Attached files
ENGINEERING, PROCUREMENT AND
CONSTRUCTION CONTRACT
dated as of August 17, 2010
By and Between
Seaboard Corporation
And
WARTSILA FINLAND OY
For
106 MW GAS FIRED (108 MW HEAVY FUEL OIL FIRED)
BARGE-MOUNTED POWER PLANT
TO BE LOCATED IN THE DOMINICAN REPUBLIC
TABLE OF CONTENTS
TABLE OF CONTENTS I
RECITALS 1
ARTICLE I. AGREEMENT; INTERPRETATION; DEFINITIONS 1
1.1 DOCUMENTS INCLUDED 1
1.2 ENTIRE AGREEMENT 2
1.3 CONFLICTING PROVISIONS 3
1.4 RULES OF INTERPRETATION 3
1.4.1 TERMINOLOGY 3
1.4.2 HEADINGS 4
1.4.3 JOINT RESPONSIBILITY FOR DRAFTING 4
1.4.4 OBLIGATION TO ACT IN GOOD FAITH, ETC. 4
1.4.5 DEFINITIONS 4
ARTICLE II. RESPONSIBILITIES OF OWNER 15
2.1 OWNER'S RESPONSIBILITIES 15
2.1.1 ACCESS TO JOB SITE 15
2.1.2 EASEMENTS 16
2.1.3 CONSTRUCTION UTILITIES 16
2.1.4 OWNER'S REPRESENTATIVE 16
2.1.5 OWNER'S GOVERNMENTAL APPROVALS 16
2.1.6 REGISTRATION AND FINANCING REQUIREMENTS 17
2.1.7 OPERATING PERSONNEL 17
2.1.8 CUSTOMS CLEARANCE 17
2.1.9 INTERCONNECTIONS TO THE UTILITY 18
2.1.10 RELEVANT INFORMATION FOR CONTRACTOR 18
2.1.11 SPARE PARTS 18
2.1.12 OTHER ITEMS OF OWNER SUPPLY 18
2.1.13 PAYMENT OBLIGATIONS TO CONTRACTOR 18
2.2 HAZARDOUS MATERIALS 18
2.3 ITEMS REQUIRED FOR CHECK-OUT, START-UP AND
PERFORMANCE TESTING 18
2.4 COMPLIANCE WITH APPLICABLE LAWS 19
2.5 ENGAGEMENT OF OWNER'S ENGINEER 19
2.6 OWNER'S SITE WORKS 19
2.7 LETTER OF CREDIT 19
ARTICLE III. RESPONSIBILITIES OF CONTRACTOR 20
3.1 CONTRACTOR'S GENERAL OBLIGATION TO PROVIDE
FACILITY 20
3.2 SPECIFIC OBLIGATIONS 20
3.2.1 HANDLING OF EQUIPMENT AND MATERIALS, ETC 20
3.2.2 QUALITY OF EQUIPMENT AND MATERIALS, ETC 21
3.2.3 CONSTRUCTION MEANS, METHODS, ETC 21
3.2.4 KEY PERSONNEL 21
3.2.5 MAINTENANCE OF JOB SITE 21
3.2.6 JOB SITE SAFETY 22
3.2.7 INTERCONNECTION TO THE UTILITY 22
3.2.8 SPECIAL TOOLS, SPARE PARTS RECOMMENDATIONS 22
3.2.9 TEMPORARY OPERATING PERSONNEL 22
3.2.10 CONTRACTOR'S PROJECT MANAGER 22
3.2.11 ENGINEERING AND DESIGN 22
3.2.12 CONSTRUCTION AND CONSTRUCTION MANAGEMENT 23
3.2.13 PROCUREMENT 23
3.2.14 CONTRACTOR'S TOOLS AND CONSTRUCTION EQUIPMENT 23
3.2.15 TAXES AND OTHER CHARGES 23
3.3 RELEVANT INFORMATION; ASSISTANCE TO OWNER IN
DEALINGS WITH UTILITY AND GOVERNMENTAL UNITS,
ETC 23
3.4 SURPLUS MATERIALS 23
3.5 HAZARDOUS MATERIALS 23
3.6 EMPLOYMENT OF LICENSED PERSONNEL AND LABOR
RELATIONS 24
3.7 COMPLIANCE WITH APPLICABLE LAWS 24
3.8 CONTRACTOR GOVERNMENTAL APPROVALS 24
3.9 INSPECTION OF SITE 25
3.10 CONTRACTOR PERFORMANCE GUARANTY 25
3.11 TRANSPORTATION 25
3.12 STORAGE AND RELATED MATTERS 25
3.13 TESTING 25
3.14 JOB SITE, SHIPYARD AND OTHER ACCESS 25
3.15 EMPLOYEE IDENTIFICATION; JOB SITE SECURITY 26
3.16 FURTHER ASSURANCES 26
3.17 COOPERATION WITH OTHERS 26
3.18 SAFETY PRECAUTIONS 26
3.19 INSPECTIONS 26
3.20 PAYMENT 26
3.21 SURVEYOR 27
ARTICLE IV. REPRESENTATIONS AND WARRANTIES 27
4.1 REPRESENTATIONS AND WARRANTIES OF OWNER 27
4.1.1 DUE ORGANIZATION, POWER AND AUTHORITY 27
4.1.2 BINDING OBLIGATION 27
4.1.3 NO EXISTING BREACH OR DEFAULT 27
4.1.4 NO PENDING LITIGATION, ETC. 27
4.1.5 COMPLIANCE WITH LAWS 28
4.2 REPRESENTATIONS AND WARRANTIES OF CONTRACTOR 28
4.2.1 DUE ORGANIZATION, POWER AND AUTHORITY 28
4.2.2 BINDING OBLIGATION 28
4.2.3 NO EXISTING BREACH OR DEFAULT 28
4.2.4 NO PENDING LITIGATION, ETC. 28
4.2.5 CONTRACTOR QUALIFIED TO PERFORM THE WORK 28
4.2.6 PATENTS, LICENSES, FRANCHISES 29
4.2.7 COMPLIANCE WITH LAWS 29
4.2.8 THE AGREEMENT 29
4.2.9 APPLICABLE LAWS AND APPLICABLE CODES AND
STANDARDS 29
ARTICLE V. CONTRACT AMOUNT AND OTHER CHARGES 29
5.1 CONTRACT AMOUNT 29
5.2 TAXES 30
5.2.1 RESPONSIBILITY OF OWNER 30
5.2.2 RESPONSIBILITY OF OWNER 30
ARTICLE VI. PAYMENT TERMS 30
6.1 PAYMENT OF CONTRACT AMOUNT 30
6.1.1 MILESTONE PAYMENT SCHEDULE; DOWN PAYMENT 30
6.1.2 MILESTONE PAYMENTS 30
6.1.3 PAYMENT AT COMMERCIAL OPERATION 31
6.1.4 PAYMENT UPON FINAL COMPLETION 31
6.1.5 INTEREST 32
6.2 PAYMENT DISPUTES 32
6.2.1 PARTIAL PAYMENT; ACCRUAL OF INTEREST 32
6.2.2 RESOLUTION OF DISPUTES 32
6.3 FORM AND MANNER OF PAYMENTS 32
6.4 NO PAYMENT IN THE EVENT OF MATERIAL BREACH. 33
6.5 PAYMENT NOT ACCEPTANCE 33
ARTICLE VII. COMMENCEMENT OF THE WORK; TERMINATION 33
7.1 EFFECTIVE DATE 33
7.2 [INTENTIONALLY OMITTED] 33
7.3 COMMENCEMENT OF WORK 34
7.4 CANCELLATION 34
7.5 TERMINATION; SURVIVAL OF PROVISIONS 34
ARTICLE VIII. DOCUMENTATION 34
8.1 DELIVERY OF PRELIMINARY DESIGN DRAWINGS 34
8.1.1 NO OWNER RESPONSE 35
8.1.2 COMMENT OR APPROVAL BY OWNER 35
8.1.3 DISAPPROVAL BY OWNER 35
8.2 DELIVERY OF JOB BOOKS AND OPERATING MANUALS 35
8.3 CONTENT OF JOB BOOKS 36
ARTICLE IX. INSPECTION AND CORRECTION OF WORK 38
9.1 PERIODIC INSPECTIONS 38
9.2 CORRECTION OF WORK 38
9.2.1 CORRECTION OF WORK PRIOR TO COMMERCIAL
OPERATION 38
9.2.2 CORRECTION OF WORK AFTER COMMERCIAL OPERATION 38
9.3 OBSERVANCE OF TESTS 39
9.4 QUALITY ASSURANCE 39
ARTICLE X. COMPLETION OF THE WORK 39
10.1 ACTION BY OWNER AND OWNER'S ENGINEER WITH
RESPECT TO COMPLETION CERTIFICATES 39
10.2 TEST GUIDELINES; TEST PROCEDURES 40
10.3 SCHEDULE, CONDUCT AND OBSERVATION OF
PRELIMINARY TESTS 40
10.4 MECHANICAL COMPLETION 40
10.4.1 CONDITIONS FOR MECHANICAL COMPLETION 40
10.4.2 ISSUANCE OF MECHANICAL COMPLETION CERTIFICATE 41
10.5 PERFORMANCE TESTS 41
10.5.1 CONDUCT OF PERFORMANCE TESTS 41
10.5.2 MINIMUM PERFORMANCE STANDARDS ACHIEVED BUT
FAILURE TO MEET ACHIEVE PERFORMANCE
GUARANTEES 42
10.5.3 MINIMUM PERFORMANCE STANDARDS NOT ACHIEVED 42
10.5.4 ISSUANCE OF PERFORMANCE TEST COMPLETION
CERTIFICATE 43
10.5.5 DISPOSITION OF OUTPUT 43
10.6 COMMERCIAL OPERATION 43
10.6.1 CONDITIONS FOR COMMERCIAL OPERATION 43
10.6.2 COMMERCIAL OPERATION PRIOR TO COMPLETION OF
TESTING 44
10.6.3 ISSUANCE OF COMMERCIAL OPERATION CERTIFICATE 44
10.7 DELAYS IN COMMERCIAL OPERATION NOT DUE TO
FAULT OF CONTRACTOR 44
10.7.1 DELAY IN COMPLETION OF UTILITY
INTERCONNECTION OF LOAD 44
10.7.2 DELAY IN PERFORMANCE TESTS 45
10.8 PUNCH LIST 45
10.9 SUBSTANTIAL COMPLETION 46
10.9.1 CONDITIONS FOR SUBSTANTIAL COMPLETION 46
10.9.2 ISSUANCE OF SUBSTANTIAL COMPLETION CERTIFICATE 47
10.10 FINAL COMPLETION 47
10.10.1CONDITIONS FOR FINAL COMPLETION 47
10.10.2ISSUANCE OF FINAL COMPLETION CERTIFICATE 48
10.11 LIQUIDATED DAMAGES 48
10.11.1DELAY LIQUIDATED DAMAGES 48
10.11.2NET ELECTRICAL CAPACITY LIQUIDATED DAMAGES 48
10.11.3NET ELECTRICAL OUTPUT LIQUIDATED DAMAGES 48
10.11.4HEAT RATE LIQUIDATED DAMAGES 48
10.11.5LIQUIDATED DAMAGES NOT PENALTY 49
10.11.6CUMULATIVE REMEDIES 49
10.12 CONTRACTOR BONUSES 49
10.12.1EARLY COMPLETION BONUS 49
10.12.2ADDITIONAL EARLY COMPLETION BONUS 50
10.13 GUARANTEED COMPLETION 50
ARTICLE XI. CHANGE ORDERS 50
11.1 OWNER REQUESTED CHANGE ORDERS 50
11.2 CONTRACTOR REQUESTED CHANGE ORDERS 51
11.2.1 CONTRACTOR CHANGE ORDER 51
11.2.2 CONTRACTOR PRELIMINARY NOTICE 52
11.2.3 CONTRACTOR FAILURE TO PROVIDE PRELIMINARY
NOTICE 52
11.3 DELAY CAUSED BY OWNER, PRE-EXISTING HAZARDOUS
MATERIALS, SUBSURFACE CONDITIONS OR CHANGES
IN LAW 52
11.4 DISPUTES WITH RESPECT TO CHANGE ORDERS 53
11.5 DOCUMENTATION 53
11.6 EFFECT OF FORCE MAJEURE EVENT 53
11.7 BASIS FOR COMPENSATION FOR COSTS 53
11.8 RECORDS AND AUDIT RIGHTS 54
11.8.1 CONTRACTOR RECORDS 54
11.8.2 GENERAL AND ADMINISTRATIVE RATES 55
11.9 MITIGATION 55
11.10 ACCORD AND SATISFACTION 55
11.11 ADJUSTMENT ONLY THROUGH CHANGE ORDER 55
ARTICLE XII. SUBCONTRACTS. 55
12.1 SUBCONTRACTORS 55
12.2 MAJOR SPECIALTY CONSULTANTS, SUBCONTRACTORS
AND EQUIPMENT SUPPLIERS 55
12.3 NO PRIVITY WITH SUBCONTRACTORS 56
12.4 REVIEW AND APPROVAL NOT RELIEF OF CONTRACTOR'S
LIABILITY 56
12.5 OWNER'S RIGHTS 56
12.6 SUBCONTRACTS 56
ARTICLE XIII. WARRANTIES 56
13.1 CONTRACTOR'S WARRANTY 56
13.2 WARRANTY PERIOD 56
13.3 CONDITIONS OF WARRANTY 57
13.4 REMEDY 57
13.5 SUBCONTRACTOR WARRANTIES 58
13.6 LIMITED WARRANTY 59
13.7 WARRANTY BOND 59
ARTICLE XIV. TITLE; RISK OF LOSS 59
14.1 CLEAR TITLE 59
14.2 RISK OF LOSS 60
14.3 CONTRACTOR'S DRAWINGS, ETC. FOR USE BY OWNER 61
14.3.1 RIGHTS IN WORK PRODUCT 61
14.3.2 REUSE OF DOCUMENTS WORK PRODUCT FOR OTHER
FACILITIES 61
14.3.3 OWNER PROVIDED DOCUMENTS 61
ARTICLE XV. OPERATOR TRAINING 61
15.1 TRAINING PROGRAM 61
15.2 CAPABLE OPERATING PERSONNEL 62
15.3 RESPONSIBILITY FOR OPERATING PERSONNEL 62
ARTICLE XVI. TERMINATION 62
16.1 EVENTS OF DEFAULT BY CONTRACTOR 62
16.1.1 UNAUTHORIZED ASSIGNMENT 63
16.1.2 BREACH OF REPRESENTATION 63
16.1.3 VIOLATION OF APPLICABLE LAWS 63
16.1.4 LATE COMPLETION 63
16.1.5 FAILURE OF CONTRACTOR PERFORMANCE GUARANTY 63
16.1.6 MATERIAL DEFAULT 63
16.1.7 BANKRUPTCY 63
16.1.8 PAYMENT SECURITY DEFAULT 63
16.1.8 ABANDONMENT 63
16.1.9 FAILURE TO PROSECUTE THE WORK 63
16.1.10FAILURE TO MAINTAIN INSURANCE 63
16.2 OWNER'S REMEDIES AGAINST CONTRACTOR 64
16.3 ADDITIONAL OWNER'S RIGHTS UPON CONTRACTOR
DEFAULT 64
16.4 GENERAL OBLIGATIONS 65
16.4.1 INVENTORY EQUIPMENT, ETC. 65
16.4.2 DELIVER DESIGN WORK PRODUCT AND INFORMATION 65
16.4.3 SUPPLY PROPRIETARY COMPONENTS 65
16.6 EVENTS OF DEFAULT BY OWNER 65
16.5.1 UNAUTHORIZED ASSIGNMENT 66
16.5.2 BREACH OF REPRESENTATION 66
16.5.3 PAYMENT DEFAULT 66
16.5.4 BANKRUPTCY 66
16.5 PAYMENT SECURITY DEFAULT 66
16.6 CONTRACTOR REMEDIES 66
16.6.1 RIGHT OF TERMINATION AND SUSPENSION 66
16.6.2 OWNER'S PAYMENT OBLIGATION 67
ARTICLE XVII. FORCE MAJEURE 67
17.1 DEFINITION 67
17.2 BURDEN OF PROOF 68
17.3 FAILURE TO PERFORM DUE TO AN EVENT OF FORCE
MAJEURE 68
17.3.1 CONTRACTOR BREACH OF AGREEMENT 68
17.3.2 OWNER BREACH OF AGREEMENT 68
17.4 NOTICE OF FORCE MAJEURE 68
ARTICLE XVIII. INSURANCE 69
18.1 INSURANCE 69
18.2 INSURANCE CARRIED BY OWNER 69
18.3 RIGHT OF OWNER TO PROCURE CONTRACTOR
INSURANCE 69
18.4 POLICY TERMS AND CONDITIONS 69
18.5 SUBCONTRACTORS' INSURANCE 70
18.6 CONTRACTOR'S WAIVER 70
18.7 OBLIGATIONS NOT RELIEVED 70
ARTICLE XIX. INDEMNIFICATION 70
19.1 CONTRACTOR GENERAL INDEMNIFICATION 70
19.2 ADDITIONAL CONTRACTOR INDEMNIFICATION 71
19.3 PATENT INDEMNIFICATION 71
19.4 OWNER GENERAL INDEMNIFICATION 72
19.5 HAZARDOUS MATERIALS INDEMNIFICATION 72
19.5.1 CONTRACTOR INDEMNIFIED PARTIES 72
19.5.2 OWNER INDEMNIFIED PARTIES 72
19.6 NOTICE 73
19.7 FAILURE TO DEFEND ACTION 73
19.8 ENFORCEABILITY 73
19.8.1 INDEMNITY, DEFENSE AND HOLD HARMLESS
OBLIGATIONS 74
19.8.2 APPLICABLE LAW 74
ARTICLE XX. NON-DISCLOSURE OF INFORMATION 74
20.1 PROPRIETARY INFORMATION 74
20.2 EXCEPTIONS 74
20.3 PRESS RELEASES 74
20.4 EQUITABLE RELIEF 75
ARTICLE XXI. ASSIGNMENT; FINANCING 75
21.1 ASSIGNMENT 75
21.2 FINANCING 75
21.2.1 OWNER ASSIGNMENT TO FINANCING PARTIES;
ASSUMPTION BY FINANCING PARTIES 75
21.2.2 DOCUMENTS TO BE PROVIDED BY CONTRACTOR 75
21.2.3 INFORMATION FOR FINANCING PARTIES 75
21.2.4 RIGHT TO INSPECT 76
21.2.5 NOTICES TO FINANCING PARTIES 76
21.2.6 AMENDMENTS REQUIRED BY FINANCING PARTIES 76
ARTICLE XXII. INDEPENDENT CONTRACTOR 76
22.1 INDEPENDENT CONTRACTOR 76
22.2 CONTRACTOR'S RESPONSIBILITIES FOR ITS
EMPLOYEES 76
22.3 RESPONSIBILITIES OF CONTRACTOR AS PRINCIPAL
FOR ITS EMPLOYEES 76
ARTICLE XXIII. LIENS AND CLAIMS 77
ARTICLE XXIV. NOTICES AND COMMUNICATIONS 78
24.1 NOTICES 78
24.2 EFFECTIVENESS OF NOTICES 79
ARTICLE XXV. DISPUTE RESOLUTION 79
25.1 NEGOTIATION OF DISPUTES AND DISAGREEMENTS 79
25.2 ARBITRATION RESOLUTION 79
25.2.1 ARBITRATION RULES AND ARBITRATORS 79
25.2.2 AWARD 80
25.2.3 DISCOVERY 80
25.2.4 JOINDER 80
25.3 CONSENT TO JURISDICTION 80
25.4 CONTINUATION OF WORK 81
ARTICLE XXVI. LIMITATION OF LIABILITY 81
26.1 MAXIMUM LIABILITY 81
26.2 CONSEQUENTIAL DAMAGES 81
26.3 RELEASES VALID IN ALL EVENTS 81
26.4 SCOPE OF RELEASES 81
ARTICLE XXVII. DRUG AND ALCOHOL-FREE WORKPLACE 82
ARTICLE XXVIII. PROJECT PLANNING AND CONTROL 82
28.1 PROJECT SCHEDULE AND CPM SCHEDULE 82
28.1.1 PROJECT SCHEDULE 82
28.1.2 CPM SCHEDULE SUBMISSION 83
28.1.3 PROGRESS UPDATES TO CPM SCHEDULE 83
28.1.4 APPROVAL OF BASELINE CPM SCHEDULE AND UPDATES
TO CPM SCHEDULE 83
28.2 PROGRESS REPORTS AND MEETINGS 83
28.3 PROJECT IMPLEMENTATION PLAN 84
28.4 RECOVERY SCHEDULE 85
ARTICLE XXIX. MISCELLANEOUS 85
29.1 VALIDITY AND ENFORCEABILITY 85
29.2 GOVERNING LAW 86
29.3 WAIVER 86
29.4 THIRD-PARTY BENEFICIARIES 86
29.5 CONTRACTOR'S EMPLOYEES 86
29.6 FOREIGN CORRUPT PRACTICES ACT 86
29.7 COUNTERPARTS 86
ENGINEERING, PROCUREMENT AND CONSTRUCTION CONTRACT
This ENGINEERING, PROCUREMENT AND CONSTRUCTION CONTRACT is
made and entered into as of August 17, 2010, by and between
Seaboard Corporation, a company organized and existing under the
laws of Delaware, with offices located at 9000 West 67 Street,
Suite 300, Merriam, Kansas 66202 ("Owner"), and WARTSILA FINLAND
OY, a company incorporated under the laws of Finland, with
offices located at Tarhaajantie 2, FIN-65100 Vaasa, Finland
("Contractor").
RECITALS
WHEREAS, Owner wishes to have constructed a gas diesel
engine combined cycle barge-mounted generating power plant,
including supply of land-based transformers and substation
equipment (as more fully described below, the "Facility" or
"Project"), with a total net capacity of 106 MW (108 MW when
running on Heavy Fuel Oil) for the delivery and sale of
electricity in the Dominican Republic; and
WHEREAS, Contractor is in the business of providing design,
engineering, equipment procurement, construction, Start-up,
testing and training services for gas diesel engine generating
barge-mounted power plant projects; and
WHEREAS, Owner wishes to contract with Contractor for the
design, engineering, procurement, construction, Start-up, and
testing of the aforementioned Facility and training related
thereto; and
WHEREAS, the parties desire to set forth the terms and
conditions under which Contractor will provide and Owner will pay
for such goods and services;
NOW, THEREFORE, in consideration of the mutual covenants
herein contained, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged,
intending to be legally bound, the parties hereto agree as
follows:
ARTICLE I.
AGREEMENT; INTERPRETATION; DEFINITIONS
1.1 Documents Included. This Engineering, Procurement and
Construction Contract between Owner and Contractor (this
"Agreement"), as may be amended from time to time in accordance
herewith, consists of this document and the following annexes and
exhibits which are attached hereto or shall be attached hereto in
accordance with the provisions of this Agreement (collectively,
"Appendices"), and which are specifically made a part hereof by
this reference:
Annex A - Technical Specification
Annex A.1 - Spare Parts List W 18V50DF
Annex A.2 - W 50 Hand Tools
Annex A.3 - Turbo-charger TPL 76C List of Tools
Annex A.4 - ME Service Tools V50DF
Annex A.5 - Steam Turbine Spare Parts
Annex A.6 - HFO Separator Tools
Annex A.7 - Lube Oil Separator Tools
Annex A.8 - Emissions Data Sheet
Annex B - Scope of Supply List
Annex C - List of Preliminary Design Drawings
Exhibit 2.1.1 - Facility and Job Site Map
Exhibit 2.1.5 - List of Governmental Approvals to be
Obtained
Exhibit 2.7 - Term Sheet ofIrrevocable Import Letter
of Credit
Exhibit 3.11 - Form of Contractor Performance Guaranty
Exhibit 3.2.4 - List of Key Personnel
Exhibit 6.1.1 - Milestone Payment Schedule
Exhibit 6.1.2(A) - Form of Invoice
Exhibit 6.1.2(B) - Form of Milestone Completion Certificate
Exhibit 6.1.2(C) - Form of Contractor's Intermediate
"Lien and Claim Waiver" Certificate
Exhibit 6.1.2(D) - Form of Subcontractor's Intermediate
"Lien and Claim Waiver" Certificate
Exhibit 6.1.4(A) - Form of Contractor's Final "Lien and
Claim Waiver" Certificate
Exhibit 6.1.4(B) - Form of Subcontractor's Final "Lien
and Claim Waiver" Certificate
Exhibit 10.2 - Performance Test Guidelines
Exhibit 10.4.2 - Form of Mechanical Completion Certificate
Exhibit 10.5.4 - Form of Performance Test Completion
Certificate
Exhibit 10.6.2 - Form of Commercial Operation Certificate
Exhibit 10.8.2 - Form of Substantial Completion Certificate
Exhibit 10.10.2 - Form of Final Completion Certificate
Exhibit 11.1(A) Form of Unilateral Change Order
Exhibit 11.1(B) Form of Mutual Change Order
Exhibit 12.1 Approved Subcontractors
Exhibit 13 - Form of Warranty Bond
Exhibit 14.1 - Form of Bill of Sale
Exhibit 16.6.2 - Termination Payment Schedule
Exhibit 18.1 - Contractor Furnished Insurance
Exhibit 28.1 - Project Schedule
1.2 Entire Agreement. Any Work (as hereinafter defined)
described in this Agreement which was performed or caused to be
performed by Contractor prior to the execution of this Agreement,
including all such Work performed pursuant to the Letter
Agreement and Side Letter, shall be deemed to have been performed
under this Agreement. This Agreement sets forth the full and
complete understanding of the Parties relating to the subject
matter hereof as of the date first above stated, and supersedes
any and all negotiations, agreements and representations made or
dated prior thereto, including the Letter Agreement and Side
Letter. Any payments made by Owner under the Letter Agreement
and Side Letter and any Work
2
performed by Contractor under the Letter Agreement and Side
Letter shall be deemed to have been made or performed, as
applicable, pursuant to this Agreement and shall be governed by
and subject to the terms of this Agreement.
Subsequent to the date hereof, this Agreement may be
supplemented, modified or otherwise amended by mutual agreement
or in accordance with the terms of this Agreement. Such
amendments, if any, must be in the form of a written amendment to
this Agreement, and, except as set forth in unilateral Change
Orders issued by Owner to Contractor hereunder, signed by
authorized representatives of both Parties to this Agreement.
1.3 Conflicting Provisions. In the event of any conflict or
inconsistency between or among this document and the Appendices,
such conflict shall be resolved in accordance with the following
order of precedence: (a) this document; (b) Annex A; (c) Annex B;
(d) the other Appendices. Either Party, upon becoming aware of
any conflict or inconsistency among any of the components of this
Agreement, shall promptly notify the other Party in writing of
such conflict or inconsistency. Any conflict or inconsistency
which cannot be resolved by the Parties to their mutual
satisfaction shall be resolved in accordance with the provisions
of ARTICLE XXV.
1.4 Rules of Interpretation.
1.4.1 Terminology. Unless otherwise required by
the context in which any term appears:
(i) Capitalized terms used in this Agreement
shall have the meanings specified in this Article or defined
elsewhere in this Agreement.
(ii) The singular shall include the plural and the
masculine shall include the feminine and neuter.
(iii) References to "Articles," "Sections,"
"Annexes", or "Exhibits" shall be to articles, sections,
annexes, or exhibits of this Agreement, and references to
paragraphs or clauses shall be to separate paragraphs or
clauses of the section or subsection in which the reference
occurs.
(iv) The words "herein," "hereof" and "hereunder"
shall refer to this Agreement as a whole and not to any
particular section or subsection of this Agreement; the
words "include," "includes" or "including" shall mean
"including, but not limited to;" and the words "best
efforts" shall mean a level of effort which, in the exercise
of reasonable judgment in the light of facts known at the
time a decision is made, can be expected to accomplish the
desired result at a reasonable cost, consistent with Prudent
Electric Practices.
(v) The term "day" shall mean calendar day
(beginning at 12:00 a.m. and ending at 11:59 p.m.), in the
location where the relevant (a) payment of funds is to be
received, (b) notice is to be received, or (c) performance
is to be made; and the term "business day" shall mean a
weekday on which commercial banks are commonly open in the
relevant location as aforesaid; provided, that in the case
of (c), if performance is to be made at the Job Site and if
work is normally scheduled to be conducted at the Job Site
on
3
a weekend or holiday, then such day shall be considered a
business day. Whenever an event is to be performed by a
particular date, or a period ends on a particular date, and
the date in question falls on a weekend, or on a day which
is not a business day, the event shall be performed, or the
period shall end, on the next succeeding business day. The
term "month" shall mean a calendar month, and the term
"year" shall mean a calendar year.
(vi) All accounting terms not specifically defined
herein shall be construed in accordance with generally
accepted accounting principles in the United States of
America, consistently applied.
(vii) All references to a particular entity shall
include such entity's successors and permitted assigns.
(viii) All references herein to any contract
(including this Agreement) or other agreement shall be to
such contract or other agreement as amended and supplemented
or modified to the date of reference.
(ix) The Facility will operate on dual fuel,
natural gas ("NG") and heavy fuel oil ("HFO") and will have
net capacity of 106 MW when running on NG and 108 MW when
running on HFO. With respect to any standards set out in
this document which do not distinguish NG or HFO the first
Arabic numeral shall mean when running on NG and the second
parenthetical standard provided shall mean when running on
HFO.
1.4.2 Headings. The titles of the articles and
sections herein have been inserted as a matter of
convenience of reference only, and shall not control or
affect the meaning or construction of any of the terms or
provisions hereof.
1.4.3 Joint Responsibility for Drafting. This
Agreement was negotiated and prepared by both Parties with
advice of counsel to the extent deemed necessary by each
Party; the Parties have agreed to the wording of this
Agreement; and none of the provisions hereof shall be
construed against one Party on the ground that such Party
is the author of this Agreement or any part thereof.
1.4.4 Obligation to Act in Good Faith, Etc. The
Parties shall act reasonably and in accordance with the
principles of good faith and fair dealing in the performance
of this Agreement. Unless expressly provided in this
Agreement that a Party may exercise its sole discretion with
respect thereto, (i) where this Agreement requires the
consent, approval, or similar action by a Party, such
consent or approval shall not be unreasonably delayed,
and (ii) wherever this Agreement gives a Party a right to
determine, require, specify or take similar action with
respect to a matter, such determination, requirement,
specification or similar action shall be reasonable.
1.4.5 Definitions. For the purposes of this
Agreement, the following words and terms shall have the
meanings specified below (other words and abbreviations that
have well-known technical or trade meanings are used in this
Agreement in accordance with such recognized meanings):
4
Affiliate. A Person who, with respect to a specified
Person, directly or indirectly through one or more intermediaries
controls, or is controlled by, or is under common control with,
the Person specified.
Agreement. As defined in Section 1.1.
Appendices. As defined in Section 1.1.
Applicable Codes and Standards. Any and all codes,
standards or requirements set forth herein (including the
Specifications) or in any Applicable Laws, which codes, standards
and requirements shall govern Contractor's performance of the
Work, as provided herein. In the event of an inconsistency or
conflict between any of the Applicable Codes and Standards, the
highest performance standard as contemplated therein shall govern
Contractor's performance under this Agreement. In all places in
this Agreement where the Contractors make a representation, or
have an obligation to ensure that the Work or Facility is or will
be in compliance with all Applicable Codes and Standards as
relates to Emissions, any such representation or obligation shall
be satisfied upon the Work or Facility meeting the Environmental
Requirements.
Applicable Laws. All laws, ordinances, judgments, decrees,
injunctions, writs, rules, regulations, orders and
interpretations of any Governmental Unit, including Governmental
Approvals, Environmental Laws, laws related to health and safety
and Applicable Codes and Standards set forth in Applicable Laws,
as may be in effect at the time of Contractor's performance under
the Agreement. In all places in this Agreement where the
Contractors make a representation, or have an obligation to
ensure that the Work or Facility is or will be in compliance with
all Applicable Laws as relates to Emissions, any such
representation or obligation shall be satisfied upon the Work or
Facility meeting the Environmental Requirements.
Arbitration Rules. As defined in Section 25.2.
Barge. The portion of the Facility consisting of the hull,
deck and superstructure upon which the Generator Sets and
required electrical and auxiliary Equipment and Materials shall
be installed as further described in the Specifications.
Base Rate. The rate of interest defined in Section 6.1.5.
Books and Records. As defined in Section 11.8.1.
Change of Law. Any of the following events, to the extent
they establish requirements materially affecting the performance
of the Work that are materially more restrictive or burdensome
than the requirements specified in this Agreement or have a
material adverse effect on Contractor's cost of and schedule for
performance of the Work: (a) The enactment, adoption,
promulgation, modification or repeal, after the Effective Date,
of any Applicable Laws; or (b) the imposition of any material
condition on the issuance or renewal of any Governmental Approval
after the Effective Date; or (c) the failure to issue or renew
any Governmental Approval; provided, however, that none of the
following shall be a Change of Law: (i) any Applicable Laws
issued, enacted or adopted before the Effective Date but which
does not become effective
5
until after the Effective Date; (ii) the general requirements
contained in any Governmental Approval at the time of application
or issuance to comply with future laws, ordinances, codes,
rules, regulations or similar legislation, or (iii) a change
in applicable withholding, income or gross receipts tax law
enacted or effective after the Effective Date by any
Governmental Unit
Change Order. A written order issued by Owner to Contractor
pursuant to ARTICLE XI hereof after the execution of this
Agreement, in the form of Exhibit 11.1(A), or a written
instrument signed by both Parties after the execution of this
Agreement in the form of Exhibit 11.1(B), authorizing an
addition, deletion or revision in the Work, any change to the
Contract Amount, and/or any adjustment to the Guaranteed
Commercial Operation Date, Guaranteed Substantial Completion
Date, Guaranteed Final Completion Date or Project Schedule.
Check-out. The tests and procedures identified in Part II.B
of the Test Guidelines (Exhibit 10.2).
Classification Society. As defined in Annex A.
Commercial Operation. Satisfaction of the conditions set
forth in Section 10.6.1, as evidenced by Owner's acceptance of
the Final Completion Certificate in accordance with Section 10.1.
Commercial Operation Certificate. The certificate issued by
Contractor, subject to Owner's acceptance, as provided in
Sections 10.1 and 10.6.2, certifying that Commercial Operation
has been achieved.
Compensable Costs. As defined in Section 11.7.
Completion Certificate. Any of the Milestone Completion
Certificates, Mechanical Completion Certificate, Performance Test
Completion Certificate, Commercial Operation Certificate,
Substantial Completion Certificate and Final Completion
Certificate.
Construction Equipment. The equipment, machinery,
structures, scaffolding, materials, tools, supplies and systems,
purchased, owned, rented or leased by Contractor or its
Subcontractors for use in accomplishing the Work, but not
intended for incorporation into the Project.
Contract Amount. The amount in Euros payable to Contractor
set forth in Section 5.1, as adjusted pursuant to the terms of
this Agreement.
Contractor. Wartsila Finland Oy.
Contractor Indemnified Parties. As defined in Section 19.4.
Contractor Performance Guaranty. As defined in Section 3.10.
Corrective Work. As defined in Section 13.4
CPM Schedule. As defined in Section 28.1.2.
6
Damages. As defined in Section 19.1.
Defect or Deficiency. Any failure, flaw, omission, fault,
inadequacy, discrepancy or inefficiency in the Work or any
component of the Work to conform to the requirements of this
Agreement, including any breach of the warranty set forth in
Section 13.1.
Delay Liquidated Damages. As defined in Section 10.11.1.
Direct Personnel Expense. As defined in Section 11.7(i).
Dispute. As defined by 25.1.
Dollar or $. United States currency.
Effective Date. The effective date of this Agreement, as
defined in Section 7.1.
Emissions. The air emission levels from the Engines at
their stacks, the noise emission levels from the Facility, river
cooling water flow, sanitary waste water after sewage
treatment, boilers water blow down and the effluent emission
levels in the discharge water after the oily water treatment
system on the Barge in each case as determined during an
Emissions Test.
Emissions Guarantees. The guarantees that the Emissions,
measured during an Emissions Test, will not exceed the limits set
forth in Annex A.1.
Emissions Tests. The tests conducted in accordance with the
Test Procedures to determine the Emissions according to the terms
of this Agreement.
Engine. A Wartsila 18V50DF engine.
Environmental Law. Any environmental regulation, rule,
ordinance, guidance document, or by-law of any Governmental Unit
whether existing as of the date hereof, previously enforced or
subsequently enacted.
Environmental Requirements. The level of emissions set forth
in Annex A.8, which are subject to the quality of fuel supplied
by Owner.
Equipment and Materials. All of the equipment, materials,
machinery, apparatus, structures, supplies, parts, tools and
other goods required by the terms of this Agreement to complete
the Work and to be incorporated into the Facility, including the
Generator Sets. Equipment and Materials shall not include any
Construction Equipment.
Euros. The single currency of the European Union.
Event of Contractor Default. As defined in Section 16.1.
Event of Owner Default. As defined in Section 16.5.
7
Extended Warranty Period. As defined in Section 13.2.
Facility. The complete, fully functional and operational
106 MW net pre-engineered dual fuel engine combined cycle barge-
mounted generation power plant (108 MW when running on Heavy Fuel
Oil), excluding on-shore Work provided by the Owner, all as set
forth in more detail in the Specifications or elsewhere in this
Agreement, (and to the extent not specifically covered by the
Specifications or other components of this Agreement, all other
elements incidental thereto as would ordinarily be reasonably
expected to be included in such an electric generation plant in
accordance with the Specifications, the Scope of Work and Prudent
Electric Practices), including facilities and all related systems
and controls necessary to enable the Facility to fully satisfy
the requirements for Final Completion as set forth herein located
in Santo Domingo, Dominican Republic for the generation of
electric power to the electricity grid of the Utility.
Facility Site. The location of the Facility described in
Exhibit 2.1.1.
Final Completion. Satisfaction of the conditions set forth
in Section 10.10.1, as evidenced by Owner's acceptance of the
Final Completion Certificate in accordance with Section 10.1.
Final Completion Certificate. The certificate issued by
Contractor, subject to Owner's acceptance, as provided in
Sections 10.1 and 10.10.2, certifying that Final Completion has
occurred.
Financing Agreements. The agreement or agreements between
Owner and Financing Parties respecting the financing of the
Facility, as provided in ARTICLE XXI.
Financing Parties. Any Person or Persons (and any trustee
or agent acting on their behalf) providing debt or equity
financing to Owner to provide funds for the development, design,
construction and operation of the Facility, and any Person or
Persons providing funds for refinancing or take-out of any such
financing, including any indenture trustee representing such
Person or Persons.
Force Majeure. As defined in Section 17.1.
Gas. Means natural gas.
Generator Sets. The six (6) generator set units, each
consisting of the assembly of an Engine, mechanical coupling and
generator and the one (1) steam turbine generator set unit
consisting of a steam turbine, generator, six (6) exhaust gas
boilers and condenser, all of which are described in more detail
in the Specifications and to be supplied and installed by
Contractor on the Barge as part of the Work pursuant to this
Agreement.
Governmental Approval. Any authorization, consent,
approval, license, lease, ruling, permit, certification,
exemption, or registration from, by or with any Governmental Unit
required to be obtained or maintained in connection with the
Project, the Job Site, the Shipyard, the performance of the Work,
including the fabrication of the Equipment and Materials,
construction
8
of the Facility at the Shipyard, installation of the Facility or
the ownership or operation of the Facility.
Governmental Unit. Any national, state or local government,
any political subdivision thereof, or any governmental, quasi-
governmental, judicial, public or statutory instrumentality,
administrative agency, authority, body or other entity having
jurisdiction over the performance of the Work, the Facility or
its operations (including the transmission of electricity from
the Facility), or the health, safety or environmental conditions
of the Facility, the Work, the Job Site, the Shipyard or
otherwise over the Parties.
Guaranteed Commercial Operation Date. The date which is 525
days after the Starting Date, subject to extension in accordance
with the terms of this Agreement, by which date Contractor has
committed to achieve Commercial Operation.
Guaranteed Final Completion Date. The date which is 645
days after the Starting Date, subject to extension in accordance
with the terms of this Agreement, by which date Contractor has
committed to achieve Final Completion.
Guaranteed Substantial Completion Date. The date which is
555 days after the Starting Date, subject to extension in
accordance with the terms of this Agreement, by which date
Contractor has committed to achieve Substantial Completion.
Guarantor. Contractor's parent company, Wartsila
Corporation, a corporation organized and existing under the laws
of Finland, with offices located at John Stenbergin ranta 2, P.O.
Box 196, FI-00531 Helsinki, Finland.
Hazardous Materials. Any hazardous or toxic substance or
hazardous or toxic waste, contaminant, or pollutant as defined in
or regulated by Applicable Laws, including the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C.
section 9601 et seq., the Resource Conservation and Recovery
Act, 41 U.S.C. section 6901 et seq., the Toxic Substances Control
Act, 15 U.S.C. section 2601 et seq. and other applicable
Environmental Laws.
Heat Rate. The ratio of the total fuel consumed during a
Heat Rate Test, based on the lower heating value of the fuel as
determined according to American Society of Mechanical Engineers
test methods, expressed in BTU, over the Net Electrical Capacity
(expressed in kWh), such Net Electrical Capacity to be as
measured at the high voltage side of the step-up transformer,
during such Heat Rate Test. Fuel consumed will be measured by the
flow meters, less any leakage, as provided with the Test
Procedures. Test results will be adjusted to the Site Conditions
from the average ambient conditions and the actual Net Electrical
Capacity at the Facility during the Heat Rate Test in accordance
with the Test Procedures. There will be no allowance for
measurement tolerances of meters used in the Heat Rate Test.
Heat Rate Guarantee. The guarantee that the Heat Rate of
the Facility during a Heat Rate Test shall not exceed the limits
set forth in Section A.O.2 of Annex A.
Heat Rate Liquidated Damages. As defined in Section
10.11.4.
9
Heat Rate Test. A continuous twelve (12) hour test
conducted in accordance with the Test Procedures to determine the
Heat Rate of the Facility.
Heavy Fuel Oil or HFO. Means heavy fuel oil.
Hull. As defined in Annex A.
Indemnified Party. As defined in Section 19.6.
Indemnifying Party. As defined in Section 19.6.
Job Site. The Facility Site and staging, laydown and
working areas designated for the installation and commissioning
of the Facility and the conducting of the Performance Tests in
Santo Domingo, Dominican Republic, as identified in Exhibit
2.1.1, including such additional areas as may, from time to time,
be designated by Owner for Contractor's use hereunder.
Key Personnel. As defined in Section 3.2.5.
Letter Agreement. The letter agreement between Seaboard
Corporation and Contractor dated August 15, 2009.
Light Fuel Oil or LFO. Means light fuel oil.
Liquidated Damages. Delay Liquidated Damages and
Performance Liquidated Damages.
Maximum Heat Rate. A Heat Rate equal to one hundred and
three percent (103%) of the Heat Rate Guarantee.
Mechanical Completion. Satisfaction of the conditions set
forth in Section 10.4.1, as evidenced by Owner's acceptance of
the Mechanical Completion Certificate in accordance with Section
10.4.2.
Mechanical Completion Certificate. The certificate issued
by Contractor, subject to Owner's acceptance, as provided in
Sections 10.1 and 10.4.2, certifying that Mechanical Completion
has occurred.
Milestones. A designated portion of the Work as shown in
the Milestone Payment Schedule.
10
Milestone Payment Schedule; Milestone Payments. The
schedule of Milestones set forth in Exhibit 6.1.1 pursuant to
which Contractor earns progress payments during the Work in
accordance with the provisions of ARTICLE VI; and the payments to
be made pursuant to said schedule.
Milestone Completion Certificate. A certificate, in the
form set forth in Exhibit 6.1.2(B), delivered by Contractor to
Owner, certifying that a Milestone has been completed entitling
Contractor to a Milestone Payment in accordance with the
provisions of ARTICLE VI.
Minimum Net Electrical Capacity. Net Electrical Capacity,
as measured during a Net Electrical Capacity Test, of ninety-
eight percent (98%) of the Net Electrical Capacity Guarantee
(i.e., an average of NG and HFO readings, 104,178 kW (105,862
kW), during 24 hours or a total of 2,500,270 kWh (2,540,677
kWh)for the 24-hour period).
Minimum Net Electrical Output. Net Electrical Output, as
measured during a Net Electrical Output Test, of ninety-eight
percent (98%) of the Net Electrical Output Guarantee (i.e., an
average of NG and HFO readings, 101,053 kW (102,686 kW), during
36 hours or a total of 3,637,893 kWh (3,696,686 kWh)for the 36-
hour period).
Minimum Performance Standards. Net Electrical Capacity that
is equal to or greater than the Minimum Net Electrical Capacity,
Net Electrical Output that is equal to or greater than the
Minimum Net Electrical Output, a Heat Rate that does not exceed
the Maximum Heat Rate, and Emissions that do not exceed the
levels specified in the Emissions Guarantee set forth in Annex
A.1.
Minimum Performance Standards Correction Period. As defined
in Section 10.5.4.
Net Electrical Capacity. The electric output of the
Facility, measured during a Net Electrical Capacity Test at the
high voltage side of the step-up transformer. Test results will
be adjusted to the Site Conditions from the average ambient
conditions at the Facility Site during the Net Electrical
Capacity Tests in accordance with the Test Procedures. There
will be no allowance for measurement tolerances of meters used in
the Net Electrical Capacity Tests. Net Electrical Capacity can
be expressed in kW or in kWh if being expressed in reference to a
specified period of time.
Net Electrical Capacity Guarantee. The guarantee that the
Net Electrical Capacity of the Facility measured during a Net
Electrical Capacity Test shall be not less than an average of NG
and HFO readings, 106,304 kW (108,022 kW), during twenty-four
(24) hours (i.e., a total of 2,551,296 kWh (2,592,528 kWh) for
the 24-hour period).
Net Electrical Capacity Liquidated Damages. As defined in
Section 10.11.2.
Net Electrical Capacity Test. A continuous twenty-four (24)
hour test conducted in accordance with the Test Procedures to
determine the Net Electrical Capacity of the Facility.
11
Net Electrical Output. The electric output of the Facility,
measured during a Net Electrical Output Test at the high voltage
side of the step-up transformer. Test results will be adjusted
to the Site Conditions from the average ambient conditions at the
Facility Site during the Net Electrical Output Test in accordance
with the Test Procedures. There will be no allowance for
measurement tolerances of meters used in the Net Electrical
Output Test. Net Electrical Output can be expressed in kW or in
kWh if referring to a specified period of time.
Net Electrical Output Guarantee. The guarantee that the
Facility will have a Net Electrical Output of at least ninety-
seven percent (97%) of an average of NG and HFO readings, 106,304
kW (108,022 kW), during 36 hours (i.e., an average 103,115 kW
(104,781 kW) during 36 hours or a total of 3,712,136 kWh
(3,772,128 kWh) kWH for the 36-hour period), as measured during a
Net Electrical Output Test.
Net Electrical Output Liquidated Damages. As set forth in
Section 10.11.3.
Net Electrical Output Test. A 36 hour test conducted in
accordance with the Performance Test Procedures to determine the
Net Electrical Output.
Notice. As defined in Section 25.1.
Operating Manuals. As defined in Section 8.2
Owner. Seaboard Corporation.
Owner Delay. Any delay in the performance of the Work
caused by (i) failure by Owner to perform, or cause to be
performed its obligations in accordance with this Agreement for
any reason (other than the fault of Contractor, its
Subcontractors or other parties for whom Contractor is
responsible) or (ii) any action or inaction by the Utility for
any reason (other than the fault of Contractor, its
Subcontractors or other parties for whom Contractor is
responsible).
Owner Indemnified Parties. As defined in Section 19.1.
Owner's Engineer. The engineering firm or any other
engineer engaged by Owner and identified to Contractor in
accordance with Section 2.5.
Owner's Representative. The individual designated by Owner
pursuant to Section 2.1.4 hereof, who shall have the
responsibility and authority specifically delegated to such
individual by Owner and made known in writing to Contractor.
Party. Owner or Contractor.
Parties. Owner and Contractor.
Performance Guarantees. The Net Electrical Capacity
Guarantee, Heat Rate Guarantee and Net Electrical Output
Guarantee.
Performance Liquidated Damages. Net Electrical Capacity
Liquidated Damages, Net Electrical Output Liquidated Damages and
Heat Rate Liquidated Damages.
12
Performance Tests. Collectively, the Net Electrical
Capacity Test, the Heat Rate Test, the Net Electrical Output Test
and the Emissions Tests as such tests may be modified by mutually
agreement of Owner and Contractor, and "Performance Testing"
shall be construed accordingly.
Performance Test Completion Certificate. The certificate,
in the form set forth in Exhibit 10.5.4, delivered by Contractor
to Owner, subject to verification by Owner's Engineer and
acceptance by Owner, as provided in Sections 10.1 and 10.5.4,
certifying that the Performance Tests have been completed and
setting forth the results thereof in such detail to reflect the
performance of the Facility as tested with respect to Net
Electrical Capacity, Heat Rate, Net Electrical Output,
Reliability and Emissions.
Person. Any individual or any company, joint venture,
corporation, partnership, association, joint stock company,
limited liability company, trust, estate, unincorporated
organization, Governmental Unit or other entity having legal
capacity, including the Parties, any Subcontractors, and their
respective directors, officers, agents, employees and
representatives.
Power House. As defined in Annex A.
Preliminary Tests. The various tests and procedures to be
performed in connection with Check-out and Start-up, as set forth
in the Test Procedures.
Primary Warranty Period. As defined in Section 13.2.
Project. The meaning specified for "Facility."
Project Implementation Plan. As defined in Section 28.2.
Project Manager. The Project Manager designated by
Contractor pursuant to Section 3.2.10.
Project Schedule. As defined in Section 28.1.1.
Prudent Electric Practices. Those practices, methods,
techniques, standards and equipment, generally prevailing at the
time of performance of the Work, that are commonly used in
prudent engineering, construction, operations and maintenance in
the United States or the European Union to design, construct,
operate and maintain a fully functional electric generation
facility comparable to the Facility, lawfully and with the
objectives of safety, dependability, efficiency, and economy.
Punch List. The list of Work prepared jointly by Owner and
Contractor in accordance with Section 10.7, which sets forth
those items which remain to be completed after commencement of
Commercial Operation to ensure that the Facility fully complies
with the requirements of this Agreement, which shall be only
those items of Work (i) that do not preclude the Facility or a
system of the Facility from operating or functioning as the
Facility or such system was designed and intended to operate,
(ii) the absence of which does not create any operational hazard
or hazard to the Work, and (iii) the completion of which will not
13
unreasonably interrupt or interfere with the Commercial Operation
of the Facility or Applicable Laws or safety.
Reference Heavy Fuel Oil. As defined in Exhibit 10.2.
Replacement Contractor. As defined in Section 16.3.
Shipyard. The facilities of the Subcontractor where
fabrication or modification of the Barge will be conducted,
including installation of the Generator Sets and required
electrical and auxiliary Equipment and Materials onto the Barge.
The Shipyard is, at the option of Contractor, one of Unithai,
Drydocks World, ASL Marine, Keppel Singmarine, Jurong, Sanitierul
Naval Constanta or Keppel Amfels, or such other shipyard as
Contractor and Owner shall mutually agree upon.
Side Letter. The letter agreement between Owner and
Contractor dated May 25, 2010.
Site Conditions. The stipulated conditions at the Facility
Site for purposes of Facility design and calculation of
Performance Tests as set forth in the Technical Specifications.
Site Works. As defined in Section 2.6.
Specifications. Collectively, the Technical Specification
set forth in Annex A and the Scope of Work set forth in Annex B.
Starting Date. Means August 17, 2010.
Start-up. The process of collectively starting and
initially operating the aggregate of systems, subsystems, and
components of each Generator Set and the Facility as a whole,
including the Preliminary Test requirements of Exhibit 10.2. A
necessary prerequisite of Start-up is that Check-out on
individual systems, subsystems, components and auxiliaries has
been satisfactorily completed. Unless otherwise stated herein,
Start-up will commence at first roll of the Engines and
auxiliaries and will conclude upon Mechanical Completion.
Subcontractor. Any Person, including the entity at whose
Shipyard the Barge will be fabricated or modified and any vendor,
suppliers, materialmen, consultants and Subcontractors at any
tier providing Equipment and Materials or services to or on
behalf of Contractor in connection with the Facility (including
any Person at any tier with whom any Subcontractor has further
contracted any part of the Work).
Substantial Completion. Satisfaction of the conditions set
forth in Section 10.9.1, as evidenced by Owner's acceptance of
the Substantial Completion Certificate in accordance with Section
10.1.
Substantial Completion Certificate. The certificate issued
by Contractor, subject to Owner's acceptance, as provided in
Sections 10.1 and 10.9.2, certifying that Substantial Completion
has occurred.
14
Surveyor. American Bureau of Shipping or such other
classification society mutually agreed upon by the Parties and
hired by Contractor as a Subcontractor.
Termination Payment Schedule. The schedule set forth in
Exhibit 16.6.2 showing the portion of the Contract Amount payable
to Contractor (before deduction of amounts already paid) in case
of cancellation or termination of this Agreement in accordance
with the provisions hereof.
Test Guidelines (Performance Test Guidelines). The test
guidelines set forth in Exhibit 10.2 which will form the basis
for development of the Test Procedures.
Test Procedures. As defined in Section 10.2.
Utility. Means Corporacion Dominicana de Electricidad.
Work. As defined in Section 3.1.
Work Product. As defined in Section 14.3.1.
ARTICLE II.
RESPONSIBILITIES OF OWNER
2.1 Owner's Responsibilities. Owner recognizes and
acknowledges the duty to cooperate with Contractor, and agrees
not to unreasonably interfere with Contractor's agents, employees
or Subcontractors during the performance of this Agreement.
Without limiting the generality of the foregoing, Owner shall be
responsible for the following matters to be performed within the
time frames set forth herein:
2.1.1 Access to Job Site. Furnish the Job Site, as
identified (together with the Facility Site) in Exhibit 2.1.1,
and assure reasonable rights of ingress and egress to and from
the Job Site for Contractor and all Subcontractors, sufficient
for the performance of the Work.
This obligation shall include the duty to provide
rights of way, permits, licenses and evidence of rights of use
for the land, waterways and water bottoms for the areas
constituting the Job Site and the approaches thereto. The Job
Site shall be available prior to the estimated time of arrival of
the Facility in accordance with Exhibit 28.1, as such schedule
may be modified by the Parties, for all aspects of the Work. Any
delay in making the Job Site available as aforesaid shall result
in an adjustment to the Guaranteed Commercial Operation Date to
the extent such delay affects performance of any Work that is on
the critical path of the CPM Schedule and causes the Contractor
to complete the Work beyond the Guaranteed Commercial Operation
Date and an adjustment to the Contract Amount for any increased
costs caused by such delay to the extent permitted under Section
11.2.1(i).
Owner may designate a Job Site different than the
site identified in Exhibit 2.1.1 by sending a written notice to
Contractor. In such event, the alternative site designated shall
constitute the Job Site as defined herein for purposes of this
Agreement. Contractor shall
15
be entitled to a Change Order for such change to the extent
expressly permitted by Section 11.2.1(i).
2.1.2 Easements. Obtain and pay for all
necessary easements for power lines, fuel lines, waters lines,
waste water lines, and sewer lines, to the Job Site, required
for performance of the Work.
2.1.3 Construction Utilities. Provide construction
power and construction water and two telephone lines in the
vicinity of the Job Site at no additional cost to the Contractor.
2.1.4 Owner's Representative. Designate, by
written notice to Contractor, an Owner's Representative, who
shall be authorized to act on behalf of Owner, with whom
Contractor may consult at all reasonable times, and whose written
instructions, requests, and decisions will be binding upon Owner
as to all matters pertaining to this Agreement and the
performance of Owner hereunder. If the Owner's Representative
does not have authority to approve Change Orders, Owner shall
deliver a notice to Contractor identifying such persons within
Owner's organization that do have such authority. Owner may, at
any time by written notice to Contractor, change Owner's
Representative or, if applicable, the persons designated as
having authority to approve Change Orders.
2.1.5 Owner's Governmental Approvals. Obtain all
Governmental Approvals in the Dominican Republic necessary for
the construction, installation, Start-up, Performance Testing and
operation of the Facility (and provide to Contractor promptly
after Owner's receipt, copies of any such Governmental Approvals
that affect the Work including those identified in Exhibit 2.1.5
as being Owner's responsibility). Owner shall provide reasonable
cooperation and assistance to Contractor in obtaining
Governmental Approvals to be obtained by Contractor under this
Agreement, provided that Contractor shall be responsible for
obtaining all permits, visas and authorizations which may be
required for Contractor and its Subcontractors to do business and
to perform Work of the type contemplated herein in the Dominican
Republic and in any other country in which the Work may be
performed.
During the period ending sixty (60) days after the
Effective Date, Contractor and Owner shall cooperate to identify
any applicable Governmental Approvals that may be required in the
Dominican Republic in connection with the Work. In the event
that the Parties identify after the Effective Date additional
applicable Governmental Approvals, affecting the Work, that
affect the performance of the Work, the provisions of Section
11.1 shall apply
Any failure or delay in obtaining the Governmental
Approvals, including any new Governmental Approvals identified
after the Effective Date, for which Owner is responsible which
causes delay to Contractor's performance of the Work shall
entitle Contractor to an adjustment in the Guaranteed Commercial
Operation Date to the extent such delay affects performance of
any Work that is on the critical path of the CPM Schedule and
causes the Contractor to complete the Work beyond the Guaranteed
Commercial Operation Date and an adjustment to the Contract
Amount for increased costs caused by such delay to the extent
permitted under Section 11.2.1(i).
16
2.1.6 Registration and Financing Requirements.
Arrange and pay for registration of the Barge under the
appropriate flag determined by Owner.
2.1.7 Operating Personnel. Supply capable
operating personnel for training, Start-up and the conduct of the
Performance Tests and operation following Commercial Operation as
listed in Annex A. Such personnel shall assist Contractor by
performing normal operating and preventative maintenance duties
in connection with Start-up and the performance of the
Performance Tests. Such personnel will be available to
Contractor, as reasonably needed, until Commercial Operation.
Contractor shall be responsible for the direct supervision, with
respect to operational matters, of the Owner's operating and
maintenance personnel during the Start-up and Performance Tests
of the Facility, provided that, notwithstanding the foregoing,
such operating and maintenance personnel shall remain employees
or agents of Owner and shall not be considered employees of
Contractor for any reason. Any additional personnel required
will be the responsibility of Contractor. The provision of
personnel by Owner or its designee pursuant to this Section 2.1.7
shall not relieve Contractor of any of its obligations or
liabilities under the Agreement, and nothing in this Section
2.1.7 or ARTICLE XV shall be interpreted to create a master-
servant or principal-agent relationship between Contractor and
any of Owner's operation or maintenance personnel.
2.1.8 Customs Clearance. Arrange for customs
clearance in the Dominican Republic for the importation of all
Equipment and Materials for the performance of the Work and,
subject to Section 3.2.1, pay directly all duties, taxes and
other charges imposed by any Governmental Unit in the Dominical
Republic and fees of customs agents/brokers required for the
importation of all Equipment and Materials into the Dominican
Republic as set forth in Section 5.2. Subject to Section 3.3,
if any Equipment and Materials or other items of the Work fail to
clear customs in the Dominican Republic within, the later of (a)
seven (7) days or (b) the commencement of accrual of demurrage
for the heavy lift vessel transporting the Barge, in the case of
the Barge, and seven (7) days, in the case of any other item of
Equipment and Materials, after application for such clearance and
such failure causes delay in discharge of the Work, Contractor
shall be entitled to an extension to the Guaranteed Commercial
Operation Date, Guaranteed Substantial Completion Date and
Guaranteed Final Completion Date, as applicable, to the extent
such delay affects performance of any Work that is on the
critical path of the CPM Schedule and causes the Contractor to
complete the Work beyond such applicable period set forth above
and an adjustment to the Contract Amount to the extent expressly
permitted under Section 11.2.1(i). For the avoidance of doubt,
Owner's obligations under this Section 2.1.8, and Contractor's
entitlement to a Change Order under this Section 2.1.8 shall not
apply to the importation of Construction Equipment.
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2.1.9 Interconnections to the Utility. Enter into
contracts and agreements with the Utility or as otherwise
required for the interconnection of the Facility to the Utility's
electricity grid and for receipt of electric power produced
pursuant to Start-up and Performance Testing. This
responsibility includes the obligation to provide, or cause
others to provide, a transmission line to the land based power
transformers supplied by Contractor as part of the Work.
2.1.10 Relevant Information for Contractor. Subject
to ARTICLE XX, provide or cause to be provided to Contractor
information, within Owner's possession or control, reasonably
requested by Contractor and necessary to enable Contractor to
fulfill its obligations pursuant to this Agreement. This
responsibility shall include the obligation to procure, or
provide reasonable assistance to Contractor in procuring, from
the Utility and any Governmental Units in the Dominican Republic
any such required information as applicable.
2.1.11 Spare Parts. Provide all spare parts for the
Facility, other than commissioning spare parts to be provided by
Contractor pursuant to Section 3.2.8.
2.1.12 Other Items of Owner Supply. Provide the
other items of equipment, materials and services identified in
Annex B as being the responsibility of Owner.
2.1.13 Payment Obligations to Contractor. Pay to
Contractor the Contract Amount and all other sums required to be
paid by Owner pursuant to the terms of this Agreement.
2.2 Hazardous Materials. Subject to Contractor's liability
for Hazardous Materials as set forth in Sections 3.5 and 19.5.2,
Owner shall be responsible, as between Owner and Contractor, for
the handling, treatment, storage, removal, remediation,
avoidance, or other appropriate action, with respect to any
Hazardous Materials present at, on, in or under, or migrating
and/or emanating to or from the Job Site which are required to be
removed or remediated by applicable Environmental Law or which
otherwise pose a health or safety risk to employees of Owner,
Contractor or Subcontractors.
2.3 Items Required for Check-out, Start-up and Performance
Testing. Owner shall supply water, fuels, chemicals and
lubricants that are required for Start-up, commissioning and the
conduct of the Performance Tests in the quantities and meeting
the specifications set forth in Annex B. Contractor shall
provide and pay for all other fuels, chemicals and lubricants
needed for the Work, including any testing at the Shipyard.
Contractor shall give Owner notice at least sixty (60) days prior
to Contractor's estimated date of Start-up, commissioning and the
Performance Tests as to the estimated quantities of water, fuels,
chemicals and lubricants that will be required. Contractor shall
make facilities needed for receipt and storage of such items
(other than the fuel storage tank) available at least one (1)
week prior to the estimated date for commencement of Start-up.
Contractor shall not be liable for any delay incurred as a result
of a shortfall in the availability at the Facility of any of the
items required to be delivered by Owner under this Section 2.3.
Owner shall be responsible for disposing of all chemical and
lubricant waste generated from Start-up and conduct of the
Performance Tests.
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2.4 Compliance with Applicable Laws. Owner shall comply
and shall cause all of its employees, agents and representatives
to comply with Applicable Laws in connection with the performance
of its obligations under this Agreement.
Owner agrees to indemnify, defend and hold the
Contractor Indemnified Parties harmless from and against all
Damages attributable to any failure of Owner or any of its
employees, agents or representatives to comply with Applicable
Laws in connection with the performance of Owner's obligations
under this Agreement.
2.5 Engagement of Owner's Engineer. Owner may engage an
Owner's Engineer to perform the duties of Owner's Engineer
described in this Agreement, in which case Owner shall cause
Owner's Engineer to perform such duties in accordance with the
terms of this Agreement. Owner shall notify Contractor of the
identity of Owner's Engineer the name and title of the person who
shall be authorized to act on behalf of Owner's Engineer and the
scope of activities for which such person will serve as the
primary contact between Contractor and Owner's Engineer in
connection with this Agreement. Until otherwise notified by
Owner, Contractor may liaise with any such designated Owner's
Engineer within the scope of activities as so designated by Owner.
If Owner does not engage an Owner's Engineer, then all references
herein to Owner's Engineer shall be deemed to refer to Owner.
2.6 Owner's Site Works. Owner shall provide or cause to be
provided all materials and equipment, machinery, tools, labor,
transportation, construction fuels, chemicals, construction
utilities, administration and other services and items required
to be performed by Owner at the Facility Site as described in
Annex B ("Site Works"). It is the intent of the Parties that
Owner design (excluding any redesign of the moorings that will be
designed by Contractor as set forth in the Specifications)
engineer, procure, construct, start-up, demonstrate, test and put
into operation the Site Works. Owner shall perform all of the
Site Works so as to support Contractor's obligation to perform
the Work Owner's obligations under the Agreement shall include
everything requisite and necessary to complete the entire Site
Works so as to operate in accordance with Prudent Electrical
Practices notwithstanding the fact that every item necessarily
involved may not be specifically mentioned or the item mentioned
is inadequate for its intended purposes; provided, however, that
Contractor shall approve the sufficiency of the Site Works as
they are being completed, although any such approval shall not
constitute any assumption by Contractor of responsibility for the
Site Works.
2.7 Letter of Credit. In order to secure Owner's payment
obligations under this Agreement, Owner shall, within eleven (11)
months of the Starting Date, deliver to Contractor an Irrevocable
Import Letter of Credit substantially in accordance with the
terms of Exhibit 2.7 ("Letter of Credit"), duly executed by Owner
in the amount of thirteen million five hundred thirty-eight
thousand eight hundred Euros (_ 13,538,800) (which amount shall
reduce after each Milestone Payment to never exceed the unpaid
Contract Amount) to secure the obligation of Owner to pay the
Contract Amount, the cost of which Letter of Credit shall be paid
by Owner. In the event Contractor shall desire to have an
advising bank and or a confirming bank, the fees for such will be
at Contractor's expense.
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ARTICLE III.
RESPONSIBILITIES OF CONTRACTOR
3.1 Contractor's General Obligation to Provide Facility.
Except as otherwise expressly set forth in ARTICLE II, Contractor
shall perform or cause to be performed all obligations, duties
and responsibilities of Contractor pursuant to this Agreement,
including all work and services required in connection with the
design, engineering, procurement, fabrication, erection,
construction, Start-up, demonstration and testing of the
Facility, and provide or cause to be provided all Equipment and
Materials, Construction Equipment, labor, transportation,
storage, construction fuels, chemicals, administration and other
services and items required to complete the Facility, as set
forth in the Specifications and any Corrective Work or otherwise
required to achieve Mechanical Completion, Commercial Operation,
Substantial Completion and Final Completion of the Project in
accordance with the requirements of the Agreement, including in
achieving the Minimum Performance Standards and the Performance
Guarantees, all on a firm fixed price unless adjusted in
accordance with the terms of this Agreement, turnkey basis and
otherwise in accordance with the Agreement (the "Work"). Certain
details of the Work are described in this ARTICLE III and the
Specifications. It is the intent of the Parties that Contractor
perform the Work and put into operation a fully functional
Facility in accordance with Prudent Electrical Practices,
Applicable Laws, Applicable Codes and Standards and all other
terms of this Agreement. Contractor shall perform all of the
Work specified in the Agreement. In addition, Contractor's
performance under the Agreement shall include everything
requisite and necessary to complete the entire Facility so as to
operate in accordance with the Specifications, Scope of Work,
final design drawings and Prudent Electrical Practices,
notwithstanding the fact that every item necessarily involved may
not be specifically mentioned or the description of the item
mentioned may be inadequate or incomplete for its intended
purposes. Details and items not indicated by the Specifications,
Scope of Work or final design drawings (and items specified
therein that are inadequate or incomplete for their intended
purposes) shall be adequately and properly performed by
Contractor at no extra cost if such details or items are
incidental to the Specifications, Scope of Work or final design
drawings and can reasonably be inferred as required and necessary
to complete the Work in accordance with the Specifications, Scope
of Work, final design drawings and Prudent Electric Practices.
The intent of the Agreement is to relieve Owner of the necessity
of engaging or supplying any labor, service or material to
complete the Facility unless the labor, service or material is
deemed excluded from Contractor's Scope of Work according to the
foregoing standard, or expressly specified in ARTICLE II of the
Agreement as being furnished by Owner, not to frustrate or
exclude permissible Change Orders under this Agreement.
3.2 Specific Obligations. Without limiting the generality
of the foregoing in Section 3.1 or the requirements of any other
provision of this Agreement, Contractor shall:
3.2.1 Handling of Equipment and Materials, Etc.
Provide for the handling of Equipment and Materials and
Construction Equipment, including, as necessary, inspection,
expediting, shipping, unloading, receiving, and providing
reasonable assistance to Owner in connection with customs
clearance in the Dominican Republic (but not payment of customs
duties, taxes or other governmentally imposed charges or fees
of customs agents/brokers
20
associated with importation into the Dominican Republic other
than those arising out of the negligence of Contractor or any
failure of Contractor or any Subcontractor to perform any of its
obligations hereunder in which case Contractor shall be liable
for such and reimburse Owner therefore).
3.2.2 Quality of Equipment and Materials, Etc.
Ensure that all Equipment and Materials incorporated into the
Work shall be new (unless otherwise agreed by Contractor and
Owner) and shall meet the requirements of the Specifications and
all applicable Governmental Approvals. References in the
Specifications to Equipment and Materials, articles or patented
processes by trade name, make or catalog number, shall be
regarded as establishing a standard of quality expected by Owner
except that previously agreed make and model number of such
Equipment and Materials, such as ABB turbochargers, Alfa Laval
purifiers and Bondstrand piping, will not be changed to an
equivalent type unless specifically agreed in writing by Owner.
Contractor may use other equipment, material, article, or process
that is equal to that named in the Specifications, subject to the
prior written approval of Owner, which approval shall not be
unreasonably withheld.
3.2.3 Construction Means, Methods, Etc. Be solely
responsible for all construction means, methods, techniques,
sequences, procedures, safety and security programs in connection
with the performance of the Work in accordance with this
Agreement.
3.2.4 Key Personnel. Exhibit 3.2.4 sets forth a
list of key personnel ("Key Personnel" or "Key Persons") from
Contractor's organization who will be assigned to the Work. In
the event Owner believes that a Key Person assigned to the Work
should be on a watch list for possible replacement, Owner may
furnish a notice to Contractor setting forth the reasons for this
belief. Contractor shall use reasonable commercial efforts to
improve the performance of said Key Person. If said performance
does not, in the good faith opinion of Owner, improve, Owner may
require that Contractor replace such Key Person without
additional expense to Owner. Key Personnel shall not be removed
or reassigned without Owner's prior written approval.
Notwithstanding, Contractor expressly retains the right to
provide substitute personnel, without prior written approval, in
the event that any of the Key Personnel quits or becomes
incapacitated.
3.2.5 Maintenance of Job Site. Keep the Job Site
free from accumulation of waste materials, rubbish and other
debris resulting from performance of the Work by depositing same
in a waste receptacle which shall be removed and replaced on an
as-needed basis; and, within thirty (30) days after commencement
of Commercial Operation, remove from the Job Site, in conformity
with Applicable Laws, all such waste materials, rubbish and other
debris, as well as all Construction Equipment, and surplus
material (other than surplus material acquired by Owner pursuant
to Section 3.4 and other than materials and Construction
Equipment necessary to complete Punch List items); and before
final departure from the Job Site after completion of the Punch
List items, remove all remaining waste and rubbish generated
during performance of Punch List work, and all remaining
materials and Construction Equipment, and leave the Job Site in
neat, clean and usable condition. In the event of Contractor's
failure to comply with any of the foregoing, Owner may accomplish
the same; provided, however, that Contractor shall be liable for
and pay to Owner all costs associated with such removal and/or
restoration.
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3.2.6 Job Site Safety. Establish reasonable safety
and security procedures, rules and regulations at the Job Site to
prevent accidents and injuries, such items to be provided to
Owner for prior written approval no later than thirty (30) days
prior to commencement of the Work at the Job Site, and cause its
employees and Subcontractors to abide by such rules and
regulations and all Applicable Laws related to safety and
security applicable at the Job Site. Owner's review and approval
of Contractor's safety and security procedures, rules and
regulations shall not in any way relieve Contractor of its
responsibility regarding safety, and Owner, in reviewing and
approving such procedures, rules and regulations, assumes no
liability for such safety program. Contractor shall erect and
maintain, as required by existing conditions and the progress of
the Work, all safeguards for safety and security, including
lights, barriers, fences and railings. Contractor shall maintain
all accident, injury and any other records required by Applicable
Law and this Agreement.
3.2.7 Interconnection to the Utility. Coordinate
with Owner respecting the design and construction for the making
of the interconnection to the Utility's grid in accordance with
the Specifications. Contractor shall be responsible for
supervising and approving the Utility's connection of the
Facility to such interconnection.
3.2.8 Special Tools, Spare Parts Recommendations.
As set forth in more detail in Annex A, provide all commissioning
spare parts required for the Facility to achieve Commercial
Operation and the special tools identified in Annex A of the
Specifications (such list in Annex A includes all special tools
necessary for the normal maintenance of the Generator Sets), make
recommendations for the purchase of spare parts for maintenance
and operation and keep possession of such special tools and
purchased spare parts for maintenance and operation until turned
over to Owner in accordance with this Agreement and as a
condition of achieving Final Completion. Owner shall be
entitled to purchase any commissioning spare parts that are
surplus after achievement of Commercial Operation as set forth in
Section 3.4.
3.2.9 Temporary Operating Personnel. Provide
operations and maintenance personnel for Start-up and Performance
Testing, if necessary in accordance with Section 15.2.
3.2.10 Contractor's Project Manager. Designate, by
written notice to Owner at or before commencement of the Work, a
Project Manager who shall have full supervision over the
completion of the Work and shall act as the primary point of
contact with Owner regarding all matters relating to the Work,
and who shall have full authority to bind Contractor.
Contractor's Project Manager shall be a Key Personnel.
3.2.11 Engineering and Design. Provide all
engineering and design Work necessary for completion of the
Facility in conformity with the Agreement and Annex A,
including (a) preparation of (i) conceptual design and (ii) the
engineering and detailed design necessary to describe the
Facility, (b) provision of specifications and criteria for the
detailed design by suppliers of Equipment and Materials for
incorporation into the Facility, and (c) preparation of drawings,
plans, bills of material, schedules and estimates and all other
engineering and design Work set forth in ARTICLE VIII or
elsewhere in this Agreement. Contractor shall perform all
engineering and design Work in accordance with Applicable Law
22
and Applicable Codes and Standards, and all engineering and
design Work shall be signed and stamped by design professionals
licensed in accordance with Applicable Laws.
3.2.12 Construction and Construction Management.
Develop a Facility construction plan and oversee, coordinate and
ensure the expeditious construction of the Facility in accordance
with Annex A and the other terms and provisions of the Agreement.
3.2.13 Procurement. Procure and pay for, in
Contractor's name as an independent contractor and not as agent
for Owner, all Contractor and Subcontractor labor, Equipment
and Materials, manufacturing and related services for
construction of and incorporation into the Facility which are
required for completion of the Facility in accordance with the
Agreement and are not explicitly specified to be furnished by
Owner pursuant to ARTICLE II.
3.2.14 Contractor's Tools and Construction Equipment.
Furnish all Construction Equipment necessary and appropriate for
the timely and safe completion of the Work in strict compliance
with this Agreement. Notwithstanding anything to the contrary
contained in this Agreement, Contractor shall be responsible for
damage to or destruction or loss of, from any cause whatsoever,
all Construction Equipment owned, rented or leased by Contractor
or its Subcontractors for use in accomplishing the Work.
3.2.15 Taxes and Other Charges. Pay such taxes and
other charges to the extent set forth in Section 5.2.2.
3.3 Relevant Information; Assistance to Owner in Dealings
with Utility and Governmental Units, Etc. Contractor shall
provide to Owner information reasonably requested by Owner to
enable it to fulfill its obligations under this Agreement,
including such assistance as is reasonably requested by Owner in
dealing with the Utility and any Governmental Unit in matters
relating to the Work and the Facility (including any
interconnection facilities not included as part of the Facility,
Owner's customs clearance obligations pursuant to Section 2.1.8
and also including matters relating to registration and flagging
of the Barge pursuant to Section 2.1.6).
3.4 Surplus Materials. It is understood that in performing
work of the scope and complexity of the Work to be performed
hereunder, it is necessary and inevitable that certain surplus
material be purchased. Contractor shall, as soon as it is
feasible to do so, determine and advise Owner what materials are
surplus. Owner shall have the right to purchase any or all such
materials at a mutually agreed upon price. Should Owner elect
not to purchase any or all of the surplus material, Contractor
shall remove (in conformity with Applicable Laws) such material
from the Job Site as soon as practicable.
3.5 Hazardous Materials. Contractor shall not, nor shall it
permit or allow any Subcontractor to, bring any Hazardous
Materials on the Job Site and shall bear all responsibility and
liability for such materials; provided, however, that Contractor
may bring onto the Job Site such Hazardous Materials as are
necessary to perform the Work so long as the same is done in
compliance with Applicable Law, Applicable Codes and Standards
and the requirements specified in this Agreement, and Contractor
shall remain responsible and strictly liable for all
23
such Hazardous Materials. If Contractor encounters Hazardous
Materials (or materials or substances which Contractor reasonably
believes to be Hazardous Materials) in or on the Job Site which
Contractor reasonably believes would create a safety or health
hazard for Contractor, any Subcontractor or any employee, agent
or representative of either Party or which would create a health
hazard for the general public or the surrounding environment if
disturbed in the performance of the Work or if moved from the
location at which such Hazardous Material was encountered,
Contractor may suspend the performance of Work to the extent
required to avoid any such safety or health hazard and until
action sufficient to protect employees of Owner, Contractor and
Subcontractors has been taken and shall be entitled to a Change
Order to the extent permitted by Section 11.2.1(iii), provided
that Contractor complies with the notice and Change Order request
requirements set forth in Section 11.2 and the mitigation
requirements set forth in Section 11.9. Any such suspension
shall be subject to the provisions of Section 2.2. Contractor
shall notify Owner immediately upon encountering any Hazardous
Materials (or materials or substances which Contractor believes
to be Hazardous Materials) in or on the Job Site.
3.6 Employment of Licensed Personnel and Labor Relations.
Whenever required by Applicable Laws, Applicable Codes and
Standards or Prudent Electric Practices, Contractor agrees to
employ licensed and qualified personnel to perform engineering,
design, architectural or other professional services in the
performance of the Work. Contractor shall be responsible for all
labor relations matters relating to the Work and shall at all
times use its efforts to maintain harmony among unions and other
personnel employed in connection therewith. Contractor shall at
all times use its best efforts and judgment as an experienced
contractor to adopt and implement policies and practices designed
to avoid work stoppages, slowdowns, disputes and strikes.
Notwithstanding the foregoing, Contractor shall have the full
responsibility and discretion to exercise its management rights
in performing the Work subject to the terms of this Agreement.
Such management rights shall include, subject to Section 3.2.3,
the right to hire, discharge, promote and transfer employees; to
select and remove foremen or persons at other levels of
supervision; to establish and enforce reasonable standards of
production; to introduce, to the extent feasible, labor saving
equipment and materials; to determine the number of craftsmen
necessary to perform a task, job or project; and to establish,
maintain and enforce rules and regulations conducive to efficient
and productive operations; provided, however that Owner shall
have the right at all times to require for just cause that any
personnel be removed and replaced by personnel acceptable to
Owner.
3.7 Compliance with Applicable Laws. Contractor shall
comply and shall cause all Subcontractors, employees, agents and
representatives to comply with all Applicable Laws in connection
with the performance of Contractor's obligations under this
Agreement.
3.8 Contractor Governmental Approvals. Contractor shall
obtain all Governmental Approvals required for it and its
Subcontractors and their personnel to do business and to perform
Work in any applicable jurisdiction, including those identified
in Exhibit 2.1.5 as being Contractor's responsibility but
excluding the Governmental Approvals Owner is required to obtain
under Section 2.1.5. Contractor shall be responsible for all
Governmental Approvals required to perform any portion of the
Work to be performed outside of the Dominican Republic. If
requested by Owner, Contractor shall promptly provide to Owner
copies of all such
24
Governmental Approvals. Contractor shall provide
information, assistance and documentation to Owner as reasonably
requested in connection with the Governmental Approvals to be
obtained by Owner under Section 2.1.5.
3.9 Inspection of Site. Owner has selected the Job Site.
Contractor acknowledges that prior to the execution of the
Agreement, Contractor (a) has made an examination of the Job Site
and the surrounding areas, drawings and Specifications and other
information set forth in Annex A, and (b) has made an examination
to determine the difficulties and hazards incident to the
performance of the Work, in each case, to the extent necessary to
perform the Work, including (i) the location of the Project, (ii)
the proximity of the Job Site to adjacent facilities and
structures, (iii) the conditions of the ports, roads and
waterways in the vicinity of the Job Site, including the
conditions affecting shipping and transportation, access,
disposal, handling and storage of Equipment and Materials, (iv)
the qualifications of all Subcontractors, (v) logistics and
hazard of transportation of the Barge, (vi) qualifications of the
Shipyard, (vii) the presence, if any, of Hazardous Materials and
(viii) all other matters that might affect Contractor's
performance under the Agreement or the design, engineering,
procurement, fabrication, erection, construction, Start-up,
demonstration and testing of the Facility. Contractor has
determined, based on such examination to Contractor's
satisfaction that, although the Job Site is not the optimal
location for a power plant of the nature for the Facility, the
Job Site is adequate for the location of the Facility in
accordance with Prudent Electric Practices.
3.10 Contractor Performance Guaranty. In order to secure
Contractor's performance obligations under this Agreement,
Contractor shall deliver to Owner, concurrent with the execution
of this Agreement, a performance guaranty, substantially in the
form set forth as Exhibit 3.11 ("Contractor Performance
Guaranty"), duly executed by the Guarantor.
3.11 Transportation. Contractor shall be responsible for
the transportation, shipping, receiving and marshaling of all
Equipment and Materials, Construction Equipment and other items
required for the Facility (including the Barge, Equipment and
Materials required for construction activities). Contractor
shall arrange and ensure the security of any such items while in
transport or in storage off or on the Job Site.
3.12 Storage and Related Matters. Contractor shall
warehouse or otherwise store (in accordance with manufacturers'
recommendations and all Applicable Laws and Applicable Codes and
Standards) all Equipment and Materials and Construction Equipment
required for permanent and temporary construction at the
Shipyard.
3.13 Testing. Contractor shall perform, and reperform if
necessary, all of the Performance Tests in accordance with the
provisions of ARTICLE X, in order to demonstrate the level of
achievement by the Facility of the Minimum Performance Standards
and the Performance Guarantees.
3.14 Job Site, Shipyard and Other Access. Contractor shall
provide Owner and its designees (including the Financing Parties
and their independent engineer) with access to the Job Site, the
Shipyard and any other location at which Work is being performed
at all times and arrange for Owner's (and its designees') access
(at reasonable times and upon reasonable notice)
25
to the engineering, manufacturing and fabricating premises of
Contractor and all major Subcontractors sufficient to permit
Owner (or its designees) to inspect Work being performed and
monitor compliance by Contractor and the Subcontractors with the
terms of the Agreement. Contractor shall also supply an office
room (equipped with desks, telephones, fax machines, internet
connections and space for changing into coveralls) for up to six
(6) personnel of Owner at the Shipyard while Work is being
performed there.
3.15 Employee Identification; Job Site Security. Contractor
shall provide a method, which shall be subject to the prior
approval of Owner of checking the employees of Contractor and its
Subcontractors in and out of the areas in which the Work at the
Job Site is to be performed. Contractor shall be responsible
that the Work is being performed in compliance with such method.
Owner's review and approval of Contractor's method shall not in
any way relieve Contractor of its responsibility regarding safety
and security, and Owner, in reviewing and approving such method,
assumes no liability for such method.
3.16 Further Assurances. Contractor shall execute and
deliver all further instruments and documents, and provide
further assistance that may be necessary or that Owner may
reasonably request in order to enable Contractor to complete
performance of the Work or to otherwise effectuate the purposes
or intent of the Agreement.
3.17 Cooperation with Others. Contractor acknowledges that
Owner, other contractors and other subcontractors or other
Persons may be working at the Job Site during the performance of
this Agreement and the Work or use of certain facilities may be
interfered with as a result of such concurrent activities.
Subject to Section 2.1.1, Contractor shall conduct its Work so as
to minimize interference with work of any of the other parties at
the Job Site.
3.18 Safety Precautions. Contractor shall implement and
administer for the Facility, a safety and health program
consistent with similar programs conducted by other international
contractors engaged in similar projects, including development of
a Facility safety manual establishing Contractor and
Subcontractor safety guidelines and requirements. Such manual
shall be subject to Owner's prior written approval. Owner's
review and approval of Contractor's safety manual shall not in
any way relieve Contractor of its responsibility regarding
safety, and Owner, in reviewing and approving such manual,
assumes no liability for such safety manual.
3.19 Inspections. Owner shall have the option of being
present at all inspections on and off the Job Site, and
Contractor shall provide reasonable advance notice of inspections
that Owner has specifically identified as witness tests. If in
the reasonable judgment of Owner, the progress and quality of the
Work is not proceeding in accordance with the Agreement, Owner
shall be entitled to bring such matters to the attention of
Contractor for the purpose of remedying such Deficiencies in
accordance with ARTICLE IX. Any inspections under this Section
3.19 shall be governed by Section 9.1. If Contractor at any
time after the date hereof becomes aware that it requires the
use of any real estate that is not included in the Job Site,
Contractor shall immediately give notice thereof to Owner.
3.20 Payment. Contractor shall timely make all payments
required to be paid to Owner pursuant to the terms of this
Agreement.
26
3.21 Surveyor. At Contractor's cost and expense, Contractor
shall enter into a subcontract with a Surveyor to inspect certain
portions of the Work and verify completion thereof. The reports
and certifications generated by the Surveyor shall be mutually
agreed upon by the Parties and copies thereof, provided to Owner
upon request and as necessary for Contractor to demonstrate
achievement of a Milestone, Mechanical Completion, Commercial
Operation, Substantial Completion and/or Final Completion.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of Owner. Owner makes
the following representations and warranties to Contractor, each
of which is true and correct on the date hereof:
4.1.1 Due Organization, Power and Authority.
Owner is a company organized, existing and in good standing under
the laws of Delaware; Owner possesses all requisite power and
authority to enter into and perform this Agreement, and to carry
out the transactions contemplated herein; and Owner has all legal
power and authority to own and use its properties and to transact
the business in which it is engaged and holds or expects to
obtain all franchises, licenses, and permits necessary and
required therefor;
4.1.2 Binding Obligation. Owner's execution,
delivery, and performance of this Agreement have been duly
authorized by, and are in accordance with, its articles of
organization and other internal governing documents; this
Agreement has been duly executed and delivered for it by the
signatories so authorized; and this Agreement constitutes Owner's
legal, valid, and binding obligation;
4.1.3 No Existing Breach or Default. Owner is not
currently in breach of, in default under, or in violation of,
and the execution and delivery of this Agreement and the
performance of its obligations hereunder will not constitute or
result in any breach of, default under or violation of, any
applicable statute, law, ordinance, decree, rule, or regulation
of any Governmental Unit, or the provisions of Owner's articles
of organization or other internal governing documents, or any
franchise or license, or any provision of any indenture or any
evidence of indebtedness or security therefor, lease, contract,
license or other agreement by which it is bound, except for
such breaches, defaults or violations as will not, either
individually or in the aggregate, result in a material adverse
effect on the ability of Owner to perform its obligations
hereunder; and
4.1.4 No Pending Litigation, Etc. No suit, claim,
action, arbitration, or legal, administrative or other
proceeding is pending or, to the best knowledge of Owner,
threatened against Owner that would affect the validity or
enforceability of this Agreement, the ability of Owner to
fulfill its commitments hereunder in any material respect, or
that could result in any material adverse change in the business
or financial condition of Owner. Owner has no knowledge of any
violation or default with respect to, or the existence of, any
order, writ, injunction or any decree of any court or any
governmental department, commission, board, agency or
instrumentality or any arbitration panel which may result in
any such nonperformance
27
of its obligations under this Agreement or material adverse
effect on its ability to perform such obligations.
4.1.5 Compliance With Laws. Owner has complied
with all Applicable Laws such that it has not been subject to any
fines, penalties, injunctive relief or criminal liabilities which
in the aggregate have materially affected or may materially
affect its business operations or financial condition.
4.2 Representations and Warranties of Contractor.
Contractor makes the following representations and warranties to
Owner, each of which is true and correct on the date hereof:
4.2.1 Due Organization, Power and Authority.
Contractor is a corporation duly organized, existing and in good
standing under the laws of Maryland; Contractor possesses all
requisite power and authority to enter into and perform this
Agreement and to carry out the transactions contemplated herein;
and Contractor has all legal power and authority to own and use
its properties and to transact the business in which it is
engaged and holds or expects to obtain in a timely manner all
franchises, licenses, and permits required therefor;
4.2.2 Binding Obligation. Contractor's execution,
delivery, and performance of this Agreement have been duly
authorized by, and are in accordance with, its articles of
incorporation and by-laws; this Agreement has been duly executed
and delivered for it by the signatories so authorized; and this
Agreement constitutes Contractor's legal, valid, and binding
obligation;
4.2.3 No Existing Breach or Default. Contractor
is not currently in breach of, in default under, or in violation
of, and the execution and delivery of this Agreement and the
performance of its obligations hereunder will not constitute or
result in any breach of, default under or violation of, any
applicable statute, law, ordinance, decree, rule, or regulation
of any Governmental Unit, or the provisions of Contractor's
articles of incorporation or by-laws, or any franchise or
license, or any provision of any indenture or any evidence of
indebtedness or security therefor, lease, contract, license or
other agreement by which it is bound, except for such breaches,
defaults or violations as will not, either individually or in
the aggregate, result in a material adverse effect on the
ability of Contractor to perform its obligations hereunder; and
4.2.4 No Pending Litigation, Etc. No suit, claim,
action, arbitration, or legal, administrative or other
proceeding is pending or, to the best knowledge of Contractor,
threatened against Contractor that could affect the
validity or enforceability of this Agreement, the ability of
Contractor to fulfill its commitments hereunder in any material
respect, or that would result in any material adverse change in
the business or financial condition of Contractor. Contractor has
no knowledge of any violation or default with respect to, or the
existence of, any order, writ, injunction or any decree of any
court or any governmental department, commission, board,
agency or instrumentality or any arbitration panel which may
result in any such nonperformance of its obligations under this
Agreement or material adverse effect on its ability to
perform such obligations; and
4.2.5 Contractor Qualified to Perform the Work.
Contractor has full experience and proper qualifications to
perform the Work and to construct the Facility.
28
4.2.6 Patents, Licenses, Franchises. Contractor
owns or possesses all the patents, trademarks, service marks,
trade names, copyrights, licenses, franchises, permits and rights
with respect to the foregoing necessary to perform the Work,
enable Owner to utilize the Facility and to carry on its
business as presently conducted and presently planned to be
conducted without conflict with the rights of others.
4.2.7 Compliance with Laws. Contractor has
complied with all Applicable Laws such that it has not been
subject to any fines, penalties, injunctive relief or criminal
liabilities which in the aggregate have materially affected or
may materially affect its business operations or financial
condition or its ability to perform the Work.
4.2.8 The Agreement. Prior to the execution of
this Agreement, Contractor performed engineering and related
services and developed and provided the information that formed
the preliminary Specifications and the preliminary drawings set
forth in Annex C. Owner has relied upon Contractor's expertise
in developing and providing such information and design.
Contractor hereby warrants and represents that such information,
when final, will be accurate, adequate and complete to engineer,
procure and construct the Project for the Contract Amount,
within the required times set forth in the Project Schedule, and
in accordance with all requirements of this Agreement, including
Applicable Laws, Applicable Codes and Standards, the warranties
set forth herein, the Minimum Performance Standards, and the
Performance Guarantees. Accordingly, Contractor (i) hereby
agrees that it shall have no right to claim or seek an increase
in the Contract Amount or an adjustment to the Project Schedule
with respect to any incomplete, inaccurate or inadequate
information or requirements that may be contained or referenced
in the Specifications, and (ii) hereby waives and releases Owner
from and against such claims.
4.2.9 Applicable Laws and Applicable Codes and
Standards. Contractor warrants that it can perform the Work at
the Contract Amount and within the Project Schedule in
accordance with Applicable Law and Applicable Codes and Standards.
Contractor shall perform the Work in accordance with Applicable
Laws and Applicable Codes and Standards,; provided, however,
Contractor shall be entitled to a Change Order for Changes in
Law to the extent allowed under Section 11.2.1(iv) provided that
Contractor complies with Change Order request requirements set
forth in Section 11.2 and the mitigation requirements set forth
in Section 11.9. Without limiting the notice requirements set
forth in Section 11.2, Contractor shall promptly notify Owner
of any Changes in Law. In all places in this Agreement
where the Contractor makes a representation, or has an obligation
to ensure that the Work or Facility is or will be in compliance
with all Applicable Laws and Applicable Codes and Standards as
relates to Emissions, any such representation or obligation
shall be satisfied upon the Work or Facility meeting the
Environmental Requirements.
ARTICLE V.
CONTRACT AMOUNT AND OTHER CHARGES
5.1 Contract Amount. The Contract Amount shall be eighty-
three million five hundred seventy-three thousand three hundred
and seventy-one Euros (E83,573,371) which
29
includes payment for parts, as described in Annexes A.1 and A.5,
all of which shall be paid in accordance with ARTICLE VI and is
subject to increases or decreases only by Change Order as
specifically provided in this Agreement. The Contract Amount
shall be complete compensation for all the Work and the
obligations to be performed by Contractor under this Agreement
and all costs incurred.
5.2 Taxes.
5.2.1 Responsibility of Owner. The Contract
Amount does not include, and Owner shall be responsible for any
sales taxes, use taxes, value added taxes, real and personal
property taxes and any other taxes imposed by Governmental
Units in the Dominican Republic on the Facility or any
components of the Work. Contractor shall, as reasonably
requested by Owner, cooperate with Owner in order to minimize
such taxes. All import duties, taxes and other charges imposed
by any Governmental Unit in the Dominican Republic associated
with the importation of the Equipment and Materials into the
Dominican Republic shall also be the responsibility of Owner for
direct payment to the applicable Governmental Unit and/or
customs agents/brokers and are not included in the Contract
Amount, subject to Section 3.2.1.
5.2.2 Responsibility of Contractor. Contractor
shall be responsible for direct payment of, and the Contract
Amount includes, (a) withholding taxes on Contractor or
Subcontractor employees in the Dominican Republic, and (b) duties,
taxes or other charges imposed for the importation into the
Dominican Republic of (i) personal effects of Contractor or
Subcontractor employees or (ii) Construction Equipment for
performance of the Work if the imposition of the duty, tax or
other charge arises from the failure of Contractor or its
Subcontractors to re-export the Construction Equipment after
Final Completion of the Work (or any earlier termination of this
Agreement) (c) any taxes based on the income or gross receipts
of Contractor or its Subcontractors in the Dominican Republic,
and (d) all present and future taxes, duties, imposts,
deductions, withholdings, other charges and liabilities imposed
on it by any Governmental Unit outside of the Dominican Republic.
ARTICLE VI.
PAYMENT TERMS
6.1 Payment of Contract Amount.
6.1.1 Milestone Payment Schedule. Exhibit 6.1.1
hereto sets forth the Milestone Payment Schedule, which is
intended to cause payments to approximate the value of the Work
performed by Contractor. The Down Payment shall be made on
August 18, 2010, and all other Milestone Payments shall be made
in accordance with the Milestones achieved under the Milestone
Payment Schedule and the other terms of this Agreement. The
Milestone Payment Schedule, including Milestones, shall be
amended only by Change Order pursuant to this Agreement. The
payments made by Owner to Contractor pursuant to the Side Letter
(in the aggregate amount of One Million Six Hundred
Thirty-Five Thousand Euros (1,635,000), receipt of which
is hereby acknowledged by Contractor) shall be credited against
the Down Payment.
6.1.2 Milestone Payments.
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(i) Contractor shall not be entitled to any
payment whatsoever for any portion of the Work relating to a
particular Milestone until such Milestone is fully completed.
Such invoice shall be substantially in the form of Exhibit
6.1.2(A), in the amount of such completed Milestones and
shall also include amounts properly due and owing for Work
performed and pursuant to a Change Order. Each invoice
(other than the final invoice) shall be accompanied by (i) a
Milestone Completion Certificate, substantially in the form
of Exhibit 6.1.2(B), signed by Contractor and, where
required, verified by Owner's Engineer (acting in accordance
with Section 10.1), except that the invoice for Milestone No.
1 as set forth in the Milestone Payment Schedule need not be
verified by Owner's Engineer, (ii) all documentation
supporting Contractor's request for payment as required
under this Agreement, including invoices and receipts
supporting all amounts billed for unilateral Change Orders,
and (iii) a fully executed intermediate lien and claim
waiver from Contractor substantially in the form of Exhibit
6.1.2(C) and from each Subcontractor whose contract for work
exceeds three hundred fifty thousand Euros (350,000) in the
aggregate, substantially in the form of Exhibit 6.1.2(D).
Intermediate lien and claim waivers, however, shall not be
required from such Subcontractors until they have performed
Work, and such Subcontractors shall be required to submit
additional interim lien and claim waivers only if they have
performed Work not covered by a previous interim lien and
claim waiver. Submission of all intermediate lien and claim
waivers is a condition precedent to payment of any invoice.
(ii) Owner shall pay the undisputed invoiced
amount, five (5) business days after receipt; provided
however Owner shall not be obligated to make any payment
unless Contractor has supplied Owner with all documentation
required hereunder. If an invoice is disputed by Owner, the
procedure set forth in Section 6.2 shall apply.
(iii) Any payment that Owner is not obligated to
make under this proviso shall be made, without interest,
upon satisfaction of the conditions described in such
clauses with respect to such payment.
6.1.3 Payment at Commercial Operation. Within
thirty (30) Days after Commercial Operation and Owner's receipt
of an invoice therefore, Owner shall, subject to its right to
withhold under this Agreement, release to Contractor the
remaining unpaid Contract Amount, other than 2% of the
Contract Amount. Notwithstanding the foregoing, in the event
pursuant to Section 10.5 Performance tests are conducted on only
one fuel (i.e., HFO or NG) and the performance Tests and other
conditions to achieve Commercial Operation are satisfied, then
the remaining Contract Amount shall be paid, other than 175% of
the sum of the value of all Punch List Work plus the value of
any Work necessary to achieve Final Completion.
6.1.4 Payment Upon Final Completion. Upon
achievement of Final Completion, Contractor shall, in addition
to any other requirements in this Agreement for achieving Final
Completion, submit a final invoice in the form of Exhibit
6.1.2(A), together with (i) a fully executed final lien and
claim waiver from Contractor substantially in the form of
Exhibit 6.1.4(A) and fully executed final lien and claim
waivers from each Subcontractor substantially in the form of
Exhibit 6.1.4(B), and (ii) a statement summarizing and
reconciling all previous invoices, payments and Change Orders.
No later than five business days after receipt
31
by Owner of such final invoice and all requested documentation
and achieving Final Completion, Owner shall, pay Contractor the
balance of the Contract Amount, including any remaining
Retainage.
6.1.5 Interest. Except where a different rate of
interest is provided in this Agreement, amounts not paid by
either Party to the other when due hereunder shall bear interest
from the date payment was due to the date of payment at a rate
per annum (the "Base Rate") equal to two percent (2%) per annum
over the rate of interest announced from time to time by Citibank,
N.A., at its principal office in New York, NY as its prime or
base lending rate for United States commercial loans; provided
that in no event shall the Base Rate exceed the maximum rate
permitted by Applicable Laws.
6.2 Payment Disputes.
6.2.1 Partial Payment; Accrual of Interest. In
case of a Dispute with respect to a portion but not all of any
payment amount, Owner or Contractor shall pay the undisputed
portion promptly in accordance with the provisions of this
Agreement. Contractor's or Owner's acceptance of partial payment
shall not be deemed to constitute a waiver of the right to
receive amounts which are then in Dispute, and Contractor and
Owner shall use their best efforts to resolve all disputed
amounts as soon as practicable. Any amounts not paid when due
(including disputed amounts which are subsequently determined
to have been properly due) or any amounts paid which are
subsequently determined not to have been properly due shall bear
interest at the Base Rate until paid.
6.2.2 Resolution of Disputes. Subject to Section
6.2.1, in the event of a Dispute between the Parties regarding
any entitlement to any payment hereunder, either Party shall have
the right to refer the Dispute for resolution in accordance with
ARTICLE XXV. Pending resolution of any such Dispute, Contractor
shall continue its performance of the Work in accordance with
this Agreement. Amounts determined by the dispute resolution
process of ARTICLE XXV to have been properly due to any Party by
any other Party shall be payable to such Party by the other
Party, together with accrued interest thereon from the time
payment was originally due to the date of payment, within ten
(10) days after (i) the effective date of the Parties' negotiated
settlement or (ii) absent such settlement, any award issued
pursuant to ARTICLE XXV.
6.3 Form and Manner of Payments. All payments to a Party
under this Agreement shall be made in United States Dollars or
Euros (as specified in this Agreement) and by wire transfer of
immediately available funds to the following bank accounts:
32
If to Contractor:
For payments in Euros:
Beneficiary: Wartsila Finland Oy
Bank: Nordea Bank Finland Plc
Swift Code: NDEAFIHH
IBAN: FI06 2052 3800 0032 68
If to Owner:
For Payment in Dollars:
UMB Bank, n.a.
Kansas City, Missouri
ABA No. 101 000 695
Credit: Seaboard Corporation
A Party may designate from time to time a different bank or
account by notice to the other Party given not less than ten (10)
business days prior to the next payment date to which such
payment instructions are to apply. If the date for any payment
called for under this Agreement should fall on a day that is not
a business day, then such payment may be made on the next
succeeding business day with the same effect as if made on the
date due.
6.4 No Payment in the Event of Material Breach.
Notwithstanding any other provision to the contrary, Owner
shall have no obligation to make any payment to Contractor at
any time when Contractor is in material breach of the
Agreement. On the payment date next following the date on
which all material breaches of Contractor have been remedied,
Owner shall make all payments withheld during the continuation
of such material breaches, subject to the provisions of this
ARTICLE VI, less any amounts paid by Owner in an effort to remedy
any such material breach or for costs incurred as a result
thereof.
6.5 Payment Not Acceptance. No making of any payment to
Contractor by Owner shall constitute an acceptance of any of the
Work or shall relieve Contractor of any of its obligations or
liabilities with respect thereto. All payments shall be subject
to correction or adjustment in subsequent payments.
ARTICLE VII.
COMMENCEMENT OF THE WORK; TERMINATION
7.1 Effective Date. This Agreement shall become effective
upon the date upon execution and delivery by each of Owner and
Contractor to the other Party of a counterpart of this Agreement
(the "Effective Date").
7.2 [INTENTIONALLY OMITTED].
33
7.3 Commencement of Work. Subject to the terms of the Side
Letter, Contractor commenced performance of the Work on the
Starting Date, and shall continue to diligently pursue the Work
in accordance with this Agreement. All Work performed prior to
the Starting Date (including any Work performed prior to the
Effective Date pursuant to the Letter Agreement and Side Letter)
shall, upon the Starting Date, be deemed to have been performed
under this Agreement and shall be subject to the terms and
conditions of this Agreement.
7.4 Cancellation. Either Party may declare the Work
canceled if there is an event of Force Majeure which prevents
performance of all of the Work and extends for a period longer
than one-hundred eighty (180) days, The Party canceling the Work
shall deliver a notice of its intent to cancel the Work to the
other Party. In the event of cancellation pursuant to this
Section 7.4, Contractor shall be paid all unpaid Milestone
Payments then due and owing and the reasonable value of any
Work performed by Contractor which partially goes toward
completing the subsequent Milestone (the basis of determining the
reasonable value being based on the pro-rata portion of the
next Milestone which has been completed) prior to termination,
less that portion of the Contract Amount previously paid to
Contractor, plus reasonable direct close-out costs, but in no
event shall Contractor be entitled to receive any amount
for unabsorbed overhead, contingency, or risk. If no Work has
been performed by Contractor at the time of cancellation,
Contractor shall be paid the sum of One Hundred U.S. Dollars
(U.S. $100) for its undertaking to perform. Upon making the
payment specified in this Section 7.4, Owner shall own the Work,
in its then state, and Contractor shall convey good and
marketable title to the Work, free and clear of liens, to Owner,
and shall make the Work available to Owner.
7.5 Termination; Survival of Provisions. This Agreement
shall terminate upon the earlier of (i) the discharge of all
obligations of both Parties under this Agreement by the complete
performance thereof, (ii) the cancellation by Owner or Contractor
of all the Work in accordance with Section 7.4 and the payment by
Owner of the amounts due to be paid to Contractor in accordance
with said Section, or (iii) termination by Owner or Contractor as
permitted under ARTICLE XVI. The following provisions shall
survive any termination, ARTICLE IV, XIX, XX, XXIV, XXV, XXVI and
XXIX and Sections 14.1, 14.3 and 20.1 and in addition, if Owner
shall have paid all undisputed amounts (if any) payable to
Contractor in accordance with the provisions of the relevant
cancellation (other than a cancellation pursuant to Section 20.1)
or termination clauses, ARTICLE XIII and XXIII.
ARTICLE VIII.
DOCUMENTATION
8.1 Delivery of Preliminary Design Drawings. Contractor
shall deliver to Owner as they become available but no later
than twenty (20) days after the Starting Date, three (3) sets of
preliminary design drawings. Of these, the following shall be
subject to Owner's review, comment, and approval or disapproval:
(i) hull outline drawing;
(ii) site arrangement drawing;
(iii) engine hall layout drawing;
34
(iv) electrical one-line drawing (including
electrical protection); and
(v) flow diagrams
Owner shall provide any comments, proposed changes or written
approvals or disapprovals regarding the submitted drawings to
Contractor within ten (10) business days of receipt of the
drawings. If Owner fails to provide comments within such period,
such drawings shall be deemed acceptable to Owner. Contractor
shall give Owner's comments due consideration but shall not be
obligated to incorporate any such comments; provided that
Contractor notifies Owner, within five (5) days after receipt
from Owner, of the comments which Contractor elects not to
incorporate. (Such final documents being "Design Documents").
8.1.1 No Owner Response. If Owner fails to
provide comments to such drawings, proposed changes or written
approvals or disapprovals within such period, Contractor may
proceed with the development of such drawings and any
construction relating thereto, but Owner's lack of comments,
approval or disapproval, if applicable, shall in no event
constitute an approval of the matters received by Owner.
8.1.2 Comment or Approval by Owner. Annex C sets
forth the list of drawings approved by Owner as of the Effective
Date. Owner's approval of any drawings shall not in any way be
deemed to limit or in any way alter Contractor's responsibility
to perform and complete the Work in strict accordance with the
requirements of the Agreement, and in the event of discrepancy,
difference or ambiguity between the terms of this Agreement and
any drawings, the interpretation imposing the greater obligation
upon Contractor shall control. In the event Owner's comments do
not constitute a disapproval of the drawing pursuant to Section
8.1.3, Contractor shall give Owner's comments due consideration
but shall not be obligated to incorporate any such comments;
provided that Contractor notifies Owner, within five (5) days
after receipt from Owner, of the comments which Contractor elects
not to incorporate.
8.1.3 Disapproval by Owner. If Owner disapproves
the submitted drawings, Owner shall provide Contractor with a
written statement of the reasons for such rejection within the
time period required for Owner's response for disapproval of such
drawings. Contractor shall provide Owner with revised and
corrected drawings as soon as possible thereafter and Owner's
rights with respect to the issuing of comments, proposed changes
or approvals or disapprovals of such revised and corrected
drawings are governed by the procedures specified above in
Section 8.1; provided that Contractor shall not be entitled to
any extensions of time to the Project Schedule, an adjustment to
the Contract Amount or an adjustment to any other obligations
under the Agreement.
8.2 Delivery of Job Books and Operating Manuals.
Contractor shall provide operating manuals (collectively, the
"Operating Manuals") to Owner in accordance with the requirements
of Annex A. Contractor shall provide four (4) copies of the final
and complete job books to Owner within sixty (60) days after
Commercial Operation. For any early start-up of an individual
unit or system, Contractor shall provide the appropriate portions
of the job books containing adequate associated design and vendor
information to enable proper orientation and training of capable
personnel of Owner or Owner's designee to allow for a safe,
efficient and
35
effective start-up of such unit or system. The job books shall
be in the English language unless otherwise described in Annex A.
8.3 Content of Job Books. Job books shall include, at a
minimum, the following (if applicable):
(i) Engineering/Design
- Process Flow Diagrams
- P&ID's
- Facility Description (as-built)
- Equipment Location Plan
- Electrical one-lines
- Cable and Raceway Schedule
- Connection Report/Loop Diagrams
- Valve List
- Motor List
- Drawing Index
- Safety information
- Control System set points
- Control System access and passwords
- Stability Booklet
- Mooring Calculations
- Tonnage Measurements
36
(ii) Purchasing & Vendor Supplied Information
- Vendor information for equipment purchased
including:
- Performance curves, as applicable
- P&ID's, as applicable
- Piping and electrical detail drawings
where applicable
- Recommendations and price lists for
operating and maintenance spare parts
- Operating and Maintenance
Information/manuals
- Installation instructions
- Equipment List
- Instrument List
(iii) Project Procedures
- System Description
- As-Builts of Piping Drawings
- Plant Output/Test Procedure
- System and component Start-up and shutdown
procedures
(iv) Project Governmental Approvals if required
- Boiler Inspection Report
- Soils Testing Report
(v) Spare Parts List and Pricing Information for
all Equipment and Materials
(vi) Test Protocols
(vii) Test report on all major Equipment and
Materials tested before delivery to the Facility
37
(viii) Quality Control Books or Procedures
(ix) Lists of Equipment Manufacturers
ARTICLE IX.
INSPECTION AND CORRECTION OF WORK
9.1 Periodic Inspections. Owner and its agents and
representatives (including Owner's Engineer and the Financing
Parties) shall have the right to inspect, at Owner's cost, the
Work at the Shipyard, at the Job Site, at the factory of
Contractor's Affiliates and any other location where the Work is
being performed, prepared or fabricated (including any item of
Equipment and Materials, design, engineering, or other service or
the workmanship associated therewith), and Contractor shall, at
the request of Owner, arrange for any such inspection at
reasonable times (normal business hours) and upon reasonable
advance notice. Owner shall inform Contractor within ten (10)
days after an inspection of the Work of any Defects or
Deficiencies in the Work it discovers during such inspection of
the Work. Owner's, Owner's Engineer's or Financing Parties'
right to conduct inspections pursuant to this Section 9.1 or
elsewhere under this Agreement shall not obligate Owner, Owner's
Engineer or Financing Parties to do so. Neither the exercise by
Owner, Owner's Engineer or Financing Parties of any such right,
nor any failure on the part of Owner, Owner's Engineer or
Financing Parties to discover or reject any Defects or
Deficiencies shall be construed as an approval or acceptance of
such Defect or Deficiency or a waiver of such Defect or
Deficiency or any of Contractor's obligations, duties or
liabilities under the Agreement. All such inspections shall be
conducted in a manner that does not unreasonably interfere with
the normal performance and progress of the Work. Owner and
Owner's Engineer shall have general access to the Job Site,
provided that each observes all safety and security regulations
established by Contractor for the Job Site.
9.2 Correction of Work.
9.2.1 Correction of Work Prior to Commercial
Operation. If, in the judgment of Owner, any work is Defective
or Deficient prior to Commercial Operation, Contractor shall
promptly correct, at its own expense, any Defects or Deficiencies
in any part of the Work, whether by repair, replacement or
otherwise, subject to Contractor's right to pursue a Dispute
under ARTICLE XXV. Correction of Defects or Deficiencies
included in the Punch List shall be governed by the provisions
of Section 10.8, and correction of Defects or Deficiencies
identified during the Primary Warranty Period or, if applicable,
Extended Warranty Period, shall be governed by the provisions of
ARTICLE XIII.
9.2.2 Correction of Work After Commercial
Operation. If, during the Primary Warranty Period (or, if
applicable, the Extended Warranty Period), any Work is found to
be Defective or Deficient, Contractor shall promptly respond and
commence its Corrective Work to remedy such Defects and
Deficiencies in accordance with Section 13.4. Correction of
Defects or Deficiencies included in the Punch List shall be
governed by the provisions of Section 10.7, and the duration
of the Primary Warranty Period or, if applicable, Extended
Warranty Period, shall be governed by the provisions of ARTICLE
XIII.
38
9.3 Observance of Tests. Each of the parties identified in
Section 9.1 and Section 21.2.4 shall have the right to observe
all tests of the Work and the Facility.
9.4 Quality Assurance. Contractor shall deliver to Owner
within thirty (30) days after the Starting Date a Project-
specific quality assurance program for Owner's review and prior
written approval that will be binding on the Contractor and its
Subcontractors and will govern their performance of all
components of the Work. Contractor shall promptly modify such
Project-specific quality assurance program to incorporate all
comments provided by Owner, if any. Owner's approval of
Contractor's quality assurance program shall in no way relieve
Contractor of its responsibility for performing the Work in
compliance with this Agreement. If Owner fails to provide
approval within such period, such Project-specific quality
assurance program shall be deemed acceptable to Owner.
ARTICLE X.
COMPLETION OF THE WORK
10.1 Action by Owner and Owner's Engineer with respect to
Completion Certificates. Upon Owner's request and exclusively
for the sole benefit of Owner, Owner's Engineer shall review and
accept or reject the Completion Certificates issued by
Contractor. The Completion Certificates shall be accompanied by
the appropriate supporting documentation identified in the
Milestone Payment Schedule. Such documentation shall consist of
(i) in the case of the Milestone Completion Certificate for
factory testing, a copy of the test report, and (ii) in the case
of the Milestone Completion Certificate for shipment of Equipment
and Materials, a copy of the bill(s) of lading. Contractor shall
concurrently deliver to Owner a copy of each submittal it makes
to Owner's Engineer pursuant to this Section. Within five (5)
business days of receipt of any Completion Certificate (ten (10)
business days in the case of the Performance Test Completion
Certificate), Owner's Engineer shall deliver a notice to
Contractor accepting or rejecting such Completion Certificate.
If such Completion Certificate is rejected, Owner's Engineer will
specifically identify its reasons for rejection of the
Certificate. If Contractor accepts the reasons for such
rejection, it shall take corrective action in accordance with
this Agreement and submit a new Completion Certificate to Owner's
Engineer for action in accordance with the procedures set forth
in this Section. If Contractor disagrees with the reasons for
the rejection or if Owner's Engineer fails to act upon the
Completion Certificate within the time period provided for herein
(or such longer period as the Contractor and Owner's Engineer may
mutually agree upon), Contractor shall promptly notify Owner's
Engineer and Owner, and the Parties and Owner's Engineer shall
meet to attempt to resolve the disagreement (or delay). If the
disagreement cannot be resolved within five (5) business days,
Contractor shall act in accordance with the instructions of Owner
without prejudice to its right to submit a request for a Change
Order in accordance with Section 11.2 and to receive interest in
accordance with Section 6.2 on any payment deferred on account of
such rejection of the Completion Certificate. Owner's Engineer's
acceptance of a Completion Certificate shall be signified by
Owner's Engineer's countersignature upon it. Owner's acceptance
shall not relieve Contractor of any of its obligations to perform
the Work in accordance with the requirements of this Agreement.
Upon receipt of a Completion Certificate verified by Owner's
Engineer, Owner shall signify its acceptance thereof by
countersigning the Completion Certificate. The date of issuance
of a
39
Completion Certificate shall constitute its effective date,
provided that the Completion Certificate has been accepted by
Owner or, in case of a Dispute, it is ultimately determined
pursuant to the provisions of ARTICLE XXV that such Certificate
should have been accepted by Owner.
10.2 Test Guidelines; Test Procedures. Test Guidelines for
the conduct of Check-Out, Start-Up (including Preliminary Tests)
and the Performance Tests are set forth in Exhibit 10.2 hereto.
No later than sixty (60) days prior to the commencement of the
Preliminary Tests, Contractor will submit to Owner and Owner's
Engineer a more complete set of procedures (the "Test
Procedures") for the conduct of the tests which are subject to
Owner's review and approval. The Test Procedures shall be in
accordance with the Test Guidelines and shall reflect the normal
mode of operation of the Facility. Owner shall cause Owner's
Engineer to review and respond to Contractor's draft Test
Procedures within twenty (20) days of the submission, and the
Parties and Owner's Engineer shall finalize the Test Procedures
within five (5) days of Owner's Engineer's response.
10.3 Schedule, Conduct and Observation of Preliminary Tests.
As each Generator Set and system and subsystem of the Facility
achieves Mechanical Completion, Contractor will commence the
process of Check-out and Start-up of such Facility component,
including performance of the relevant Preliminary Tests for such
component. Contractor shall provide Owner and Owner's Engineer,
at least seven (7) days in advance of the first Preliminary Test
and a preliminary schedule for conduct of the Preliminary Tests.
Such schedule shall be subject to adjustment and modification to
deal with the dynamic process involved in Check-out and Start-up
of the Facility. Contractor shall provide Owner and Owner's
Engineer with each revision of the schedule for the Preliminary
Tests and in any event at least twenty-four (24) hours notice of
the actual commencement of the first Preliminary Test.
10.4 Mechanical Completion.
10.4.1 Conditions for Mechanical Completion.
"Mechanical Completion" means that, with respect to the
applicable system and subsystem of Equipment and Materials for
the Facility or for the entire Facility, all of the following
have occurred: (i) Contractor has completed all procurement,
fabrication, assembly, erection, installation and pre-
commissioning checks and tests of all Equipment and Materials
(including all systems and components of Equipment and Materials)
for such applicable system or subsystem or for the entire
Facility to ensure that all such Equipment and Materials was
correctly fabricated, assembled, erected and installed and is
capable of being operated safely and reliably within the
requirements and Specifications contained in this Agreement,
including in accordance with Applicable Laws, Governmental
Approvals, Prudent Electric Practices and applicable Operating
Manuals, (ii) the system and subsystem of Equipment and Materials
for the Facility or for the entire Facility has been mechanically
completed and is ready for safe and continuous operation on
Heavy Fuel Oil, Gas and LFO, as applicable, and with respect to
the entire Facility, all Generator Sets operational in automatic
mode from the control room, (ii) Contractor has
satisfactorily completed Start-up (including all Preliminary
Tests) and is ready to conduct the Performance Tests with respect
to such system and subsystem of Equipment and Materials for the
Facility or for the entire Facility, and (iii) Contractor has
delivered to Owner a Mechanical Completion Certificate for the
40
applicable system or subsystem or for the entire Facility in
accordance with Section 10.4.2, and Owner has accepted such
certificate by counter-signing such certificate, and (iv)
Contractor has performed all other obligations required under the
Agreement for Mechanical Completion.
10.4.2 Issuance of Mechanical Completion
Certificate. When Contractor believes that the Facility or any
Generator Set has achieved Mechanical Completion, Contractor
shall issue a Mechanical Completion Certificate substantially
in the form of Exhibit 10.4.2. Owner's Engineer and Owner shall
act upon the Mechanical Completion Certificate in accordance
with the provisions of Section 10.1.
10.5 Performance Tests.
10.5.1 Conduct of Performance Tests. Contractor
shall test: (i) the Facility or a portion of the Facility (so
long as at least fifty percent (50%) of the Generator Sets are
available for testing) on a simple cycle basis, when ready, and
again on a combined cycle basis, when ready; or (ii) upon
Contractor's Notice to Owner, upon only one fuel if either HFO or
NG are not available, in each case, by carrying out the
Performance Tests to demonstrate the Minimum Performance
Standards and the Performance Guarantees have been achieved.
Contractor shall provide Owner and Owner's Engineer with at least
five (5) business days' notice of the date upon which Contractor
proposes to commence the Performance Tests. For good cause,
Contractor may stop and may re-perform a Performance Test at
any time unless otherwise provided under the Test Procedures.
Contractor shall provide reasonable cooperation in meeting a
request by Owner for the rescheduling of a Performance Test
if necessary to allow Owner, Owner's Engineer and representatives
of Financing Parties (if any) to attend a Performance Test. All
Performance Tests will be conducted in accordance with the Test
Procedures and in the normal Facility operating configuration.
If any Performance Tests are conducted (i) on a portion of the
Facility or Generator Set, rather than the Facility as a whole,
or (ii) on only one fuel; such Performance Tests shall only be
used to establish conditions for Commercial Operation, on a
pro-rata basis, excluding the assessment or payment of
Performance Liquidated Damages (10.6.1(iii)), have been fully and
finally satisfied. Notwithstanding anything to the contrary,
Performance Liquidated Damages shall not accessed until the
Performance Test on the entire Facility has been conducted,
which Performance Liquidated Damages shall be calculated on a
weighted average basis as described in Section A.O.2 of Annex A.
Owner shall provide operating personnel for the conduct of each
Performance Test, who shall work entirely under the supervision
of Contractor as set forth in more detail in Section 2.1.7 and
ARTICLE XV. Each Party shall have the right to perform data
collection for each Performance Test. The Parties shall agree
on the data to be used for analysis, and the analysis will be
performed by Contractor. If Owner observes any Defects or
Deficiencies in the Facility or any Generator Set during any
Performance Test, Owner shall promptly notify Contractor in
writing. Owner and Contractor shall cooperate in good faith
in determining when or to what extent the Facility will be taken
out of service in order to take corrective measures; provided,
however, that Owner shall not unreasonably interfere with
Contractor's preparations for and conduct of any Performance
Test. Contractor shall have the right to determine the nature
of any corrective measures or modifications to the Facility
to be taken by Contractor; provided that, in the reasonable
opinion of Owner's Engineer and Contractor, such corrective
measures or modifications would not adversely affect in any
material respect the operation or maintenance of the Facility
after
41
commencement of Commercial Operation. No automatic controls or
safety protections may be temporarily bypassed to achieve
Performance Guarantees.
10.5.2 Minimum Performance Standards Achieved but
Failure to Achieve Performance Guarantees. If the Facility fails
to meet one or more of the Performance Guarantees in accordance
with the Test Procedures by the Guaranteed Commercial Operation
Date, then at Contractor's election after consultation with
Owner, Contractor shall, with respect to each Performance
Guarantee not achieved: (i) take all corrective action and
re-perform the relevant Performance Tests expeditiously until
achievement of such Performance Guarantees in accordance with the
Test Procedures, provided however, if the Facility meets all
Minimum Performance Standards, but such corrective actions do not
result in the achievement of such Performance Guarantee within
ninety (90) days after the Guaranteed Commercial Operation Date,
then Contractor shall pay applicable Performance Liquidated
Damages as set forth in this Section, or (ii) pay the applicable
Performance Liquidated Damages for such Performance Guarantee in
lieu of meeting the relevant Performance Guarantee(s). Re-
performance of any individual Performance Test may require re-
performance of other Performance Tests if so mandated by the Test
Procedures. Contractor's liability under this Section shall be in
addition to any Delay Liquidated Damages owed under this
Agreement. Contractor shall not unreasonably object to Commercial
Operation of the Facility or portion of the Facility while
corrective actions are underway to achieve the Performance
Guarantees.
10.5.3 Minimum Performance Standards Not Achieved.
If the Facility fails to achieve all of the Minimum
Performance Standards, as evidenced by the Performance Test
results, by the Guaranteed Commercial Operation Date, then
(i) Commercial Operation shall not occur and (ii) the provisions
of Section 10.11.1 shall apply. In addition to the foregoing,
Contractor shall attempt for a period of two hundred seventy
(270) days (commencing on the date on which the Facility or
component thereof was shown, through the Performance Tests, to
have failed to achieve one or more of the Minimum Performance
Standards) ("Minimum Performance Standards Correction Period") to
correct the Work to enable the Work to achieve all of the
Minimum Performance Standards and otherwise achieve Commercial
Operation. If the Work has not achieved all of the Minimum
Performance Standards and Commercial Operation upon the
termination of the Minimum Performance Standards Correction
Period, then Owner may, in its sole discretion, either (i) grant
Contractor a second sixty (60) day Minimum Performance Standards
Correction Period under the same terms and conditions as the
first, including the application of Section 10.11.1, or (ii) take
such steps to remedy Contractor Default to the extent permitted
under 16.2 of this Agreement. If, on the other hand, the Work
has achieved all of the Minimum Performance Standards and
Commercial Operation during the Minimum Performance Standards
Correction Period (or during the second sixty (60) day period,
should Owner elect that option), then Contractor shall be
liable to Owner for any Liquidated Damages to which Owner
is entitled under this Agreement. During any Minimum Performance
Standard Correction Period, Owner shall provide Contractor with
access to the Facility Site sufficient to perform its curative
Work under this Agreement, so long as such access does not
unreasonably interfere with operation of the Project and subject
to any reasonable security or safety requirements of Owner.
Contractor shall provide at least one (1) week's notice to Owner
if performance of the curative Work will interfere with operation
of the Project, in which case Owner may place reasonable
limitations on Contractor's access to the Facility Site such that
42
performance of the Work will minimize disruption to Owner's
operations and loss of revenue resulting from performance of such
Work. If, with respect to any Performance Guarantees,
Contractor achieves Minimum Performance Standards but does
not achieve the corresponding Performance Guarantee, if any,
then Contractor shall immediately pay Owner the Performance
Liquidated Damages, unless otherwise mutually agreed.
10.5.4 Issuance of Performance Test Completion
Certificate. Upon completion of the last Performance Test,
whether upon achievement of all the Performance Guarantees or
otherwise in accordance with the provisions of Section 10.5.2,
Contractor shall issue a Performance Test Completion Certificate
setting forth the Minimum Performance Standards and
Performance Guarantees achieved in the form of Exhibit 10.5.4.
Owner's Engineer and Owner shall act upon the Performance Test
Completion Certificate in accordance with the provisions of
Section 10.1.
10.5.5 Disposition of Output. At all times when
Contractor desires to conduct Start-up, Performance Tests or
other operations of the Facility, any Generator Set or Facility
systems in furtherance of Performance Tests or repair and
maintenance, Owner shall, at no expense to Contractor, arrange
for the disposition of the Facility's output of electricity
in such manner as Owner shall determine. Any output of
electricity, and all proceeds from the sale thereof, shall be
the property of Owner.
10.6 Commercial Operation.
10.6.1 Conditions for Commercial Operation.
"Commercial Operation" shall be achieved with respect to the
Facility or a Generator Set only when all of the following have
occurred:
(i) Mechanical Completion has been achieved (as
indicated by Contractor's issuance and Owner's acceptance of
the Mechanical Completion Certificate and subject to the
provisions of Section 10.6.2);
(ii) all Minimum Performance Standards have been
achieved;
(iii) all Performance Guarantees for the Work have
been achieved, or in the alternative, all applicable
Performance Liquidated Damages due and owing have been paid,
(under the applicable Performance Tests and as indicated by
Contractor's issuance and Owner's acceptance of the
Performance Test Completion Certificate);
(iv) any Delay Liquidated Damages due and owing
have been paid;
(v) The Facility or a Generator Set can be used
for their intended purposes as described in the Agreement in
accordance with all Applicable Laws, Applicable Codes and
Standards, Governmental Approvals, and Prudent Electric
Practices, and all portions of the Facility can legally,
safely and reliably be placed in commercial operation;
43
(vi) The Facility or Generator Set meets all of
the requirements set forth in the Specifications other than
(i) any Work which, by the terms of the Agreement, is not
required to be performed until a later date, and (ii) Punch
List items;
(vii) Contractor has submitted to Owner a final
Punch List in accordance with Section 10.7;
(viii) Contractor has delivered to Owner a fully
executed intermediate lien and claim waiver from Contractor
substantially in the form of Exhibit 6.1.2(C); and
(ix) Contractor has delivered to Owner a
certificate under Section 10.6.2 stating that the
requirements under this Section 10.6.1 have been satisfied
(the "Commercial Operations Certificate") and Owner has
accepted such certificate by counter-signing such
certificate.
10.6.2 Commercial Operation Prior to Completion of
Testing. The Owner is not entitled to use any Generator Set
before the conclusion and acceptance by Owner of the applicable
Performance Tests and Commercial Operation of said Generator Set;
provided, however, the foregoing restriction shall not apply if
Owner is operating with Contractor's written consent pursuant to
Section 10.5.2 or otherwise. If the Owner generates electricity
from any Generator Set and such electricity is exported through
the outgoing feeders without the formal written consent of the
Contractor or without a Commercial Operations Certificate being
issued, Owner shall be regarded as having thereby accepted such
Generator Set; the Contractor shall be relieved of their duty to
carry out the Performance Tests with respect to such Generator
Set; the Commercial Operation Certificate shall be deemed to
have been issued and accepted by Owner with respect to such
Generator Set; and Owner shall pay a pro-rata amount of the
remaining Contract Price, less 2% representing the milestone
payment for the punch list items being completed, to Contractor,
unless a Change Order shall have been agreed to, prior to the
generation of electricity, in accordance with Section 11.3,
providing for additional time and expense.
10.6.3 Issuance of Commercial Operation
Certificate. When commencement of Commercial Operation occurs for
the Facility or a Generator Set, when running on simple cycle or
combined cycle, and when running on both NG and HFO or only NG or
HFO, Contractor shall issue a Commercial Operation Certificate
substantially in the form of Exhibit 10.6.2. Owner's Engineer and
Owner shall act upon the Commercial Operation Certificate in
accordance with the provisions of Section 10.1.
10.7 Delays in Commercial Operation Not Due to Fault of
Contractor.
10.7.1 Delay in Completion of Utility
Interconnection of Load. If, due to no fault of Contractor or
its Subcontractors, the interconnection to the Utility is not
operational and ready prior to the arrival of the Barge at the
Job Site so as to enable Contractor to commence Start-up (and
provided that Contractor is in fact ready to commence Start-up),
or if Owner fails to provide a sufficient and stable load, or
consumables within thirty (30) days after Contractor's notice to
Owner (excluding extensions for events of Force Majeure to the
extent expressly permitted under Section 17.3.2), the period
of delay in completing the interconnection to the Utility or
in furnishing a sufficient and stable load shall constitute Owner
Delay, and Contractor
44
shall be entitled to a Change Order adjusting the Guaranteed
Commercial Operation Date on a day-for-day basis for the period
of delay, and compensating Contractor for any increased costs in
performing the Work caused by such delay. Notwithstanding the
above, if Owner fails to provide interconnection to the Utility,
sufficient and stable load, or consumables within sixty (60) days
after Contractors' notice to Owner (excluding extensions for
events of Force Majeure to the extent expressly permitted under
Section 17.3.2), Owner shall be regarded as having thereby
accepted the respective portion of the Facility or Generator
Set(s); the Contractors shall be relieved of their duty to carry
out the Performance Tests; the Commercial Operation Certificate
shall be deemed to have been issued and accepted by Owner; and
Owner shall pay all remaining amounts of the Contract Price to
Contractors unless a Change Order shall have been agreed to,
prior to the occurrence of any Owner act or omission listed
herein, in accordance with Section 11.3, providing for additional
time and expense.
10.7.2 Delay in Performance Tests. In the event
that Contractor has achieved Mechanical Completion but, due to no
fault of Contractor or its Subcontractors, Contractor is unable
to conduct the Performance Tests in order to achieve Commercial
Operation, Contractor shall be entitled to interest at the Base
Rate on the balance of the Contract Amount for each day after
fifteen (15) days that Contractor is in fact ready to commence
Start-up and unable to conduct the Performance Tests due to such
delay. If Owner's work delays the Performance Tests by more than
sixty (60) days (excluding extensions for events of Force Majeure
to the extent expressly permitted under Section 17.3.2),
Contractor shall, in addition to the interest at the Base Rate of
the Contract Amount, be entitled to (i) apply a degradation curve
to the Performance Test results to account for the time that the
Facility, or respective portions thereof, has been in use; (ii)
inspect and require additional service work be performed to the
Facility in preparation for testing at Owner's sole cost; and
(iii) Change Order adjusting the Guaranteed Commercial Operation
Date on a day-for-day basis for the period of delay, and
compensating Contractor for any increased costs in performing the
Work caused by such delay, which in any case may not exceed one
hundred and eighty (180) days. Notwithstanding anything to the
contrary, Owner's sole recourse for any shortfall in the
Performance Tests after sixty (60) days of delay shall be limited
to Performance Liquidated Damages. In no event shall Owner be
entitled to reject the Facility, or portion thereof, on the basis
of the delayed Performance Tests nor shall Contractor be
otherwise liable to the Owner for any shortfall in the
Performance Tests. Notwithstanding the above, if Owner is unable
to conduct all Performance Tests after one hundred and eighty
(180) days of delay, the Owner shall be regarded as having
thereby accepted the respective portion of the Facility or
Generator Set(s); the Contractors shall be relieved of their duty
to carry out the Performance Tests; the Commercial Operation
Certificate shall be deemed to have been issued and accepted by
Owner; and Owner shall pay all remaining amounts of the Contract
Price to Contractors, unless Contractor, in its sole discretion
agrees to a Change Order prior to the occurrence of any Owner act
or omission listed herein, in accordance with Section 11.3,
providing for additional time and expense.
10.8 Punch List. Within thirty (30) days after achievement
of Mechanical Completion of the Facility, Contractor shall
prepare a provisional Punch List (consulting with Owner in
preparing the Punch List) and provide it to Owner and Owner's
Engineer with an estimate of the cost and time to complete
and/or correct each Punch List item. A final Punch List shall
be submitted by Contractor upon achievement of Commercial
Operation. Owner's Engineer shall
45
notify Contractor within ten (10) days after receipt of each
Punch List that it accepts such Punch List and estimate or shall
otherwise state its reasons for disagreement therewith in
reasonable detail; provided, however, that
acceptance or rejection thereof shall not relieve Contractor of
its liability to complete or correct the Punch List items. If
Owner's Engineer fails to notify Contractor that it accepts or
rejects Contractor's Punch List within the time period set forth
above, or fails to provide detailed reasons for its rejection,
then Owner shall be deemed to have accepted Contractor's Punch
List. If the Parties fail to agree on the Punch List and
estimate, Contractor shall comply with the reasonable
instructions of Owner with respect to the disagreed items without
prejudice to its right to submit a request for a Change Order in
accordance with ARTICLE XI for additional costs incurred in
complying with Owner's instructions. Owner may withhold from
amounts otherwise payable under Section 6.1.3 an amount equal to
175% of the estimated value of each Punch List item until
Contractor has completed that item or Contractor may provide
alternate security reasonably acceptable to Owner in such amount.
If Contractor fails to complete all Punch List items to be
completed by Contractor within ninety (90) days after the date of
Substantial Completion, Owner may, in addition to any other
rights that it may have under this Agreement, at law or in
equity, deduct the related cost of such item from the amount
withheld with respect to such item and pay the remaining amount
withheld, if any, to Contractor upon achievement of Final
Completion in accordance with Section 6.1.4. If Contractor has
been unable to complete any Punch List item within ninety (90)
days of Substantial Completion because Owner has refused to grant
access for such completion, then, at Owner's option (and unless
the Parties agree otherwise), Contractor shall either (i) remain
at the Job Site until such access is granted (or, subject to
Owner's consent, demobilize and remobilize at the Job Site),
entitling Contractor to a Change Order to the extent expressly
permitted by Section 11.3 with all Compensable Costs of remaining
at the Job Site (or demobilization and remobilization, if
applicable) and increased costs of completing the Punch List
items caused by the delay (computed in accordance with Section
11.7 plus profit thereon at the rate of twelve percent (12%) to
be paid by Owner, or (ii) convey and deliver to Owner the
personal property required to complete the Punch List items.
10.9 Substantial Completion.
10.9.1 Conditions for Substantial Completion.
Substantial Completion shall be achieved only when all of the
following have been satisfied:
(i) the Facility shall have achieved Commercial
Operation as evidenced by Owner's Engineer's and Owner's
acceptance of the Commercial Operation Certificate;
(ii) the Parties have agreed upon the final Punch
List and estimate in accordance with Section 10.7;
(iii) Contractor has delivered to Owner a fully
executed intermediate lien and claim waiver from Contractor
substantially in the form of Exhibit 6.1.2(C) and fully
executed intermediate lien and claim waivers from each
Subcontractor substantially in the form of Exhibit 6.1.2(D);
46
(iv) Contractor has delivered to Owner a
certificate under Section 10.9.2 stating that the
requirements under this Section 10.9.1 have been satisfied
(the "Substantial Completion Certificate") and Owner has
accepted such certificate by counter-signing such
certificate; and
(v) Contractor has performed all other
obligations required under this Agreement for Substantial
Completion.
10.9.2 Issuance of Substantial Completion
Certificate. When Contractor believes that Substantial
Completion has occurred, Contractor shall issue a Substantial
Completion Certificate substantially in the form of Exhibit
10.8.2. Owner's Engineer and Owner shall act upon the Substantial
Completion Certificate in accordance with the provisions of
Section 10.1.
10.10 Final Completion.
10.10.1 Conditions for Final Completion. Final
Completion shall occur when all of the following have been
satisfied:
(i) Contractor's obligations regarding all Punch
List items shall have been performed in accordance with
Section 10.7;
(ii) Owner shall have received the final Facility
job books, as-builts and other documents identified in
ARTICLE VIII or elsewhere in this Agreement as being
furnished by Contractor;
(iii) Contractor shall have paid to Owner all
amounts of Liquidated Damages determined to be due and owing
to Owner in accordance with the provisions of this Agreement;
(iv) Contractor has delivered to Owner a fully
executed final lien and claim waiver from Contractor
substantially in the form of Exhibit 6.1.4(A) and fully
executed final lien and claim waivers from each
Subcontractor substantially in the form of Exhibit 6.1.4(B);
(v) all special tools and commissioning spare
parts identified in Annex A of the Specifications and all
other items to be provided by Contractor to Owner hereunder
shall have been delivered to Owner free and clear of all
liens;
(vi) Substantial Completion shall have occurred;
(vii) Contractor has delivered to Owner a
certificate under Section 10.10.2 stating that the
requirements under this Section 10.10.1 have been satisfied
(the "Final Completion Certificate") and Owner has accepted
such certificate by counter-signing such certificate; and
47
(viii) Contractor has performed all other
obligations required under this Agreement for Final
Completion.
10.10.2 Issuance of Final Completion Certificate.
When Contractor believes that Final Completion has occurred,
Contractor shall issue a Final Completion Certificate
substantially in the form of Exhibit 10.10.2. Owner's Engineer
and Owner shall act upon the Final Completion Certificate in
accordance with the provisions of Section 10.1.
10.11 Liquidated Damages.
10.11.1 Delay Liquidated Damages. In the event
that the Facility fails to achieve Commercial Operation on or
before the Guaranteed Commercial Operation Date (as extended
pursuant to any provision of this Agreement), Contractor shall be
liable for the payment of liquidated damages ("Delay Liquidated
Damages") to Owner; (a) for delay in achieving the Guaranteed
Commercial Operation Date by operating on at least a simple cycle,
in an amount equal to Fifteen Thousand Dollars U.S. Dollars
(U.S. $15,000) per day for each day of delay beginning with the
501st day through the 537th day after the Starting Date, and (b)
for delay in achieving the Guaranteed Commercial Operation Date
on a combined cycle, in an amount equal to (i) Twenty Thousand
U.S. Dollars (U.S. $20,000) per day for each day of delay
beginning with the 538th day through the 557th day of failure to
achieve Commercial Operation after the Starting Date and (ii)
Forty Thousand U.S. Dollars (U.S. $40,000) per day for each day
of delay, after the 557th day of failure to achieve Commercial
Operation until Commercial Operation is achieved, pro rata and in
relation to output of each specific Generator Set.
Notwithstanding the foregoing, the Parties agree that the Delay
Liquidated Damages for simple cycle and combined cycle operation
shall not be assessed for the same time period.
10.11.2 Net Electrical Capacity Liquidated
Damages. If the Net Electrical Capacity of the Facility, as set
forth in the Performance Test Completion Certificate issued by
Contractor and accepted by Owner, is less than the Net
Electrical Capacity Guarantee, then Contractor shall pay to
Owner, as liquidated damages ("Net Electrical Capacity Liquidated
Damages"), an amount equal to Two Thousand U.S. Dollars (U.S.
$2,000) for each kW by which the Net Electrical Capacity is less
than the Net Electrical Capacity Guarantee.
10.11.3 Net Electrical Output Liquidated Damages.
If the Net Electrical Output of the Facility, as set forth in the
Performance Test Completion Certificate issued by Contractor and
accepted by Owner, is less than the Net Electrical Output
Guarantee, then Contractor shall pay to Owner, as liquidated
damages ("Net Electrical Output Liquidated Damages"), an amount
equal to Fifty Thousand U.S. Dollars (U.S. $50,000) for each one
tenth of one percent (0.1%) by which the Net Electrical Output
(expressed in kWH) is less than the Net Electrical Output
Guarantee (also expressed in kWH).
10.11.4 Heat Rate Liquidated Damages. If the
Heat Rate of the Facility, as set forth in the Performance Test
Completion Certificate issued by Contractor and accepted by
Owner, is greater than the Heat Rate Guarantee, then Contractor
shall pay to Owner, as liquidated damages ("Heat Rate Liquidated
Damages"), an amount equal to Five Thousand U.S.
48
Dollars (U.S. $5,000) for each BTU/kWH that the Heat Rate is
greater than the Heat Rate Guarantee.
10.11.5 Liquidated Damages not Penalty. The
Parties acknowledge, recognize and agree on the following:
(i) that time is of the essence with respect to
achieving Commercial Operation on or before the Guaranteed
Commercial Operation Date, achieving Substantial Completion
on or before the Guaranteed Substantial Completion Date and
achieving Final Completion on or before the Guaranteed Final
Completion Date; that because of the unique nature of the
Facility and the unavailability of a substitute facility,
it is difficult or impossible to determine with precision
the amount of Damages that would or might be incurred by
Owner as a result of Contractor's failure to achieve
Commercial Operation on or before the Guaranteed Commercial
Operation Date;
(ii) that a failure of the Facility to meet the
Performance Guarantees will cause damage to Owner which may
be difficult or impossible to determine with precision;
(iii) that any sums which would be payable under
this Section 10.11 are in the nature of liquidated damages,
and not a penalty, and are fair and reasonable and such
payment represents a reasonable estimate of fair
compensation for the losses that may reasonably be
anticipated from such failure, and shall, without
duplication, be the sole and exclusive measure of Damages
with respect to any failure by Contractor to achieve
Commercial Operation on or before the Guaranteed Commercial
Operation Date or any failure of the Facility to meet the
Performance Guarantees; and
(iv) that the provisions for Liquidated Damages
under this Section 10.11 are without prejudice to
Contractor's obligation to cause the Facility to meet the
Minimum Performance Standards in accordance with the Test
Procedures.
10.11.6 Cumulative Remedies. The remedies set
forth in this Section 10.11 are cumulative and not exclusive of
any other remedies available under this Agreement or Applicable
Laws.
10.12 Contractor Bonuses.
10.12.1 Early Completion Bonus. The aggregate amount
of all bonuses payable by Owner to Contractor under this Section
10.12.1 shall not exceed Five Hundred Thousand U.S. Dollars
(U.S. $500,000). Owner shall pay to Contractor a bonus ("Early
Completion Bonus") per day for each day prior to the Guaranteed
Commercial Operation Date during which Commercial Operation has
occurred and during which Owner is exporting power from the
Facility for revenue (a) pursuant to simple cycle operations only
(and not on a combined cycle) in an amount equal to (i) $7,500
per day for each day between and inclusive of the 472nd and 491st
day after the Starting Date, and (ii) $15,000 per day for each
day occurring 471 days or earlier after the Starting Date; and
(b) pursuant to combined cycle operations, (i) $7,500 per day for
each day between and inclusive of the 515th and 524th day after
the Starting
49
Date; (ii) $15,000 per day for each day between and inclusive of
the 495th and 514th day after the Starting Date; and (iii)
$30,000 per day for each day occurring 494 days or earlier after
the Starting Date.
10.12.2 Additional Early Completion Bonus. The
aggregate amount of all bonuses payable by Owner to Contractor
under this Section 10.12.2 shall not exceed Three Hundred Forty
Thousand Euros (340,000). Owner shall pay to Contractor an
additional bonus ("Additional Early Completion Bonus") per day
for each day prior to the Guaranteed Commercial Operation Date
during which Commercial Operation has occurred and during which
Owner is exporting power from the Facility for revenue (a)
pursuant to simple cycle operations only (and not on a combined
cycle) in an amount equal to E17,000 per day for each day
between and inclusive of the 482nd day after the Starting Date,
and the 491st day after the Starting Date (for up to 10 days);
and (b) pursuant to combined cycle operations, E17,000 per day
for each day between and inclusive of the 515th and 524th
day after the Starting Date (for up to 10 days).
10.13 Guaranteed Completion. Contractor guarantees that
Commercial Operation shall be achieved no later than the
Guaranteed Commercial Operation Date, as adjusted in accordance
with this Agreement. Contractor guarantees that Substantial
Completion shall occur no later than the Guaranteed Substantial
Completion Date, as adjusted in accordance with this Agreement.
Contractor guarantees that Final Completion shall occur no later
than the Guaranteed Final Completion Date, as adjusted in
accordance with this Agreement.
ARTICLE XI.
CHANGE ORDERS
11.1 Owner Requested Change Orders. Owner shall be entitled
to a Change Order upon request in accordance with this Section
11.1.
11.1.1 If Owner desires to make any change in the
Work including upgrading Equipment and Materials or deducting
items of Work, Owner shall submit to Contractor in writing a duly
signed proposed Change Order, and thereafter, Owner and
Contractor may informally consult concerning the estimated cost
and impact on the Guaranteed Commercial Operation Date,
Guaranteed Substantial Completion Date, Guaranteed Final
Completion Date and the Contract Amount. Unless otherwise
notified by Owner, Contractor shall within ten (10) Business Days
of receipt of the proposed Change Order prepare, a detailed
estimate meeting the requirements of Section 11.5 of the impact
of such change on the Contract Amount, the Project Schedule and
any other obligation or potential liability of Contractor under
the Agreement, taking into account the effect of such change
on the Work and other agreed upon and contemplated Change Orders.
11.1.2 Owner shall review Contractor's estimate
within ten (10) Business Days, and if Owner accepts or the
Parties otherwise agree as to the Change Order and the effect, if
any, upon the Contract Amount, the Guaranteed Commercial
Operation Date, Guaranteed Substantial Completion Date,
Guaranteed Final Completion Date or any other obligation or
potential liability of Contractor under the Agreement, the
Parties shall execute such Change Order in the form of Exhibit
11.1(B) reflecting such agreement.
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Alternatively, Owner may determine in its sole discretion not to
undertake the proposed Change Order, in which case no Change
Order shall be executed. If the Parties cannot agree upon the
Change Order or the effect, if any upon the Contract Amount, the
Guaranteed Commercial Operation Date or any other obligation or
potential liability of Contractor under the Agreement within ten
(10) Business Days of Contractor's receipt of Owner's proposed
Change Order, or if Owner desires that the proposed changed Work
as set forth in the proposed Change Order immediately commence
without receipt of Contractor's written estimate, Owner may, by
issuance of a unilateral Change Order in the form of
Exhibit 11.1(A), require Contractor to commence and perform the
changed Work specified therein on a time and materials basis
whereby Contractor is paid its Compensable Costs, plus profit
thereon at the rate of twelve percent (12%).
11.2 Contractor Requested Change Orders.
11.2.1 Contractor Change Order. Contractor shall
be entitled to a Change Order in the event that any of the
following occur:
(i) Owner Delay or other acts or omissions of
Owner to perform its obligations under this Agreement, which
adversely affect Contractor's actual cost (which costs shall
be adequately documented and supported by Contractor) of
performance of the Work or ability to perform any
requirement under this Agreement and, with respect to Owner
Delay, compensation and a time extension to the Guaranteed
Commercial Operation Date, Guaranteed Substantial Completion
Date and Guaranteed Final Completion Date, as applicable, to
the extent expressly permitted under Section 11.3;
(ii) events of Force Majeure to the extent
expressly permitted under Section 17.3.1;
(iii) discovery of pre-existing Hazardous Materials
at the Job Site for which Owner is responsible in accordance
with Section 2.2 that adversely affect Contractor's cost
(which costs shall be adequately documented and supported by
Contractor) of performance of the Work or ability to perform
any requirement under this Agreement, and with respect to
any delays caused by such discovery of pre-existing
Hazardous Materials, an adjustment to the Contract Amount
and a time extension to the Project Schedule to the extent
expressly permitted under Section 11.3;
(iv) Changes in Law that adversely affect
Contractor's costs (which costs shall be adequately
documented and supported) of performance of the Work or
ability to perform any requirement under this Agreement, and
with respect to any delays caused by such Changes in Law, a
time extension to the Project Schedule to the extent
expressly permitted under Section 11.3; or
(v) Subsurface conditions deviating from the
assumptions set forth in the Specifications that adversely
affect Contractor's cost (which costs shall be adequately
documented and supported by Contractor) of performance of
the Work or ability to perform any requirement under this
Agreement, and with respect to any delays caused by such
discovery of subsurface conditions, an adjustment to the
Contract Amount and a
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time extension to the Project Schedule to the extent
expressly permitted under Section 11.3.
(vi) to the extent expressly permitted under
Sections 2.1.1 or 9.2.1.
11.2.2 Contractor Preliminary Notice. Promptly
upon becoming aware that any of the foregoing will impact the
Contract Amount, the Project Schedule any other obligation or
potential liability of Contractor under the Agreement,
Contractor shall give preliminary notice thereof to Owner and
shall within fifteen (15) days after such preliminary notice
prepare and deliver to Owner a request for a Change Order which
shall describe such condition or event in detail and the
adjustments to the Work (including the impact of such change
on the Contract Amount, the Project Schedule and any other
obligation or potential liability of Contractor under the
Agreement, taking into account the effect of such change on the
Work and other agreed upon and contemplated Change Orders. If
it is not reasonably practicable to obtain within the aforesaid
period the information needed, then such period shall be
extended as may be reasonable under the circumstances, and
Contractor shall provide Owner with reports, no less frequently
than bi-weekly, as to Contractor's best estimate of the
adjustment to the Work, Guaranteed Commercial Operation Date and
Contract Amount. Thereafter, the procedures set forth in Section
11.1.2 shall apply. Unless otherwise set forth herein or agreed
by the Parties, adjustments to the Contract Amount shall be
based on Contractor's Compensable Costs, plus profit thereon at
the rate of twelve percent (12%). In connection with any
Change Order issued under this Section, any other provisions of
this Agreement (including the Annexes or Exhibits) affected by
the Change Order shall be suitably adjusted.
11.2.3 Contractor Failure to Provide Notice. The
Parties acknowledge that Owner will be prejudiced if Contractor
fails to provide the notices and proposed Change Orders as
required under this Section 11.2, and agree that such
requirements are an express condition precedent necessary to any
right for an adjustment in Contract Amount, the Guaranteed
Commercial Operation Date, the Guaranteed Substantial Completion
Date or Guaranteed Final Completion Date, Milestone Payment
Schedule, any Work, any of the Minimum Performance Standards or
Performance Guarantees or any other modification to any other
obligation of Contractor under this Agreement. Verbal notice,
shortness of time, or Owner's actual knowledge of a particular
circumstance shall not waive, satisfy, discharge or otherwise
excuse Contractor's strict compliance with this Section 11.2.
11.3 Delay Caused by Owner, Pre-Existing Hazardous Materials,
Subsurface Conditions or Changes in Law. Should (i) an Owner
Delay event or Owner ordering a change in the Work (provided that
a Change Order has been issued in accordance with Section 11.1)
delay the commencement, prosecution or completion of the Work, or
(ii) the commencement, prosecution or completion of the Work be
delayed as a result of Contractor's discovery of pre-existing
Hazardous Materials on the Job Site, subsurface conditions
deviating from the assumptions regarding such conditions set
forth in this Specifications or Changes in Law, then Contractor
shall, with respect to any of the above, be entitled to a Change
Order for an adjustment in the Contract Amount and an extension
to the Project Schedule if (i) (x) such delay affects the
performance of any Work Schedule that is on the critical path of
the CPM Schedule, or (y) Contractor is unable to proceed with
other portions of the Work so as not to cause a delay
52
in the applicable Guaranteed Commercial Operation Date,
Guaranteed Substantial Completion Date or Guaranteed Final
Completion Date, and (ii) Contractor complies with the notice,
documentation and mitigation requirements herein. Unless
otherwise set forth herein or agreed by the Parties, adjustments
to the Contract Amount shall be for Contractor's Compensable
Costs, plus profit thereon at the rate of twelve percent (12%)
resulting from such delay and meeting the requirements of this
Section 11.3, and any adjustments to the Contract Amount or the
Project Schedule shall be recorded in a Change Order. The
Parties agree that if they execute a Change Order with respect
to any change in the Scope of Work described in this Section 11.3
any delay arising out of such change in the Scope of Work and
meeting the requirements of this Section 11.3 shall be included
in the Change Order incorporating such change in the Scope of
Work.
11.4 Disputes with Respect to Change Orders. In the event
the Parties have not reached agreement with respect to the proper
adjustment to the Contract Amount, the Milestone Payment Schedule
and/or the Project Schedule with respect to any event or other
occurrence described in Section 11.2 or Section 11.3 within
thirty (30) days of the occurrence of the event or circumstance
described therein, the cost or amount of such adjustment, if any,
shall be determined pursuant to the provisions of ARTICLE XXV.
In the case of any Dispute as to whether any Work requested or
directed by Owner is in fact a change from Contractor's existing
contractual obligations under this Agreement and the proper
subject of a Change Order, the matter shall be referred to
dispute resolution in accordance with the provisions of ARTICLE
XXV. Pending the resolution of such Dispute, Contractor will
comply with the written direction of Owner and Owner shall pay
Contractor its Compensable Costs incurred as a result of
complying with Owner's direction plus profit thereon at the rate
of ten percent (10%) and an equitable adjustment in the
Guaranteed Commercial Operation Date. If the Dispute is
ultimately resolved in Owner's favor, Contractor shall repay to
Owner the Compensable Costs or such portion thereof based on the
resolution of the Dispute.
11.5 Documentation. All claims by Contractor for
adjustments to one or more of the Contract Amount, the Guaranteed
Completion Date, the Milestone Payment Schedule, or the
Performance Guarantees as a result of Change Orders under ARTICLE
XI and XII shall be supported by such documentation as is
reasonably sufficient for Owner to determine the accuracy thereof,
including invoices from Subcontractors and Contractor's
man-hour breakdowns.
11.6 Effect of Force Majeure Event. In the event and to the
extent that a Force Majeure event affects Contractor's ability to
meet the Guaranteed Commercial Operation Date, Contractor may be
entitled to a Change Order to the extent permitted by Section
17.3.1.
11.7 Basis for Compensation for Costs. Where the provisions
of this Agreement provide for the payment or reimbursement by
Owner of Contractor's "Compensable Costs", such payment or
reimbursement shall be for the following:
(i) "Direct Personnel Expense" for Contractor's
employees, which shall consist of their gross salary or
wages (computed on the then-current market rates in the
applicable jurisdiction);
53
(ii) Benefits at the rate of thirty percent (30%)
of Direct Personnel Expense under item (i) above for
permanent, full-time employees and at the rate of fifteen
percent (15%) of Direct Personnel Expense under item (i)
above for part-time and/or temporary employees;
(iii) Out-of-Pocket Expenditures for materials,
supplies and services of Subcontractors; and
(iv) General and administrative costs of ten
percent (10 %) of the sum of items (i), (ii) and (iii) above,
provided that, all Compensable Costs: (a) must be reasonably
incurred in the proper performance of the Work, (b) must be
reasonably and sufficiently documented and (c) shall include only
those costs that would not have been incurred but for the change
in the Work or, in the case of Change Orders under Section 11.2
or 11.3, the events or conditions for which Contractor is
entitled to relief in accordance with the provisions of said
Sections. Notwithstanding the foregoing, all Compensable Costs
shall be exclusive of (1) fees and expenses of the Contractors'
legal counsel, and any travel expenses (including transportation,
lodging and food) incurred by any of the Contractors' legal
counsel in conjunction with the Work, (2) any taxes, duties,
levies or other impositions applicable to Contractor (except to
the extent Owner bears responsibility for such taxes, duties,
levies or other impositions under the terms of this Agreement),
(3) all costs incurred or paid by the Contractors to cure Defects
or Deficiencies in the Work, (4) all costs incurred to
participate in a Dispute resolution process pursuant to ARTICLE
XXV, except to the extent provided therein, (5) any amounts paid
pursuant to Contractors' indemnity obligations hereunder, and (6)
all costs incurred to cure any default, by either Contractor, or
any Subcontractor, of a duty or obligation under this Agreement.
Contractor shall use reasonable efforts to minimize Compensable
Costs and shall provide Owner with options for reducing such
costs whenever possible.
11.8 Records and Audit Rights.
11.8.1 Contractor Records. Contractor shall
maintain accurate records, books, logs, reports, receipts, and
other pertinent documentation as may be necessary for proper
management under this Agreement, to adequately substantiate Work
Performed under any Change Order, as required under Applicable
Laws or relating to this Agreement ("Books and Records") at Site.
Upon reasonable notice and during regular business hours, Owner
may inspect Books and Records, excluding those Books and Records
that may be retained by Contractor due to proprietary information.
In the event any Work is performed by Contractor on a time and
material or similar basis, Contractor shall deliver to Owner a
true copy of all records, books, logs and documentation that
may be necessary to adequately substantiate such work for review
by Owner or its authorized agents or representatives upon Owner's
request during the term of this Agreement and for a period of one
(1) year after final payment under this Agreement. Contractor
shall retain all such Books and Records for a minimum period of
three (3) years after Final Completion of the Project, or such
greater period of time as may be required under Applicable Laws.
For the avoidance of doubt and notwithstanding the rights
conveyed above, this Section is
54
not intended to provide the Owner with audit rights beyond the
Books and Records maintained on Site by the Contractor for proper
management under this Agreement.
11.8.2 General and Administrative Rates. Overhead
and general and administrative burden rates included in
Compensable Costs are negotiated rates and shall not be subject
to review or audit.
11.9 Mitigation. Contractor shall use reasonable
commercial efforts to mitigate any delay or costs resulting from
the events described in Sections 11.2 and 11.3, as a condition
to any adjustment to the Project Schedule or the Contract Amount.
11.10 Accord and Satisfaction. Mutual Change Orders
agreed upon by the Parties, and unilateral Change Orders entered
into on a time and materials basis shall constitute a full and
final settlement and accord and satisfaction of all effects of
the change as described in the Change Order upon the Agreement
and shall be deemed to compensate Contractor fully for such
change.
11.11 Adjustment Only Through Change Order. No change
in the requirements of this Agreement, whether an addition to,
deletion from, suspension of or modification to this Agreement,
including any Work, shall be the basis for an adjustment for any
change in the Contract Amount, the Project Schedule (including
the Guaranteed Commercial Operation Date, Guaranteed Substantial
Completion Date or Guaranteed Final Completion Date), any Work,
the Milestone Payment Schedule, any of the Minimum Performance
Standards or Performance Guarantees or any other obligations of
Contractor or right of Owner under this Agreement unless and
until such addition, deletion, suspension or modification has
been authorized by a Change Order executed and issued in
accordance with and in strict compliance with the requirements of
this ARTICLE XI. Contractor shall not perform any change in the
Work unless and until such change is authorized pursuant to this
ARTICLE XI, and should Contractor perform or claim to perform any
changes in the Work prior to authorization by Change Order, all
such costs and expenses incurred by Contractor shall be for
Contractor's account
ARTICLE XII.
SUBCONTRACTS.
12.1 Subcontractors. Owner acknowledges and agrees that
Contractor intends to have portions of the Work accomplished by
Subcontractors pursuant to written subcontracts between
Contractor and such Subcontractors, and that such Subcontractors
may have certain portions of the Work performed by lower tiered
Subcontractors. All Subcontractors shall be reputable, qualified
firms with an established record of successful performance in
their respective trades performing identical or substantially
similar work. All contracts with Subcontractors shall be
consistent with the terms or provisions of this Agreement.
Contractor shall be fully responsible to Owner for the acts and
omissions of Contractor's Subcontractors.
12.2 Major Specialty Consultants, Subcontractors and
Equipment Suppliers. In connection with the purchase of any
items of Equipment and Materials from any Subcontractor,
Contractor shall purchase only such models of Equipment and
Materials for incorporation into
55
the Facility as have attained the standard of reliability and
performance required under the Agreement.
12.3 No Privity With Subcontractors. Owner shall not be
deemed by virtue of the Agreement to have any contractual
obligation to or relationship with any Subcontractor. No
Subcontractor is intended to be or shall be deemed a third-party
beneficiary of this Agreement.
12.4 Review and Approval Not Relief of Contractor's
Liability. The review, approval or consent by Owner as to
Contractor's entering into any subcontract with any Subcontractor
shall not relieve Contractor of any of its duties, liabilities or
obligations under the Agreement, and Contractor shall be liable
to the same extent as if any such subcontract had not been
entered into. Any inspection, review or approval by Owner
permitted under the Agreement of any Work in progress by
Contractor or Subcontractors shall not relieve Contractor of any
duties, liabilities or obligations under the Agreement.
12.5 Owner's Rights. Contractor shall supervise and direct
the work of all Subcontractors and shall be responsible for all
engineering, procurement and transportation and construction
means, methods, techniques, sequences and procedures for
coordinating the work of Subcontractors.
12.6 Subcontracts. Contractor shall furnish Owner with a
copy of all subcontracts within ten (10) days after Owner's
request. Contractor reserves the right to redact or remove any
confidential or proprietary information from subcontracts,
including but not limited to trade secrets and pricing, which it
may not freely divulge. Owner shall comply with any
confidentially provisions which Contractor is subject to with
respect to the subcontract. Notwithstanding the above, Owner's
receipt and review of any subcontracts under this Section shall
not relieve the Contractor of any obligations under this
Agreement nor shall such action constitute a waiver of any right
or duty afforded Owner under this Agreement, or approval of or
acquiescence in a breach hereunder.
ARTICLE XIII.
WARRANTIES
13.1 Contractor's Warranty. Contractor warrants that the
Work, including the Equipment and Materials and other items
constituting the Facility, will (a) be new (except as otherwise
agreed or permitted by Owner in writing), complete, fit for the
purposes specified in this Agreement (b) be free of defects in
design, materials and workmanship; (c) conform to the
Specifications and other requirements of this Agreement, and (d)
be performed in a good and workmanlike manner.
13.2 Warranty Period. Contractor shall have the obligation
to perform Corrective Work in accordance with Section 13.4 for a
period of fifteen (15) months commencing on Commercial Operation
("Primary Warranty Period"). If any Work is corrected, repaired,
replaced and/or re-performed pursuant to Section 13.4 during the
Primary Warranty Period, Contractor's Corrective Work obligations
under Section 13.4 with respect to such Work shall be extended to
the later of the expiration of the relevant Primary Warranty
Period or six (6) months
56
from the date of completion of such modification, correction,
repair, replacement or re-performance ("Extended Warranty
Period"); provided, however, that in no event shall the Extended
Warranty Period extend beyond twenty-one (21) months after
commencement of the Primary Warranty Period.
Nothing contained in this Section 13.2 shall be
construed: (a) to establish a period of limitation with respect
to any other obligations in this Agreement, which shall terminate
as stated in Section 7.5, or (b) as a waiver of any other rights
which Owner may have under this Agreement, or at law or in
equity.
13.3 Conditions of Warranty. Contractor shall have no
obligation for breach of warranty under Section 13.1 to the
extent that (i) such failure to meet the warranty is caused by
normal wear and tear occurring at the Facility; (ii) such failure
to meet the warranty is the result of Owner's misuse or
negligence or acts of God occurring after commencement of the
Primary Warranty Period and not normally associated with the
operation of an electric generation station such as the
Facility; (iii) without Contractor's approval, spare parts other
than those supplied or recommended by Contractor have been
used, so as, in the reasonable judgment of the Contractor,
and have adversely affected the Facility's performance or
reliability; or (iv) the Facility or any relevant part thereof
is installed, used or serviced by Owner or its contractors
other than in conformance with Contractors' or any
Subcontractor's manuals, written instructions or written
technical specifications. Contractor also shall have no
obligation for breach of warranty under Section 13.1 to the
extent that, after commencement of the Primary Warranty Period,
Owner fails to operate or maintain the Facility or the
applicable Generator Sets in accordance with Prudent Electric
Practices, to the extent that such failure by Owner is the cause
of any Defect or damage to the Facility or the applicable
Generator Sets or notify Contractor within a reasonable
time after the defect becomes apparent, not to exceed
thirty (30) days from the date supervisory level personnel of
Owner responsible for the Facility become aware of such defect.
Following Owner's request for correction of any Defects or
Deficiencies, Owner shall make available to Contractor its
operating and maintenance records for the Facility for the
purpose of verifying compliance with the foregoing conditions of
warranty and assistance in determining the causes of any failure
in performance. The warranty under Section 13.1 shall also not
apply to any Owner-directed changes (not mutually agreed via
Change Order) in the design or construction of the Facility which
Contractor reasonably disputes as not being in accordance with
good workmanship or Prudent Electric Practices, provided that
Contractor has notified Owner of Contractor's Dispute with the
Owner-directed change at least seven (7) Business Days prior to
performing any such change. Owner's warranty rights shall not be
reduced by the presence of spare parts at the Facility, or the
lack thereof.
13.4 Remedy. If the warranty set forth in Section 13.1
hereof is breached, such breach constitutes a defect under the
Agreement. If during the Primary Warranty Period (or, if
applicable, the Extended Warranty Period), any Work is Defective
or Deficient, Contractor shall, upon receipt of written notice
thereof from Owner, (i) correct the Defects or Deficiencies by
repair, replacement, other corrective actions and/or re-
performance of the applicable Work ("Corrective Work") promptly
but at no cost to Owner (and at Contractor's sole cost, including
the cost of such repair, replacement, correction or re-
performances, any transportation, handling, shipping, replacement
parts, labor and other expenses); (ii) be liable for and pay to
Owner any
57
and all damages to the Facility incurred by Owner or any Owner
Affiliate directly arising out of or relating to such Defects or
Deficiencies; and (iii) in any event, Contractor shall provide a
service engineer to begin Corrective Work at the Facility as soon
as reasonably possible after receipt by Contractor of Owner's
notice. Owner shall provide Contractor with full and free access
to the Project, so long as such access does not materially
interfere with construction or operation of any portion of the
Project and subject to any reasonable security or safety
requirements of Owner. Any change to Equipment and Materials
that would alter the Specifications may be made only with prior
written approval of Owner. All costs incidental to Contractor's
performance of its warranty obligations and Corrective Work,
including the removal, replacement and reinstallation of
Equipment and Materials necessary to gain access to any Defect or
Deficiency in the Work and retesting of repaired or replaced Work
(if appropriate in accordance with industry standards) shall be
borne by Contractor. Any duties, taxes or other charges
assessable for importation into the Dominican Republic of items
required to meet Contractor's warranty obligations shall be borne
by Contractor; provided however that Owner shall use reasonable
efforts to minimize the cost of such charges. If, after fourteen
(14) days' notification of the breach of warranty (or, in the
case of a breach which jeopardizes the performance of the
Facility, three (3) business days after such notification),
Contractor has not commenced a response to the correction of the
breach and thereafter diligently pursued a correction, then Owner,
by written notice to Contractor, may correct or cause to be
corrected such breach in accordance with this Agreement, and
Contractor shall be liable for all reasonable costs, charges and
expenses incurred by Owner in connection with such repair or
replacement and arising from or relating to such Defect and shall
forthwith pay to Owner an amount equal to such costs, charges and
expenses upon receipt of invoices certified by Owner. Owner's
action in correcting Defects in accordance with this Section
shall not void Contractor's warranty obligations, except as set
forth in Section 13.3. Subject 13.3, if during any consecutive
six months during the Warranty Period any Work is repeatedly
Defective or Deficient in the same manner on three (3) or more
occasions and materially adversely affects commercial operation
of the Facility, the Contractor shall negotiate with Owner in
good faith an extension of the Extended Warranty Period for such
Defective of Deficient Work. The foregoing shall not apply to
the extent such reoccurring defect is a result of Owner's gross
negligence, willful misconduct or failure to use authorized parts
and/or to adhere in all material respects to the procedures set
forth in Contractor Guidelines heretofore furnished to Owner.
The remedies set forth in this Section 13.4 and the other
remedies of Owner set forth in this Agreement are the sole and
exclusive remedies of Owner for any breach of the warranty set
forth in Section 13.1.
13.5 Subcontractor Warranties. Contractor shall, without
additional cost to Owner, obtain warranties from Subcontractors
that meet or exceed the requirements of this Agreement; provided,
however, Contractor shall not in any way be relieved of its
responsibilities and liability to Owner under this Agreement,
regardless of whether such Subcontractor warranties meet the
requirements of this Agreement, as Contractor shall be fully
responsible and liable to Owner for its warranty and Corrective
Work obligations and liability under this Agreement for all Work.
All such warranties shall be deemed to run to the benefit of
Owner and Contractor. Contractor shall be responsible for
enforcing the warranties of all Subcontractors through the
relevant Primary Warranty Period or, if applicable, the relevant
Extended Warranty Period, unless Owner requests that any such
warranties be assigned to it at an earlier date. Any
Subcontractor warranties that are still in existence at the end
of the relevant Primary Warranty Period or
58
Extended Warranty Period, as the case may be, shall automatically
be assigned on such date to Owner. All such warranties, with
duly executed instruments assigning the warranties to Owner,
shall be delivered to Owner upon expiration of the Primary
Warranty Period or Extended Warranty Period, as the case may be.
Contractor shall provide reasonable assistance to Owner in
connection with the enforcement of Owner of any Subcontractor
warranty. Contractor agrees that: (i) Contractor's warranty, as
provided under this ARTICLE XIII shall apply to all Work
regardless of the provisions of any Subcontractor warranty, and
such Subcontractor shall be in addition to, and not a limitation
of, such Contractor warranty; (ii) Contractor is jointly and
severally liable with such Subcontractor with respect to such
Subcontractor warranty; and (iii) service of notice on Contractor
that there has been a breach of a Subcontractor warranty shall
be sufficient to invoke the terms of the instrument. This
Section 13.5 shall not in any way be construed to limit
Contractor's liability under this Agreement for the entire Work
or its obligation to enforce Subcontractor warranties.
13.6 Limited Warranty. THE WARRANTIES SET FORTH IN THIS
AGREEMENT ARE THE ONLY WARRANTIES BY CONTRACTOR APPLICABLE TO THE
FACILITY AND ARE EXPRESSLY IN LIEU OF ANY OTHER WARRANTIES,
EXPRESSED OR IMPLIED INCLUDING ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR ANY OTHER
WARRANTY EXPRESSED OR IMPLIED AGAINST DEFECTS, LATENT OR
OTHERWISE. THE CONTRACTOR NEITHER ASSUMES NOR AUTHORIZES ANY
OTHER PERSON TO ASSUME FOR IT ANY OTHER WARRANTY OBLIGATION IN
CONNECTION WITH THE FACILITY OR ANY PART THEREOF.
NOTWITHSTANDING ANYTHING TO THE CONTRARY, THIS SECTION 13.6 SHALL
IN NO WAY LIMIT CONTRACTOR'S OBLIGATIONS TO COMPLY WITH ARTICLE
VI AND ARTICLE X, TO COMPLY WITH, AND TO CAUSE THE FACILITY TO
COMPLY WITH, ALL THE EMISSIONS GUARANTEES, TO CAUSE THE FACILITY
TO ACHIEVE COMMERCIAL OPERATION AND FINAL COMPLETION AND TO
PERFORM ITS OTHER OBLIGATIONS UNDER THIS AGREEMENT.
13.7 Warranty Bond. Contractor shall deliver to Owner a
Warranty Bond ("Warranty Bond") in the form of Exhibit 13, issued
by an insurance company having a rating of at least "A" by
Standard & Poor's in an amount equal to four million one hundred
sixty-one thousand six hundred sixty-eight Euro (E4,161,668). The
Warranty Bond shall be delivered to Owner at least thirty (30)
days prior to the expected date of Commercial Operation of the
Facility and shall be a condition to Owner's Obligation to pay
all Milestone Payments due on account of and after Commercial
Operation. The Warranty Bond shall have a term which extends for
the entire Warranty Period.
ARTICLE XIV.
TITLE; RISK OF LOSS
14.1 Clear Title. Contractor warrants and guarantees that
legal title to and ownership of the Work (other than all
calculations, as built and arrangements drawings and other
drawings to be licensed to Owner in connection with the
operation and maintenance of the Facility and detailed
engineering drawings as set forth in Section 14.3) shall be free
and clear of any and all
59
liens, claims, security interests or other encumbrances when
title thereto passes to Owner as specified herein. Subject to
Section 14.3, title to all Work, including Work Product and
Equipment and Materials, provided by Contractor as part of the
Facility will pass to the Owner as and to the extent payment
therefore is made by the Owner in accordance with this Agreement.
Contractor shall deliver to Owner an assignment and bill of sale
in the form of Exhibit 14.1 within ten (10) days after receipt of
such payment evidencing the conveyance of the percentage of the
Work which has been paid for pursuant to the Milestone Payment
Schedule, and such additional assignments, bills of sale or other
documents as reasonably requested by Owner to evidence and give
effect to such transfer of title.
14.2 Risk of Loss. Notwithstanding the passage of title
pursuant to Section 14.1, Contractor shall have care, custody and
control of, and shall bear the risk of loss with respect to, the
Facility and all Work, whether or not incorporated therein or
located on or off the Job Site until Commercial Operation and
without regard to any Milestone Payments made by Owner to
Contractor; provided, however, that Owner shall bear the risk of
loss resulting from any of the following events or causes
occurring in the Dominican Republic or, with respect to matters
affecting the registration of the Barge, the jurisdiction
selected by Owner for the registration of the Barge, unless
Contractor has been able to obtain insurance coverage for such
risks and has so notified Owner:
(i) war, hostilities (whether war is declared or
not), invasion, act of foreign enemies;
(ii) rebellion, revolution, insurrection, or
military or usurped power, or civil war;
(iii) ionizing radiations, or contamination by
radioactivity from any nuclear fuel, or form any nuclear
waste from the combustion of nuclear fuel, radioactive toxic
explosive, or other hazardous properties of any explosive
nuclear assembly or nuclear component of such assembly
except to the extent caused by the negligence or willful
misconduct of Contractor or any Subcontractor; or
(iv) riot, commotion or disorder, unless solely
restricted to employees of Contractor or its Subcontractors
and arising from the conduct of the Work.
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14.3 Contractor's Drawings, Etc. for Use by Owner.
14.3.1 Rights in Work Product. All drawings,
documents, and engineering and other data furnished or to be
furnished by Contractor or its Subcontractors in connection with
the Work, including any work done by Contractor under the Letter
Agreement and Side Letter, ("hereinafter individually or
collectively referred to as "Work Product") are instruments of
service and shall remain Contractor's property. However,
Contractor hereby grants to Owner an irrevocable, perpetual,
non-exclusive and royalty-free license (assignable without
Contractor's Consent to Owner's assigns and successors in
interest) to retain, use, modify, damage and destroy the Work
Product for any purpose in connection with the operation,
maintenance, construction, repair, or completion of the Facility
or the Work.
14.3.2 Reuse of Work Product for Other Facilities.
Work Product is not intended or represented to be suitable for
reuse by Owner or others on any other project or facility. Any
such reuse without prior written verification or adaptation by
Contractor or its Subcontractors for the specific purpose
intended will be at Owner's sole risk and without liability or
legal exposure to Contractor or its Subcontractors. Owner shall
defend, indemnify and hold harmless Contractor and its
Subcontractors against all Damages arising out of or resulting
from such reuse without verification or adaptation. Any
verification or adaptation of Work Product on any other project
or facility or an Extension of the Facility will entitle
Contractor to additional compensation at rates to be agreed upon.
14.3.3 Owner Provided Documents. Contractor agrees
that all documents (as well as any drawings, tracings,
specifications, calculations, memoranda, data, notes, computer
files and other materials) which are supplied by Owner or any
of Owner's other consultants or contractors to Contractor under
the Agreement shall remain the sole and exclusive property of
Owner, and Contractor shall not make use of any such documents
or other media for any other project or for any other purpose
than to perform this Agreement. All such documents and other
medial, including all copies thereof, shall be returned to Owner
at the earlier of Final Completion or termination of the
Agreement.
ARTICLE XV.
OPERATOR TRAINING
15.1 Training Program. As part of the Work, Contractor
shall provide, at no additional cost to Owner, training for
Owner's operators of the Facility in accordance with the Training
Program set forth in Annex A of the Specifications. The training
program shall, at a minimum, consist of the following:
(i) instruction at the manufacturing plant of the
Generator Set engines in or at Contractor's training
facility in the United States for a group of eight (8)
persons for a period of ten (10) business days; and
(ii) instruction at the Facility conducted
concurrently by one (1) mechanical engineer and one (1)
electrical engineer and one (1) engineer specialized in the
steam system for a period of fifteen (15) business days.
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Contractor shall give Owner at least fourteen (14) days advance
notice of the date when Owner's personnel must arrive at the
training facility to commence training, which date shall be
approximately forty-five (45) days prior to the anticipated date
of Mechanical Completion. Such notice shall also confirm the
location of the training facility. The costs of travel, food and
lodging for Owner's personnel participating in the training at
the factory or training facility shall be Owner's responsibility.
15.2 Capable Operating Personnel. If, during the conduct of
training, Contractor, in the exercise of its reasonable judgment,
determines that any of Owner's operation and maintenance trainees
provided pursuant to Section 2.1.7 are not capable of mastering
the skills necessary to safely and effectively operate the
Facility and so notifies Owner, Owner shall consider Contractor's
request to remove such person from the training program, but
Owner shall have absolute discretion in all such decisions. If,
upon completion of the training program set forth in Annex A,
Contractor, in the exercise of its reasonable judgment,
determines that any of Owner's operation and maintenance
personnel are not ready to effectively participate in Start-up
and Performance Test operations, Contractor may request that
Owner replace such person(s) with adequately trained person(s).
In the event Owner is unable to supply such replacement
person(s), Contractor shall, at Owner's request pursuant to a
Change Order, furnish such replacement operations and maintenance
personnel, at Owner's expense. Such Contractor personnel will be
replaced as soon as possible with adequately trained Owner
personnel, and Contractor shall assist in such additional
training as needed at Owner's request pursuant to a Change Order,
at Owner's expense. Nothing in this Agreement, including this
Section 15.2 or Section 2.1.7, shall be interpreted to create a
master-servant or principal-agent relationship between Contractor
and any of Owner's operation or maintenance personnel.
15.3 Responsibility for Operating Personnel. Owner shall be
solely responsible for the hiring of the operating and
maintenance personnel of the Facility and for supervision of the
operating and maintenance personnel of the Facility after
Commercial Operation. Subject to the provisions of Section 15.2,
Contractor will supervise operating and maintenance personnel
until Commercial Operation.
ARTICLE XVI.
TERMINATION
16.1 Events of Default by Contractor. Contractor shall be
in default hereunder upon the occurrence of any one of the
following events, which shall be events of default (each an
"Event of Contractor Default") if not cured within ten (10) days
following delivery to Contractor of a notice of such event from
Owner, or, if capable of being cured but not within such ten (10)
day period, if Contractor has not commenced the cure within such
period and does not thereafter diligently pursue such cure or
such cure shall not have been accomplished within 21 days of the
occurrence of such event, provided that (i) each of the events
described in Sections 16.1.1, 16.1.2, 16.1.3, 16.1.4, 16.1.5,
16.1.7, or 16.1.9 below shall be an Event of Contractor Default
upon its occurrence and (ii) the event described in Section
16.1.2 below shall be an Event of Contractor Default upon its
occurrence unless any proposed cure is capable of completely
eliminating all material adverse economic consequences of such
event:
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16.1.1 Unauthorized Assignment. Contractor shall
have assigned or transferred this Agreement or any right or
interest herein except as expressly permitted by this Agreement
or agreed to by Owner;
16.1.2 Breach of Representation. Any
representation made by Contractor in Section 4.2 shall have been
materially false or misleading when made;
16.1.3 Violation of Applicable Laws. Contractor
shall have violated any Applicable Laws or Applicable Codes and
Standards and such violation is not capable of being cured and
materially jeopardizes the ability to achieve Commercial
Operation;
16.1.4 Late Completion. The Facility cannot in
the reasonable judgment of Owner be expected to achieve
Commercial Operation on the Guaranteed Commercial Operation
Date (taking into consideration all adjustments to the
Guaranteed Commercial Operation Date to which Contractor is
entitled under the provisions of this Agreement) plus 150 days;
16.1.5 Failure of Contractor Performance Guaranty.
The Contractor Performance Guaranty securing Contractor's
performance obligations shall have ceased to be in full force and
effect or such guaranty shall have been repudiated by the
Guarantor or the Guarantor shall have wrongfully failed to pay
thereunder;
16.1.6 Material Default. Contractor shall have
defaulted in its performance in any material respect under
any material provision of this Agreement (except to the extent
specifically addressed in the other subsections of this Section
16.1);
16.1.7 Bankruptcy. Contractor or Guarantor is
insolvent or any proceeding shall have been instituted against
Contractor or Guarantor seeking to adjudicate Contractor or
Guarantor as a bankrupt or insolvent, or Contractor or Guarantor
shall have made a general assignment for the benefit of its
creditors, or a receiver shall have been appointed on account
of the insolvency of Contractor or Guarantor, or Contractor or
Guarantor shall have filed a petition seeking to take advantage
of any other law relating to bankruptcy, insolvency,
reorganization, winding up or composition or readjustment of
debts and, in the case of any such proceeding instituted against
Contractor or Guarantor (but not by Contractor or Guarantor),
such proceeding shall not have been dismissed within sixty (60)
days of such filing; or
16.1.8 Payment Security Default. Owner fails to
obtain, deliver or maintain the Letter of Credit to secure
Owner's payment obligations under this Agreement.
16.1.9 Abandonment. Contractor abandons the
Facility or ceases or suspends performance of all or a material
portion of the Work;
16.1.10 Failure to Prosecute the Work. Contractor
fails to commence the Work in accordance with this Agreement; or
16.1.11 Failure to Maintain Insurance. Contractor
fails to maintain insurance required under this Agreement,
including, without limitation, the Warranty Bond required
pursuant to Section 13.7.
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16.2 Owner's Remedies Against Contractor. The provisions of
ARTICLE XXV hereof notwithstanding, and without limitation to
Owner's rights under ARTICLE X, if an Event of Contractor Default
shall have occurred, Owner shall have the right to take such
steps to overcome the Event of Contractor Default, in which case
Contractor shall be liable to Owner for any and all Damages
(including all attorneys' fees and arbitration expenses) incurred
in connection therewith or terminate this Agreement in whole or
in part by delivery of a notice of termination to Contractor, in
addition to any rights and remedies that may be available at law
or in equity or as provided herein.
16.3 Additional Owner's Rights Upon Contractor Default. In
the event that Owner elects to terminate this Agreement pursuant
to Section 16.2 hereof and Owner notifies Contractor of its
intention to take over and complete the Work, Contractor shall
provide Owner with the right to continue to use any and all
patented and/or proprietary information (subject to the
provisions of Section 20.1) and assign to Owner all title and
interests of Contractor to all Work not already owned by Owner,
together with all subcontracts and other contractual agreements
(including warranties) and rights thereunder as may be designated
by Owner. Owner and Replacement Contractor shall be required to
compensate such Subcontractors only for compensation becoming due
and payable to such parties under the terms of their subcontracts
with Contractor from and after the date Owner elects to succeed
to the interests of Contractor in such subcontracts. All sums
claimed by such Subcontractors to be due and owing for Work
performed prior to such date shall constitute debts between
Contractor and the affected Subcontractors, and Owner or
Replacement Contractor shall in no way be liable for such sums;
provided, however, that Owner may, at its election, pay any sums
owed to such Subcontractors and Contractor shall reimburse Owner
for such sums on demand. In the event of any termination of this
Agreement, Owner may, without prejudice to any other right or
remedy it may have, at its option, finish the Work by whatever
method Owner may deem expedient. To the extent the costs of
completing the Work after a termination pursuant to Section 16.2,
including any and all Damages incurred by Owner (including
compensation for additional professional services, Liquidated
Damages, attorneys' fees, consultant fees and arbitration
expenses, and any and all Damages for failure of performance and
cost of financing or interest on such expense), exceed the unpaid
balance of the Contract Amount, Contractor shall pay the
difference to Owner upon demand. If the unpaid balance of the
Contract Amount is less than such amount incurred by Owner, then
such excess shall be paid by Owner to Contractor, but such amount
shall not be paid until after Final Completion of the Project has
been achieved. In addition, Owner shall be entitled to exercise
any rights or remedies available to Owner under the Agreement or
at law or in equity. In the case of a termination pursuant to
Section 16.2, Contractor shall not be entitled to the Termination
Payment. Furthermore, Owner shall have the right to take
possession of and Contractor shall make available to Owner all
Construction Equipment and all components of the Work whether
located at the Job Site, Shipyard or elsewhere, on the date of
such termination for the purpose of completing the Work, and
Owner may employ any other Person, (sometimes hereinafter
referred to as "Replacement Contractor") to finish the Work in
accordance with the terms of this Agreement (subject to all
obligations under any and all subcontracts as may be assigned to
such Replacement Contractor) by whatever method that owner may
reasonably deem expedient. The Owner's right to assign a
subcontract to a Replacement Contractor may be conditioned upon
the Replacement Contractor's (i) not being a direct competitor of
the Subcontractor and (ii) having creditworthiness at least equal
to that of Contractor. Owner shall
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be required to mitigate reasonably the cost for completion of
such Work but may make such expenditures as in Owner's sole
judgment will best accomplish the timely completion of the
Facility, provided Owner shall not be required or expected to
mitigate any such costs by terminating, repudiating or
renegotiating any agreement entered into between
Contractor and any Subcontractor (including any Subcontractor
that is an Affiliate of Owner). Contractor hereby irrevocably
constitutes and appoints Owner as Contractor's attorney-in-fact,
with full irrevocable power and authority in the place and stead
of Contractor and in the name of Contractor or otherwise, from
time to time in Owner's discretion, effective only if in Owner's
reasonable judgment Contractor shall have failed to use its best
efforts to perform its obligations upon the occurrence and during
the continuation of a Contractor Event of Default for the purpose
of carrying out the terms of this ARTICLE XVI or its other
remedies under this Agreement, to take any action and to execute
any document and instrument which Owner may deem necessary or
advisable to accomplish the purposes of exercising its rights and
remedies under this Agreement, including: (i) to ask, demand,
enforce, sue for, recover for, receive and performance of any
rights or remedies of Contractor under any Subcontract in
connection with the Work; (ii) to receive, endorse and collect
any drafts or other instruments or documents in connection with
clause (i) above; and (iii) to file any claim or take any action
or institute any proceeding which Owner may deem necessary or
desirable for the enforcement of any of the rights of Owner with
respect to any Work or Subcontract.
16.4 General Obligations. If Owner elects to terminate this
Agreement for any reason, Contractor shall, at Owner's request
and at Contractor's expense, perform the following services
relative to the Work so affected:
16.4.1 Inventory Equipment, Etc. Assist Owner in
preparing an inventory of all Equipment and Materials and other
components of the Work in use or in storage at the Job Site and
elsewhere and otherwise cooperate with Owner for the efficient
transition of the Work;
16.4.2 Deliver Work Product and Information.
Deliver to Owner all Work Product and other information as may
be reasonably requested by Owner for the completion and/or
operation of the Facility; and
16.4.3 Supply Proprietary Components. Supply any
proprietary components needed for the completion and operation
of the Facility.
16.5 Events of Default by Owner. Owner shall be in default
hereunder upon the occurrence of any one of the following events,
which shall be events of default (each an "Event of Owner
Default") if not cured within fourteen (14) days following
delivery to Owner of a notice of such event or, if capable of
being cured but not in such fourteen (14) day period, if Owner
has not commenced the cure within such period and does not
thereafter diligently pursue such cure, provided that (i) the
events described in Section 16.5.4 below shall be an Event of
Owner Default upon its occurrence and (ii) the event described in
Section 16.5.2 below shall be an event of Owner Default unless
the proposed cure is capable of completely eliminating all
material adverse economic consequences of such event:
65
16.5.1 Unauthorized Assignment. Owner shall have
assigned or transferred this Agreement or any right or interest
herein except as expressly permitted by this Agreement or as
agreed to by Contractor;
16.5.2 Breach of Representation. Any
representation made by Owner in Section 4.1 shall have been
materially false or misleading when made;
16.5.3 Payment Default. Owner shall have failed
to pay any amount payable to Contractor when due in accordance
with this Agreement (provided that any amount disputed by Owner
shall not be considered due until determined to be payable by
Owner in accordance with the provisions of ARTICLE XXV); or
16.5.4 Bankruptcy. Owner is insolvent or any
proceeding shall have been instituted against Owner seeking to
adjudicate Owner as a bankrupt or insolvent, or Owner shall have
made a general assignment for the benefit of its creditors, or
a receiver shall have been appointed on account of the insolvency
of Owner, or Owner shall have filed a petition seeking to take
advantage of any other law relating to bankruptcy, insolvency,
reorganization, winding up or composition or readjustment of
debts and in the case of any such proceeding instituted against
Owner (but not by Owner) such proceeding shall not have been
dismissed within sixty (60) days of such filing.
16.5.5 Payment Security Default. Owner fails to,
deliver or maintain the Letter of Credit to secure Owner's
payment obtain obligations under this Agreement.
16.6 Contractor Remedies.
16.6.1 Right of Termination and Suspension.
(i) The provisions of ARTICLE XXV hereof
notwithstanding, if an Event of Owner Default (other than a
payment default under Section 16.5.3) shall have occurred
and be continuing, Contractor shall have the right to
terminate this Agreement by delivery of a notice of
termination to Owner, in addition to any rights and remedies
that may be available at law or in equity.
(ii) In the case of a payment default under
Section 16.5.3 which has not been cured within the period
specified in Section 16.5, Contractor shall, without
prejudice to its right to interest under Section 6.2 have
the right, upon notice to Owner, to suspend performance of
the Work until Contractor receives such undisputed amounts.
In case of any such suspension, Contractor shall be entitled
to a Change Order for any costs incurred by Contractor
resulting from such suspension and shall be entitled to an
extension to the Project Schedule to the extent permitted
under Section 11.3. Contractor may terminate this Agreement,
in addition to any rights and remedies that may be available
at law or in equity, upon delivery of written notice to
Owner, if an event of payment default under Section 16.5.3
shall have occurred and be continuing ten (10) days after
Contractor's notice of payment default by Owner.
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16.6.2 Owner's Payment Obligation. Upon termination
of this Agreement by Contractor because of an Event of Owner
Default, Contractor shall be entitled to retain all payments
already received from Owner and, in addition, to receive from
Owner (a) payment of any payments to which Contractor is entitled
in accordance with this Agreement and which have not yet been
paid, including all attorneys' fees and arbitration expenses,
incurred in connection therewith (together with accrued interest
in accordance with Section 6.2.1 if payment is overdue); and (b)
payment of a portion of the Contract Amount according to the
provisions of the Termination Payment Schedule set forth in
Exhibit 16.6.2 reduced by all portions of the Contract Amount
already paid to Contractor or payable under (a) above (it being
understood that any interest paid or that may be due shall not be
deducted from such amount); provided, however, the Contractor
shall mitigate Damages and the foregoing amount shall be reduced
to the extent of such mitigation and other costs expected to be
incurred in connection with the Work which are avoided. Payment
of the foregoing amount shall be made by Owner to Contractor
within thirty (30) days after receipt of Contractor's invoice
therefor. Contractor shall make available to Owner all Work, and
Contractor shall at the request and expense of Owner perform the
obligations set forth in Section 16.4.
16.7 Termination of the Agreement shall not relieve
Contractor or Owner of its obligations with respect to
confidentiality as set forth in ARTICLE XX.
ARTICLE XVII.
FORCE MAJEURE
17.1 Definition. For purposes of this Agreement, the term
"Force Majeure" shall mean any cause or occurrence affecting the
ability of a Party to perform its obligations under this
Agreement, which cause or occurrence is unforeseeable and beyond
the reasonable control of the Party affected and not due to an
act or omission of the Party affected and which could not have
been cured, remedied, avoided, offset or otherwise overcome by
the exercise of reasonable diligence, including the following
events to the extent they meet the foregoing requirements: acts
of God or the public enemy; expropriation or confiscation of
facilities; compliance with any order of any Governmental Unit;
trade or economic sanction; sabotage, acts of war (declared or
undeclared); blockade; embargo; insurrection; hostilities; civil
unrest; riots; military or guerilla action; terrorist activity or
threats of terrorist activities which, under the circumstances,
would be considered a precursor to actual terrorist activity;
earthquakes; volcanic eruption; landslide; typhoon; hurricane;
tornado; extreme weather of substantially equivalent severity,
devastating and disrupting force and violence as a typhoon,
hurricane or tornado; fires; floods; explosion; riots; strikes,
work stoppages, boycotts, walkouts or other labor disturbances
(except as excluded in (a) below) or any other causes, whether or
not of the same class or kind as those specifically named above,
that are unforeseeable and not within the reasonable control of
the Party affected and not due to an act or omission of the Party
affected and could not have been cured, remedied, avoided, offset
or otherwise overcome by the exercise of reasonable diligence.
The following events are explicitly excluded from Force Majeure
events and are solely the responsibility of the affected Party:
(a) any strike, work-to-rule action, go-slow or similar labor
difficulty which is caused by Contractor's or its Subcontractors'
violation of applicable labor agreements or Applicable Laws,
directed against Contractor or its Subcontractors or their
Affiliates or limited to Work at the Job Site (including any
laydown areas) or any of Contractor's or its Affiliates'
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manufacturing facilities, (b) late delivery of Equipment and
Materials or Construction Equipment (unless caused by a Force
Majeure event), (c) economic hardship, (d) Change of Law (which
shall be governed exclusively by Section 11.2.1(iv)), and (e) any
weather event which is not specifically enumerated in the
preceding sentence.
17.2 Burden of Proof. In the event that the Parties are
unable in good faith to agree that a Force Majeure event has
occurred, the burden of proof as to whether a Force Majeure
event has occurred shall be upon the Party claiming a Force
Majeure event.
17.3 Failure to Perform Due to an Event of Force Majeure.
17.3.1 Contractor Breach of Agreement. Subject to
the notice and other informational requirements set forth in
Section 17.4 and Section 11.2 and mitigation requirements of
Section 11.9, Contractor shall not be deemed in breach of this
Agreement because of any failure or delay in complying with its
obligations under or pursuant to this Agreement (except its
obligations to make accrued payment) to the extent such failure
or delay is due to one or more events of Force Majeure. If the
commencement, prosecution or completion of the Work is delayed by
an event of Force Majeure, Contractor shall be entitled to an
extension to the Guaranteed Commercial Operation Date, Guaranteed
Substantial Completion Date and Guaranteed Final Completion
Date, as applicable, to the extent that performance of such
obligations is so delayed if such delay affects the performance
of any Work that is on the critical path of the CPM Schedule and
causes Contractor to complete the work beyond such dates as
applicable. The Parties agree, to the extent reasonably possible,
to eliminate the Force Majeure event or to mitigate the effects
of a Force Majeure event. Any such delay will be reflected
in a Change Order as specified in Section 11.2.1(ii) above.
17.3.2 Owner Breach of Agreement. Subject to the
notice and other informational requirements set forth in Section
17.4, Owner shall not be deemed in breach of this Agreement
because of any failure or delay in complying with its obligations
under or pursuant to this Agreement (except its obligations
to make accrued payment) to the extent such failure or delay is
due to one or more events of Force Majeure. and Owner's
obligations hereunder shall be suspended to the extent that
performance of such obligations affect the performance of any
Work that is on the critical path of the CPM Schedule.
17.3.3 Either Party may cancel this Agreement in
accordance with Section 7.4 if Force Majeure delays a Party's
performance for a period greater than one hundred and eighty
(180) days.
17.4 Notice of Force Majeure. Either Party, upon learning
that an event of Force Majeure is likely to affect its ability to
perform hereunder, shall promptly give notice to the other Party.
Such notice shall state the nature of the event, its anticipated
effect and the anticipated duration thereof, and any action being
taken to avoid or minimize its effect. If Contractor is the
affected Party and intends to submit a request for Change Order
for the consequences of the Force Majeure event, it shall comply
with the notice and other informational requirements of Section
11.2.
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ARTICLE XVIII.
INSURANCE
18.1 Insurance. Contractor shall procure, or caused to be
procured, at no expense to Owner and maintain or cause to be
maintained in full force and effect at all times from
commencement of the Work through the date of Commercial Operation
(or such longer period as may be set forth in Exhibit 18.1), with
insurance carriers acceptable to Owner and with a rating of at
least "A" by Standard & Poor's, the insurance as set forth in
Exhibit 18.1. All policies provided by Contractor and its
Subcontractors pursuant to this Section 18.1 shall be written as
primary policies, not contributing with, and not in excess of,
the coverage that Owner and its permitted assigns and Affiliates
may carry against the same hazards.
18.2 Insurance Carried by Owner. During the term of this
Agreement, Owner shall carry general business insurance in
amounts reasonable and appropriate consistent with its past
practices for its activities during the period prior to
Commercial Operation. Such business insurance may include
worker's compensation, employer's liability, automobile
liability, commercial general liability coverages, as well as
property damage coverage for its property (excluding the Work but
including any other Owner property located on or adjacent to the
Job Site). In addition, on and after the date of Commercial
Operation of the Facility, Owner will carry insurance with such
coverages and in such amounts as are customarily carried by
responsible owners and operators of an electric power generation
plant such as the Facility. Owner shall cause its insurers to
include Contractor as an additional insured to the extent of
Owner's indemnification obligations under this Agreement and to
waive rights of subrogation against Contractor and its
Subcontractors except that with respect to Owner's
property/casualty insurance, any such waiver shall not extend to
Contractor's warranty obligations under this Agreement. Owner's
obligations under this Section shall continue until such time as
Contractor's warranty obligations under ARTICLE XIII expire.
Upon request of Contractor, Owner shall furnish to Contractor
certificates of insurance or other evidence of compliance with
the requirements of this Section.
18.3 Right of Owner to Procure Contractor Insurance. If
Contractor fails to procure and maintain the insurance required
under Section 18.1, or any portion thereof, Owner shall have the
right, but not the obligation, to procure and maintain insurance,
for and in the name of Contractor, and shall be entitled to a
Change Order to reduce the Contract Amount in respect of the
amount paid by Owner for any such insurance. In addition to the
foregoing, in the event that liability for any loss or damage is
denied by the underwriter or underwriters in whole or in part due
to the breach of said insurance by Contractor, or for any other
reason attributable to Contractor, or if Contractor fails to
maintain any of the insurance herein required, then Contractor
shall defend, indemnify and hold the Owner Indemnified Parties
harmless against all losses which would otherwise have been
covered by such insurance.
18.4 Policy Terms and Conditions. Except as specifically
set forth in this ARTICLE XVIII or Exhibit 18.1, all policies of
insurance maintained by Contractor and Owner respectively shall
be written on reasonable and customary terms, conditions and
exclusions for projects of similar size and scope. The coverages
referred to in this ARTICLE XVIII and Exhibit 18.1 are
69
set forth in full in the respective policy forms, and the
descriptions of such policies in this Agreement and Exhibit 18.1
are summaries and not intended to be complete.
18.5 Subcontractors' Insurance. Contractor shall ensure
that each Subcontractor shall either be covered by the insurance
provided by Contractor pursuant to this Agreement, or by
insurance procured by a Subcontractor. Should a Subcontractor be
responsible for procuring its own insurance coverage, Contractor
shall ensure that each such Subcontractor shall procure and
maintain insurance coverages reasonable and appropriate for the
nature and scope of their activities and taking into account the
amount of the subcontract and industry practices in the Dominican
Republic or other locations where Work may be performed. Any
insurance maintained by Subcontractors shall not reduce any
obligation of Contractor under this ARTICLE XVIII. All such
insurance shall be provided at the sole cost of Contractor or its
Subcontractors.
18.6 Contractor's Waiver. All policies of insurance
provided by Contractor or any of its Subcontractors pursuant to
this Agreement shall include clauses providing that each
underwriter shall waive its rights of recovery, under subrogation
or otherwise, against the Owner Indemnified Parties. Contractor
further releases, assigns and waives, and shall require all of
its Subcontractors to release, assign and waive, any and all
rights of recovery against the Owner Indemnified Parties, and
against other contractors and Subcontractors which Contractor may
otherwise have or acquire in or from or in any way connected with
any loss covered by policies of insurance maintained or required
to be maintained by Contractor pursuant to the Agreement (other
than third party liability insurance policies) or because of
deductible clauses in or inadequacy of limits of any such
policies of insurance.
18.7 Obligations Not Relieved. Anything in this Agreement
to the contrary notwithstanding, the occurrence of any of the
following shall in no way relieve Contractor from any of its
obligations under this Agreement: (i) failure by Contractor to
secure or maintain the insurance coverage required hereunder;
(ii) failure by Contractor to comply fully with any of the
insurance provisions of this Agreement; (iii) failure by
Contractor to secure such endorsements on the policies as may be
necessary to carry out the terms and provisions of this Agreement;
(iv) the insolvency, bankruptcy or failure of any insurance
company providing insurance to Contractor; (v) failure of any
insurance company to pay any claim accruing under its policy;
or (vi) losses by Contractor or any of its Subcontractors not
covered by insurance policies.
ARTICLE XIX.
INDEMNIFICATION
19.1 CONTRACTOR GENERAL INDEMNIFICATION. TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAWS AND SUBJECT TO SECTION
14.2, CONTRACTOR AGREES TO PROTECT, DEFEND, INDEMNIFY AND HOLD
OWNER, THE FINANCING PARTIES, THE UTILITY, EACH OF THEIR
SUBSIDIARIES AND AFFILIATES AND THEIR RESPECTIVE OFFICERS,
DIRECTORS AND EMPLOYEES (THE "OWNER INDEMNIFIED PARTIES") FREE
AND HARMLESS FROM AND AGAINST ANY AND ALL LOSSES, COSTS, DAMAGES,
INJURIES, LIABILITIES, PENALTIES, INTEREST, CLAIMS, DEMANDS,
CAUSES OF ACTION, SUITS OR OTHER
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LITIGATION (INCLUDING ALL COSTS THEREOF AND REASONABLE
ATTORNEYS' FEES) OF EVERY KIND AND CHARACTER
(COLLECTIVELY, "DAMAGES") ARISING FROM OR RELATED TO PERSONAL
INJURY TO, ILLNESS OR DEATH OF ANY PERSON AND DAMAGE TO OR
DESTRUCTION OF PROPERTY (INCLUDING THE WORK AND THE FACILITY) IN
ANY WAY DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THE
WORK OR CONTRACTOR'S OBLIGATIONS HEREUNDER, TO THE EXTENT THAT
SUCH INJURY OR DAMAGE IS CAUSED BY THE NEGLIGENCE (WHETHER
CHARACTERIZED AS SOLE, JOINT, CONCURRENT, CONTRIBUTING OR
COMPARATIVE NEGLIGENCE) OR WILLFUL MISCONDUCT OF ANY CONTRACTOR
INDEMNIFIED PARTIES OR ANY SUBCONTRACTOR OR ANY REPRESENTATIVES,
EMPLOYEES, OFFICERS OR DIRECTORS OF ANY SUBCONTRACTOR.
19.2 ADDITIONAL CONTRACTOR INDEMNIFICATION. WITHOUT LIMITING
THE GENERALITY OF SECTION 19.1, CONTRACTOR SHALL FULLY INDEMNIFY,
SAVE HARMLESS AND DEFEND THE OWNER INDEMNIFIED PARTIES FROM AND
AGAINST ANY AND ALL DAMAGES (INCLUDING DAMAGES IN FAVOR OF ANY
THIRD PARTY) WITH RESPECT TO (A) FAILURE OF ANY CONTRACTOR
INDEMNIFIED PARTIES OR ANY SUBCONTRACTOR OR ANY REPRESENTATIVES,
EMPLOYEES, OFFICERS OR DIRECTORS OF ANY SUBCONTRACTOR TO COMPLY
WITH APPLICABLE LAWS OR APPLICABLE CODES AND STANDARDS, (B)
PAYMENTS OF TAXES RELATING TO CONTRACTOR'S INCOME OR OTHER TAXES
REQUIRED TO BE PAID BY CONTRACTOR WITHOUT REIMBURSEMENT UNDER THE
AGREEMENT, (C) NON-PAYMENT OF AMOUNTS DUE AS A RESULT OF
FURNISHING MATERIALS OR SERVICES TO CONTRACTOR OR ANY
SUBCONTRACTOR WHICH ARE PAYABLE BY CONTRACTOR OR ANY
SUBCONTRACTOR IN CONNECTION WITH THE WORK, OR (D) ANY CLAIMS,
LIENS, SECURITY INTERESTS, ENCUMBRANCES OR RIGHTS IN REM OF ANY
KIND FILED OR ASSERTED AGAINST OR ATTACHED UPON ALL OR ANY
PORTION OF THE BARGE, THE WORK, THE JOB SITE OR THE FACILITY OR
ANY INTEREST THEREIN BY ANY SUBCONTRACTOR OR ANY OTHER PERSON OR
ENTITY ACTING THROUGH OR UNDER CONTRACTOR OR ANY SUBCONTRACTOR,
OR OTHERWISE ARISING OUT OF OR IN CONNECTION WITH THE AGREEMENT
OR PERFORMANCE BY CONTRACTOR OR ANY SUBCONTRACTOR OF THE WORK.
19.3 PATENT INDEMNIFICATION. WITHOUT LIMITING THE
GENERALITY OF SECTIONS 19.1 AND 19.2, CONTRACTOR AGREES TO
INDEMNIFY, DEFEND AND SAVE THE OWNER INDEMNIFIED PARTIES HARMLESS
FROM AND AGAINST ANY AND ALL CLAIMS WHATSOEVER ARISING FROM OR
IN ANY MANNER RELATED TO VIOLATION OR INFRINGEMENT OF ANY PATENTS,
COPYRIGHTS OR OTHER INTELLECTUAL PROPERTY OR RIGHT OR THE
IMPROPER USE OF OTHER PROPRIETARY RIGHTS WHICH MAY OCCUR IN
CONNECTION THE WORK PURSUANT TO THIS AGREEMENT AND THE OWNERSHIP
OR USE OF ANY PORTION OF THE FACILITY. OWNER'S ACCEPTANCE
OF CONTRACTOR'S ENGINEERING DESIGN AND/OR PROPOSED OR SUPPLIED
EQUIPMENT AND MATERIALS SHALL NOT BE CONSTRUED TO RELIEVE
CONTRACTOR OF ANY OBLIGATION
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HEREUNDER. CONTRACTOR SHALL HAVE SOLE AUTHORITY FOR
THE CONTROL OF THE DEFENSE OF ANY AND ALL SUCH CLAIMS AND ANY
SUITS BROUGHT THEREON, AND OWNER SHALL RENDER SUCH ASSISTANCE AS
CONTRACTOR MAY REASONABLY REQUIRE IN CONNECTION THEREWITH;
PROVIDED THAT IN ANY SUIT BROUGHT ON ANY SUCH CLAIM, OWNER SHALL
HAVE THE RIGHT TO BE REPRESENTED BY COUNSEL OF ITS OWN CHOICE AND
AT ITS OWN EXPENSE. SHOULD ANY SUCH CLAIM IMPAIR CONTRACTOR'S
PERFORMANCE OF THE WORK OR OPERATIONS OF THE FACILITY BY OWNER
THEN CONTRACTOR SHALL, AT ITS OWN EXPENSE, TIMELY PROCURE THE
RIGHT TO CONTINUE ITS PERFORMANCE OF THE WORK SO AS NOT TO
MATERIALLY IMPAIR THE SCHEDULE FOR COMPLETION OF THE WORK AND/OR
PROCURE FOR OWNER THE RIGHT TO CONDUCT OR OPERATION OF THE
FACILITY WITHOUT ADDITIONAL EXPENSE TO OWNER. IF CONTRACTOR IS
UNABLE TO SECURE SUCH LICENSE WITHIN A REASONABLE TIME,
CONTRACTOR SHALL, AT ITS OWN EXPENSE AND WITHOUT IMPAIRING
PERFORMANCE REQUIREMENTS, EITHER REPLACE THE AFFECTED WORK, IN
WHOLE OR PART, WITH NON-INFRINGING COMPONENTS OR PARTS OR MODIFY
THE SAME SO THAT THEY BECOME NON-INFRINGING.
19.4 OWNER GENERAL INDEMNIFICATION. SUBJECT TO SECTION 14.2
ABOVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAWS, OWNER
AGREES TO PROTECT, DEFEND, INDEMNIFY AND HOLD CONTRACTOR, EACH OF
ITS SUBSIDIARIES AND AFFILIATES AND ITS OFFICERS, DIRECTORS AND
EMPLOYEES (THE "CONTRACTOR INDEMNIFIED PARTIES") FREE AND
HARMLESS FROM AND AGAINST ANY AND ALL DAMAGES ARISING FROM OR
RELATED TO PERSONAL INJURY TO, ILLNESS OR DEATH OF ANY PERSON AND
DAMAGE TO OR DESTRUCTION OF PROPERTY IN ANY WAY DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THE WORK OR OWNER'S
OBLIGATIONS HEREUNDER, TO THE EXTENT THAT SUCH INJURY OR DAMAGE
IS CAUSED BY THE NEGLIGENCE (WHETHER CHARACTERIZED AS SOLE,
JOINT, CONCURRENT, CONTRIBUTING OR COMPARATIVE NEGLIGENCE) OR
WILLFUL MISCONDUCT OF ANY OWNER INDEMNIFIED PARTY.
NOTWITHSTANDING THE FOREGOING, CONTRACTOR SHALL HAVE FULL
RESPONSIBILITY, AND OWNER SHALL HAVE NO LIABILITY WITH RESPECT
TO, LOSS, DAMAGE OR DESTRUCTION TO CONSTRUCTION EQUIPMENT.
19.5 Hazardous Materials Indemnification.
19.5.1 Contractor Indemnified Parties. Subject to
Section 19.5.2, Owner agrees to indemnify and hold the Contractor
Indemnified Parties harmless against and in respect of any and
all Damages, which may be imposed upon, incurred by, or asserted
against Contractor or any Subcontractor by any party or parties
(including a Governmental Unit) arising out of, in connection
with, or relating to any contamination or pollution resulting
from any Hazardous Materials for which Owner is responsible under
Section 2.2.
19.5.2 Owner Indemnified Parties. Contractor
agrees to indemnify and hold the Owner Indemnified Parties
harmless against and in respect of any and all Damages which
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may be imposed upon, incurred by, or asserted against the Owner
Indemnified Parties by any party or parties (including a
Governmental Unit) arising out of, in connection with, or
relating to Hazardous Materials: (a) at, in, on, under, or
migrating and/or emanating to or from the Job Site or any other
location to the extent such Hazardous Materials were generated,
created or used at or brought onto the Job Site or any other
location or disposed of at any location in connection with the
Work by Contractor or any Subcontractor or other Person engaged
by them or operating under Contractor's supervision pursuant to
the performance of the Work, (b) that were improperly handled,
treated, stored or transported by Contractor, any Subcontractor,
or other Person engaged by them or operating under their
supervision or (c) that were the result of any negligent, willful,
or unlawful act or omission of Contractor or any Subcontractor or
other Person engaged by them or operating under their supervision,
provided, however, that in the event any such event results from
the actions of employees or subcontractors of Owner or pre-
existing Hazardous Materials at in, on under, or migrating and/or
emanating from the Job Site, Contractor shall not be responsible.
19.6 Notice. If any party entitled to indemnification
hereunder (the "Indemnified Party") intends to seek
indemnification under this Article from any other party (the
"Indemnifying Party") with respect to any action or claim, the
Indemnified Party shall give the Indemnifying Party notice of
such claim or action upon the receipt of actual knowledge or
information by the Indemnified Party of any possible claim or
of the commencement of such claim or action. In no event shall
the notice period afforded to the Indemnifying Party be less
than the lesser of (a) fifteen (15) business days prior to the
last day for responding to such claim or action or (b) one-half
of the period allowed for responding to such claim or action,
provided that the failure to give such notice shall not
affect the Indemnifying Party's obligations hereunder unless
the failure to give such notice materially and
adversely affects the rights, remedies or liability of the
Indemnifying Party with respect thereto. The Indemnifying Party
shall have the right to assume the defense of any such claim or
action with counsel designated by the Indemnifying Party and
reasonably satisfactory to the Indemnified Party; provided,
however, that if the defendants in any such action include both
the Indemnified Party and the Indemnifying Party, and the
Indemnified Party shall have reasonably concluded that there may
be legal defenses available to it which are different from or
additional to those available to the Indemnifying Party, the
Indemnified Party shall have the right to select separate counsel
to assert such legal defenses and to otherwise participate at the
Indemnifying Party's expense.
19.7 Failure to Defend Action. If any action or claim
arises as to which a Party's indemnification obligation arises
under this Agreement and the Indemnifying Party, after receipt of
notice of such action or claim fails to timely assume the defense
of such action or claim, then the Indemnified Party may, at its
option, and without relieving the Indemnifying Party of its
obligations hereunder, so perform, but all Damages (including all
attorneys' fees, consultant fees and litigation expenses,
settlement payments and judgments) so incurred by such
Indemnified Party in that event shall be reimbursed by the
Indemnifying Party to such Indemnified Party, together with
interest at the rate set forth in Section 6.1.5 on same from
the date any such cost and expense was paid by such Indemnified
Party until reimbursed by the Indemnifying Party.
19.8 Enforceability.
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19.8.1 Indemnity, Defense and Hold Harmless
Obligations. The indemnity, defense and hold harmless
obligations for personal injury, illness or death or property
damage under this Agreement shall apply regardless of whether
the Indemnified Party was concurrently negligent (whether
actively or passively), it being agreed by the Parties that in
this event, the Parties' respective liability or responsibility
for such Damages under this Agreement shall be determined in
accordance with the principles of comparative negligence.
19.8.2 Applicable Law. In the event that any
indemnity provisions in this Agreement are contrary to the law
governing this Agreement, then the indemnity obligations
applicable hereunder shall be applied to the maximum extent
allowed by Applicable Law.
ARTICLE XX.
NON-DISCLOSURE OF INFORMATION
20.1 Proprietary Information. Any information concerning
the Parties which is designated in writing as confidential or
proprietary and disclosed to the other Party incident to the
performance of Work pursuant to this Agreement is disclosed in
confidence and the transferee shall not, without the written
approval of the transferor (a) use such information except in
performance of the Work or in connection with the ownership or
operation, maintenance, construction, repair, completion or
expansion of the Facility or the Work, or (b) publish or
otherwise disclose it to others, provided, however, that nothing
herein shall limit Owner's right to disclose information to
anyone for the purpose of financing or insuring the Facility or
the Work or to a successor owner or potential successor owner of
the Facility or the Work, or Contractor's right to disclose
information to Subcontractors or prospective Subcontractors to
the extent necessary to obtain subcontract bids or to perform
subcontract work to the extent such Persons agree to hold such
information confidential to the same extent as set forth herein.
20.2 Exceptions. The restrictions of this Section shall not
apply to information which (i) was furnished to it prior to this
Agreement without restriction, other than information furnished
pursuant to the Letter Agreement and Side Letter; (ii) becomes
generally available to the public otherwise than through a breach
of this Agreement; or (iii) is received by either Party from a
third party without restriction and not in breach of this
Agreement. Furthermore, Owner or Contractor may provide any such
information to any Governmental Unit having jurisdiction and
asserting a right to obtain such information; provided, if any
such Governmental Unit demands from one Party disclosure of
proprietary information belonging to the other Party, the Party
receiving such demand shall promptly notify the other Party of
such demand to enable the other Party to take whatever legal
means may be available to limit the scope or consequences of such
disclosure. The Parties agree that this Agreement shall be
considered and treated as confidential.
20.3 Press Releases. In the event Contractor intends to
issue or publish a press release, advertisement or tombstone
relating in any way to the Project or the Work under this
Agreement, Contractor shall provide a draft thereof to Owner for
review and approval (such approval not to be unreasonably
withheld or delayed) prior to such issuance or publication.
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20.4 Equitable Relief. The Parties acknowledge that in the
event of a breach of any of the terms contained in this ARTICLE
XX, the transferor would suffer irreparable harm for which
remedies at law, including damages, would be inadequate, and that
the transferor shall be entitled to seek equitable relief
therefor by injunction, in addition to any and all rights and
remedies available to it at law and in equity, without the
requirement of posting a bond.
ARTICLE XXI.
ASSIGNMENT; FINANCING
21.1 Assignment. Except as provided in this Section 21.1
and in Section 21.2, this Agreement may be assigned to other
parties only upon the prior written consent of the other Party
hereto. Notwithstanding the foregoing, this Agreement or any
right or obligation contained herein may be assigned by either
Owner or Contractor, to an Affiliate thereof, provided that the
Party making such assignment shall remain obligated for the
performance of such Affiliate's obligations under this Agreement,
and Owner may assign its rights and obligation before Final
Completion with the consent of Contractor which will not be
unreasonably withheld and after Final Completion without any
consent; provided that as a condition to any assignment after
Final Completion but before the expiration of the Extended
Warranty Period, Owner shall notify Contractor in writing of
the parties to such assignment, the nature of the rights assigned,
the effective date of such assignment and the scope of Warranty
claims (if any) retained by Owner. When duly assigned in
accordance with the foregoing, this Agreement shall be binding
upon and shall inure to the benefit of the assignee; any
assignment not in accordance with this Section 21.1 or Section
21.2 shall be void and without force or effect.
21.2 Financing.
21.2.1 Owner Assignment to Financing Parties;
Assumption by Financing Parties. Owner may, without further
approval of Contractor, assign, pledge and/or grant a security
interest in this Agreement and its related rights to any
Financing Parties. The Financing Parties, their agents,
successors or assigns may acquire the rights of Owner under
this Agreement under the Financing Parties' remedies contained
in the Financing Agreements in the event of Owner's default under
the Financing Agreements.
21.2.2 Documents to be Provided by Contractor. In
addition to other assurances provided in this Agreement,
Contractor acknowledges that Owner intends to obtain project
financing associated with the Project, and Contractor agrees to
cooperate with Owner and the Financing Parties in connection with
such project financing, including entering into direct agreements
with the Financing Parties, as required by the Financing Parties.
Contractor shall provide assignments and consents,
acknowledgements, estoppel certificates, legal opinions and such
other closing documents as are customary and as reasonably
requested in connection with such project financing. Such
documents shall be in a form reasonably acceptable to Contractor
and the requesting Financing Party.
21.2.3 Information for Financing Parties.
Contractor shall provide such documents and other technical
assistance as Owner may reasonably request in connection with
75
obtaining financing for the Facility. During the performance of
the Work, Contractor shall make available to Owner and the
Financing Parties information relating to the status of the
Work including information relating to the design, engineering,
construction and testing of the Facility and such other matters
as Owner or the Financing Parties may reasonably request. The
Parties recognize that the Agreement is subject to review by
financial institutions for purposes of the financing of the
Facility. Owner shall reimburse Contractor at commercially
reasonable rates for its time in providing information not
related to the Facility or the Work.
21.2.4 Right to Inspect. The Financing Parties
and their engineers and consultants shall have the right to
participate in all inspections conducted by Owner under this
Agreement and to attend all Performance Tests of the Facility
and to make such other inspections as they may reasonably request.
Owner shall cause all such persons to observe Contractor's
security and safety regulations at all applicable locations.
Any such inspections shall be governed by the terms of Section
9.1.
21.2.5 Notices to Financing Parties. Contractor
shall furnish to the Financing Parties copies of notices given to
Owner hereunder. Contractor agrees to furnish concurrently to
the Financing Parties a copy of any default notice issued by it
to Owner under Section 16.5.
21.2.6 Amendments Required by Financing Parties.
Contractor agrees to cooperate with Owner in the negotiation
and execution of reasonable amendments or additions to this
Agreement required by any Financing Party. Any proposed
amendment or addition which would in any material respect
increase Contractor's costs or expose it to greater risk without
appropriate compensation will not be considered reasonable.
ARTICLE XXII.
INDEPENDENT CONTRACTOR
22.1 Independent Contractor. Contractor is an independent
contractor and nothing contained herein shall be construed as
constituting any relationship with Owner other than that of owner
or independent contractor, nor shall it be construed as creating
any relationship whatsoever between Owner and Contractor's
employees or Subcontractors. None of Contractor, Subcontractors
or their respective employees, agents, representatives or
servants shall be deemed to be employees, agents, representatives
or servants of Owner.
22.2 Contractor's Responsibilities for its Employees.
Subject to the provisions of this Agreement, Contractor shall
have sole authority and responsibility to employ, discharge and
otherwise control its employees, agents, representatives or
servants.
22.3 Responsibilities of Contractor as Principal for its
Employees. Contractor has complete and sole responsibility as a
principal for its agents, Subcontractors and all other hires to
perform or assist in performing the Work.
76
ARTICLE XXIII.
LIENS AND CLAIMS
Should any Subcontractor or any other Person acting through
or under Contractor or any Subcontractor file a claim, lien,
encumbrance, security interest or right in rem of any kind is
filed or asserted against or attached upon all or any portion of
the Barge, the Work, the Job Site or the Facility or any interest
therein, Contractor shall, at its sole cost and expense, promptly
(i) remove, pay or discharge, and discharge of record, or post a
bond against, any such claim, lien, encumbrance, security
interest or right in rem and (ii) indemnify and protect the Owner
Indemnified Parties as set forth in Section 19.2(D), which
indemnity shall survive the termination of this Agreement.
Contractor shall immediately notify Owner of the assertion of any
such claim, lien, encumbrance, security interest or right in rem
against the Barge, the Work, the Job Site, the Facility, or any
part thereof. Upon the failure of Contractor promptly to remove,
pay, discharge or post a bond against, any such claim, lien,
encumbrance, security interest or right in rem as required hereby
within twenty (20) days of notice of the existence thereof from
any source, Owner may, in its sole discretion and in addition to
any other rights that it has under this Agreement, at law or
equity, take any one or more of the following actions:
(i) remove, pay or discharge such claim, lien
encumbrance, security interest or right in rem using
whatever means that Owner, in its sole discretion deems
appropriate, including the payment of settlement amounts. In
such circumstance, Contractor shall be liable to Owner for
all Damages (including all attorneys' fees, consultant fees
and litigation expenses, and settlement payments) incurred
by Owner arising out of or relating to such removal and
discharge. All such Damages shall be paid by Contractor no
later than thirty (30) days after receipt of each invoice
from Owner;
(ii) seek and obtain an order granting specific
performance from a court of competent jurisdiction,
requiring that Contractor immediately discharge and remove,
by bond, payment or otherwise, such claim, lien,
encumbrance, security interest or right in rem. The Parties
expressly agree that Owner shall be entitled to such
specific performance and that Contractor shall be liable to
Owner for all Damages (including all attorneys' fees,
consultant fees and litigation expenses) incurred by Owner
arising out of or relating to such specific performance
action. Contractor agrees that the failure to discharge and
remove any such claim, lien, encumbrance, security interest
or right in rem will give rise to irreparable injury to
Owner and Owner's Affiliates, and further, that Owner and
such Owner Affiliates will not be adequately compensated by
Damages; or
(iii) unless Contractor shall furnish a bond or
other adequate security for any such lien, withhold any
amounts otherwise due and owing to Contractor under this
Agreement equal to the amount of the claim, lien,
encumbrance or right in rem plus all Damages arising out of
such claim, lien, encumbrance, security interest or right in
rem, including all attorneys' fees, consultant fees and
litigation expenses.
Nothing in this ARTICLE XXIII shall be construed as
limitation on or waiver by Contractor of any of its rights to
encumber the Facility as security for Work performed by
77
Contractor or for any payments owed to it by Owner hereunder;
provided that Contractor may only exercise such right after
providing Owner with thirty (30) days prior written notice of its
intent to do so and, with respect to payments to Contractor by
Owner hereunder, Owner shall not have made such payment or
provided a bond or other reasonably acceptable provision to
secure such payment within such thirty (30) day period.
ARTICLE XXIV.
NOTICES AND COMMUNICATIONS
24.1 Notices. Any notice, demand, offer, or other written
instrument required or permitted to be given pursuant to the
terms and conditions of this Agreement shall be in writing and
either (a) delivered personally; (b) sent by certified mail,
return receipt requested; (c) sent by a recognized overnight mail
or courier service with delivery receipt required; (d) sent by
facsimile transfer and acknowledged by recipient; or
(e) electronic message (receipt confirmed):
If to Contractor: Wartsila Finland Oy
Tarhaajantie 2
FIN-65100 Vaasa
Finland
Tel.+358 10 709 0000
Attention: Kai Kettu
Email: kai.kettu@wartsila.com
With a copy to: Wartsila North America, Inc.
16330 Air Center Boulevard
Houston, TX 77032
United States of America
Phone: +1 281-233-6200
Fax: +1 281-233-6233
Attention: Hugo Teste
Email: hugo.teste@wartsila.com
and
If to Owner: Seaboard Ship Management, Inc.
1551 Sawgrass Corporate Parkway,
Suite 200
Sunrise, Florida 33323
Telephone: (954) 846-1377
Facsimile: (954) 846-9266
Attention: Narinder Wadhwa
Email: nwadhwa@seaboardship.com
With a copy to: Seaboard Corporation
9000 West 67th Street
Shawnee Mission, Kansas 66201
Telephone: (913) 676-8925
78
Facsimile: (913) 676-8978
Attention: David Becker
Email:
david_becker@seaboardcorp.com
Either Party may change its address or the party to
notify by a notice delivered in accordance with this section.
24.2 Effectiveness of Notices. Notices shall be effective
when received by the Party to whom addressed.
ARTICLE XXV.
DISPUTE RESOLUTION
25.1 Negotiation of Disputes and Disagreements. The Parties
shall negotiate in good faith and attempt to resolve any claim,
dispute or controversy arising out of or relating to this
Agreement or the breach, termination or validity thereof (a
"Dispute"). If the Parties have been unable to settle or agree
upon within a period of thirty (30) days after the Dispute
arises, either Party may give written notice ("Notice") to the
other Party requesting that a senior officer of each Party's
management meet at a mutually agreed time and place not later
than forty-five (45) days after the non-notifying Party's receipt
of such Notice to attempt to resolve such matter. To aid the
negotiation by the Parties' senior management, the Project
Manager and Owner's Representative shall promptly prepare and
exchange memoranda stating the issues in dispute and their
positions, summarizing the negotiations which have taken place
and attaching relevant documents. Should a resolution of such
Dispute not be obtained within sixty (60) Days of the non-
notifying Party's receipt of such Notice, then either Party may
by notice to the other submit the Dispute to arbitration in
accordance with the provisions of Section 25.2. Any of the time
periods specified in this Section 25.1 may be extended by mutual
agreement of the Parties.
25.2 Arbitration Resolution.
25.2.1 Arbitration Rules and Arbitrators. Any
claim, dispute or controversy arising out of or relating to this
Agreement or the breach thereof which has not been resolved by
negotiation or subject to a proceeding in accordance with the
procedures set forth in Section 25.1 shall be submitted to
binding arbitration under the Rules of Arbitration of the
International Chamber of Commerce ("Arbitration Rules") then in
effect. The arbitration shall be conducted in English and shall
be held in New York City, or such other location as the Parties
shall mutually agree. If the amount of any asserted claim or
counterclaim does not exceed One Million U.S. Dollars (U.S.
$1,000,000), the arbitration shall be conducted before a single
arbitrator in accordance with the Arbitration Rules. Otherwise,
the arbitration shall be conducted in accordance with the
procedures of the Arbitration Rules before a panel of three (3)
arbitrators, with each Party selecting one arbitrator and the
third arbitrator, who shall be the chairman of the panel, being
selected by the two Party-appointed arbitrators. The claimant
shall name its arbitrator in the demand for arbitration
and the responding Party shall name its arbitrator within ten
(10) days after receipt of the demand for arbitration. The third
arbitrator shall be named within ten (10) days after
the appointment of the second arbitrator, failing which the third
79
arbitrator shall be appointed in accordance with the Arbitration
Rules. Each arbitrator will be qualified by at least ten (10)
years experience in construction, engineering, and/or the
electric utility industry, and the chairman of the arbitration
panel shall have had legal training.
25.2.2 Award. The award rendered by the
arbitration shall be final and judgment thereon may be entered by
any court having jurisdiction thereof. The prevailing Party (as
determined by the arbitrator(s)) shall be entitled to
reimbursement of its expenses, including reasonable attorney's
fees, incurred in connection with the arbitration and any
judicial enforcement of this arbitration agreement, unless the
arbitrator(s) determines that it would be manifestly unfair to
honor this agreement of the Parties and determines a different
allocation of costs.
25.2.3 Discovery. The Parties shall be entitled to
engage in reasonable discovery, including the right to
production of relevant and material documents by the opposing
Party and the right to take depositions reasonably limited in
number, time and place; provided that in no event shall any Party
be entitled to refuse to produce relevant and non-privileged
documents or copies thereof requested by the other Party within
the time limit set and to the extent required by order of the
arbitrator(s). All disputes regarding discovery shall be
promptly resolved by the arbitrator(s).
25.2.4 Joinder. This agreement to arbitrate is
binding upon the Parties, the Guarantor and the successors and
permitted assigns of any of them. At either Party's option, any
other Person may be joined as an additional party to any
arbitration conducted under this Section 25.2; provided that the
party to be joined is or may be liable to either Party in
connection with all or any part of any Dispute between the
Parties. Where such joinder results in more than one claimant
or more than one respondent, the arbitrator(s) shall be appointed
in accordance with the Arbitration Rules; provided that for the
selection of arbitrators under Section 25.2.1, the Contractor
and the Guarantor shall be considered one party.
25.3 CONSENT TO JURISDICTION. EACH OF THE PARTIES HEREBY
CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE AND
FEDERAL COURTS SITUATED IN THE COUNTY AND STATE OF NEW YORK FOR
PURPOSES OF ANY PROCEEDING DESCRIBED IN SECTION 25.1 OR TO AID IN
SUPPORT OF ARBITRATION AND THE ENFORCEMENT OF ANY ARBITRAL AWARD
MADE UNDER THE PROVISIONS OF SECTION 25.2. EACH PARTY HEREBY
IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY
ACTION OR PROCEEDING BY DELIVERY OF COPIES OF SUCH PROCESS BY
COMMERCIAL COURIER TO IT AT ITS ADDRESS SPECIFIED IN SECTION 24.1
HEREOF OR IN ANY OTHER MANNER PERMITTED BY LAW. EACH PARTY
HEREBY IRREVOCABLY WAIVES ANY OBJECTIONS, INCLUDING ANY OBJECTION
TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF
ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.
EACH PARTY HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND
ALL PROCESS IN SUCH ACTION OR PROCEEDING BY DELIVERY OF COPIES OF
SUCH PROCESS BY
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COMMERCIAL COURIER TO SUCH PARTY AT ITS ADDRESS SPECIFIED IN
SECTION 24.1 HEREOF OR IN ANY OTHER MANNER PERMITTED BY LAW.
25.4 Continuation of Work. Pending final resolution of any
Dispute, Owner and Contractor shall continue to fulfill their
respective obligations hereunder, but without prejudice to the
rights of the Parties under ARTICLE XVI.
ARTICLE XXVI.
LIMITATION OF LIABILITY
26.1 Maximum Liability. Contractor's maximum aggregate
liability to Owner pursuant to this Agreement whether arising
from tort (including negligence or strict liability), breach of
contract, breach of warranty, indemnification, or any other cause
of action shall be one hundred percent (100%) of the Contract
Amount; provided, however, that Contractor's maximum aggregate
liability for Liquidated Damages shall be further limited to ten
percent (10%) of the Contract Amount. Notwithstanding the
foregoing, this Section 26.1 shall not apply to Contractor's
warranty and guarantee in Section 14.1 (good title free and clear
of liens), or Contractor's indemnification obligations pursuant
to Section 19.2 (C) or (D) (indemnification for contractor
liens and consensual liens), and Section 19.3 (patent
infringement claims).
26.2 Consequential Damages. Except for Liquidated Damages
(if any) [and the proceeds of Builders' Risk insurance], in no
event, whether as a result of breach of contract, breach of
warranty, tort liability (including negligence or strict
liability), or otherwise, and whether arising before or after
completion of the Facility, shall Contractor be liable to Owner
for special, indirect, or consequential damages of any nature
whatsoever, including losses or damages caused by reason of
unavailability of the Facility, shutdowns or service
interruptions, loss of use, loss of profits or revenue, inventory
or use charges, cost of purchased or replacement power, interest
charges or cost of capital or claims of Owner's customers.
Except to the extent such damages are included in the amounts
payable under Section 16.6.2, in no event, whether as a result of
breach of contract, breach of warranty, tort liability
(including negligence or strict liability), or otherwise, shall
Owner be liable to Contractor for special, indirect, or
consequential damages of any nature whatsoever, including loss
of use, loss of anticipated profits or revenue, or inventory or
use charges. Notwithstanding the foregoing, the limitation of
liability in this Section 26.2 shall not apply to Contractor's
indemnification obligations under this Agreement with respect to
claims brought by any third party. For purposes of this Section
26.2, "third party" means any Person other than Contractor or
Owner.
26.3 Releases Valid in All Events. Releases, disclaimers
and limitations on liability expressed herein shall apply even in
the event of the negligence, strict liability, fault or breach of
contract (including other legal bases of responsibility such as
fundamental breach) of the Party whose liability is released,
disclaimed or limited to the extent provided in such release,
disclaimer and limitation.
26.4 Scope of Releases. All releases, waivers, or
limitations of liability given by Owner in favor of Contractor
and expressed in this ARTICLE XXVI shall apply equally to
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Contractor, its Affiliates, and the employees, officers,
directors and shareholders of each. All releases, waivers, or
limitations of liability given by Contractor in favor of Owner
and expressed in this ARTICLE XXVI shall apply equally to Owner,
the Financing Parties, each of their respective Affiliates and
the employees, officers, directors and shareholders of each.
ARTICLE XXVII.
DRUG AND ALCOHOL-FREE WORKPLACE
The Parties desire to provide a safe and productive work
environment. The Parties believe that the use, possession and/or
distribution of illegal/unauthorized drugs and alcohol presents a
serious threat to the safety of employees, visitors and others at
the Shipyard, Job Site, or other premises owned, leased, or
occupied by Owner or its Affiliates. All employees of Contractor
or any Subcontractor associated with the Work under this
Agreement must agree to:
(i) While on or entering the Shipyard, Job Site
or other premises owned, leased, or occupied by Owner or its
Affiliates, search of personal and professional possessions,
including: automobiles, trucks, briefcases, lunchboxes, and
person for illegal/unauthorized drugs.
(ii) Drug testing at any time while on the
Shipyard, Job Site or other premises owned, leased or
occupied by Owner or its Affiliates. Failure to do so or
failing any such test shall be grounds for immediate removal
from the Shipyard, Job Site or other premises owned, leased,
or occupied by Owner or its Affiliates.
(iii) Failure of any employee to agree and abide
by these requirements will be grounds for immediate removal
(and Contractor shall promptly remove or to require any
Subcontractor to remove such employee) from the Shipyard,
Job Site or other premises owned, leased, or occupied by
Owner or its Affiliates and from any Work under this
Agreement. Notwithstanding the foregoing, Owner shall have
no liability and Contractor agrees to release, indemnify,
defend and hold harmless the Owner Indemnified Parties from
and against any and all Damages (including all attorneys'
fees and litigation expenses), which may directly or
indirectly arise or result from Contractor or any
Subcontractor terminating the employment of or removing from
the Work any such employee who fails to meet the foregoing
requirements following a request by Owner to have such
employee removed from the Work.
ARTICLE XXVIII.
PROJECT PLANNING AND CONTROL
28.1 Project Schedule and CPM Schedule.
28.1.1 Project Schedule. Exhibit 28.1 sets forth
the schedule of dates in which Contractor is required to achieve
certain stages of completion of the Work, including the
Guaranteed Commercial Operation Date, Guaranteed Substantial
Completion Date and
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Guaranteed Final Completion Date ("Project Schedule"). The
Project Schedule shall only be modified by Change Order.
28.1.2 CPM Schedule Submission. On or prior to
the Start Date, Contractor shall prepare and submit to Owner for
its review and written approval a detailed critical path method
schedule for the Project using Microsoft Project ("CPM Schedule").
Owner may issue written comments, proposed changes and/or written
approval or disapproval of such CPM Schedule. The CPM Schedule
shall, at a minimum, (i) include separate activities for each
portion of the Project (including engineering, procurement and
construction, along with non-physical activities related to the
Work), (ii) be fully integrated and shall be consistent with
the Project Schedule, and (iii) show an uninterrupted critical
path from the notice to proceed through Commercial Operation,
Substantial Completion and Final Completion. With respect to each
activity in the CPM Schedule, the CPM Schedule shall show the
activity number, activity description, early start and early
finish dates, late start and late finish dates, duration, total
float value, and responsible Contractor, Subcontractor or other
parties (including Owner). The CPM Schedule shall represent
Contractor's best judgment as to how it shall complete the Work
in compliance with the Project Schedule, including the Guaranteed
Commercial Operation Date, Guaranteed Substantial Completion
Date and Guaranteed Final Completion Date. The CPM Schedule
shall be submitted in hard copy and also in its native electronic
format, provided on a computer diskette. Once the CPM Schedule
and the required submittals have been reviewed and approved by
Owner, this version of the CPM Schedule shall be the baseline
CPM Schedule for the Work.
28.1.3 Progress Updates to CPM Schedule. After
approval by Owner of the baseline CPM Schedule, such CPM Schedule
shall be managed and updated monthly by Contractor. Each updated
CPM Schedule shall meet the requirements of Section 28.1.2, and
in addition shall (i) at a minimum, be prepared with the same
level of detail as the baseline CPM Schedule, (ii) reflect the
Work as actually performed or as forecasted, and (iii) show any
other information requested by Owner. Contractor shall submit to
Owner current updates to the CPM Schedule on a monthly basis,
which shall be submitted with each invoice. Contractor shall
promptly correct any errors or inconsistencies in the updates to
the CPM Schedule identified to Contractor by Owner and
resubmit a corrected update for Owner's review.
28.1.4 Approval of Baseline CPM Schedule and
Updates to CPM Schedule. Owner's approval, or lack of approval,
of the baseline CPM Schedule and any review, or lack of review,
of the updated CPM Schedule shall not relieve Contractor of
any obligations for the performance of the Work, change the
Project Schedule, nor shall it be construed to establish the
reasonableness of the CPM Schedule. Notwithstanding any approval
by Owner of the baseline CPM Schedule or any review of the
updated CPM Schedule, Owner shall be entitled to reasonably rely
upon the baseline CPM Schedule and any updates to the CPM
Schedule, including reliance that Contractor has developed a
comprehensive, reasonable and accurate schedule to complete the
Work within the times set forth in the Project Schedule.
28.2 Progress Reports and Meetings. Contractor and Owner
shall conduct meetings at the Job Site or Shipyard (or at
another location designated by Owner and reasonably acceptable to
Contractor) on a periodic basis (no less frequently than
[monthly]) according to a mutually
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agreed schedule throughout construction of the Facility to
thoroughly discuss the progress and status of construction and
other matters arising during the prior period. Such meetings
shall be attended by Contractor's Project Manager (or his duly
authorized representative) and Owner's Representative (or his
duly authorized representative), and by such additional
representatives of each Party as such Party may desire. Also,
on a monthly basis and together with each invoice, Contractor
shall provide Owner with a progress report containing the
following information with respect to the Work:
(i) a description of Contractor's and all
Subcontractors' activities in performance of the
Work and engineering, procurement and construction
progress as compared with the baseline CPM
Schedule (and, at the request of Owner, an updated
CPM Schedule);
(ii) an identification and evaluation of problems and
deficiencies in the Work (including to an
evaluation of any factors which are anticipated to
have a material effect on the Project Schedule);
(iii) a description of the Work which has been
completed;
(iv) the status of material, supplies and equipment
deliveries;
(v) an updated CPM Schedule;
(vi) certification that all amounts due to all
Subcontractors prior to the last of such month
have been paid;
(vii) a detailed description of the Milestones
achieved and the Work performed prior to the
period covered by such report and the extent to
which scheduled payments therefor have been
received;
(viii) safety statistics required under Applicable
Laws and Applicable Codes and Standards and
quality assurance reports (A) from the
manufacturing and fabrication facilities of all
Subcontractors and (B) with respect to all
construction activity at the Facility Site;
(ix) such other information as may be requested by
Owner and agreed to by Contractor, which agreement
shall not be unreasonably withheld;
(x) a description of anticipated activities in the
coming month.
Contractor shall be responsible for ensuring that performance of
the Work proceeds in accordance with the CPM Schedule (as updated
from time to time) and for coordinating the schedules of all
Subcontractors.
28.3 Project Implementation Plan. Contractor shall, within
twenty-one (21) days after receipt of the notice to proceed,
deliver to Owner for Owner's review and approval a project
implementation plan that provides the guidelines by which the
normal working relationships will
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be conducted between Owner, Owner's Representative and
Contractor (the "Project Implementation Plan"). The Project
Implementation Plan will contain, among other materials, an
organizational chart, correspondence procedures, procedures for
the review of drawings (except to the extent already set forth in
Section 8.1) and Work progress, and verification procedures to be
implemented for Owner with respect to any Work provided on a cost
reimbursable basis.
28.4 Recovery Schedule. If, at any time during the
prosection of the work, (i) should any updated CPM Schedule or
progress report show that any activity on the critical path of
the CPM Schedule is delayed such that any stage of completion
under the Project Schedule, including Commercial Operation, will
occur thirty (30) or more days after the applicable completion
date set forth in the Project Schedule, including the Guaranteed
Commercial Operation Date, or should Contractor fail to provide a
current updated CPM Schedule in compliance with the requirements
of this Agreement and owner reasonably determines that any
activity on the critical path is delayed such that any stage of
completion under the Project Schedule will occur thirty (30) or
more days after the applicable completion date set forth in the
Project Schedule and (ii) Contractor or any of its Subcontractors
or Sub-subcontractors are responsible for such delay, Owner may,
in addition to any other remedies that it may have under this
Agreement, require that contractor prepare, at Contractor's cost,
a schedule to explain and display how it intends to regain
compliance with the Project Schedule ("Recovery Schedule").
within seven (7) days of receipt of a written request from Owner,
Contractor shall prepare the Recovery Schedule and submit it to
Owner for its review. The Recovery Schedule shall represent
Contractor's best judgment as to how it shall regain compliance
with the Project Schedule. Contractor shall participate in a
conference with Owner, and with any other person whom Owner
designates to participate, to review and evaluate the Recovery
Schedule. Any revisions necessary as a result of this review
shall be resubmitted for review by Owner. In preparing and
executing the Recovery Schedule, Contractor shall take all
reasonably necessary steps to regain compliance with the Project
Schedule, including establishing additional shifts, hiring
additional manpower, paying or authorizing overtime, providing
additional Construction Equipment, and resequencing activities.
The costs incurred by Contractor in executing the Recovery
Schedule shall be to Contractor's account. Owner's requirement,
review and approval of the Recovery Schedule shall not relieve
Contractor of any obligations for performance of the Work, change
any dates in the Project Schedule or be construed to establish
the reasonableness of the Recovery Schedule. In the event of a
Dispute between the parties regarding any entitlement to
execution of a Recovery Schedule, either Party shall have the
right to refer the Dispute for resolution in accordance with
ARTICLE XXV. Pending resolution of any such Dispute, Contractor
shall continue its performance of the work in accordance with
this Agreement.
ARTICLE XXIX.
MISCELLANEOUS
29.1 Validity and Enforceability. The invalidity or
unenforceability of any portion or provision of this Agreement
shall not affect the validity or enforceability of any other
portion or provision. Any invalid or unenforceable portion or
provision shall be deemed severed from this
85
Agreement, and the balance of the Agreement shall be construed
and enforced as if the Agreement did not contain such invalid
or unenforceable portion or provision. Notwithstanding the
provisions of the preceding sentence, should any term or
provision of this Agreement be found invalid by any
Governmental Unit having jurisdiction thereof, the Parties shall
immediately renegotiate in good faith such term or provision
of the Agreement to eliminate such invalidity.
29.2 Governing Law. This Agreement shall be governed by the
internal laws of the State of New York, without reference to its
conflict of laws principles (other than New York General
Obligations Law Section 5-1401). The United Nations Convention
on Contracts for the International Sale of Goods shall not apply
to the Agreement and shall be disclaimed in and excluded from any
Subcontracts entered into by Contractor in connection with the
Work or the Project.
29.3 Waiver. The waiver of any breach or failure to enforce
any of the terms, covenants or conditions of this Agreement shall
not in any way affect, limit, modify or waive the future
enforcement of such terms, covenants or conditions.
29.4 Third-Party Beneficiaries. The provisions of this
Agreement are intended for the sole benefit of Owner and
Contractor, and there are no third-party beneficiaries other
than assignees contemplated by the terms herein;
29.5 Contractor's Employees. Each Party agrees that it
shall not, for a period of at least one year from Commercial
Operation, employ or attempt to employ any employee on the
payroll of the other Party or such Party's Affiliates, without
the prior written permission of such Party.
29.6 Foreign Corrupt Practices Act. Each Party shall, and
shall cause each of its Subcontractors and the agents and
employees of each of them to, comply with all provisions of
the Foreign Corrupt Practices Act of the United States (15 U.S.C.
sections 78dd-1 and 2) and all applicable export and re-export
control laws and regulations and shall not take any action that
could result in either Party or any of its Affiliates becoming
subject to any action, penalty or loss of benefits under such Act.
29.7 Counterparts. This Agreement may be executed in any
number of counterparts and by each of the Parties in
separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall
constitute one and the same Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Parties have caused this Agreement
to be executed as of the date and the year first above written.
SEABOARD CORPORATION,
as Owner
By: /s/ Robert L. Steer
Robert L. Steer
Senior Vice President
WARTSILA FINLAND OY,
as Contractor
By: /s/ Sampo Suvisaari
Sampo Suvisaari
General Manager
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ADDENDA/EXHIBITS
TO
THE ENGINEERING, PROCUREMENT AND
CONSTRUCTION CONTRACT
DATED AS OF AUGUST 17, 2010,
BY AND BETWEEN SEABOARD CORPORATION
AND WARTSILA FINLAND OY
Following is a list of the Addenda and Exhibits to the
Engineering, Procurement and Construction Contract dated as of
August 17, 2010, by and between Seaboard Corporation and Wartsila
Finland OY, which is filed with the Securities and Exchange
Commission ("SEC"). Seaboard Corporation ("Seaboard") undertakes
to provide to the SEC the Addenda and Exhibits, as requested,
subject to Seaboard's right to request confidential treatment
under the Freedom of Information Act.
Annex A - Technical Specification
Annex A.1 - Spare Parts List W 18V50DF
Annex A.2 - W 50 Hand Tools
Annex A.3 - Turbo-charger TPL 76C List of Tools
Annex A.4 - ME Service Tools V50DF
Annex A.5 - Steam Turbine Spare Parts
Annex A.6 - HFO Separator Tools
Annex A.7 - Lube Oil Separator Tools
Annex A.8 - Emissions Data Sheet
Annex B - Scope of Supply List
Annex C - List of Preliminary Design Drawings
Exhibit 2.1.1 - Facility and Job Site Map
Exhibit 2.1.5 - List of Governmental Approvals to be
Obtained
Exhibit 2.7 - Term Sheet of Irrevocable Import Letter
of Credit
Exhibit 3.11 - Form of Contractor Performance
Guaranty
Exhibit 3.2.4 - List of Key Personnel
Exhibit 6.1.1 - Milestone Payment Schedule
Exhibit 6.1.2(A) - Form of Invoice
Exhibit 6.1.2(B) - Form of Milestone Completion
Certificate
Exhibit 6.1.2(C) - Form of Contractor's Intermediate
"Lien and Claim Waiver" Certificate
Exhibit 6.1.2(D) - Form of Subcontractor's Intermediate
"Lien and Claim Waiver" Certificate
Exhibit 6.1.4(A) - Form of Contractor's Final "Lien and
Claim Waiver" Certificate
Exhibit 6.1.4(B) - Form of Subcontractor's Final "Lien
and Claim Waiver" Certificate
Exhibit 10.2 - Performance Test Guidelines
Exhibit 10.4.2 - Form of Mechanical Completion
Certificate
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Exhibit 10.5.4 - Form of Performance Test Completion
Certificate
Exhibit 10.6.2 - Form of Commercial Operation
Certificate
Exhibit 10.8.2 - Form of Substantial Completion
Certificate
Exhibit 10.10.2 - Form of Final Completion Certificate
Exhibit 11.1(A) Form of Unilateral Change Order
Exhibit 11.1(B) Form of Mutual Change Order
Exhibit 12.1 Approved Subcontractors
Exhibit 13 - Form of Warranty Bond
Exhibit 14.1 - Form of Bill of Sale
Exhibit 16.6.2 - Termination Payment Schedule
Exhibit 18.1 - Contractor Furnished Insurance
Exhibit 28.1 - Project Schedule
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