EXHIBIT 10.137 ENGINEERING, PROCUREMENT AND CONSTRUCTION AGREEMENT

ENGINEERING, PROCUREMENT AND CONSTRUCTION AGREEMENT
TABLE OF CONTENTS

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LIST OF EXHIBITS

A.        Scope of Work

B.         Work Progress Schedule

C.        Rate Schedule

D.        Form of Change Order

E.         (1) Form of Partial Lien Waivers and Release,

            (2) Form of Final Lien Waiver and Release

F.         (1) Form of Substantial Completion Certificate

            (2) Form of Final Completion Certificate

G.        Target Performance Criteria

H.        List of Major Subcontracts and Subcontractors

I.          Permits

J.          Owner's Drug and Alcohol Policy

K.        Procedure for Assessment of Existing Work

L.         Owner-Furnished Property

M.        Plant Site and Site Descriptions

N.        Target Cash Flow Budget

O.        Form of Performance Security

P.         Form of Monthly Progress Report

Q.        Key Personnel

R.         Target Price Summary           

ENGINEERING, PROCUREMENT AND CONSTRUCTION AGREEMENT

THIS ENGINEERING, PROCUREMENT AND CONSTRUCTION AGREEMENT (this "Agreement") effective the 24th day of February 2005 ("Effective Date"), is by and among FLUOR ENTERPRISES , INC. a California corporation (hereinafter referred to as the "Contractor") and PHELPS DODGE ENERGY SERVICES, LLC, a Delaware limited liability company, PNMR DEVELOPMENT AND MANAGEMENT CORPORATION , a New Mexico corporation, and TUCSON ELECTRIC POWER COMPANY , an Arizona corporation (hereinafter collectively referred to as "Owner").  Contractor and Owner may be referred to collectively as the "Parties" or individually as a "Party".

RECITALS

WHEREAS , Contractor has represented to Owner that it is specifically qualified to perform engineering, procurement, construction, testing, start-up and commissioning services of the nature contemplated by this Agreement; and

WHEREAS , Owner desires to engage Contractor to perform engineering, procurement,  construction, testing, start-up, and commissioning services related to the partially-constructed Luna Energy Facility, a nominal 570 MW gas-fired combined cycle power plant to be completed in Deming, New Mexico, and Contractor desires to perform such services for Owner;

NOW THEREFORE , in consideration of the mutual terms, covenants and conditions set forth in this Agreement, Contractor and Owner agree as follows:

ARTICLE 1

DEFINITIONS

In addition to other defined terms contained in this Agreement, the following terms shall have the meaning specified below in this Article .

1.1              "Affiliate" .   of a Party means any other entity directly or indirectly controlling or controlled by or under direct or indirect common control with such Party.  For the purposes of this definition, control means the power to direct the management or policies directly or indirectly whether through the ownership of voting securities or otherwise.

1.2              " Applicable Codes and Standards " .   shall mean the codes, standards or requirements set forth in Exhibit A applicable to the Work.

1.3              "Applicable Law" .   shall mean any law, including but not limited to Environmental Laws, statute, code, order, decree, injunction, license, permit, consent, approval, agreement or regulation of any federal, state, tribal or local government, department, court, office, agency, board or commission having jurisdiction over a Party or any portion of the Work

1.4              "Business Day" .    means a day other than Saturday, Sunday, or a day on which banks are authorized to close in New Mexico, Texas or Arizona.

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1.5              "Change Order" .   means a written instrument, in substantially the form attached hereto as Exhibit D , signed by Owner and Contractor in accordance with Article 5.

1.6              "Contamination" .   means any Hazardous Material present at the Site or which has been brought to the Site by a party other than Contractor or its Subcontractors.

1.7              "Contract Completion Date" .   means May 1, 2006, as may be adjusted pursuant to the Agreement.

1.8              "Contract Documents " .   means this Agreement plus all attachments, exhibits, specifications, schedules, and drawings and any Change Orders or amendments thereto.

1.9              "Contract Sum" .   is the sum through the applicable True-Up Date of the actual amounts for (a) Reimbursable Costs paid by Owner that are chargeable against the Target Price plus (b) other amounts incurred or paid by Owner in accordance with this Agreement that are chargeable against the Target Price.

1.10          "Contractor's Project Director" or "Project Director" .   shall be the person identified in Article 7.2 .

1.11          "D/FD Engineering Services" .   shall have the meaning set forth in Article 6.2.

1.12          "Disclosing Party" .   shall mean the Party disclosing information in Article 16.2 .

1.13          "Engineering Services" .   shall have the meaning set forth in Article 6.2 .

1.14          "Environmental Laws" .   mean all federal, state and local laws, rules, regulations and ordinances governing, regulating or relating to public health, pollution, or the protection of the environment, including, but not limited to, the laws and regulations promulgated pursuant to:  the Resource Conservation and Recovery Act of 1976, 42 U.S.C. § 6901 et seq., as amended, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. § 9601 et seq., as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. § 9601 et seq., as amended, the Federal Water Pollution Control Act, 33 U.S.C. § 1251, et seq., as amended, the Clean Air Act, 42 U.S.C. § 7401 et seq., as amended, the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq., as amended, the Hazardous Materials Transportation Act, 49 U.S.C. § 5101 et seq., as amended, the Safe Drinking Water Act, 42 U.S.C. § 300f et seq., as amended, the National Environmental Policy Act, 42 U.S.C. § 4321 et seq., as amended, and the Emergency Planning and Community Right-to-Know Act, 42 U.S.C. § 11001 et seq., as amended , the New Mexico Water Quality Act, §74-6-1 et seq., as amended, the New Mexico Air Quality Act, § 74-2-1 et seq., as amended, the New Mexico Hazardous Waste Act, §74-4-1, et seq., as amended, the New Mexico Solid Waste Act, §74-9-1, et seq., as amended, the New Mexico Ground Water Protection Act, § 74-6B-1, et seq., as amended, and the New Mexico Hazardous Chemicals Information Act, §74-4D-1, et seq., as amended, together with all applicable similar and related federal, state and local laws, rules, regulations and ordinances, as may be amended from time to time.

1.15          "Existing Work " .   shall mean those portions of the Facility constructed and existing as of the Effective Date together with Owner-Furnished Property.

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1.16          " Facility" .    means the combined cycle power plant known as Luna Energy Facility, in Deming, New Mexico, including without limitation all equipment, materials, fuel and water supply systems, discharge equipment and all other ancillary equipment located at the Site.

1.17          "Facility CPM Schedule" .   shall have the meaning set forth in Article 3.2.2 .

1.18          "Fee" .   shall have the meaning set forth in Article 4.3 .

1.19          "Final Completion" .   shall have the meaning set forth in Article 10.5.1.

1.20          "Fully Dispatchable Facility" .    shall mean a reliable power generation facility capable of starting and operating in accordance with manufacturers' recommendations, Applicable Law and generally accepted operating practices without excessive trips or significant periods of downtime and as further described in Exhibit A . 

1.21          " Good Engineering and Construction Practices" or " GECP " .   shall mean that degree of skill and judgment and the utilization of practices, methods, and techniques and standards that (a) are generally expected of skilled and experienced engineering and construction firms in the electric power industry in the United States of America and commonly used by such firms to design, engineer, construct, commission, and test power and related facilities similar to the Facility and (b) conform in all material respects to the recommendations and guidelines of the suppliers and manufacturers of the equipment comprising the Facility, taking into account such equipment's size, service and type, so that such equipment may be operated in compliance with any applicable warranty, in compliance with Applicable Laws, and in a manner that consistent with preserving the reliability and availability of the Facility under the operating conditions reasonably expected at the Site. 

1.22          "Hazardous Materials" .   mean any hazardous, toxic, or polluting substance, material or waste as defined or regulated under any Applicable Law and other substances, materials or wastes that, even if not so defined or regulated, reasonably could be anticipated to pose a hazard to human health and safety or to the environment.

1.23          "Key Personnel" .   shall mean those Contractor positions identified in Article 2.21 .

1.24          "Major Subcontracts" .   means all of the contracts between Contractor and Major Subcontractors.

1.25          "Major Subcontractors" .   means those Subcontracts set forth in Exhibit H and any other Subcontractor with a scope of work, whether through one contract or several contracts, having consideration due to such Subcontractor equal to or greater than $1,000,000.

1.26          "Mechanical Completion" .    shall have the meaning set forth in Article 10.1 .

1.27          "Notice to Proceed" .   means that notice issued by Owner in accordance with Article 3.1 .

1.28          "Owner Event of Default" .   shall have the meaning set forth in Article 11.7 .

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1.29          "Owner-Furnished Property " .   means that certain property, real and personal, owned, leased or otherwise controlled by the Owner associated with the Existing Work and the Facility and furnished to Contractor pursuant to Article 2.24.2 , including, but not limited to, those items described in Exhibit L, which are intended to be all of the materials and equipment necessary for the Facility except as identified in Attachment 1 to Exhibit L. 

1.30          " Owner", " Owner Party" or "Owner Parties" .    means , PNMR Development and Management Corporation, Tucson Electric Power Company and Phelps Dodge Energy Services, LLC, individually or collectively, as the context requires, including their respective successors and permitted assigns .

1.31          "Owner's Project Manager " .   means the person identified pursuant to Article 7.1 .

1.32          "Overrun" .   shall have the meaning set forth in Article 4.4.2.

1.33          "Performance Security" .   means a guaranty from Fluor Corporation in the form set forth in Exhibit O and provided by Contractor to Owner pursuant to Article 4.12 .

1.34          "Performance Tests " .   means those tests performed in accordance with Exhibit A.

1.35          " Plant Site " .   means the location where the generating station is situated as more particularly described on Exhibit M .

1.36          "Punch List" .   means a listing of all incomplete or deficient Work, identified by Owner or identified by Contractor as Punch List items.

1.37          "Rate Schedule" .   means the schedule set forth in Exhibit C .

1.38          "Receiving Party" .   shall have the meaning set forth in Article 16.2 .

1.39          "Reimbursable Cost" or "Reimbursable Costs" .   shall have the meaning set forth in Article 4.2 .

1.40          "Services" .   shall mean the engineering, procurement, construction, testing, start-up and commissioning services to be performed by Contractor in accordance with the Contract Documents, all as more particularly described in Exhibit A .

1.41          "Site" .    means the Plant Site, all easements and rights-of-way, and all other real property associated with the Facility, which is more particularly described in Exhibit M .

1.42          "Subcontractors" .    means any person with whom Contractor has entered into any subcontract, purchase order or other agreement for such person to perform any part of the Work or to provide any materials, equipment or supplies, including any person at any tier with whom any Subcontractor has further subcontracted any part of the Work.

1.43          "Substantial Completion" .   shall have the meaning set forth in Article 10.3.1 .

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1.44          "Target Cash Flow Budget " .   means the line item budget, by month, through Final Completion of the projected Reimbursable Costs included in the Target Price and the Fee paid to Contractor, which initial budget is attached as Exhibit N .

1.45          "Target Performance Criteria" .   means those Facility characteristics described in Exhibit G .

1.46          "Target Price" .   means [*], which includes the Reimbursable Costs required to complete the performance of the Work, including allowances of [*] for the water treatment facility in Deming, [*] for the gas pipeline, [*] for the well water and gathering systems, and [*] for the completion of the Chiller Installation, through the date twelve (12) months following the date of Substantial Completion, as adjusted by a Change Order.  These allowances are exclusive of gross receipts tax, escalation and G&A.  The Target Price does not include the Fee will shall be paid to Contractor, or gross receipts taxes which shall be reimbursed to Contractor.

1.47          "True-Up Date" .   shall mean, as applicable, the date of Final Completion and the date twelve (12) months following the date of Substantial Completion.

1.48          "Uncontrollable Forces" .   shall have the meaning set forth in Article 17.1 .

1.49          "Underrun" .    shall have the meaning set forth in Article 4.4.1 .

1.50          "Warranty Period" .    shall have the meaning set forth in Article 6.1.1 .

1.51          "Work" .   means the Services and all things to be designed, engineered, manufactured, furnished, executed, installed, tested, completed, made good or otherwise provided by Contractor in accordance with the Contract Documents, all as more particularly described by the descriptions contained in, Exhibit A.  Work excludes Existing Work, but shall include modifications, deletions, replacements and additions to Existing Work performed by Contractor pursuant to the terms and conditions of this Agreement.

1.52          "Work Progress Schedule" .   means the timeline for completion of each principal category of the Work for achieving Substantial Completion of the Facility by the Contract Completion Date.  The Work Progress Schedule is attached hereto as Exhibit B.

ARTICLE 2

THE WORK AND OBLIGATIONS OF THE PARTIES

2.1              The Work. .   Contractor agrees to perform the Work in accordance with the Scope of Work set forth in Exhibit A.  Contractor shall fully perform the Work in accordance with GECP, all Applicable Laws, all Applicable Codes and Standards, and all other terms and provisions of this Agreement, with the explicit understanding that the Work will result in a fully integrated and functional combined cycle facility.  Contractor shall design and construct the Facility so that it is capable of achieving the Target Performance Criteria; provided, however, such Target Performance Criteria are an estimate of the performance criteria to be achieved and Contractor does not guarantee that the Target Performance Criteria will be achieved.  Contractor acknowledges that pursuant to the foregoing obligation it shall carry out all of the supply and

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services required or that can be inferred reasonably from this Agreement even though not expressly mentioned herein so that the Work shall include any work that is necessary to satisfy the requirements of the Contract Documents, and to the extent not specifically addressed by the Contract Documents, in accordance with GECP.

2.2                  Specific Obligations for the Work. .   Without limiting the generality of Article 2.1, or the requirements of any other provision of this Agreement (including, but not limited to, Exhibit A ), Contractor shall:

2.2.1             Protect from damage and properly store all equipment procured by Contractor or accepted by Contractor at the Site (including Owner-Furnished Property and any spare parts);

2.2.2             Provide construction, construction management (including the furnishing of all field supplies, tools, construction equipment, and all Site supervision and craft labor), engineering, procurement, inspection and quality control services required under this Agreement;

2.2.3             Coordinate all delivery schedules and performance obligations of all Subcontractors and other Owner vendors so that performance under such subcontracts and purchase orders, as the case may be, is enforced in accordance with the terms thereof and as required by this Agreement;

2.2.4             Perform shop and other inspections of the Work of Subcontractors as reasonably required to determine conformance with all of the requirements of this Agreement;

2.2.5             Comply with all Applicable Laws, including but not limited to state and federal occupational, safety and health laws and regulations;

2.2.6             Supply all initial lubrication fills for the Facility;

2.2.7             Perform all quality control and quality assurance activities (including witnessing tests) to confirm that the Work complies with this Agreement.

2.2.8              Perform the Work in accordance with the Work Progress Schedule;

2.2.9             Perform commissioning and start-up of the Facility, including the development of a detailed commissioning plan, that includes a commissioning matrix, the commissioning procedures, turnover packages, manpower requirements, technical direction and Owner interfaces; and

2.2.10           Provide a training program for the operations and maintenance personnel, which includes detailed training plan and applicable operating and maintenance procedures for the Facility.

2.3              Spare Parts. .   Contractor shall provide Owner with a recommended spare parts list for the Facility within thirty (30) days following the Effective Date.  The spare parts list shall identify

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those spare parts that are recommended for operations and those that are recommended for testing, start-up and commissioning.  With respect to the latter, the spare parts list shall include the dates by which the recommended spare parts need to be purchased and available at the Site to support the Work Progress Schedule.  Although Owner shall be responsible for the costs to purchase, secure, and store any spare parts that Owner elects to acquire, Contractor shall purchase, on a timely basis (it being understood that Owner shall designate the spare parts to be purchased on a timely basis consistent with the Work Progress Schedule), such spare parts on behalf of Owner as Owner's agent and shall store and secure such spare parts until care, custody and control of the Facility is transferred to Owner pursuant to Article 2.13 .  Subject to Owner's consent, which shall not be withheld unreasonably, Contractor may use any spare parts maintained on the Site by Owner.  The replacement cost of Owner supplied spare parts used by Contractor, unless replaced by an equipment supplier as a warranty replacement, shall be included in the Contract Sum and chargeable against the Target Price.

2.4              Contractor's Tools and Equipment. .   Contractor shall furnish all tools and equipment necessary and appropriate for the timely and safe performance and completion of the Work.

2.5              Employment of Personnel . 

2.5.1             Contractor shall not employ, or permit any Subcontractor to employ, in connection with its performance under this Agreement any unfit person or anyone not skilled in the Work assigned to such person.  Contractor agrees to promptly remove (or to require any Subcontractor to remove) from its services in connection with the Work any employee who is unfit or unskilled.  If Owner has any objection to the fitness or qualifications of any person retained by Contractor to perform the Work, Owner shall so notify Contractor in writing.  Upon receipt of such notice, Contractor shall investigate Owner's concerns and take appropriate action, which may include the reassignment or removal of such person.  Notwithstanding any other provisions in this Agreement to the contrary, Contractor shall provide workers skilled and specialized in the Work to which they are assigned. 

2.5.2             Contractor, at Owner's request, shall perform security and background checks, as well as drug and alcohol tests, for the purpose of determining a worker's suitability for the assignment. 

2.5.3             Owner reserves all rights to deny placement of any of Contractor's workers on Owner premises, property, equipment or projects at its sole discretion.  Such denial of placement of subject workers shall be conveyed subject to the provisions of Article 7.3 "Notices" and/or consistent with the normal custom between Owner and Contractor. 

2.5.4             No Party shall, during the term of this Agreement or for a period of one hundred eighty (180) days thereafter, directly or indirectly for itself or on behalf of, or in conjunction with, any other person, partnership, corporation, business or organization, actively solicit the employment of an employee of the other with whom that Party or its personnel have had contact during the course of this

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Agreement, unless that Party has obtained the written consent of the other Party to such hiring and that Party pays to the other a fee to be mutually agreed upon.

2.6              Clean-up and Non-Interference. .   Contractor shall at all times keep the Site free from waste materials or rubbish caused by its activities.  As soon as practicable after the completion of all Punch List items, Contractor shall remove all of its equipment and materials not constituting part of the Facility and remove all waste material and rubbish generated by Contractor or that Contractor has brought to the Site, in connection with Contractor's performance of the Work, from the Site to a permitted disposal facility, and restore the Site in accordance with all Applicable Laws and Applicable Codes and Standards and this Agreement.  During the period from Substantial Completion until completion of the Punch List, Contractor shall perform its Work so that the performance of the Work does not unreasonably interfere with the operation of the Facility.

2.7              Safety and Security. .   Contractor recognizes and agrees that safety is of paramount importance in the performance of the Work and that Contractor is solely responsible for performing the Work in a safe manner.  Contractor agrees to perform the Work, and Contractor shall require all Subcontractors to perform their portion of the Work, in accordance with the safety and health rules and standards of Applicable Law and the safety program developed by Contractor and submitted to Owner.  Contractor further agrees to provide necessary training to its employees and Subcontractors to inform them of the foregoing safety and health rules and standards.  Should Owner at any time observe Contractor, or any of its Subcontractors, performing the Work in an unsafe manner, or in a manner that may, if continued, become unsafe, then Owner shall have the right (but not the obligation) to require Contractor to stop the Work affected by the unsafe practice until such time as the manner of performing the Work has been rendered safe.  Contractor shall be responsible for the supervision of the Facility as set forth in Article 2.13 .  The Parties recognize that the Facility has already been fenced.  The Scope of Work in Exhibit A addresses responsibility for security and guarding of the Facility.  Nothing in this Article 2.7 shall affect Contractor's status as an independent contractor.

2.8              Emergencies. .   In the event of any emergency endangering life or property, Contractor shall take such action as may be reasonable and necessary to prevent, avoid or mitigate injury, damage, or loss and shall, as soon as possible, report any such incidents, including Contractor's response thereto, to Owner.  If Contractor has not taken reasonable precautions for the safety of the public or the protection of the Work, and such failure creates an emergency requiring immediate action, then Owner, with or without advance notice to Contractor may, but shall be under no obligation to, provide reasonable protection as required to address such emergency; provided, however, that Owner shall in any event notify Contractor of any actions taken by Owner within ten (10) Business Days of taking such action.  All reasonable direct costs so incurred by Owner as a result of any emergency caused by Contractor shall be included in the Contract Sum and chargeable against the Target Price. 

2.9              Approvals, Certificates, Permits and Licenses. .   Contractor shall obtain all approvals, certificates, permits and licenses required to be in Contractor's name to perform the Work and as set forth in Exhibit I .  Contractor shall promptly, within such time period as may be agreed upon by the Parties, provide Owner with all assistance that Owner may reasonably require to secure

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those approvals, certificates, permits and licenses required to be in the name of Owner as set forth in Exhibit I.

2.10          Contractor Taxes. .   Contractor shall pay all taxes and contributions for unemployment insurance, old age retirement benefits, pensions, annuities, and similar benefits, as well as taxes measured by or imposed on the income of Contractor, which may now or hereafter be imposed on Contractor by Applicable Law or collective bargaining agreements with respect to persons employed by Contractor for performance of the Work.  Contractor shall be liable for and shall pay and shall indemnify, defend, and hold Owner harmless from, all such taxes and contributions, including any interest accrued and penalties imposed thereon (plus reasonable attorney fees), except for those taxes that are reimbursable by Owner in accordance with the immediately succeeding sentence.  On all invoices, Contractor shall separately show all New Mexico gross receipts, compensating, sales, excises, assessments, charges, and other similar taxes which are imposed on the Services or the Work, or any part thereof, and such taxes shall be reimbursable by Owner to Contractor.  Charges not subject to New Mexico gross receipts tax shall be separately stated, and no New Mexico or other jurisdiction's gross receipts, compensating, use or sales taxes shall be charged to Owner thereon.  Contractor shall utilize appropriate New Mexico nontaxable transaction certificates (a form of which shall be provided to Contractor by Owner) or similar certificates from other states, where applicable, to minimize such gross receipts, compensating, sales, and other similar taxes.

2.11          Hazardous Materials. .   Contractor shall design, construct, pre-commission, test and start-up the Facility and otherwise perform the Work in compliance with the requirements of all Applicable Laws.  If, during the course of the performance of the Work, Contractor or any Subcontractor discovers, or reasonably believes it has discovered in, on or under any part of the Site, any Hazardous Materials (other than Hazardous Materials that Contractor or a Subcontractor has brought onto the Site, produced, created or used), Contractor shall proceed in accordance with Article 14.4.3.

2.12          Progress Meeting and Reports. .   Contractor shall hold a monthly progress meeting at the Site, or at an alternate location mutually agreeable to Owner and Contractor, for the purpose of reviewing the monthly progress report for the previous month with Owner.  Contractor shall provide Owner with monthly progress reports and the following other information relating to the progress of the Work as may be reasonably requested by Owner:

2.12.1           Minutes for all status and other Facility meetings within four (4) Business Days following such meeting;

2.12.2           Weekly progress reports of construction activities;

2.12.3           Safety incident reports within three (3) Business Days of the occurrence of any such incident (preliminary written notice is to be provided to Owner within 24 hours of a safety incident, provided, however, that verbal notice of critical or fatal injuries shall be provided to Owner within 3 hours);

2.12.4           Monthly progress reports, in a form set forth in Exhibit P , no later than ten (10) days after the end of each month, which shall cover activities up to the end of

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                     the previous month and which shall include five (5) paper copies of such reports that shall be distributed as directed by Owner and which shall include Contractor's representation that the Work through the date of the progress report has, unless otherwise stated by Contractor, been performed in accordance with this Agreement; and

2.12.5           Updates every month to the Facility CPM Schedule pursuant to Article 3.2.  

2.13          Care, Custody and Control/Risk of Loss. .   Upon the Effective Date, Contractor shall have the full responsibility for care, custody and control and risk of loss of the Facility (including Existing Work) until the earlier of Substantial Completion or the date of termination of this Agreement pursuant to the provisions of Article 11 .  Risk of loss and care, custody, and control of the Facility shall transfer from Contractor to Owner upon the earlier of Substantial Completion or the date of termination of this Agreement pursuant to the provisions of Article 11 .  In connection with Contractor's risk of loss obligation, Contractor shall be responsible for and obligated to replace, repair, or reconstruct, and to furnish any material, equipment, or supplies furnished by Contractor or Owner-Furnished Property, which are lost, damaged, or destroyed prior to transfer of care, custody, and control of the Facility or the affected portion thereof to Owner, to the extent Contractor receives proceeds of insurance maintained for the Facility pursuant to Article 15 or Contractor otherwise receives reimbursement of its costs pursuant to the terms of this Article 2.13 .  Except as otherwise provided herein in this Article 2.13 , Contractor's responsibility and liability for risk of loss and any damage to the Facility shall be limited to the scope and limits of such insurance.  Prior to the transfer of care, custody and control of the Facility to Owner, (a) all non-covered losses and deductibles for covered losses which, in either case, are not attributable to the fault of Contractor or its Subcontractors shall be paid by Owner as a Reimbursable Cost that is not included in the Contract Sum and that is not chargeable against the Target Price and (b) all non-covered losses and deductibles for covered losses which, in either case, are attributable to the fault of Contractor or its Subcontractors shall be paid by Owner as a Reimbursable Cost that is included in the Contract Sum and that is chargeable against the Target Price.  Owner assumes all responsibility for such loss, damage, or destruction after transfer of care, custody, and control of the Facility from Contractor to Owner.

2.14          [Intentionally Omitted]

2.15          Interpretation. .    In the event of any inconsistencies between Applicable Laws and the Contract Documents, Contractor shall comply with Applicable Laws in the manner set forth in this Article 2.15 .  Where a conflict exists between parts of the Contract Documents, or between the Contract Documents and Applicable Laws, or among Applicable Laws, the more stringent or higher quality requirements shall control unless otherwise directed by Owner.  If Contractor finds a conflict, error, omission, inconsistency or discrepancy in the Contract Documents, then Contractor shall call it to Owner's attention in writing before proceeding with the portion of the Work affected thereby.

2.16          Training and Operational Supervision . .   Contractor shall establish and implement a training program for Owner's operations and maintenance personnel.  Prior to Substantial Completion, Contractor shall supervise Owner's operations and maintenance personnel.

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2.17          Interconnections . .   Contractor shall construct the interconnections between the Facility and the interconnection facilities of (a) the electric transmission provider, (b) the gas transporter, (c) the water supplier and (d) the water discharge system, all as set forth in Exhibit A .

2.18          Responsibility for Subcontractors.

2.18.1           Contractor may subcontract portions of the Work to any person without further approval by Owner except for any Major Subcontracts, which are subject to Owner's reasonable review and approval.  Contractor may have portions of the Work performed by its Affiliates or their employees, in which event Contractor shall be responsible for such Work and Owner will look solely to Contractor as if the Work were performed by Contractor.  Owner understands that Contractor's subsidiary organizations, Fluor Global Sourcing & Supply Inc. and/or Global Sourcing & Supply International LLC (either or both referred to as "GS&S"), have negotiated proprietary and confidential "Supplier Relationship Agreements" (whether entered into by GS&S or any of their respective Affiliates, a "Contractor SRA") with various strategic suppliers of certain materials, equipment, and Work.  Such Contractor SRAs contain favorable pricing and terms and conditions.  If either Contractor or Owner procures materials, equipment or services using Contractor SRAs, then it is agreed that the quoted prices and terms from such Contractor SRAs are firm and not subject to audit. Notwithstanding any provision herein or in any related agreements to the contrary, neither Contractor nor GS&S shall be subject to audit or adjustment for any volume, cash, trade discounts, refunds, rebates, freight allowances, equalizations, credits, commissions or the like under any Contractor SRAs or other agreements either may have with any vendor outside of this Agreement and unrelated to the Work, and any such items shall accrue exclusively to the benefit of Contractor or GS&S.  Contractor and GS&S retain the right to communicate with the vendor to notify the vendor of Contractor's rights relating to SRAs so that the vendor does not have a basis to object to continue to pay SRA volume incentives to GS&S notwithstanding the provisions in the purchase order to the contrary, if any.

2.18.2           The issuance of subcontracts shall not relieve Contractor of any of its obligations under the Contract Documents, including, among other things, the obligation to properly supervise and coordinate the work of Subcontractors.  Work performed by Contractor's Affiliates shall be treated as if the Contractor had performed the Work.

2.18.3           Owner's approval of any proposed Major Subcontract shall not constitute an approval of any portion of the Work or a waiver of any of Owner's rights hereunder or reduce Contractor's responsibilities hereunder.  Contractor shall provide to Owner, on request, information (other than financial information) concerning the status of the negotiations with, the performance under and any disputes under each Major Subcontract, including information concerning specifications and cancellation terms.  Contractor agrees that it will not (a) terminate any Major Subcontract, (b) amend or waive any material provision of

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                     a Major Subcontract, or (c) settle any dispute without Owner's consent under a Major Subcontract that affects Owner's warranty rights. 

2.18.4           Notwithstanding any agreement with any Subcontractor(s), Contractor shall be solely responsible for the Work.  Contractor has complete and sole responsibility as a principal for its agents and all others it hires to perform or assist in performing the Work.  Except as otherwise provided in this Agreement, Owner shall not be deemed to have any contractual obligation to any Subcontractor and nothing contained in any subcontract shall create a contractual relationship between any Subcontractor and Owner.

2.18.5           Contractor shall provide to Owner a summary of bids received for Subcontracts for Owner's review in accordance with the procedures set forth in Section 2.3 of Exhibit A .

2.18.6           Nothing in this Article 2.18 limits Owner's audit rights to review any purchase orders issued in connection with the Work in accordance with Article 4.9 . 

2.19          Assurances Regarding Payments . .   Upon request from time to time, Contractor shall provide to Owner such information as Owner may reasonably request as to the status of payments from Owner to Contractor and from Contractor to Subcontractors.

2.20          Office Space. .   Contractor shall provide Owner with access to Owner's existing offices at the Site for use by representatives of Owner.

2.21          Key Personnel. .   Contractor shall appoint a Project Director (as further described in Article 7.2 ), a deputy project director, a quality assurance/quality control director, a site manager, an engineering manager, a chief field engineer, a construction manager, a project safety manager, a start-up manager, the mechanical Subcontractor site manager, and the electrical Subcontractor site manager (together the "Key Personnel"); as set forth in Exhibit Q .  The Project Director shall have full responsibility and authority for the Work on behalf of Contractor and shall act as Owner's primary point of contact with Contractor with respect to prosecution of the Work.  Contractor shall not change a Key Personnel position or the person appointed to such position without the prior written consent of Owner (with the exception of the Project Director position, which Owner agrees will be replaced with the deputy project director when Contractor deems appropriate but in no event shall Contractor continue to employ both a Project Director and an assistant project director for longer than two (2) months following the Effective Date unless otherwise agreed by the Parties), which shall not be unreasonably withheld or delayed.

2.22          Co-operation and Coordination . .   Upon prior reasonable notice by Owner, Contractor shall co-operate with, and grant reasonable access to the Site to, any person whom Owner appoints in writing to provide services with respect to the Facility, including, without limitation any person, whether employed by Owner or not, carrying out interface work in relation to the gas supply system, the electric interconnection facilities and the water supply and discharge system, provided that Owner obtains agreement from such persons to comply with Contractor's health and safety requirements, Applicable Law and Good Engineering and Construction Practices.

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2.23          Start-Up, Commissioning and Testing Gas and Raw Water . .   Contractor shall only use the natural gas supplied by Owner for the purposes of starting-up, commissioning and initial operation of the Facility and the performance of the Performance Tests.  Contractor shall follow the scheduling and nomination procedures for natural gas to be mutually developed by the Parties prior to the commencement of the Performance Tests on a basis consistent with the requirements of Owner's fuel transportation agreement(s).  Contractor also shall follow the scheduling and nomination procedures for water to be mutually developed by the Parties prior to the commencement of the Performance Tests on a basis consistent with the requirements of Owner's water supply contract(s).  The Parties acknowledge that they anticipate that the scheduling and nomination procedures for natural gas and water will include prior-day notice. 

2.24          Owner Obligations. 

2.24.1           Site.  Owner shall make the Site available to Contractor as of the Effective Date.  Owner shall provide suitable access thereto and an adequate area or areas adjoining such site for Contractor's office, warehouse, craft change rooms, shop buildings, welding facilities, materials storage and lay down area, employee parking, and furnish necessary construction utilities.

2.24.2           Owner-Furnished Property.  No later than the Effective Date, Owner shall make available to Contractor the Owner-Furnished Property.

2.24.3           Fuel and Water Utilities.  Owner shall provide at the relevant interface point, natural gas and all utilities, including water and electricity, as set forth in Exhibit A , to enable construction, testing, start-up, commissioning, initial operation of the Facility, and all Performance Tests in accordance with the Work Progress Schedule.

2.24.4           Operations Personnel.  Owner shall provide appropriately qualified, competent, and, where necessary, licensed operators for training when required by Contractor and to support commissioning, initial operation of the Facility and all Performance Tests.

2.24.5           Start-Up Power.  Owner shall provide electric energy for the energization, commissioning, operation, and testing of the Facility; provided, however, Contractor shall use reasonable efforts to minimize the demand charges that Owner will incur for such supply of electric energy.

2.24.6           Scheduling and Delivery of Output.  Owner shall arrange for the delivery of all electric energy generated by the Facility.  Contractor shall comply with the scheduling and nomination procedures for delivery of electric energy to be mutually developed by the Parties prior to the date for such delivery set out in the Work Progress Schedule on a basis consistent with the requirements of Owner's applicable interconnection agreement and transmission service agreement.  The Parties acknowledge that they anticipate that the scheduling and nomination procedures for delivery of electric energy will include prior-day notice.  Upon receipt of notice from Contractor in accordance with such

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                     scheduling and nomination procedures, Owner shall coordinate delivery of electric energy from the Facility to conduct start-up, operation, or testing; provided that Owner shall only be required to provide for such delivery in accordance with the Work Progress Schedule.

2.24.7           Licenses and Permits.  Owner shall obtain any approvals, certificates, permits and other licenses required to be in Owner's name that are required for the Facility and as set forth in Exhibit I , except where such permits or licenses are specifically identified to be the responsibility of Contractor as part of the Work as set forth in Exhibit I .

2.24.8           Taxes.  Owner shall pay all property taxes assessed against the Facilities.

2.24.9           Existing Drawings and Specifications.  Owner shall provide Contractor with access to and the right to use all drawings and specifications, if any, prepared for the Facility (including the gas pipeline, water treatment and water well systems) for Owner, or for Owner's predecessor in interest, that are in Owner's possession, prior to the Effective Date that are necessary for Contractor's performance of the Work.  If Contractor identifies any additional drawings and specifications necessary for the performance of the Work that existed, but were not in Owner's possession, as of the Effective Date, Owner shall use commercially reasonable efforts to obtain such drawings and specifications and the right to access and use, once obtained.  To the extent Owner is unable to obtain such drawings and specifications in a reasonable period of time, Contractor shall be entitled to a Change Order in accordance with the provisions of Article 5 for any resultant delay or additional costs for the creation of such drawings and specifications.

2.24.10       Subsurface Conditions.  Contractor shall have access to any soil data in Owner's possession as of the Effective Date which is related to the Facility (including the gas pipeline, water treatment and water well systems) and necessary for Contactor's performance of the Work, including the Fugro South, Inc., Geotechnical Investigation, Luna Energy Facility, Prepared for Duke/Fluor Daniel, dated October 20, 2000 and the Terracon, Soils Investigation Report for the Proposed Waste Water Treatment Plant Addition, Project #68025032, dated June 26, 2002.  If Contractor identifies any additional soil data necessary for the performance of the Work that existed, but was not in Owner's possession, as of the Effective Date, Owner shall use commercially reasonable efforts to obtain such soil data.  To the extent Owner is unable to obtain such soil data in a reasonable period of time, Contractor shall be entitled to a Change Order in accordance with the provisions of Article 5 for any resultant delay or additional costs for the creation of such soil data.

2.24.11       Notice to Suppliers of Existing Equipment.  Immediately following the Effective Date, except with respect to the services addressed in Article 2.24.12 , Owner shall notify major equipment suppliers (and others as required) with respect to existing equipment at the Site that Contractor is designated as

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                     Owner's authorized representative in connection with applicable purchase orders.

2.24.12       Coordination with General Electric.  Owner will contract directly with General Electric (GE) for technical assistance and technical direction with respect to GE-supplied equipment.  Owner will coordinate between GE and Contractor for such technical assistance and technical direction.

2.24.13       Parent Company Guarantee.  In the event that Tucson Electric Power elects to assign this Agreement to another party, at least one of the Owners will provide Contractor a Parent Company Guaranty acceptable to the Parties.

2.25          Existing Work. .    Contractor shall perform an assessment of the Existing Work in accordance with the scope and procedures set forth in Exhibit K.  If at any time Contractor identifies any modifications, changes, replacements or additions thereto to the Existing Work, Contractor shall notify Owner.

2.26          Commercial Activities . .   Contractor shall not, and shall ensure that any Subcontractors do not, engage in any commercial activity or permit any third parties to establish commercial activities on the Site that are unrelated to the performance of the Work.  Contractor shall not allow its employees to engage in any commercial activity on the Site other than the performance of the Work.

ARTICLE 3

CONSTRUCTION SCHEDULE

3.1              Commencement of the Work and Contract Completion Date. .   Contractor shall commence the Work under this Agreement upon the receipt of a notice from Owner to Contractor requesting that Contractor commence the Work (the "Notice to Proceed"), which Notice to Proceed shall be deemed to be issued on the Effective Date.  From and after the Effective Date, Contractor shall diligently prosecute the Work continuously and with due diligence in accordance with the Work Progress Schedule set forth in Exhibit B .  It is estimated, but not guaranteed, that Substantial Completion will be achieved by the Contract Completion Date.  Notwithstanding the foregoing, no damages or other liability shall be imposed solely for Contractor's failure to achieve Substantial Completion on or before the Contract Completion Date.

3.2              Work Progress Schedule and Facility CPM Schedule . 

3.2.1             Contractor shall perform the Work in accordance with the Work Progress Schedule set forth in Exhibit B , as may be adjusted from time to time in accordance with this Agreement.

3.2.2             Within ten (10) days after the execution of this Agreement, Contractor shall submit for Owner's review and approval a critical path method schedule (the "Facility CPM Schedule"), which shall use Primavera software, conform to the Work Progress Schedule, and set forth the timing of all elements of the Work

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                     and the interrelationship of such elements.  The Facility CPM Schedule shall describe comprehensively, and in a form and to the level of detail agreed to by Owner, the activities required to complete the Work.  The Facility CPM Schedule shall include all significant activities divided into specific, identifiable tasks according to their importance, together with a critical path schedule.  The Facility CPM Schedule shall highlight selected activities by time period and type of activity showing the sequence in which Contractor proposes to perform the Work and the date by which Contractor reasonably requires that Owner shall have fulfilled its obligations under this Agreement and Contractor intends to rely upon the Facility CPM Schedule in connection therewith.  Contractor shall not change the dates set forth in the Facility CPM Schedule for Owner's obligations unless approved by Owner.

3.2.3             The Facility CPM Schedule shall be periodically (but at least monthly) updated and delivered to Owner with the monthly progress report.  Contractor shall provide an explanation of any expected delay in achieving a level one milestone date and Contractor's plan to remedy such delay and any additional costs associated with such plan.  If at any time the Facility CPM Schedule shows that Substantial Completion will not be achieved by the Contract Completion Date, Contractor shall advise Owner and submit to Owner a recovery plan (including the costs of implementing such plan) for Owner's review and approval.  Upon receipt of Owner's approval, Contractor shall implement such plan as approved as a Reimbursable Cost that is included in the Contract Sum, and chargeable against the Target Price if the cause of delay is attributable to Contractor.

3.3              Delays and Time Extensions. .   Without limiting the obligations of Contractor set forth in Article 3.2.3 , Contractor shall promptly notify Owner in writing of any actual or anticipated event that is delaying or could delay completion of the Facility in accordance with the Work Progress Schedule.  Contractor shall indicate the expected duration and anticipated effect of the delay, and the action being taken to correct the problem and make up for lost time.  Contractor shall be entitled to an adjustment to the Contract Completion Date and the Target Price, as appropriate, pursuant to the provisions of Article 5 for any delay that may occur, so long as such delay is not caused by Contractor or any Subcontractor or is not otherwise attributable to Contractor's failure to perform in accordance with this Agreement.  Contractor shall take all steps reasonably available to Contractor to mitigate any impacts of the delay on the Work Progress Schedule or Reimbursable Costs, as the case may be.  All time extensions shall be incorporated into the Contract Documents through the execution of a Change Order.

ARTICLE 4

COMPENSATION

4.1              Compensation. .   Owner shall reimburse Contractor for its costs and pay Contractor a Fee in accordance with this Article 4 .

4.2              Reimbursable Costs . .   Contractor's costs related to the Work shall be invoiced as the total of and in accordance with the following applicable categories:

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4.2.1               Home Office Employees and Related Costs

4.2.1.1          Employees' Compensation.  For straight time and overtime hours, compensation in accordance with Exhibit C and subsequent revisions, for such time as is devoted to the Work by home office employees, including employees of certain affiliates of Contractor, whether such Work is performed in the office or in the field.  In addition, members of Contractor's corporate staff who devote direct time to the performance of the Work shall be reimbursed as set forth above if approved by Owner.  Members of Contractor's and its affiliates' management team, in lieu of the foregoing commercial basis, will be reimbursed in accordance with the Project Management Principals Rate Schedule set forth in Exhibit C ;

4.2.1.2         Agency personnel.  The invoiced cost of agency personnel;

4.2.1.3         Indirect Expense.  An amount equal to [*] per hour for home office support services and Houston engineering services (collectively and initially estimated to be [*] hours), to recover a portion of the costs referred to in Article 4.5 below;

4.2.1.4          Miscellaneous Expenses.  Miscellaneous expenses, including, but not limited to, custom printed forms, special book bindings, drafting room and office materials and supplies, freight, express mail, duties, and excise taxes, and any other costs incurred in connection with the Work will be invoiced at cost; and

4.2.1.5          Project Support.  Miscellaneous administrative and project support services charged in accordance with Contractor's current practices,  including but not limited to charges for personnel, safety services, communications services, document storage, client office space, printing and reproduction, automation tools and computer services, which shall be reimbursed in accordance with the Rate Schedule set forth in Exhibit C . 

4.2.2               Field Employees and Related Costs

4.2.2.1          Salaried Field Employees.  For straight time and overtime hours, compensation in accordance with Exhibit C and subsequent revisions, for such time as is devoted to the Work, including travel time, of Contractor's salaried field employees, including employees of certain affiliates of Contractor, whether such Work is performed in the office or in the field.  In addition, members of Contractor's corporate staff who devote direct time to the performance of the Work shall be reimbursed as set forth above if approved by Owner;

4.2.2.2          Agency Personnel.  The invoiced cost of agency personnel;

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4.2.2.3          Hourly Field Employees - Wages, Benefits and Training Contribution.  The wages of hourly field employees and the costs of subsistence, travel time and expenses;

4.2.2.4          Hourly Field Employees - Taxes and Insurances.  An amount equal to all payroll taxes, e.g ., FICA, FUI and SUI, levied or assessed by any governmental body, which are measured by the compensation payable pursuant to subparagraph 4.2.2.3 above, plus premiums for workers' compensation and risk management programs;

4.2.2.5          Major Construction Tools and Equipment.  For the use of all major construction tools and equipment in accordance with Exhibit C ;

4.2.2.6          Transportation Expenses.  The costs of transporting and handling major construction tools and equipment, in accordance with Exhibit C .  The cost of transportation, to and from the Site, of Contractor-supplied small tools as set forth in Exhibit C shall be reimbursed at invoiced cost to Contractor;

4.2.2.7          General Expenses.  The cost for providing temporary construction facilities at the Site; the cost of operating and maintaining a job office and warehouse and storage facilities, including the cost of the office furnishings, equipment, and supplies; expendable construction items and supplies in accordance with Exhibit C ; communication and utilities expenses and all other field office services and expenses; the cost of maintaining and performing running repairs to construction tools and equipment; and all other direct costs; and

4.2.2.8          Project Support.  Miscellaneous administrative and project support services charged in accordance with Contractor's current practices, including but not limited to charges for personnel, safety services, communications services, document storage, client office space, printing and reproduction, automation tools and computer services which shall be reimbursed in accordance with the Rate Schedule set forth in Exhibit C .

4.2.3               Adjustments

4.2.3.1          The allowances in Article 4.2 shall be increased or reduced when Contractor benefit programs or benefit costs change, or when statutory or insurance requirements or costs change.

4.2.4               Other Costs

4.2.4.1          Materials and Equipment.  The cost of materials, machinery, equipment, supplies, parts, and miscellaneous services procured for the Work excluding Contractor's major construction tools and equipment which are provided for in Article 4.2.2.6 hereof;

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4.2.4.2         Transportation of Materials and Equipment.  The cost of all transportation expenses to the Site on materials, machinery, tools and equipment, including the cost of loading, hauling, unloading, and insurance;

4.2.4.3          Travel and Relocation Expenses.  The cost of all travel and relocation and other related expenses in accordance with Contractor's established policies.  If Owner's or Contractor's employees travel by Contractor's aircraft (owned or leased), Contractor will be reimbursed at commercial airline rates for class or fare authorized for equivalent Contractor employees under Contractor's established policies.  For any part of the route for which there is no regularly scheduled commercial air service, reimbursement shall be at the rates established by Contractor from time to time.;

4.2.4.4          Taxes and Bonds.  The cost of any duties, taxes, licenses or bonds arising directly out of or that are applicable to the Work, other than taxes that are non-reimbursable pursuant to Articles 2.10 and 4.5 ;

4.2.4.5          Permits and Inspections.  The cost of permits required of Contractor by any governmental body in connection with the construction services herein provided for, and the cost of inspections required by law or ordinance of any governmental body;

4.2.4.6          Subcontracts.  The cost of any subcontracts;

4.2.4.7          Insurance.  The cost of all project specific insurance premiums maintained by Contractor to protect Owner and/or Contractor as set forth in Article 15 and the costs of all insurance deductibles and non-covered losses;

4.2.4.8          Audits, Monitoring and Accounting.  The cost of periodic project audits and similar programs monitoring the financial or other aspects of the project, and any project-specific accounting functions, including, but not limited to, preparation of property accounting records;

4.2.4.9          Litigation and Related Costs.  The costs of attorney's fees, costs, settlements, and/or judgments incurred in connection with any labor or commercial litigation, claims or disputes arising out of or in connection with the performance of this Agreement other than litigation, claims or disputes (i) solely between Owner and Contractor or (ii) arising in connection with Article 13 ; and

4.2.4.10       General and Administrative Expenses.  An amount equal to [*] of all direct Reimbursable Costs (excluding gross receipts tax, and Fee) to cover the cost of Contractor's general and administrative expenses.

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4.3              Fee. .    Contractor shall be entitled to a fee (the "Fee") based on the date Substantial Completion is achieved.

4.3.1             If Substantial Completion is achieved on or before April 1, 2006, the Fee shall be [*].

4.3.2             If Substantial Completion is achieved after April 1, 2006 but on or before May 1, 2006, the Fee shall be [*] plus 1/30th of the difference between [*] and [*] for each day prior to May 1, 2006 that Substantial Completion is achieved ( e.g. , if Substantial Completion is achieved on April 2, 2006, the Fee would be [*] plus 29/30ths of [*] and if Substantial Completion is achieved on April 30, 2006, the Fee would be [*] plus 1/30th of [*]).

4.3.3             If Substantial Completion is achieved after May 1, 2006 but on or before June 1, 2006, the Fee shall be [*] plus 1/31st of the difference between [*] and [*] for each day prior to June 1, 2006 that Substantial Completion is achieved ( e.g. , if Substantial Completion is achieved on May 2, 2006, the Fee would be [*] plus 30/31sts of [*] and if Substantial Completion is achieved on May 31, 2006, the Fee would be [*] plus 1/31st of [*]).

4.3.4             If Substantial Completion is achieved after June 1, the Fee shall be [*].

4.3.5             Owner shall pay [*] of the Fee in equal monthly installments beginning with the month in which the Effective Date occurs through May 1, 2006.  Owner shall pay the balance of any Fee due to Contractor ten (10) Business Days after the date Substantial Completion is achieved.

4.4              Target Price, Underrun and Overrun. .    The Parties contemplate that the Work can be completed for the Target Price, which amount is not guaranteed.  To provide Contractor with an incentive to so complete the Work for an amount no greater than the Target Price, the Contract Sum shall be compared to the Target Price at each True-Up Date and the Parties shall share responsibility for any resulting Underrun or Overrun in accordance with the provisions of this Article 4.4 . 

4.4.1             Underrun.  If the Contract Sum is less than the Target Price at a True-Up Date, then the Parties recognize that there is an Underrun (the amount of the Underrun is the Target Price minus the Contract Sum at such True-Up Date).  The amount of the Underrun minus [*] shall be shared [*] to Owner and [*] to Contractor.

4.4.2             Overrun.  If the Contract Sum is more than the Target Price at a True-Up Date, then the Parties recognize that there is an Overrun (the amount of the Overrun is the Contract Sum minus the Target Price).  The amount of the Overrun in excess of [*] shall be charged [*] to Owner and [*] to Contractor.

4.4.3             Billing and Payment of Underruns.  If there is an amount due to Contractor for an Underrun after the initial True-Up Date, Contractor shall invoice such amount to Owner and Owner shall pay such amount within twenty (20)

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                     calendar days after the receipt of such invoice.  If the amount due to Contractor for an Underrun at the final True-Up Date is greater than the amount previously paid by Owner with respect to the initial True-Up Date, Contractor shall invoice such additional amount to Owner and Owner shall pay such additional amount within twenty (20) calendar days after the receipt of such invoice.  If the amount due to Contractor for an Underrun at the final True-Up Date is less than the amount previously paid by Owner with respect to the initial True-Up Date, Contractor shall repay Owner for the excess paid by Owner within twenty (20) calendar days after the final True-Up Date.

4.4.4             Billing and Payment of Overruns.  If at any time during the performance of the Work prior to the initial True-Up Date, the Contract Sum exceeds the Target Price by more than [*], Contractor shall thereafter invoice Owner for only [*] of its Reimbursable Costs in its progress invoices delivered pursuant to Article 4.6.  If there is an amount due from Contractor for an Overrun after the initial True-Up Date, Contractor shall pay such amount , adjusted to account for any reduced billings from Contractor pursuant to the first sentence of this Article 4.4.4, within twenty (20) calendar days after the True-Up Date.  If the amount due from Contractor for an Overrun at the final True-Up Date is greater than the amount previously paid by Contractor with respect to the initial True-Up Date, Contractor shall pay such additional amount within twenty (20) calendar days after such True-Up Date.

4.4.5             Limitation on Contractor Responsibility for Overruns.  Notwithstanding the other provisions of this Article 4.4 , in no event shall Contractor be obligated to pay Owner for Overruns or have withheld from payments of Reimbursable Costs to Contractor on account of Overruns more than the sum of [*] plus [*] of the positive difference, if any, between the Fee paid to Contractor pursuant to Article 4.3 and [*].

4.4.6             Exclusive Remedy.  Contractor's obligation to share responsibility for any Overrun as set forth in this Article 4.4 shall be Contractor's only obligation and liability and Owner's exclusive remedy for a Contract Sum that exceeds the Target Price.

4.5              Non-Reimbursable Items. .   The following costs and expenses are not reimbursable to Contractor as a separate amount, as these costs are included in the hourly rates and the general and administrative percentage allowed as a Reimbursable Cost under Article 4.2:

(a)                Contractor's Executive Officers, including the Chairman of the Board, P