings” ). The Progress Meetings may also include, at the request of Owner, consultants and other Persons. Contractor shall prepare and promptly deliver to Owner written minutes of each meeting; provided , that the publication or distribution of such minutes shall not constitute a permitted basis for providing notice, or otherwise asserting claims, under this Agreement by any Party. No implication whatsoever shall be drawn as consequence of a failure by any Party to comment on or object to any minutes prepared or distributed by Contractor. Unless otherwise mutually agreed, Contractor’s Site Representative shall attend all Progress Meetings after Contractor mobilizes to the Site. In addition to the above monthly Progress Meetings, Contractor shall hold regularly scheduled (but not less frequently than weekly during construction) status or scheduling meetings with its Subcontractors as appropriate, and Owner shall have the right but not the obligation to attend and participate in such weekly status meetings; provided , that, if Contractor determines in its reasonable discretion that

 

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Owner’s attendance at the meeting would prohibit Contractor from effectively addressing confidential or sensitive issues, Contractor shall have the right to bar Owner from that portion of such meetings.

3.23 Signage . Neither Contractor nor its Subcontractors shall display, install, erect or maintain any advertising or other signage at the Site without Owner’s prior written approval, other than signs and notices required by applicable Laws, related safety or work rules, site identification, or used to solicit employees for the performance of the Services.

3.24 Interference with Traffic . Contractor shall carry out the Services so as not to interfere unnecessarily or improperly with (a) Owner’s operations at or in the vicinity of the Site, including the existing Buck coal facility located adjacent to the Site, (after Owner has assumed custody and control of the Simple Cycle Facility) or (b) access to, use of or occupation of public or private roads, footpaths or properties in the possession of Owner or any other Person. Contractor shall communicate with, and ascertain the requirements of, all Government Authorities in relation to vehicular access to and egress from the Site and shall comply with any such requirements. Contractor shall be deemed to have satisfied itself as to, and shall be fully responsible for, the routing for delivery of heavy or large loads to the Site so as to satisfy any requirements of Government Authorities with respect thereto.

3.25 Supply of Water and Disposal of Sewage . Contractor shall provide, within the Site, an adequate supply of drinking and other water for the use of those Persons working on the Site. Contractor shall dispose of, either off-Site or through the Facility’s septic system or other approved method, all on-Site sewage effluent during performance of the Services.

3.26 Housekeeping . At all times during the term of this Agreement, Contractor shall keep the Site and surrounding area adjacent to where the Services are actually being performed, free from waste materials, equipment, rubbish, debris and other garbage, and liquid and non-liquid materials whether spilled, dropped, discharged, blown out or leaked. Contractor shall employ adequate dust control measures. To the extent practicable, Contractor and all Subcontractors shall utilize reasonable waste reduction and recycling techniques at the Site. Before the Final Completion Date, Contractor shall remove from the Site all tools, trailers, surplus and waste materials, and rubbish, and shall otherwise leave the Facility and the Site in a neat and clean condition. If Contractor fails to perform such housekeeping services, Owner, following notice and a reasonable opportunity for Contractor to cure, may perform such services, and all reasonable and necessary costs incurred in connection therewith shall be assessed against the [*].

4. OWNER RESPONSIBILITIES

Owner shall perform the responsibilities set forth in this Article at its own expense and at those reasonable times as may be required by Contractor for the successful completion of the Work in accordance with the Schedule.

4.1 Owner’s Representative . Owner shall appoint Owner’s Project Director with whom Contractor may consult at all reasonable times, and whose instructions, requests and decisions shall be binding upon Owner as to all matters pertaining to this Agreement and the performance of the Parties under this Agreement; provided , that no amendment or modification of this Agreement shall be effected except by an Amendment, and no Change shall be effected except as provided in Article 8 .

 

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4.2 Access . Subject to Section 11.1 , from the time of the issuance of the Full Notice to Proceed hereunder until the Combined Cycle Substantial Completion Date, Owner shall provide Contractor, at no additional cost to Contractor, unrestricted right of access to such portion of the Site as Contractor may reasonably require for the construction of the Facility and for Contractor’s office, warehouse, shop buildings, welding facilities, Contractor’s equipment storage, lay down area, and employee parking. After the Combined Cycle Substantial Completion Date, Owner shall allow Contractor reasonable access to the applicable portion of the Site in order to achieve Final Completion.

4.3 Permits . Owner shall be responsible for obtaining, renewing and maintaining the permits, licenses, approvals and certifications necessary for the operation, maintenance, use and ownership of the Facility, including the permits listed in Exhibit E (collectively, the “Owner Permits” ). Contractor shall provide Owner with all reasonably necessary information, documents, data, criteria and performance characteristics of the Facility requested or required by Owner to assist Owner in obtaining Owner Permits.

4.4 Owner Equipment . Owner shall procure and provide Owner Equipment by the dates set forth in the Schedule to prevent delay. Except to the extent that the failure of any Owner Equipment to be provided by the dates set forth in the Schedule or to perform in accordance with its manufacturer’s specifications is caused by Contractor’s failure to perform its obligations in accordance with this Agreement, any impact to Contractor from the delay (or re-sequence) in delivery or performance of Owner Equipment shall give rise to a Change.

4.5 Fuel and Utilities . Owner shall provide, at no cost to Contractor, the electrical interconnect for power export from the Facility at the interconnection points identified in Exhibit A-1 , and all fuel necessary for Commissioning and Performance Testing when requested by Contractor and as required in accordance with the Schedule. Commencing on the Simple Cycle Substantial Completion Date, [*] for the operation of the Simple Cycle Facility. Commencing on the Combined Cycle Substantial Completion Date, [*]

4.6 Operation and Maintenance Staff . Not less than [*] prior to the [*] Date as set forth in the Schedule, Owner shall provide, under the direction of Contractor through Simple Cycle Substantial Completion, at no cost to Contractor, the complement of qualified operation and maintenance personnel for applicable Commissioning, Performance Testing and operation of the Simple Cycle Facility. At the earlier of: (a) six months prior to the [*] Completion Date as set forth in the Schedule, or (b) the actual date of Combined Cycle Mechanical Completion, Owner shall provide, under the direction of Contractor through Combined Cycle Substantial Completion, at no cost to Contractor, the complement of qualified operation and maintenance personnel for applicable Commissioning, Performance Testing and operation of the Combined Cycle Facility. In addition, Owner, at its cost, shall ensure that an adequate number of qualified representatives from those suppliers supplying Owner Equipment are present at Commissioning or Performance Testing as necessary for technical assistance.

 

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4.7 Job Site Rules . From the date on which Owner provides Contractor access to the Site to perform the Work until the Simple Cycle Substantial Completion Date and from the Combined Cycle Tie-In Access Date until the Combined Cycle Substantial Completion Date, Owner, its representatives and agents shall abide by all reasonable Site safety rules promulgated by Contractor.

4.8 Payment . In accordance with the terms and conditions of this Agreement, Owner shall pay Contractor the Contract Price. Owner shall make all payments promptly when due.

5. EQUIPMENT AND WORKMANSHIP

5.1 Quality of Equipment and Workmanship . All Equipment and workmanship shall be subject to such tests as Owner may reasonably require at the place of manufacture, fabrication or preparation, or at the Site or at such other place or places as may be mutually agreed upon by the Parties, including any place of an independent third party. Contractor shall provide such assistance, labor, electricity, fuels, stores, apparatus and instruments as are reasonably required for examining, measuring and testing any Equipment and Owner Equipment (other than specialty tools as listed in Owner Equipment Contracts) and workmanship, before incorporation into the Facility.

5.2 Cost of Tests .

(a) Subject to the last sentence of Section 10.4 , the cost of conducting any test related to the Work shall be [*]

(b) If the results of any such test indicate that the applicable Equipment or workmanship do not conform to the requirements of this Agreement (including the Specifications and Prudent Industry Practices) and Owner has reasonable grounds to suspect that any other similar Equipment or workmanship may not conform to the requirements of this Agreement (including the Specifications and Prudent Industry Practices), Owner may require Contractor to carry out further tests, which in the reasonable opinion of Owner are necessary to verify that such other similar Equipment or workmanship conforms to the requirements of this Agreement (including the Specifications and Prudent Industry Practices). The costs of any such tests shall be borne by [*] and shall be borne by [*]

5.3 Samples . At the reasonable request of Owner and at Owner’s cost, Contractor shall supply Owner with samples of Equipment (for which samples can reasonably be provided). The manufacturer’s standard samples (with relevant information) and any additional samples shall be labeled as to origin and intended use in the Facility.

5.4 Inspection of Operations . Owner (and its representatives) shall at all reasonable times have access to the Site and to all workshops and places where Equipment or Owner Equipment is being manufactured, fabricated or prepared for the Facility. Contractor shall provide Owner a reasonable opportunity to be present for any tests of any Equipment or Owner Equipment.

 

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5.5 Examination of Work before Covering . For certain agreed parts of the Work as set forth in Exhibit A-1 , Contractor shall give notice to Owner whenever any such part of the Equipment or Owner Equipment, as applicable, or foundations is or are ready or about to be ready for examination and Owner shall, without unreasonable delay, attend (or inform Contractor that it is unnecessary for it to attend) for the purpose of examining and measuring such part of the Equipment or Owner Equipment, as applicable, or of examining such Work. No part of such Equipment or Owner Equipment shall be covered up or put out of view without affording Owner a reasonable opportunity to examine and measure any such part of the Equipment or Owner Equipment.

5.6 Uncovering and Making Openings . If, following discovery of defective workmanship or materials in any part of the Work, Owner has reasonable grounds to suspect that further parts of the Work may be similarly defective, Contractor shall, upon the reasonable request of Owner, provide Owner clear evidence that such other parts are not defective to the reasonable satisfaction of Owner or shall uncover such further parts of the Work or make further openings, in or through the same, and Contractor shall inspect and repair, if necessary, any such parts. The costs of such work carried out by Contractor under this Section shall be part of the [*] unless the parts of the Work so uncovered turn out to be not defective, in which case Owner shall bear such costs.

6. SCHEDULE

6.1 Commencement of Work . Upon receipt of the Limited Notice to Proceed, Contractor shall commence the performance of the Work described in such Limited Notice to Proceed, or, if no Limited Notice to Proceed is given, Contractor shall commence the performance of the Work upon its receipt of the Full Notice to Proceed, and thereafter continuously and diligently fulfill its obligations under this Agreement. Contractor shall perform its obligations under this Agreement in accordance with the Schedule set forth in Exhibit B , as such may be modified and updated from time to time in accordance with the terms of this Agreement.

6.2 Schedule Requirements; Updates . A true and correct copy of a summary level Schedule, along with Key Contractor Schedule Milestones, is attached as Exhibit B . The Parties agree that the Schedule and the Key Contractor Schedule Milestones within the Schedule reflect dates for completion of Work activities by Contractor in order to meet the Targeted Simple Cycle Substantial Completion Date and the Targeted Combined Cycle Substantial Completion Date. In addition, Contractor shall prepare and make available to Owner at all times at the Site, or such other location mutually agreed upon by the Parties, a current, working copy of the detailed Schedule depicting all critical path activities and illustrating the progress which has been made on the Work against the Schedule (in hard copy and electronic format), including critical path activities interconnected by schedule logics, for Owner’s review and comment. Unless otherwise mutually agreed upon by the Parties, Contractor shall update the working copy of the Schedule monthly and shall provide a copy to Owner at the Progress Meeting; provided , however , that no update of or revisions to the working copy of the Schedule shall be deemed to alter, revise or otherwise change the date for any Key Contractor Schedule Milestones, the Guaranteed Simple Cycle Substantial Completion Date, the Guaranteed Combined Cycle Substantial Completion Date or the Guaranteed Final Completion Date, all of which shall be amended only by a duly executed Change Order or amendment hereto.

6.3 [*]

(a) [*]

 

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[*]

(b) [*]

(c) [*]

7. CONTRACT PRICE; COMPENSATION AND PAYMENT

7.1 [*]

(a) [*]

 

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[*]

(b) Limited Notice to Proceed Work . Upon receipt of a Limited Notice to Proceed from Owner, Contractor shall commence the performance of the Services as agreed in such Limited Notice to Proceed and shall continuously and diligently perform such Services pursuant to this Agreement as outlined in such Limited Notice to Proceed until such time as Owner issues a Full Notice to Proceed. Contractor hereby acknowledges and agrees that a portion of the Work includes Work performed by Contractor under the [*], which Work has already been paid by Owner thereunder and is not included as part of the [*] or [*].

(c) Full Notice to Proceed Work . Each Party shall, in good faith, cooperate with the other and use all commercially reasonable efforts to expeditiously update, in accordance with the

 

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[*], the [*] in order to [*] Upon issuance of the Full Notice to Proceed by Owner, Contractor shall commence the performance of all Services and shall continuously and diligently perform all Services and its other obligations under this Agreement.

(d) [*]

(e) [*]

7.2 Determination of Monthly Payments of Contract Price .

 

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(a) [*] Payment Invoice . [*] shall submit to Owner [*] for payment of the amount set forth in the Cash Flow Plan for such month and any other additions or deductions that may have become due, and subject to any limitations, under this Agreement, including those under Sections 7.2(b) , 7.3(a) , 7.3(b) and 7.5 . Submittal of each Monthly Payment Invoice shall constitute a representation by Contractor that (x) Contractor has performed and completed all Work included in each Cost Comparison Report previously provided hereunder, (y) [*] previously provided hereunder have been calculated and determined in accordance with the requirements of this Agreement, and (z) the amounts included in such [*] Payment Invoice for the current month are the correct amounts due and owing to Contactor in accordance with this Article 7 and [*]

(b) [*]

(c) [*]

 

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[*]

7.3 [*]

7.4 Deficient Invoices and Payments .

 

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(a) If any [*] is deficient, Contractor shall be required to resubmit that [*] in proper form; provided , however , that Owner shall pay any portion of it that is not deficient or subject to dispute. Owner shall review each [*] and shall endeavor to make exceptions, if any, by providing Contractor with written notice by the earlier of (i) such date the Monthly Payment Invoice is paid by Owner or (ii) [*] Days after Owner receives the [*]. Notwithstanding anything in this Article to the contrary, the failure of Owner to raise an exception shall not preclude Owner from subsequently seeking, and Contractor from paying, a refund of any amounts to which Contractor was not entitled under this Agreement, and Owner may, by any payment pursuant to Section 7.2 , make any correction or modification that should properly be made to any amount previously considered due.

(b) If Owner provides no exceptions within such time period, Owner shall pay Contractor, within [*] Days of its receipt of such [*] and such substantiating documentation and materials as Owner may have reasonably required, in U.S. dollars the amounts designated in such [*], plus any additions and less any deductions which may have become due under this Agreement, as reflected in such [*]. Any amount of a [*] that Owner disputes shall be resolved promptly in accordance with Article 28 . Once the dispute is resolved, Owner or Contractor, as applicable, shall pay any amount owing promptly after the date of the final resolution. If for any reason Owner fails to pay Contractor for all sums due and owing (other than sums that are the subject of a good faith dispute or permitted to be withheld pursuant to this Section 7.4(b) ) within [*] Days after receipt of a substantiated [*] which complies with the requirements of this Article, interest shall thereafter accrue on such sums due and owing at the [*] until paid.

(c) If any Services performed or Equipment supplied by Contractor for which payment has been made hereunder is not in accordance with this Agreement, Owner may withhold from any Monthly Payment Invoice the cost of rectification or replacement until such rectification or replacement has been completed, and, if Contractor is failing to perform any Services or provide any Equipment in accordance with this Agreement and Owner has so notified Contractor in writing, Owner may withhold from any Monthly Payment Invoice the estimated value of such Work until it has been performed or provided in accordance with this Agreement.

7.5 [*]

(a) [*]

 

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Contractor in prior [*] and the amount of such [*] that exceeds the [*] threshold, together with the total cumulative amounts for all prior Monthly Payment Invoices, will not cause the Contractor to exceed the total cumulative value of the Cash Flow Plan through such month, then Owner shall pay such Monthly Payment Invoice in full. [*]

(b) The Parties acknowledge that nothing in this Section limits, and the Parties shall not construe this Section as limiting, Contractor’s ability to accelerate Key Contractor Schedule Milestones, provided that Owner shall not be obligated to pay more than the [*] Amount for any given month. The Parties also acknowledge and agree that nothing in this Section limits, and the Parties shall not construe this Section as limiting, Contractor’s ability to update the Schedule, other than delaying the Key Contractor Schedule Milestones, in accordance with Section 6.2 .

7.6 Final Payment . Upon achievement of Final Completion, Contractor shall submit to Owner an invoice for the final payment and other payments due under this Agreement (the “Final Payment Invoice” ) which shall set forth all remaining amounts due to it pursuant to this Agreement. When submitting the Final Payment Invoice, Contractor shall submit a written notice, reasonably satisfactory to Owner, confirming that the total of the applicable Final Payment Invoice represents full and final settlement of all monies due to Contractor under this Agreement. If requested by Owner, the Final Payment Invoice shall also include a waiver (or a bond if a Lien exists to indemnify Owner against such Lien) of any Liens; provided , that the waiver or bond may contain a requirement that Owner pay such Final Payment Invoice. The procedures set forth in Section 7.2(b) (including application of any late payment charge) shall be followed for payment of the applicable Final Payment Invoice, and Owner shall be entitled to offset against any Monthly Payment Invoice or Final Payment Invoice any amounts owing by Contractor to Owner under this Agreement, including any Liquidated Damages owed after application of the cost sharing provisions in Section 7.3 .

7.7 Certification by Contractor . In each Monthly Payment Invoice and in the Final Payment Invoice, Contractor shall certify as follows:

“There are no known Liens (or such Liens are bonded over) outstanding at the date of this invoice, all amounts that are due and payable to any third party (including Subcontractors) with respect to the Work as of the date of this invoice have been paid or are included in the amount requested in this invoice, and, except for those bills not paid but so included and amounts disputed between Owner and Contractor, there is no known basis for the creation of any Liens, except in respect to payments to any Subcontractor withheld for proper reasons in accordance with the contract with such Subcontractor. Contractor hereby waives and releases, to the extent of the receipt of payment requested in this invoice, any right to any Lien with respect to payment for such portion of the Work included in this invoice.”

7.8 No Acceptance by Payment . Owner’s payment of any invoice, including a Final Payment Invoice, does not constitute approval or acceptance of any item or cost in that invoice nor shall be construed to relieve Contractor of any of its obligations under this Agreement.

 

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7.9 Revenue from Use of Facility . Owner shall be entitled to all revenue derived from or in connection with operation or use of the Facility before and after each of the Simple Cycle Substantial Completion Date and the Combined Cycle Substantial Completion Date.

8. CHANGE ORDERS

8.1 Changes . Without invalidating this Agreement, Owner may order changes in the Specifications or the Work consisting of additions, deletions or other revisions (each, a “Change” ), provided , that Owner may not delete all Work through this Article.

8.2 Change Proposals . If Owner desires to make a Change, it shall submit a written proposal to Contractor describing the Change requested. Contractor shall promptly review Owner’s proposal and submit to Owner an estimate of the cost to develop a Change Order for such Change, such development costs to be determined [*] the estimated costs to develop the Change Order are reasonably acceptable to Owner, Owner shall promptly provide notice thereof to Contractor in writing. Upon receipt of such notice, Contractor’s Project Manager shall promptly notify Owner in writing, as soon as practicable, either by giving reasons why Contractor, either directly or indirectly through a Subcontractor, could not effect such Change (if this is the case) or by submitting a proposed Change Order, which shall include in reasonable detail:

(a) the effect and impact, if any, that the Change would have, in Contractor’s reasonable judgment, on the Work, [*] the Schedule, any warranties herein and the operation or maintenance of the Facility,

(b) Contractor’s proposal for any necessary modifications to Work, [*] the Schedule or any warranties herein, and

(c) Contractor’s proposal for any necessary modifications to any other provisions of this Agreement, including the Specifications, the Milestones, the Cash Flow Plan or the Performance Guarantees.

Contractor shall provide Owner such supporting documentation for the foregoing as Owner may reasonably request. Notwithstanding the foregoing, Contractor shall not, as a result thereof, be entitled to any payment hereunder or any extension of the Schedule if such Change was necessary as a result of the fault of Contractor, including any breach by Contractor of this Agreement. For all proposed Change Orders to the scope of Work which occur after the [*] the Parties agree that the Contractor shall apply or deduct, as applicable, [*] to implement or remove such scope of Work, as applicable. Owner shall, as soon as practicable after receipt of such submittal and supporting documentation, respond with any comments or questions. Contractor shall not delay any Work while awaiting a response. If Owner responds with comments or questions, Contractor shall endeavor to address such comments or answer such questions as soon as practicable. If Owner decides not to proceed with a Change, it shall reimburse Contractor for its efforts in developing the estimates and other information regarding the potential Change, [*] (such reimbursement to be either outside the Contract Price or through

 

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a separate Change Order); provided , that Owner shall only be required to reimburse Contractor if Contractor has complied with the cost proposal requirements set forth above.

8.3 Change Orders . If Owner wishes to proceed with the Change, Owner shall issue a written order to Contractor authorizing the Change and setting forth any revisions to this Agreement that it deems, in good faith, necessary or appropriate to effect the Change (the “ Change Order ”). If Contractor refuses to accept such revisions in the Change Order, Contractor shall provide Owner written notice thereof within ten (10) Business Day of its receipt of the Change Order, describing in reasonable detail its objections to the Change Order. Owner shall be entitled, despite such notice from Contractor, to require Contractor to continue to perform its obligations hereunder as would be modified by the Change Order; provided, that, if Owner requires Contractor to so perform and Contractor has provided Owner timely notice objecting to such Change Order, (x) the Parties shall resolve the Dispute over the necessary or appropriate revisions in accordance with the dispute resolution procedures set forth in Article 28 and (y) if the Change involves additional or disputed Work, Owner shall continue to pay Contractor pursuant to the payment terms hereof based, subject to resolution of the Dispute pursuant to Article 28 (Owner may require any dispute over price to be resolved pursuant to an “open book” process), on the [*] Once the Dispute is resolved, any amount owing will be paid within thirty (30) Days after the date of resolution. Contractor shall furnish to Owner such receipts or other vouchers as may be necessary to prove the amounts paid and labor performed [*] and, before ordering materials, shall submit to Owner quotations for the same for Owner’s approval (such approval not to be unreasonably delayed or withheld). Promptly after the end of each month, Contractor shall deliver to Owner a priced statement of the labor and materials used during such month associated with such Change performed on a [*] basis.

8.4 Owner Caused Changes . If Contractor experiences an increase in costs or a delay in Contractor’s ability to perform the Work due to Owner or due to a delay in the delivery of any Owner Equipment or a delay resulting from a defect in any Owner Equipment or a breach of the Owner Equipment Contracts by the suppliers of the Owner Equipment, and such delay or defect is not the result of Contractor’s failure to comply with the requirements of this Agreement, Contractor shall be entitled to a Change and an equitable adjustment in the [*] and/or the Schedule.

8.5 Contractor Proposed Changes . Contractor shall have the right to request a Change but shall have no right to require a Change which is not contemplated by this Agreement without the prior written consent of Owner; however, nothing herein shall be construed to restrict Contractor’s right to request an equitable adjustment in the [*] and Schedule to mitigate impacts caused by events such as, but not limited to, Force Majeure and Change in Law.

9. FORCE MAJEURE

9.1 Event of Force Majeure . The performance by Owner or Contractor under this Agreement shall be excused to the extent that such Party’s performance is delayed or prevented by reason of an event of Force Majeure. If a Party is or will be reasonably prevented from performing its obligations under this Agreement by an event of Force Majeure, such Party shall use all commercially reasonable efforts to remove the cause affecting such non-performance and to minimize and mitigate any delay in or impact upon the performance of this Agreement or any damage to or other impact upon the Equipment or the Owner Equipment. If an event of Force Majeure occurs, the Parties shall [*] to: (a) [*] for a period of time reasonably necessary to overcome

 

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the effect of the delay, and (b) the Contract Price, [*] provided , that Contractor shall [*] on Change Orders which result from an event of Force Majeure.

9.2 Notice . If a Party is or will be reasonably prevented from performing its obligations under this Agreement by an event of Force Majeure, then it shall notify the other Party of the obligations, the performance of which is or will be prevented, and the nature and cause of the event in writing within [*] after the notifying Party or its Project Manager becomes aware, through the exercise of reasonable diligence, of the event of Force Majeure. The Party affected by an event of Force Majeure shall provide the other Party with weekly updates (a) estimating its expected duration, the cost of any remedial action, and the probable impact on the performance of its obligations hereunder, (b) of the actions taken to remove or overcome the event of Force Majeure and (c) of the efforts taken to mitigate or limit damages to the other Party. The Party affected by an event of Force Majeure shall also provide written notice to the other Party when it ceases to be so affected.

9.3 Suspension; Termination Due to Force Majeure . If any event of Force Majeure claimed by Contractor delays Contractor’s performance for an aggregate time period greater than [*] consecutive Days, then Owner, in its sole and absolute discretion, shall have the right to terminate this Agreement (or the affected portion of the Work) without penalty in accordance with Section 23.7 . If any event of Force Majeure claimed by Owner delays Contractor’s performance of substantially all of the Work for an aggregate time period greater than [*] consecutive Days, then Contractor, in its sole and absolute discretion, shall have the right to suspend performance and demobilize under this Agreement without penalty in accordance with Section 23.7 . If any event of Force Majeure claimed by Owner delays Contractor’s performance of substantially all of the Work in any [*] time period for an aggregate time period greater than [*] Days, then Contractor, in its sole and absolute discretion, shall have the right to terminate this Agreement without penalty in accordance with Section 23.7 .

10. MECHANICAL COMPLETION; PERFORMANCE TESTING; SUBSTANTIAL COMPLETION; FINAL COMPLETION

10.1 Mechanical Completion Inspection . At least thirty (30) Days prior to the date upon which Contractor expects Simple Cycle Mechanical Completion and Combined Cycle Mechanical Completion, respectively, Contractor shall notify Owner in writing thereof and shall take necessary measures to allow a preliminary inspection of the Simple Cycle Facility or the Combined Cycle Facility (as applicable) to be conducted by Owner and its representatives. Contractor shall include with such notice documents and information prudent or convenient for Owner to determine whether Simple Cycle Mechanical Completion or Combined Cycle Mechanical Completion, respectively, is achieved. If Owner notifies Contractor of any deficiencies in the Work, Contractor shall immediately remedy such deficiencies as part of the [*] and provide Owner with the relevant documentary evidence of the correction.

10.2 Simple Cycle Mechanical Completion . “Simple Cycle Mechanical Completion” shall be deemed to have occurred upon satisfaction of all of the following conditions:

(a) All materials, equipment and systems related to the safe start-up and testing of the Simple Cycle Facility shall have been constructed and installed in accordance with this Agreement, including the Specifications and applicable Laws, and in a manner that does not void any warranties, and the Equipment and Owner Equipment for the Simple Cycle Facility shall be mechanically and

 

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electrically sound, all required pre-operational testing for the Simple Cycle Facility shall have been satisfactorily completed, and all systems for the Simple Cycle Facility shall have been checked for alignment, lubrication, rotation and hydrostatic and pneumatic pressure integrity;

(b) All systems and components for the Simple Cycle Facility shall have been flushed and cleaned out as necessary, and the Equipment and Owner Equipment for the Simple Cycle Facility shall be ready to support the commencement of Performance Testing for the Simple Cycle Facility;

(c) The Parties shall have agreed upon the Testing Procedures for the Simple Cycle Facility;

(d) The Equipment and Owner Equipment for the Simple Cycle Facility shall be capable of being tested in accordance with Exhibit A-2 without damage thereto or any other portion of the Facility or to any property or injury to any Person and in compliance with all applicable Laws and all permits and licenses required by such Laws;

(e) Contractor shall have provided the applicable Documentation that is needed to start-up, operate and maintain the Simple Cycle Facility (including the Facility Manuals), which Documentation shall have been approved, in the reasonable determination of Owner, as adequate for the start-up, operation and maintenance of the Simple Cycle Facility (such approval not to be unreasonably withheld or delayed);

(f) Contractor shall have provided the training of Owner’s personnel and representatives as required by Exhibit A-1 for operation of the Simple Cycle Facility; and

(g) Contractor shall have delivered to Owner a certificate signed by Contractor certifying that all of the preceding conditions in this Section 10.2 have been satisfied.

Contractor shall not commence Performance Testing for the Simple Cycle Facility until all of the above conditions for Simple Cycle Mechanical Completion have been satisfied and Contractor shall have provided the required prior notice to Owner of the applicable Performance Testing and given Owner an opportunity to attend.

10.3 Performance Testing . As soon as reasonably practicable following each of Simple Cycle Mechanical Completion and Combined Cycle Mechanical Completion and after providing Owner at least five (5) Business Days prior written notice (unless Owner agrees to a shorter notice period or regulatory requirements necessitate a longer notice period), Contractor shall commence Performance Testing of the Simple Cycle Facility or the Combined Cycle Facility, as applicable. Owner and its agents, representatives and invitees, including any independent third party inspector and any of its other contractors for the Project or their respective agents, representatives and invitees, shall have the right to attend and witness the Performance Testing. After the completion of each Performance Testing for each of the Simple Cycle Facility and the Combined Cycle Facility, Contractor shall determine and submit to Owner, in writing and electronically, the raw data and completed results of such Performance Testing, together with a comparison of such results to the applicable Performance Guarantees and a statement whether such results satisfy the applicable Performance Guarantees. By submitting such raw data and completed results, Contractor represents that such raw data, and the conversion of such raw data into the test results, is accurate.

 

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10.4 Satisfaction of Performance Testing . Within [*] Days after it receives the results for all of the Performance Testing for each of the Simple Cycle Facility and the Combined Cycle Facility, including the underlying raw data and other information required by Section 10.3 , Owner shall respond in writing to Contractor stating whether (a) such Performance Testing was performed according to the Testing Procedures, and (b) the results of such Performance Testing satisfied the applicable Performance Guarantees, or, if Owner does not believe that is the case, Owner shall provide its reasons. Upon its receipt of any such response from Owner that is not in the affirmative, Contractor shall promptly take whatever action shall be necessary to cure the defect in such Performance Testing, adjust or modify any of the Equipment, or require adjustment or modification of Owner Equipment in accordance with Section 3.1(a)(ii) , or otherwise in order to satisfy the applicable Performance Guarantees so noted by Owner and shall promptly repeat such Performance Testing in accordance with Section 10.3 and this Section. If, following such Performance Testing, either: (a) Owner agrees that the applicable Performance Guarantees have been satisfied and that such Performance Testing was performed according to the Testing Procedures, (b) the failure to meet any applicable Performance Guarantee is attributable to the performance of Owner Equipment (other than due to Contractor’s failure to fulfill its obligations set forth in Section 3.1(a) ), or (c) Owner fails to respond within the time period set forth above, then the applicable Performance Guarantees shall be deemed to have been satisfied on the date of completion of such Performance Testing for the purposes of calculating the applicable Delay Liquidated Damages. Notwithstanding anything in this Article to the contrary, no agreement, confirmation, statement or otherwise of, or the lack thereof from, Owner relating to whether such Performance Testing was performed according to the Testing Procedures or whether the results of such Performance Testing satisfied the applicable Performance Guarantees shall relieve Contractor of any of its obligations under this Agreement. All costs that Contractor incurs in satisfying its obligations under this Article are part of the [*] except that Contractor shall be reimbursed through a Change Order for additional costs it may incur due to defects in Owner Equipment that are not the result of Contractor’s failure to comply with the requirements set forth in this Agreement or damage to Equipment included in the Simple Cycle Facility that was not the fault of Contractor or any Subcontractor, including for any repeat Performance Testing and the consumables and spare parts associated therewith.

10.5 Substantial Completion Punch List . Prior to each of Simple Cycle Substantial Completion and Combined Cycle Substantial Completion, Contractor shall submit to Owner, for Owner’s review and approval (not to be unreasonably withheld or delayed), the Substantial Completion Punch List. Following review and approval of such Substantial Completion Punch List, Contractor shall work diligently to complete all items contained thereon in a timely manner in accordance with this Agreement.

10.6 Simple Cycle Substantial Completion . “Simple Cycle Substantial Completion” shall be deemed to have occurred upon satisfaction of all of the following conditions:

(a) Simple Cycle Mechanical Completion shall have been achieved;

(b) The Simple Cycle Facility shall be capable of being operated in accordance with the Specifications without damage thereto or to any property or injury to any Person and in compliance with all Owner Permits, Laws and orders of all Government Authorities then in effect;

(c) Contractor shall have completed the Performance Testing for the Simple Cycle Facility and the results of such Performance Testing shall have satisfied the applicable Minimum

 

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Performance Guarantees, all according to the applicable Testing Procedures and the requirements of this Article 10 ;

(d) Contractor shall have completed the performance of the Services for the Simple Cycle Facility according to all of the provisions of this Agreement, with the exception of those items specified in the Substantial Completion Punch List, which Contractor shall have prepared and for which Contractor shall have received approval from Owner (such approval not to be unreasonably withheld or delayed);

(e) Contractor shall have delivered to Owner all Documentation for the Simple Cycle Facility that Contractor is required to deliver to Owner pursuant to Exhibit A-3 ; and

(f) Contractor shall have delivered to Owner a certificate signed by Contractor certifying that all of the preceding conditions in this Section have been satisfied.

Upon satisfaction of all of the foregoing conditions for Simple Cycle Substantial Completion, Owner shall accept the Simple Cycle Facility, subject to Combined Cycle Substantial Completion and Final Completion according to this Article 10 , by delivering to Contractor notice of that acceptance promptly, and Contractor shall turn over risk of loss and care, custody, control and operation of the Simple Cycle Facility to Owner. For the purposes of calculating Simple Cycle Liquidated Damages, the date upon which Contractor submits the certifying notice required by this Section 10.6 (if such notice is accurate) shall be deemed the Simple Cycle Substantial Completion Date.

To the extent that Simple Cycle Substantial Completion is not achieved by the Guaranteed Simple Cycle Substantial Completion Date as a result of the improper performance of any Owner Equipment or any other fault of any supplier of any Owner Equipment and Contractor has complied with its obligations relating to such Owner Equipment in accordance with Section 3.1(a)(ii) , Contractor shall be entitled to a Change Order providing, in addition to reimbursement of any increased costs incurred by Contractor, for an equitable extension to the Guaranteed Simple Cycle Substantial Completion Date.

10.7 Combined Cycle Mechanical Completion . “Combined Cycle Mechanical Completion” shall be deemed to have occurred upon satisfaction of all of the following conditions:

(a) All materials, equipment and systems related to the safe start-up and testing of the Facility shall have been constructed and installed in accordance with this Agreement, including the Specifications and applicable Laws, and in a manner that does not void any warranties, and the Equipment and Owner Equipment for the Combined Cycle Facility shall be mechanically and electrically sound, all required pre-operational testing for the Combined Cycle Facility shall have been satisfactorily completed, and all systems for the Combined Cycle Facility shall have been checked for alignment, lubrication, rotation and hydrostatic and pneumatic pressure integrity;

(b) All systems and components for the Combined Cycle Facility shall have been flushed and cleaned out as necessary, and the Equipment and Owner Equipment for the Combined Cycle Facility shall be ready to support the Combined Cycle Tie-In and the commencement of Performance Testing for the Combined Cycle Facility;

(c) The Parties shall have agreed upon the Testing Procedures for the Combined Cycle Facility;

 

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(d) The Equipment and Owner Equipment for the Combined Cycle Facility shall be capable of being tested in accordance with Exhibit A-2 without damage thereto or any other portion of the Facility or to any property or injury to any Person and in compliance with all applicable Laws and all permits and licenses required by such Laws;

(e) Contractor shall have provided the applicable Documentation that is needed to start-up, operate and maintain the Facility (including the Facility Manuals), which Documentation shall have been approved, in the reasonable determination of Owner, as adequate for the start-up, operation and maintenance of the Facility (such approval not to be unreasonably withheld or delayed);

(f) Contractor shall have provided the training of Owner’s personnel and representatives as required by Exhibit A-1 for operation of the Facility; and

(g) Contractor shall have delivered to Owner a certificate signed by Contractor certifying that all of the preceding conditions in this Section 10.7 have been satisfied.

Contractor shall not commence Performance Testing for the Combined Cycle Facility until all of the above conditions for Combined Cycle Mechanical Completion have been satisfied and Contractor shall have provided the required prior notice to Owner of the applicable Performance Testing and given Owner an opportunity to attend.

If Contractor is unable to satisfy any of the foregoing conditions as a result of any event or circumstance for which neither Contractor nor any Subcontractor is responsible that occurs during the period between the Simple Cycle Substantial Completion Date and the Combined Cycle Tie-In Access Date or as a result of the improper performance of any Owner Equipment or any other fault of any supplier of any Owner Equipment, and Contractor has complied with its obligations relating to such Owner Equipment in accordance with Section 3.1(a)(ii) , Contractor shall be entitled to a Change Order providing, at Owner’s election, that such condition is deemed to have been satisfied (but only to the extent Contractor is unable to satisfy such condition) or for an equitable adjustment to the Work, the [*] and the Schedule or otherwise as may be reasonable under the circumstances.

10.8 Combined Cycle Substantial Completion . “Combined Cycle Substantial Completion” shall be deemed to have occurred upon satisfaction of all of the following conditions:

(a) Combined Cycle Mechanical Completion and Combined Cycle Tie-In shall have been achieved;

(b) The Combined Cycle Facility shall be capable of being operated in accordance with the Specifications without damage thereto or to any property or injury to any Person and in compliance with all Owner Permits, Laws and orders of all Government Authorities then in effect;

(c) Contractor shall have performed Performance Testing for the Combined Cycle Facility and the results of such Performance Testing shall have satisfied the applicable Minimum Performance Guarantees, all according to the applicable Testing Procedures and the requirements of Article 10 ;

 

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(d) Contractor shall have completed the performance of the Services according to all of the provisions of this Agreement, with the exception of those items specified in the Substantial Completion Punch List, which Contractor shall have prepared and for which Contractor shall have received approval from Owner (such approval not to be unreasonably withheld or delayed);

(e) Contractor shall have delivered to Owner all Documentation that Contractor is required to deliver to Owner pursuant to Exhibit A-3 ; and

(f) Contractor shall have delivered to Owner a certificate signed by Contractor certifying that all of the preceding conditions in this Section have been satisfied.

Upon satisfaction of all of the foregoing conditions for Combined Cycle Substantial Completion, Owner shall accept the Combined Cycle Facility, subject to Final Completion according to this Article 10 , by delivering to Contractor notice of that acceptance promptly, and Contractor shall turn over risk of loss and care, custody, control and operation of the Combined Cycle Facility to Owner. For the purposes of calculating Combined Cycle Liquidated Damages, the date upon which Contractor submits the certifying notice required by this Section 10.8 (if such notice is accurate) shall be deemed the Combined Cycle Substantial Completion Date.

If Contractor is unable to satisfy any of the foregoing conditions as a result of any event or circumstance for which neither Contractor nor any Subcontractor is responsible or as a result of the improper performance of any Owner Equipment or any other fault of any supplier of any Owner Equipment and Contractor has complied with its obligations relating to such Owner Equipment in accordance with Section 3.1(a)(ii) , Contractor shall be entitled to a Change Order providing, at Owner’s election, that such condition is deemed to have been satisfied (but only to the extent Contractor is unable to satisfy such condition) or for an equitable adjustment to the Work, the [*] or otherwise as may be reasonable under the circumstances.

10.9 Final Completion . “ Final Completion ” shall be deemed to have occurred upon satisfaction of all of the following conditions:

(a) Contractor shall have achieved all conditions for Simple Cycle Substantial Completion and Combined Cycle Substantial Completion;

(b) Contractor shall have completed all Performance Testing and either (i) all Performance Guarantees shall have been satisfied according to the Testing Procedures, or (ii) Contractor shall have satisfied all of the Make Right Performance Guarantees and shall have satisfied its Performance Liquidated Damage obligations as required by Section 12.2 for those Performance Guarantees that allow a performance buy-down;

(c) The performance of the Services (except for Services relating to any warranty Work) shall be one hundred percent (100%) complete, including the completion (or buying down) by Contractor of all items on the Substantial Completion Punch List in accordance with this Agreement;

(d) Contractor shall have delivered to Owner the Documentation that Contractor is required to deliver to Owner pursuant to Exhibit A-3 dated as of the Final Completion Date;

 

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(e) There shall exist no Contractor Default and no event which, with the passage of time or the giving of notice or both, would be a Contractor Default; and

(f) Contractor shall have delivered to Owner a certificate signed by Contractor certifying that all of the preceding conditions in this Section have been satisfied.

11. OWNER’S RIGHT TO OPERATE

11.1 [*] Upon the Simple Cycle Substantial Completion Date, Owner shall take care, custody and control of the Simple Cycle Facility and shall have the right, in its sole and absolute discretion, to operate the Simple Cycle Facility without interference from the Work for up to [*] Days, provided that Owner shall continue to provide Contractor reasonable access to the Site, in order for Contractor to complete the Work listed on the Substantial Completion Punch List and to complete the Work necessary in order to complete the Combined Cycle portion of the Work. Owner shall notify Contractor of the Combined Cycle Tie-In Access Date, which shall occur no later than such [*] Day, at which time Contractor shall, as expeditiously as reasonably practicable, effect the Combined Cycle Tie-In. Notwithstanding the foregoing, if Contractor is not ready to effect the Combined Cycle Tie-In by such [*] Day, Owner shall have the right to continue to operate the Simple Cycle Facility until such date as Contractor is, and has notified Owner that it is, prepared to effect the Combined Cycle Tie-In. If Owner elects to operate the Simple Cycle Facility without permitting the Combined Cycle Tie-In for a period in excess of [*] Days or otherwise notifies Contractor in writing that it is not ready for Contractor to effect the Combined Cycle Tie-In by such [*] Day, Contractor shall be entitled to a Change Order providing for an equitable extension to the Guaranteed Combined Cycle Substantial Completion Date.

11.2 Owner’s Right to Operate Prior to Satisfaction of Performance Guarantees . If the Simple Cycle Facility or the Combined Cycle Facility fails to satisfy the applicable Performance Guarantees during the applicable Performance Testing or fails to achieve Simple Cycle Substantial Completion by the Guaranteed Simple Cycle Substantial Completion Date or Combined Cycle Substantial Completion by the Guaranteed Combined Cycle Substantial Completion Date and the Simple Cycle Facility or the Combined Cycle Facility can be operated in compliance with applicable Laws, Owner, in its sole discretion, shall have the right nonetheless to operate the Simple Cycle Facility or the Combined Cycle Facility and shall give Contractor written notice of its decision. If Owner elects to operate the Simple Cycle Facility or the Combined Cycle Facility and, during such time, does not permit Contractor to cure the Defects necessary to satisfy the applicable Minimum Performance Guarantees, then the Guaranteed Simple Cycle Substantial Completion Date, Guaranteed Combined Cycle Substantial Completion Date and Guaranteed Final Completion Date (if such dates have not passed) shall be extended on an equitable basis until such time as Owner tenders the Simple Cycle Facility or the Combined Cycle Facility to Contractor for further Services and Performance Testing, and Contractor shall be entitled to a Change Order for equitable schedule and/or price adjustment. Owner shall bear the risk of loss during such time as it operates the Simple Cycle Facility or the Combined Cycle Facility. Owner’s operation of the Simple Cycle Facility or the Combined Cycle Facility under this Section shall not reduce Contractor’s obligations under this Agreement, including Contractor’s obligation to cause each of the Simple Cycle Facility and the Combined Cycle Facility to satisfy the Specifications and applicable Performance Guarantees, except for normal wear and tear and operation not in accordance with the Specifications or Prudent Industry Practices. Notwithstanding anything to the contrary, if Owner elects to operate the Facility for more than [*] as contemplated in this Section 11.2, and such election to operate

[*] Redacted type.

 

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prevents Contractor from proceeding timely with curing any Defects during such operating time, then the degradation curves set forth in Exhibit A-2 shall apply.

12. [*]

12.1 [*]

[*] Redacted type.

 

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[*]

12.2 [*]

[*] Redacted type.

 

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[*]

12.3 [*]

12.4 Payment . The [*] specified in Sections 12.1 and 12.2 , if owing following the application of the provision of Section 12.3 , shall be due and payable [*] after written demand by Owner. [*] that remain unpaid after the expiration of such ten-Day period shall bear interest at the Prime Interest Rate plus 4% per annum or the highest rate allowed by applicable Law, whichever is less. Any [*] disputed by Contractor and determined to be payable pursuant to the resolution of such dispute in accordance with this Agreement shall also bear interest from the expiration of the ten-Day period referred to above at the Prime Interest Rate plus 4% per annum or the highest rate allowed by applicable Law, whichever is less. Notwithstanding the assessment of interest, and in addition to its other rights and remedies, Owner shall have the right to offset the amount of any [*] plus interest against any amounts due or that may become due to Contractor under this Agreement. Any amounts of [*] determined to be wrongfully assessed against Contractor by Owner shall bear interest, from the time such amounts were paid by Contractor or offset by Owner, at the Prime Interest Rate plus 4% per annum or the highest rate allowed by applicable Law, whichever is less.

13. WARRANTY

13.1 Services Warranty Period . Contractor warrants that all Services will be performed in a professional and workmanlike manner, will conform to the requirements of this Agreement, including the requirements set forth in Section 3.1(a)(ii) , and will reflect competent professional knowledge and judgment for a period commencing on the date such Service was performed and ending [*] after the Combined Cycle Substantial Completion Date (the “Services Warranty Period” ), provided that the Services Warranty Period for each Service performed with respect to the Substantial Completion Punch List shall commence upon Contractor’s completion of, and Owner’s acceptance of, such Service and shall continue for a period of [*] thereafter or after the Combined Cycle Substantial Completion Date, whichever is later.

[*] Redacted type.

 

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13.2 Equipment Warranty Period . Contractor warrants that the following Equipment furnished to Owner will be free from Defects in workmanship and material and will conform to this Agreement, including the Specifications:

(a) for Equipment t