<PAGE>
Exhibit 10.4
An asterisk ([*]) indicates that confidential information has been
omitted and filed separately with the Securities and Exchange Commission as
part of a Confidential Treatment Request.
================================================================================
MAINTENANCE PROGRAM PARTS, SHOP REPAIRS AND
SCHEDULED OUTAGE TFA SERVICES CONTRACT
between
AES RED OAK, LLC
and
SIEMENS WESTINGHOUSE POWER CORPORATION
================================================================================
Dated as of December 8, 1999
AES RED OAK PROJECT
PROPRIETARY INFORMATION AES RED OAK LTP CONTRACT
<PAGE>
TABLE OF CONTENTS
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ARTICLE 1. DEFINITIONS; GENERAL REFERENCES......................................................1
1.1 Defined Terms........................................................................1
1.2 General References...................................................................7
ARTICLE 2. CONTRACT DOCUMENTS...................................................................7
2.1 Contract Documents...................................................................7
2.2 Conflicting Provisions...............................................................7
ARTICLE 3. SCOPE OF WORK........................................................................7
3.1 Seller's Scope.......................................................................7
3.2 Buyer's Scope........................................................................7
3.3 Early Replacement....................................................................8
3.4 Parts Life Credit....................................................................9
ARTICLE 4. CONTRACT PRICE AND PAYMENT TERMS....................................................10
4.1 Contract Price......................................................................10
4.2 Taxes...............................................................................10
4.2 Invoices............................................................................11
4.3 Payment.............................................................................11
4.4 Notice of Payment Disputes..........................................................11
4.5 Late Payments.......................................................................11
4.6 Payments Not Acceptance of Workscope Obligations....................................11
ARTICLE 5. TERM AND OUTAGES....................................................................12
5.1 Term................................................................................12
5.2 Unscheduled Outages.................................................................12
5.3 Unscheduled Outage Work.............................................................14
5.4 Exclusivity of Obligations and Remedies.............................................15
ARTICLE 6. CHANGES.............................................................................15
6.1 Request For Changes.................................................................15
6.2 Adjustment..........................................................................15
6.3 No Additional Compensation Changes..................................................16
6.4 Changes in Operating Restrictions...................................................16
6.5 Scope Changes Due to Seller Error...................................................16
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PROPRIETARY INFORMATION i AES RED OAK LTP CONTRACT
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ARTICLE 7. DELIVERY; TITLE; RISK OF LOSS AND TRANSPORTATION....................................16
7.1 Delivery of New Program Parts or Miscellaneous Hardware.............................16
7.2 Shop Repaired Program Parts.........................................................16
7.3 Transportation......................................................................17
ARTICLE 8. WARRANTIES..........................................................................18
8.1 New Program Parts and Miscellaneous Hardware Warranty and Exclusive Remedy..........18
8.2 Shop Repair Warranty and Exclusive Remedy...........................................19
8.3 Services Warranty and Exclusive Remedy..............................................19
8.4 Shop Repair Turn Around Time Warranty and Exclusive Remedy..........................20
8.5 Warranty Conditions.................................................................21
8.6 Exclusivity of Warranties and Remedies..............................................22
8.7 Relationship to CTG Subcontract.....................................................22
ARTICLE 9. INTELLECTUAL PROPERTY...............................................................22
9.1 Patent, Copyright, or Trade Secret Infringement.....................................22
9.2 Limitation of Intellectual Property Obligations.....................................23
9.3 Exclusivity of Duties and Remedies..................................................23
ARTICLE 10. COMPLIANCE WITH LAWS................................................................23
10.1 Generally...........................................................................23
10.2 Changes in Law, Etc.................................................................24
ARTICLE 11. INSURANCE...........................................................................24
11.1 Seller's Insurance..................................................................24
11.2 Buyer's Insurance...................................................................25
11.3 Policies............................................................................25
11.4 Bearing On Other Contractual Rights and Obligations.................................26
ARTICLE 12. TERMINATION.........................................................................26
12.1 Termination for Seller's Inability to Perform.......................................26
12.2 Termination for Seller's Failure to Perform.........................................26
12.3 Buyer's and Seller's Rights and Obligations when Buyer
Terminates for Seller's Inability or Failure to Perform ..........................27
12.4 Termination for Buyer's Convenience.................................................26
12.5 Buyer's and Seller's Rights and Obligations When Buyer
Terminates for Its Convenience ...................................................27
12.6 Termination by Seller...............................................................28
</TABLE>
PROPRIETARY INFORMATION ii AES RED OAK LTP CONTRACT
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12.7 Buyer's and Seller's Rights and Obligations when Seller
Terminates .......................................................................29
12.8 Exclusivity of Rights and Remedies..................................................30
ARTICLE 13. INDEMNIFICATION.....................................................................30
13.1 Seller's Indemnity..................................................................30
13.2 Buyer's Indemnity...................................................................31
ARTICLE 14. LIMITATION OF LIABILITY.............................................................31
14.1 No Consequential Damages~...........................................................31
14.2 Exclusive Remedy and Cap on Liability...............................................31
14.3 Extent of Waivers...................................................................32
14.4 Extent of Conflicts.................................................................32
ARTICLE 15. FORCE MAJEURE.......................................................................32
15.1 Excuse by Force Majeure.............................................................32
15.2 Effect of Force Majeure.............................................................33
ARTICLE 16. MISCELLANEOUS.......................................................................33
16.1 Cooperation In Financing............................................................33
16.2 Proprietary Information.............................................................33
16.3 Subcontractors......................................................................36
16.4 Third Parties.......................................................................37
16.5 Dispute Resolution..................................................................37
16.6 Assignment and Delegation...........................................................38
16.7 Severability........................................................................38
16.8 Amendments..........................................................................38
16.9 Joint Effort........................................................................38
16.10 Captions............................................................................38
16.11 Non-Waiver..........................................................................38
16.12 Applicable Law......................................................................38
16.13 Successors and Assigns..............................................................39
16.14 Counterparts........................................................................39
16.15 Notices.............................................................................39
16.16 Complete Contract...................................................................39
16.17 Site Access.........................................................................39
16.18 Permits and Licenses................................................................39
16.19 Special Packing.....................................................................40
16.20 Return of Program Parts or Miscellaneous Hardware...................................40
16.21 Transfer............................................................................40
16.22 Survival............................................................................40
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PROPRIETARY INFORMATION iii AES RED OAK LTP CONTRACT
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16.23 Environmental Compliance............................................................40
16.24 Liquidated Damages Not Penalty......................................................42
16.25 Project Conformance.................................................................42
16.26 501F Fleetwide Issue Notification...................................................42
</TABLE>
<TABLE>
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Exhibit A - Scope of Work Description
Exhibit B - Program Parts List
Exhibit C - Program Parts Supplied and Repaired Schedule
Exhibit D - Current Service Bulletin 36803
Exhibit E - Payment Schedule
Exhibit F - Natural Gas & Water Specifications
</TABLE>
PROPRIETARY INFORMATION iv AES RED OAK LTP CONTRACT
<PAGE>
MAINTENANCE PROGRAM PARTS, SHOP REPAIRS
AND SCHEDULED OUTAGE TFA SERVICES CONTRACT
THIS MAINTENANCE PROGRAM PARTS, SHOP REPAIRS AND SCHEDULED OUTAGE TFA SERVICES
CONTRACT (this "CONTRACT") is entered into as of December 8, 1999, by and
between AES RED OAK, LLC, a Delaware limited liability company ("BUYER"), and
SIEMENS WESTINGHOUSE POWER CORPORATION, a Delaware corporation ("SELLER").
WHEREAS, Buyer is developing a power project to be located near Sayreville, New
Jersey (the "PROJECT"); and
WHEREAS, in connection with the Project, Buyer desires to purchase from Seller
and Seller desires to provide to Buyer combustion turbine parts, shop repairs
and scheduled outage technical field assistance services, all as more
particularly described herein;
NOW, THEREFORE, in consideration of these premises and mutual covenants
contained herein, the parties hereby agree as follows:
ARTICLE 1. DEFINITIONS; GENERAL REFERENCES
1.1 DEFINED TERMS. Except as otherwise expressly provided herein,
capitalized terms used in this Contract and its Exhibits shall have the
following meanings:
"BUYER" has the meaning set forth in the Preamble.
"BUYER'S AFFILIATES" means The AES Corporation, and any subsidiary thereof,
excluding any entity which is partially owned by a competitor of Seller in the
field of design, engineering, manufacturing, maintenance, operation, procurement
and construction of power generation, transmission or distribution facilities.
"COMBUSTION TURBINE MAINTENANCE MANAGEMENT PROGRAM SERVICES" means all of the
program maintenance managerial services to be provided by Seller hereunder, as
described in Section 2.5 of Exhibit A, Scope of Work Description.
"CHANGE" has the meaning set forth in Section 6.1.
"CHANGE ORDER" has the meaning set forth in Section 6.1.
PROPRIETARY INFORMATION 1 AES RED OAK LTP CONTRACT
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MAINTENANCE PROGRAM PARTS, SHOP REPAIRS
AND SCHEDULED OUTAGE TFA SERVICES CONTRACT
"COMBUSTION TURBINE" means one of the Project's three (3) 501F combustion
turbines furnished by the EPC Contractor under the EPC Contract or any
replacement 501F combustion turbine furnished by the EPC Contractor or one of
its affiliates under the CTG Subcontract.
"CONTRACT" means this Program Parts, Shop Repairs and Scheduled Outage TFA
Services Contract, including all Exhibits hereto, as amended, supplemented or
modified from time to time.
"CONTRACT PRICE" has the meaning set forth in Section 4.1.
"CTG SUBCONTRACT" means the Agreement for the Design, Fabrication, Delivery, and
Commissioning of Combustion Turbine Generators between Seller and EPC
Contractor, dated as of [ , 1999].(1)
"DAY" means a calendar day.
"DELAYED PAYMENT RATE" means a rate of interest per annum equal to the offered
rate as quoted by Reuters' Page ISDA (rounded upwards, if necessary, to the
nearest one sixteenth of one percent (1/16 of 1%)) or, in the event that such
offered rate does not appear, the offered rate which appears on the Telerate
Page 3750, in each case as being the rate obtained in the London interbank
eurocurrency market as of 11:00 a.m., London time, for deposits in U.S. dollars
on the first Day of any payment default for a period of one (1) month, PLUS TWO
PERCENT (2%), or the maximum rate permitted by applicable Law, whichever is
less.
"DELIVERY" has the meaning set forth in Article 7. The word "DELIVERED" shall
have a correlative meaning.
"EPC CONTRACT" means the Agreement for Engineering, Procurement and Construction
Services between Buyer and EPC Contractor dated as of October 15, 1999, as such
agreement may be amended, supplemented or modified from time to time.
"EPC CONTRACTOR" means Raytheon Engineers & Constructors, Inc. and its
successors and permitted assigns as "Contractor" under the EPC Contract.
"EQUIVALENT BASE LOAD HOURS" or "EBH" means the calculated result of equivalent
base load hours determined in accordance with Exhibit D, Current Service
Bulletin 36803.
----------------
(1) To insert name and effective date.
PROPRIETARY INFORMATION 2 AES RED OAK LTP CONTRACT
<PAGE>
MAINTENANCE PROGRAM PARTS, SHOP REPAIRS
AND SCHEDULED OUTAGE TFA SERVICES CONTRACT
"EQUIVALENT STARTS" means the calculated result of equivalent starts determined
in accordance with Exhibit D, Current Service Bulletin 36803.
"ESCALATION FACTOR" means the net percentage increase or decrease (as the case
may be) in the Consumer Price Index-U (published by the US Department of Labor)
over the period from base date of January 1, 2000 through date of the invoice.
If such index ceases to be published such similar substitute index as is
mutually agreed to by the parties, shall apply.
"FACILITY" means the combined cycle electric generating facility to be located
in Sayreville, New Jersey which makes up the Project, and includes the three (3)
Combustion Turbines.
"FEE" means the applicable fee listed in Exhibit E, Payment Schedule for the
given number of EBHs.
"FORCE MAJEURE" shall have the meaning set forth in Section 15.1.
"GOVERNMENTAL AUTHORITY" shall have the meaning set forth in Section 16.2.3.
"HAZARDOUS MATERIALS" shall have the meaning set forth in Section 16.23(e).
"HAZARDOUS WASTE" means any waste that is found to pre-exist or is generated at
the Site which is defined in the Laws to be hazardous.
"INDEPENDENT ENGINEER" shall have the meaning set forth in Section 16.2.1.
"LAWS" means all applicable laws, statutes, rules, regulations, orders and
ordinances or specified standards or objective criteria contained in any
applicable license, permit or approval, or other legislative or administrative
act, of the United States of America or any state of the United States, agency,
department, authority, political subdivision or other instrumentality thereof,
or a decree, judgment or order of a court, including but not limited to those
governing wages, hours, employment discrimination and safety, laws regarding
workers' compensation, disability laws and employee benefit laws.
"MISCELLANEOUS HARDWARE" means miscellaneous hardware items including but not
limited to pins, springs, studs, gaskets, tie wires, fasteners, screws, washers,
nuts, bolts which are required to roll out and roll in the Program Parts which
is supplied by Seller under this Contract or in accordance with a Change Order
hereto, issued pursuant to Article 6.
"NATURAL GAS" shall have the meaning set forth in Exhibit F.
PROPRIETARY INFORMATION 3 AES RED OAK LTP CONTRACT
<PAGE>
MAINTENANCE PROGRAM PARTS, SHOP REPAIRS
AND SCHEDULED OUTAGE TFA SERVICES CONTRACT
"NEW PROGRAM PARTS" means the Program Part(s) of the type that are listed in
Exhibit B, Program Parts List which are supplied by Seller under this Contract,
in a new and unused condition.
"NEW PROGRAM PARTS AND MISCELLANEOUS HARDWARE WARRANTY" shall have the meaning
set forth in Section 8.1.
"NORMAL WEAR AND TEAR" means the level of wear and tear that the Facility or
part(s) thereof will experience as a result of being operated and maintained in
accordance with the instruction manuals and operating criteria provided to the
EPC Contractor by Seller or the original equipment manufacturer under the terms
of the CTG Subcontract and any mutually agreed upon variance thereto, the
operating parameters specified in Section 6.4, the warranty conditions specified
in Section 8.5 and, to the extent not inconsistent with any of the foregoing, in
general accordance with Prudent Utility Practices. The definition of Normal Wear
and Tear expressly excludes any consequential/downstream/downflow damage caused
to the Facility or part(s) thereof by a part which gave way upstream/upflow.
"OFFEREE" shall have the meaning set forth in Section 16.2.1.
"OFFERING STATEMENTS" shall have the meaning set forth in Section 16.2.1.
"PERIOD" means the interval from the completion of one Scheduled Outage through
the next Scheduled Outage of the applicable Combustion Turbine. For the purpose
of this definition the initial Period shall begin at initial synchronization of
the applicable Combustion Turbine.
"POWER PURCHASE AGREEMENT" means the Amended and Restated Power Purchase
Agreement dated as of September 17, 1999 between Williams and Buyer, as such
agreement may be amended, supplemented or modified from time to time.
"PROGRAM PART(S)" means (i) type of part(s) of the Combustion Turbine that are
listed in Exhibit B, Program Parts List and are supplied by Seller under this
contract PLUS (ii) the equivalent parts to those listed in Exhibit B, Program
Parts List, which were included in the original Combustion Turbine(s) supplied
by Seller under the CTG Subcontract.
"PROJECT" has the meaning set forth in the Preamble.
"PRUDENT UTILITY PRACTICE" means the practices, methods, techniques and
standards that at the particular time of performance of the Workscope
Obligations by Seller or of Buyer's obligations specified in Sections 3 and 4 of
Exhibit A, (i) are generally accepted in the electric power industry in the
United States, for use in connection with the design,
PROPRIETARY INFORMATION 4 AES RED OAK LTP CONTRACT
<PAGE>
MAINTENANCE PROGRAM PARTS, SHOP REPAIRS
AND SCHEDULED OUTAGE TFA SERVICES CONTRACT
engineering, construction, testing, operation and maintenance of power stations
of the same or similar size and type as the Facility, all in a manner consistent
with Laws, reliability, safety, environmental protection, economy and
expediency, and (ii) conform in all material respects to the manufacturer's
design, engineering, construction, testing, operation and maintenance guidelines
applicable to the equipment in question, including Seller's operation and
maintenance guidelines for the Combustion Turbines. Prudent Utility Practices
are not limited to the optimum practice or method to the exclusion of others,
but rather refer to commonly used and reasonable practices and methods.
"RATING AGENCY" shall have the meaning set forth in Section 16.2.1.
"REPORT" shall have the meaning set forth in Section 16.2.1.
"SCHEDULED OUTAGE" means a planned outage of the applicable Combustion Turbine,
scheduled by Buyer and Seller, during which the applicable Scheduled Outage TFA
Services described in Exhibit A, Scope of Work Description will be performed
hereunder. A Scheduled Outage will commence when the Combustion Turbine breaker
is opened and will end when Seller has completed its applicable Scheduled Outage
TFA Services for the given Scheduled Outage and Seller has submitted to Buyer
written notice of completion and Buyer has concurred. The projected Scheduled
Outage plan is contained in Exhibit C, Program Parts Supplied and Repaired
Schedule.
"SCHEDULED OUTAGE TFA SERVICES" means all of the TFA Services to be provided by
Seller hereunder during the applicable Scheduled Outage, as described in Section
2.4 of Exhibit A, Scope of Work Description, but excludes services provided by
or on behalf of Seller pursuant to the CTG Subcontract.
"SELLER" has the meaning set forth in the Preamble.
"SEC" shall have the meaning set forth in Section 16.2.1.
"SELLER'S AFFILIATES" means Siemens A.G., and any subsidiary thereof, excluding
any entity which is partially owned by a competitor of Buyer in the field of
development and ownership of power generation, transmission or distribution
facilities.
"SERVICES" means any and all services to be provided by Seller under this
Contract including Scheduled Outage TFA Services, Combustion Turbine Maintenance
Program Management Services, Shop Repairs and any services performed in
accordance with a Change Order hereto issued pursuant to Article 6.
"SERVICES WARRANTY" shall have the meaning set forth in Section 8.3.
PROPRIETARY INFORMATION 5 AES RED OAK LTP CONTRACT
<PAGE>
MAINTENANCE PROGRAM PARTS, SHOP REPAIRS
AND SCHEDULED OUTAGE TFA SERVICES CONTRACT
"SHOP REPAIR" means shop repair/refurbishment work performed hereunder by Seller
on Program Parts at Seller's manufacturing plant, Seller's service facility or a
suitable facility selected by Seller.
"SHOP REPAIR WARRANTY" shall have the meaning set forth in Section 8.2.
"SITE" means the real property located near Sayreville, New Jersey on which the
Project is to be or has been constructed.
"SPILL" shall have the meaning set forth in Section 16.23(c).
"TERM" shall have the meaning set forth in Section 5.1.
"TFA SERVICES" means any and all technical field assistance services to be
provided by Seller hereunder, including without limitation the advice and
consultation given to Buyer's personnel by a field service representative of
Seller with respect to:
(i) installation, inspection, repair and maintenance activities
performed by others at the Site, and
(ii) any Seller recommended quality assurance procedures for
activities performed at the Site.
TFA Services does not include (x) management, supervision or regulation of
Buyer's personnel, agents and contractors or (y) any technical field assistance
services provided by or on behalf of Seller pursuant to the CTG Subcontract.
"TURNED-AROUND" shall have the meaning set forth in Section 8.4.
"UNSCHEDULED OUTAGE" means any outage of a Combustion Turbine other than a
Scheduled Outage.
"WATER" shall have the meaning set forth in Exhibit F.
"WILLIAMS" means Williams Energy Marketing & Trading Company, a Delaware
corporation, and its permitted successors and assigns as supplier of fuel to,
and purchaser of electricity from, the Facility under the Power Purchase
Agreement.
"WORKSCOPE OBLIGATIONS" means all obligations of Seller pursuant to the terms of
this Contract to perform Services and Shop Repairs and to provide Program Parts
and Miscellaneous Hardware, and includes any other equipment, parts, shop
repairs or services mutually agreed to by the parties hereto and specified in a
Change Order issued pursuant to Article 6.
PROPRIETARY INFORMATION 6 AES RED OAK LTP CONTRACT
<PAGE>
MAINTENANCE PROGRAM PARTS, SHOP REPAIRS
AND SCHEDULED OUTAGE TFA SERVICES CONTRACT
1.2 GENERAL REFERENCES. As used in this Contract, the terms "herein,"
"herewith" and "hereof" are references to this Contract, taken as a whole, the
term "includes" or "including" shall mean "including, without limitation," and
references to a "Section," "subsection," "clause," "Article" or "Exhibit" shall
mean a Section, subsection, clause, Article or Exhibit of this Contract, as the
case may be, unless in any such case the context requires otherwise. The
singular shall include the plural and the masculine shall include the feminine
and neuter, and vice versa.
ARTICLE 2. CONTRACT DOCUMENTS
2.1 CONTRACT DOCUMENTS. This Contract consists of this contract document
itself and the following Exhibits which are specifically made a part hereof by
reference:
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Exhibit A - Scope of Work Description
Exhibit B - Program Parts List
Exhibit C - Program Parts Supplied and Repaired Schedule
Exhibit D - Current Service Bulletin 36803
Exhibit E - Payment Schedule
Exhibit F - Natural Gas & Water Specification
</TABLE>
2.2 CONFLICTING PROVISIONS. In the event of any conflict between this
document and any Exhibit hereto, the terms and provisions of this document, as
amended from time to time, shall control. In the event of any conflict among the
Exhibits, the following order of precedence shall govern: Exhibit E, A, B, C, D,
and F. Subject to the foregoing, the several instruments forming part of this
Contract are to be taken as mutually explanatory of one another and in the case
of ambiguities or discrepancies within or between such parts the same shall be
explained and adjusted by the mutual agreement of the Parties.
ARTICLE 3. SCOPE OF WORK
3.1 SELLER'S SCOPE. During the Term, Seller shall fulfill its Workscope
Obligations Scope of Work Description and shall perform any other Workscope
Obligations mutually agreed to by the parties hereto and specified in a Change
Order issued pursuant to Article 6, Changes.
3.2 BUYER'S SCOPE. During the Term, Buyer shall fulfill its obligations
specified in Exhibit A, Scope of Work Description, and shall perform any other
obligations mutually agreed to by the parties and specified in a Change Order
issued pursuant to Article 6, Changes.
PROPRIETARY INFORMATION 7 AES RED OAK LTP CONTRACT
<PAGE>
MAINTENANCE PROGRAM PARTS, SHOP REPAIRS
AND SCHEDULED OUTAGE TFA SERVICES CONTRACT
3.3 EARLY REPLACEMENT. (a) If during the Term and after the applicable
warranty period for a Program Part set forth in Section 8.1 or set forth in the
CTG Subcontract has expired or otherwise does not apply to such Program Part, it
is determined that a Program Part has to be replaced, due to Normal Wear and
Tear, prior to the scheduled replacement period per Exhibit C, Program Parts
Supplied and Repaired Schedule, Seller shall replace such Program Part early by
moving up a New Program Part which is scheduled to be Delivered at a later date
per Exhibit C, Program Parts Supplied and Repaired Schedule, if such a New
Program Part remains available under Exhibit C. Any Program Part which is
replaced pursuant to this Section shall be deemed to have a scrap value of $0
and shall be returned by Buyer to Seller along with free and clear title
thereto. Any transportation costs associated with the return of such Program
Part shall be the responsibility of Seller. No amount shall be due to or from
Buyer in connection with the return of such Program Part to Seller.
(b) If during the Term and after the applicable warranty period for a
Program Part set forth in Section 8.1 or set forth in the CTG Subcontract has
expired or otherwise does not apply to such Program Part, it is determined that
a Program Part has to be replaced prior to the scheduled replacement period per
Exhibit C, Program Parts Supplied and Repaired Schedule and such Program Part is
not covered by Section 3.3(a) (I.E. it is not due to Normal Wear and Tear),
Seller shall replace such Program Part early by moving up a New Program Part
which is scheduled to be Delivered at a later date per Exhibit C, Program Parts
Supplied and Repaired Schedule, if such a New Program Part remains available
under Exhibit C. Any Program Part which is replaced pursuant to this Section
shall be deemed to have a scrap value of $0 and shall be returned by Buyer to
Seller along with free and clear title thereto. Any transportation costs
associated with the return of such Program Part shall be the responsibility of
Seller. No amount shall be due to or from Buyer in connection with the return of
such Program Part to Seller.
(c) Buyer shall be entitled to participate in the decision making process
regarding the actual parts life and the degree of repair or refurbishment
associated with any Program Part(s) pursuant to this Section 3.3. The final
decision, however, with regard to actual parts life and the degree of repair or
refurbishment associated with any Program Part(s) shall be made by Seller based
on Prudent Utility Practices and communicated to Buyer. If Buyer disputes
Seller's final decision based on the assertion that Seller's final decision is
inconsistent with Prudent Utility Practices, then Buyer may seek to resolve such
dispute in accordance with Section 16.5, Dispute Resolution.
(d) If the actual replacement date of a Program Part pursuant to Section
3.3(a) or (b) is less than or equal to one (1) year earlier than the Scheduled
Outage during which the Program Part was scheduled to be replaced per Exhibit C,
Program Parts Supplied and Repaired Schedule, such early replacement shall not
affect the Contract Price or
PROPRIETARY INFORMATION 8 AES RED OAK LTP CONTRACT
<PAGE>
MAINTENANCE PROGRAM PARTS, SHOP REPAIRS
AND SCHEDULED OUTAGE TFA SERVICES CONTRACT
Exhibit E, Payment Schedule. If the actual replacement date is more than one (1)
year earlier than the Scheduled Outage during which the Program Part was
scheduled to be replaced, per Exhibit C, Program Parts Supplied and Repaired
Schedule, such early replacement shall result in a change to Exhibit E, Payment
Schedule, pursuant to a Change Order, levelizing the cash flow effect of moving
the replacement part up over the remaining Term on a $/EBH basis and modifying
the Fees listed in Exhibit E accordingly.
(e) During the Term, once all of the New Program Parts available under
Exhibit C, Program Parts Supplied and Repaired Schedule have been Delivered
pursuant to this Section 3.3 and no further replacements remain to be provided
under Exhibit C, Buyer shall, pursuant to a Change Order purchase, pursuant to
Section 3.4, Parts Life Credit, any and all further replacement Program Parts
required for the remainder of the Term (including the Scheduled Outage
requirements specified in Exhibit C, Program Parts and Repaired Schedule, and
any Unscheduled Outage requirements, but excluding any such replacements covered
by any applicable warranty set forth in Section 8.1 or set forth in the CTG
Subcontract) and Seller shall provide such replacement Program Parts at the
discounted price calculated in accordance with Section 3.4, Parts Life Credit at
the prices specified in Exhibit B, subject to the Escalation Factor, discounted
by any applicable parts life credit pursuant to Section 3.4. In such event,
Buyer shall pay 35% of the purchase price for such replacement Program Part at
the time the Change Order is issued and the remainder at the time such
replacement Program Parts are Delivered. Any Program Part which is replaced
pursuant to this Section shall be deemed to have a scrap value of $0 and shall
be returned by Buyer to Seller along with free and clear title thereto. Any
transportation costs associated with the return of such Program Part shall be
the responsibility of Seller. No amount shall be due to or from Buyer in
connection with the return of such Program Part to Seller.
(f) Seller's obligation to provide such required early replacement Program
Parts shall be to obtain and deliver to the Project the required replacement
Program Parts, whether new or repaired, as soon as commercially reasonably
possible so as to minimize the duration of the outage.
3.4 PARTS LIFE CREDIT. During the Term and after conclusion of the
applicable warranty periods stated in Section 8.1 or in the CTG Subcontract, as
the case may be, Seller will provide a parts life credit if a Program Part
requires replacement due to Normal Wear and Tear pursuant to Section 3.3(a)
prior to meeting neither its expected useful life as calculated in terms of EBHs
as specified in Exhibit B, Program Parts List, nor its expected useful life as
calculated in terms of Equivalent Starts, as specified in Exhibit B, Program
Parts List. (Buyer shall be entitled to participate in the decision making
process regarding the actual parts life and the degree of repair or
refurbishment
PROPRIETARY INFORMATION 9 AES RED OAK LTP CONTRACT
<PAGE>
MAINTENANCE PROGRAM PARTS, SHOP REPAIRS
AND SCHEDULED OUTAGE TFA SERVICES CONTRACT
associated with any Program Part(s). The final decision, however, with regard to
actual parts life and the degree of repair or refurbishment associated with any
Program Part(s) shall be made by Seller based on Prudent Utility Practices and
communicated to Buyer. If Buyer disputes Seller's final decision based on the
assertion that Seller's final decision is inconsistent with Prudent Utility
Practices, then Buyer may seek to resolve such dispute in accordance with
Section 16.5, Dispute Resolution.) The parts life credit will be calculated by
multiplying the price for such Program Part's replacement specified in Exhibit
B, Program Parts List subject to escalation pursuant to the Escalation Factor,
by the lesser of: (i) the expected useful life of the Program Part needing to be
replaced in terms of EBHs, as specified in Exhibit B, Program Parts List, MINUS
the total number of EBHs incurred by such Program Part, DIVIDED BY the expected
useful life of such Program Part in terms of EBHs, as specified in Exhibit B;
and (ii) the expected useful life of the Program Part needing to be replaced in
terms of Equivalent Starts, as specified in Exhibit B, MINUS the total number of
Equivalent Starts incurred by such Program Part, DIVIDED BY the expected useful
life of such Program Part in terms of Equivalent Starts, as specified in Exhibit
B. Once all of the New Program Parts, under Exhibit C, Program Parts Supplied
and Repaired Schedule, have been Delivered pursuant to Section 2.1 of Exhibit A,
Scope of Work Description, or Section 3.3, Early Replacement, and no further
replacements exist under Exhibit C, Buyer shall use this credit towards the
purchase of such Program Part replacements. However, in no event, shall any
parts life credit be extended under this Section 3.4 beyond one (1) year after
the conclusion of the Term of this Contract.
ARTICLE 4. CONTRACT PRICE AND PAYMENT TERMS
4.1 CONTRACT PRICE. As full consideration of the performance by Seller of
the Workscope Obligations (other than those Workscope Obligations provided
pursuant to a Change Order), Buyer will pay to Seller the Fees as adjusted
either up or down by the Escalation Factor at the time of each invoice. The
"CONTRACT PRICE" shall be the aggregate total of the Fees, as adjusted, PLUS any
additional payment amount mutually agreed to by the parties pursuant to a Change
Order hereto, issued pursuant to Article 6, Changes.
4.2 TAXES. The Contract Price paid or to be paid to Seller under this
Contract does not include any federal, state, (other than federal or state,
income taxes imposed on Seller, or Seller's subcontractors or subvendors), or
local property, license or privilege (other than federal, state or local
assessments for licenses and privileges associated with Seller's ability to
conduct general business within the area), sales, use, excise, value added,
gross receipts, or similar taxes now or hereafter applicable to, measured by, or
imposed upon or with respect to the transaction, the property, its sale, its
value or its use, or any services
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performed in connection therewith. Buyer agrees to pay or reimburse Seller for
any such taxes which Seller or its subcontractors or subvendors are required to
pay. Seller shall use reasonable efforts and due diligence, and shall cause its
subcontractors or subvendors to use their reasonable efforts and due diligence,
to efficiently manage its performance of the Workscope Obligations hereunder so
as to minimize the incurrence of any federal, state or local property, license
or privilege, sales, use, excise, value added, gross receipts or similar taxes
to be paid or reimbursed by Buyer hereunder. Taxes to be paid by Buyer do not
include any taxes that Seller should not have incurred if it had used such
reasonable efforts and due diligence.
4.3 INVOICES. Per Exhibit E Payment Schedule, Seller shall furnish Buyer an
invoice indicating the Fee being invoiced, as adjusted up or down in accordance
with this Contract by the Escalation Factor at the time of such invoice.
4.4 PAYMENT. Within twenty-five (25) Days following the date Buyer receives
each invoice under Section 4.3, Buyer shall pay to Seller the undisputed amount
of the invoice. All payments to Seller shall be made by wire transfer to the
account of Seller at Mellon Bank, N.A., Account # 038-0269, ABA # 04300261, or
such other depository as Seller shall designate by written notice to Buyer.
4.5 NOTICE OF PAYMENT DISPUTES. Notwithstanding Buyer's obligations under
Section 4.4 , if prior to the expiration of the applicable period for payment
referenced in Section 4.4, Buyer disputes that any Workscope Obligations satisfy
the requirements of this Contract, Buyer shall, prior to the expiration of such
period, provide Seller with written notice identifying the basis for such
dispute. Thereafter, the payment of such disputed amounts shall be deferred
until such dispute has been resolved to the satisfaction of Buyer and Seller.
Any dispute which is not resolved by mutual agreement shall be resolved in
accordance with Section 16.5.
4.6 LATE PAYMENTS. If there is a dispute about any amount invoiced by
Seller, the amount not in dispute shall be promptly paid as described in this
Article 4, and any disputed amount which is ultimately determined to have been
payable prior to the actual date of payment shall be paid with interest, at the
Delayed Payment Rate, from the date due to the date of payment.
4.7 PAYMENTS NOT ACCEPTANCE OF WORKSCOPE OBLIGATIONS. No payment made
hereunder shall be considered or deemed to represent that Buyer has inspected
the Workscope Obligations, or checked the quality or quantity thereof and shall
not be deemed or construed as approval or acceptance of any Workscope
Obligations, or as a waiver of any claim or right that Buyer may then or
thereafter have, including any warranty right.
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ARTICLE 5. TERM AND OUTAGES
5.1 TERM. The term of this Contract (the "TERM") shall commence on the date
as specified in the Recitals and unless terminated early pursuant to Article 12,
shall terminate upon completion of the Shop Repairs following the twelfth (12th)
Scheduled Outage of the applicable Combustion Turbine (I.E. expected to be at
96,000 EBH) or sixteen (16) years from the effective date of this Contract as
specified in the Recitals.
5.2 UNSCHEDULED OUTAGES.
5.2.1 If during the Term an Unscheduled Outage occurs which is the result of
(i) the failing of a New Program Part or Miscellaneous Hardware supplied by
Seller, to conform with the New Program Parts and Miscellaneous Hardware
Warranty set forth herein, (ii) the failing of a Shop Repair, supplied by
Seller, to conform with the Shop Repair Warranty set forth herein, (iii) a
Program Part requiring replacement due to Normal Wear and Tear pursuant to
Section 3.3 prior to achieving its expected life in terms of EBHs or Equivalent
Starts as specified in Exhibit B, Program Parts, or (iv) the failure of a
Service, performed by Seller, to conform with the Service Warranty set forth
herein, then Buyer shall hire Seller, to the extent not supplied by Seller as a
warranty remedy under Seller's warranties contained in Article 8 of this
Contract or by or on behalf of Seller under the , pursuant to a Change Order, to
supply any additional Program Parts, Miscellaneous Hardware, Shop Repairs, and
TFA Services related to the Combustion Turbine required for such Unscheduled
Outage and Seller (a) shall supply any such additional Program Parts required
for such Unscheduled Outage, at the prices specified in Exhibit B, Program Parts
List, subject to escalation pursuant to the Escalation Factor, discounted by any
applicable parts life credit under Section 3.4, (b) any such Miscellaneous
Hardware and Shop Repairs required for such Unscheduled Outage, at the prices
specified in Seller's Domestic Price Lists, in effect at the time of supply or
performance, or in Seller's price quote at the time of supply or performance, if
Seller's Domestic Price lists do not include a price for the required
Miscellaneous Hardware or Shop Repairs (PROVIDED that any such Seller's price
quote is reasonable and consistent with Seller's standard pricing policy), and
(c) any such TFA Services related to the Combustion Turbine required for such
Unscheduled Outage, at the prices specified in Seller's Domestic Price Lists, in
effect at the time of supply or performance with a 10% discount applied capped
at a maximum of $100,000 per year, or in Seller's price quote at the time of
supply or performance with a 10% discount applied capped at a maximum of
$100,000 per year, if Seller's Domestic Price lists do not include a price for
the required TFA Services (PROVIDED that any such Seller's price quote is
reasonable and consistent with Seller's standard pricing policy).
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If such an Unscheduled Outage occurs within 1,000 EBHs of a Scheduled Outage and
additional Program Parts, Miscellaneous Hardware, Shop Repairs and TFA Services
to be used during the Unscheduled Outage are part of the Program Parts,
Miscellaneous Hardware, Shop Repairs and Scheduled Outage TFA Services which
were going to be used during the upcoming Scheduled Outage, the upcoming
Scheduled Outage shall be moved up in time and those Program Parts,
Miscellaneous Hardware, Shop Repairs and Scheduled Outage TFA Services shall be
provided during the Unscheduled Outage/moved-up Scheduled Outage. Buyer shall
not be required to pay any additional money for those Program Parts,
Miscellaneous Hardware, Shop Repairs and Scheduled Outage TFA Services which are
provided early during the Unscheduled Outage/moved-up Scheduled Outage pursuant
to the preceding sentence.
5.2.2 If during the Term an Unscheduled Outage occurs for reasons other than
those set forth in Section 5.2.1, then Buyer shall hire Seller, to the extent
not supplied by Seller as a warranty remedy under Seller's warranties contained
in Article 8 of this Contract or by or on behalf of Seller under the CTG
Subcontract, pursuant to a Change Order, to supply any additional Program Parts,
Miscellaneous Hardware, Shop Repairs or technical field assistance service work
on the Combustion Turbine required for such Unscheduled Outage, and Seller (a)
shall supply such additional Program Parts required for such Unscheduled Outage,
at the prices specified in Exhibit B, Program Parts List, subject to escalation
pursuant to the Escalation Factor, discounted by any applicable parts life
credit under Section 3.4, (b) Miscellaneous Hardware and Shop Repairs, at the
prices specified in Seller's Domestic Price Lists, in effect at the time of
supply or performance, or in Seller's price quote at the time of supply or
performance, if Seller's Domestic Price lists do not include a price for the
required additional Miscellaneous Hardware or Shop Repairs in effect at the time
of supply (PROVIDED that any such Seller's price quote is reasonable and
consistent with Seller's standard pricing policy), and (c) TFA Service, at the
prices specified in Seller's Domestic Price Lists, in effect at the time of
supply or performance, or in Seller's price quote at the time of supply or
performance, if Seller's Domestic Price lists do not include a price for the
required TFA Services (PROVIDED that any such Seller's price quote is reasonable
and consistent with Seller's standard pricing policy).
If such an Unscheduled Outage occurs within 1,000 EBHs of a Scheduled Outage and
additional Program Parts, Miscellaneous Hardware, Shop Repairs and TFA Services
to be used during the Unscheduled Outage are part of the Program Parts,
Miscellaneous Hardware, Shop Repairs and Scheduled Outage TFA Services which
were going to be used during the upcoming Scheduled Outage, the upcoming
Scheduled Outage shall be moved up in time and those Program Parts,
Miscellaneous Hardware, Shop Repairs and Scheduled Outage TFA Services shall be
provided during such Unscheduled Outage/Moved-up Scheduled Outage. Buyer shall
not be required to pay any additional
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money for those Program Parts, Miscellaneous Hardware, Shop Repairs and
Scheduled Outage TFA Services which are provided early during such Unscheduled
Outage/Moved-up Scheduled Outage pursuant to the preceding sentence.
5.3 UNSCHEDULED OUTAGE WORK. Seller shall be entitled to a Change Order for
any additional Program Parts, Miscellaneous Hardware, Shop Repairs or technical
field assistance service work on the Combustion Turbine purchased by Buyer from
Seller pursuant to Section 3.4 or 5.2 in accordance with Article 6. In the case
of an Unscheduled Outage, Seller, upon notification from Buyer via a Change
Order, agrees to take prompt action(s) to mobilize its service personnel to the
Project site to provide the technical field assistance services requested in
such Change Order, and agrees to provide any additional Program Parts specified
in such Change Order as soon as reasonably commercially practicable, to minimize
downtime; PROVIDED, HOWEVER, and notwithstanding the prices specified in Section
3.4 or 5.2, that if Seller delivers such additional Program Parts within (a) 15
Days of receipt of Buyer's written request for such Change Order, Seller shall
be paid by Buyer the price for such additional Program Parts as specified in
Section 3.4 or 5.2, as the case may be, PLUS 17%, (b) after 15 Days but within
30 Days of Buyer's written request for such Change Order, Seller shall be paid
by Buyer the price for such additional Program Parts, as specified in Section
3.4 or 5.2, as the case may be, or (c) after 30 Days of Buyer's written request
for such Change Order, Seller shall be paid the price for such additional
Program Parts, as specified in Section 3.4 or 5.2, as the case may be, MINUS
17%.
Notwithstanding the provisions of the previous paragraph, in the event that an
Unscheduled Outage has occurred and Seller fails, by the end of the second Day
(as it may be extended pursuant to Article 15, Force Majeure) following Seller's
receipt of written notice of the Unscheduled Outage, to send a TFA Services
representative to the Site who can start providing TFA Services related to the
Combustion Turbine for the Unscheduled Outage, then, upon Seller's failure,
Buyer may obtain another qualified person at Buyer's cost to start providing TFA
Services related to the Combustion Turbine for the Unscheduled Outage. If Buyer
elects to exercise its right under the preceding sentence, Buyer shall take full
responsibility for any damage to the Facility or any adverse effects on the
warranties, expected lives, Unscheduled Outages, early Program Part replacements
and reduction in time intervals between Scheduled Outage expressed herein that
may be caused as a result thereof. In the event that (x) Buyer has exercised its
rights under the first sentence of this paragraph, (y) the Combustion Turbine
has been disassembled and is ready to be inspected to determine the cause of the
Unscheduled Outage, and (z) Seller has not provided TFA Services personnel to
assist with such inspection, then Seller shall be considered to have failed to
perform its material obligations under this Contract, and Buyer may elect to
terminate this Contract pursuant to Section 12.2, Termination for Seller's
Failure to Perform. In such case, unless Seller
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has made and is continuing to make diligent efforts to cure such failure in
accordance with (and subject to the maximum cure period set forth in) Section
12.2, then Seller shall have waived its right to, and shall not be entitled to
the benefits of, the cure periods specified in Section 12.2.
5.4 EXCLUSIVITY OF OBLIGATIONS AND REMEDIES. WITHOUT LIMITING SELLER'S
OBLIGATIONS, WARRANTIES OR GUARANTEES SPECIFIED IN ARTICLE 8 OR ANY OBLIGATIONS,
WARRANTIES OR GUARANTEES OF SELLER UNDER THE CTG SUBCONTRACT (WHICH MAY BE
ASSIGNED TO BUYER PURSUANT TO THE EPC CONTRACT), SELLER'S OBLIGATIONS SET FORTH
IN THIS ARTICLE 5 WITH RESPECT TO UNSCHEDULED OUTAGES ARE EXCLUSIVE AND ARE IN
LIEU OF ALL OTHER OBLIGATIONS, WARRANTIES OR GUARANTEES, WHETHER STATUTORY,
EXPRESS, OR IMPLIED (INCLUDING ALL WARRANTIES OF MERCHANTABILITY AND FITNESS FOR
A PARTICULAR PURPOSE, AND ALL WARRANTIES ARISING FROM COURSE OF DEALING OR USAGE
OF TRADE). Without limiting any remedies or liabilities arising under or in
connection with Section 3.3 or 3.4, Article 8 or the CTG Subcontract, the
remedies set forth in this Article 5 shall constitute Seller's sole liability
and Buyer's exclusive remedies arising under or in connection with this Contract
for Unscheduled Outages whether claims of Buyer are based in contract, in tort
(including negligence and strict liability), or otherwise.
ARTICLE 6. CHANGES
6.1 REQUEST FOR CHANGES. Buyer or Seller may request changes in the
Workscope Obligations (a "CHANGE") and, if accepted by the other party, the Fees
set forth in Exhibit E, performance, schedule, and other pertinent provisions of
this Contract will be adjusted by mutual agreement of the parties and set forth
in a writing in a document (a "CHANGE ORDER") prior to implementation of the
Change (or if the parties are unable to agree on an equitable adjustment such
equitable adjustment will be determined pursuant to Section 16.5, Dispute
Resolution).
6.2 ADJUSTMENT. Additional expenses incurred and time spent by Seller in
performing its Workscope Obligations due to (i) delays arising from a failure of
Buyer to meet its obligations under this Contract, whether through its own
performance or failure to perform, or through Buyer's other contractors' or
subcontractors' performance or failure to perform, and (ii) changes in Laws
after the date of this Contract, as applicable, will be treated as Changes and
this Contract will be adjusted as set forth in Section 6.1. Seller shall use
reasonable efforts and due diligence to mitigate the effect of any such delays
or changes in Laws on the performance of its Workscope Obligations.
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6.3 NO ADDITIONAL COMPENSATION CHANGES. Upon providing Buyer reasonable
prior written notice thereof, Seller may make an immaterial change in its
Program Parts and Miscellaneous Hardware, Shop Repairs or Services supplied
hereunder without additional compensation from Buyer if such change does not
adversely affect the warranties, the technical soundness of the work, the
schedule for the performance of the Workscope Obligations, or the operability of
the Project. Subject to Buyer's prior written consent (which shall not be
unreasonably withheld), Seller may make a material change in its Program Parts
and Miscellaneous Hardware, Shop Repairs or Services supplied hereunder without
additional compensation from Buyer if such change does not adversely affect the
warranties, the technical soundness of the work, the schedule for the
performance of the Workscope Obligations, or the operability of the Project.
Seller shall not receive additional compensation from Buyer for any such change
whether it is are material or immaterial.
6.4 CHANGES IN OPERATING RESTRICTIONS. The basis of this Contract is that
each Combustion Turbine shall be operated in accordance with the requirements of
the Power Purchase Agreement and Prudent Utility Practices, 8,000 EBH/year, with
250 Equivalent Starts per year, using Natural Gas and Water in accordance with
the specifications set forth in Exhibit F, Natural Gas & Water Specification.
6.5 SCOPE CHANGES DUE TO SELLER ERROR. Notwithstanding anything in this
Article 6 to the contrary, no Change Order shall be issued and no adjustment of
the price, performance, schedule, and other pertinent provisions of this
Contract shall be made for Seller's correction of a warranty defect pursuant to
Article 8, Warranties.
ARTICLE 7. DELIVERY; TITLE; RISK OF LOSS AND TRANSPORTATION
7.1 DELIVERY OF NEW PROGRAM PARTS OR MISCELLANEOUS HARDWARE. "DELIVERY" of
each New Program Part, Miscellaneous Hardware or component thereof supplied
under this Contract shall be made when said New Program Part, Miscellaneous
Hardware, or component thereof arrives free on board the carrier (FOB) at the
Site. Subject to the provisions of the immediately following paragraph, legal
and equitable title, and risk of loss or damage to each such New Program Part,
Miscellaneous Hardware, or component thereof shall pass from Seller to Buyer
upon Delivery.
7.2 SHOP REPAIRED PROGRAM PARTS. Program Part(s) sent to Seller for Shop
Repair or Program Part(s) and Miscellaneous Hardware being returned pursuant to
the provisions of Article 8, Warranty, or Article 9, Intellectual Property, of
this Contract will be sent by Buyer at its expense to the repair facility in the
continental United States or Canada designated by Seller where the work is to be
performed. Title to such Program Part(s) or Miscellaneous Hardware will remain
at all times with Buyer. Risk of loss or damage to
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such Program Part(s) or Miscellaneous Hardware will transfer to Seller upon its
arrival on board the carrier at the repair or manufacturing facility and will
transfer back to Buyer when said Program Part, Miscellaneous Hardware, or
component thereof is Delivered to Buyer free on board the carrier (FOB) at the
Site. "DELIVERY" of each Program Part sent to Seller for Shop Repair or Program
Part and Miscellaneous Hardware being returned pursuant to the provisions of
Article 8, Warranty, or Article 9, Intellectual Property under this Contract
shall be made when such Shop Repaired Program Part, Program Par or Miscellaneous
Hardware, or component thereof arrives free on board the carrier (FOB) at the
Site.
7.3 TRANSPORTATION.
A. Transportation and Storage
When items of New Program Parts or Miscellaneous Hardware are
ready for shipment or Shop Repair is completed on Program Parts, Seller will (i)
in the absence of shipping instructions, inform Buyer of pending shipment and
Buyer will thereafter promptly give shipping instructions to Seller, (ii)
determine the method of transportation and the routing of the shipment and (iii)
ship the New Program Parts, Miscellaneous Hardware or Shop Repaired Program
Parts freight and insurance in freight prepaid and included in the price by
Normal Carriage as defined below to the Site.
In the event that Buyer fails to provide Seller with timely
shipping instructions or is unwilling or unable to timely receive the New
Program Parts, Miscellaneous Hardware or Shop Repaired Program Parts, Seller
will, upon notice to Buyer and after giving Buyer reasonable opportunity to
designate a mutually acceptable alternate destination, place such New Program
Parts, Miscellaneous Hardware, or Shop Repaired Program Parts in storage. If the
New Program Parts, Miscellaneous Hardware or Shop Repaired Program Parts are to
be placed into storage pursuant to this provision, Delivery of the New Program
Parts Miscellaneous Hardware or Shop Repaired Program Parts shall be deemed to
occur when the New Program Parts, Miscellaneous Hardware or Shop Repaired
Program Parts (i) are placed Free On Board the common carrier for shipment to
the storage location or (ii) is placed into the storage location when stored in
a Seller manufacturing or repair facility. On behalf of and as agent for Buyer,
Seller shall insure the New Program Parts, Miscellaneous Hardware, or Shop
Repaired Program Parts during any such storage period.
In the event of storage pursuant to the preceding paragraph,
all expenses thereby reasonably incurred by Seller, including but not limited
to, preparation for and placement into storage, handling, transportation,
storage, inspection, preservation, taxes, insurance and any necessary
rehabilitation prior to installation shall be payable by Buyer within 25 Days
following submission of invoices prepared by Seller, unless Buyer
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disputes that such New Program Part, Miscellaneous Hardware or Shop Repaired
Program Part conforms to Seller's warranty obligations under Article 8 and Buyer
is found to be correct in its dispute pursuant to Section 16.5, Dispute
Resolution. When conditions permit and upon payment to Seller of any additional
amounts due hereunder, Buyer shall arrange, at its expense, removal of New
Program Parts, Miscellaneous Hardware or Shop Repaired Program Parts from
storage.
B. Normal Carriage
Normal Carriage means carriage by either highway transport
(PROVIDED this does not necessitate use of specialized riggers trailers) or by
rail transport on normal routing from the manufacturing/repair facility to the
Site as designated in Section 7.1 or 7.2 respectively.
C. Special Transportation and Services
If Buyer requests Seller to transport by other than Normal
Carriage, Seller shall provide such requested non-Normal Carriage transport;
PROVIDED, HOWEVER, that if Buyer's request for transportation by other than
Normal Carriage is for reasons other than a delay attributable to Seller
actually jeopardizing Delivery of such Program Part, Miscellaneous Hardware or
Shop Repaired Program Part in accordance with Seller's Workscope Obligations,
Buyer shall pay or reimburse Seller for any such transportation charges in
excess of regular charges for Normal Carriage, including, but not limited to,
excess charges reasonably incurred by Seller for special routing, special
trains, specialized riggers trailers, lighterage, barging and air transport,
within 25 Days following submission of an invoice therefor prepared by Seller.
ARTICLE 8. WARRANTIES
8.1 NEW PROGRAM PARTS AND MISCELLANEOUS HARDWARE WARRANTY AND EXCLUSIVE
REMEDY. Seller warrants that the New Program Parts and Miscellaneous Hardware
(including, without limitation, any additional Program Parts supplied under
Section 3.3 or Section 5.2) provided to Buyer hereunder, including any New
Program Part or Miscellaneous Hardware repaired or replaced by Seller under this
New Program Parts and Miscellaneous Hardware Warranty, will be new and of
utility grade quality in accordance with Prudent Utility Practices and free of
defects in engineering, design, workmanship and materials until the first to
occur of (A) one (1) year from the date of installation of the original New
Program Part or Miscellaneous Hardware into the Combustion Turbine, (B) 250
Equivalent Starts after installation of the original New Program Part or
Miscellaneous Hardware, (C) 8,000 EBHs after installation of the original New
Program Part or Miscellaneous Hardware, or (D) three (3) years from the date of
Delivery of the
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original New Program Part or Miscellaneous Hardware in accordance with the terms
of this Contract; EXCEPT THAT the warranties on all New Program Parts and
Miscellaneous Hardware shall expire no later than one year after the conclusion
of the Term (the "NEW PROGRAM PARTS AND MISCELLANEOUS HARDWARE WARRANTY"). If
during the New Program Parts and Miscellaneous Hardware Warranty period, Seller
is within a reasonable time after discovery by Buyer notified in writing that a
New Program Part fails to conform to the New Program Parts and Miscellaneous
Hardware Warranty, Seller will at its expense (including any import duties,
taxes, or fees, etc. imposed by applicable governmental authorities), as soon as
commercially reasonable, correct such failure by, at Seller's option, repair or
replacement. If Seller, in attempting to correct such failure under this New
Program Parts and Miscellaneous Hardware Warranty, determines that such New
Program Part or Miscellaneous Hardware cannot be repaired, Seller will, as soon
as commercially reasonable, correct such failure by replacement. Any Program
Part which is replaced pursuant to this Section shall be deemed to have a scrap
value of $0 and shall be returned by Buyer to Seller along with free and clear
title thereto. Any transportation costs associated with the return of such
Program Part shall be the responsibility of Seller. No amount shall be due to or
from Buyer in connection with the return of such Program Part to Seller.
8.2 SHOP REPAIR WARRANTY AND EXCLUSIVE REMEDY. Seller warrants that the
Shop Repair work performed by Seller on Program Parts, including any repair of a
defective portion of a Shop Repair by Seller under this Shop Repair Warranty,
will be free of defects in engineering of the Shop Repair, design of the Shop
Repair, workmanship and materials until the first to occur of (A) one (1) year
from the date of installation of the original Shop Repaired Program Part into
the Combustion Turbine, (B) 250 Equivalent Starts after installation of the
original Shop Repaired Program Part into the Combustion Turbine, (C) 8,000 EBHs
after installation of the original Shop Repaired Program Part into the
Combustion Turbine or (D) three (3) years from completion of the original Shop
Repair; EXCEPT THAT the warranties on all Shop Repaired Program Parts shall
expire no later than one (1) year after the conclusion of the Term (the "SHOP
REPAIR WARRANTY"). If during the Shop Repair Warranty period Seller is within a
reasonable time after discovery by Buyer notified in writing that a Shop
Repaired Program Part fails to conform to the Shop Repair Warranty, Seller will
at its expense (including any import duties, taxes, or fees, etc. imposed by
applicable governmental authorities) as soon as commercially reasonable, correct
such nonconformity by repair of the defective portion of the Shop Repaired
Program Part, or if such nonconformity cannot be repaired, Buyer shall be
entitled to a Parts Life Credit pursuant to Section 3.3.
8.3 SERVICES WARRANTY AND EXCLUSIVE REMEDY. Seller warrants, for each item
of Services provided hereunder, that (i) the Services of its personnel will be
competent and consistent with Prudent Utility Practices, (ii) the technical
information, reports, analyses
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and recommendations transmitted by Seller in connection therewith will be
competent and consistent with Prudent Utility Practices, (iii) the Services will
comply in all material respects with Laws for a period of one (1) year from the
date of completion of that item of Services and (iv) the Services will be free
from defects in workmanship for one a period of one (1) year from the date of
completion of that item of Services; EXCEPT THAT the warranties on Services
shall expire no later than one year after the termination or conclusion of the
Term (the "SERVICES WARRANTY"). If during the Services Warranty period Seller is
notified by in writing, within a reasonable amount of time after Buyer's
discovery, that any portion of the Services fails to conform to the Services
Warranty, Seller will promptly reperform such nonconforming portion of the
Services at no additional cost or expense to Buyer in a manner that conforms to
the Services Warranty.
8.4 SHOP REPAIR TURN AROUND TIME WARRANTY AND EXCLUSIVE REMEDY. Seller
warrants that any Program Part removed during a Scheduled Outage and delivered
by Buyer to the repair or manufacturing facility designated by Seller for Shop
Repair, will be repaired and Delivered by Seller, in accordance with Section
7.2, ("TURNED-AROUND") within twenty-six (26) weeks of delivery of such Program
Part by Buyer to the repair or manufacturing facility designated by Seller. If a
Program Part removed during a Scheduled Outage and delivered by Buyer to the
repair or manufacturing facility designated by Seller for Shop Repair, is not
Turned-Around within twenty-six (26) weeks or Seller, at its option, does not
provide a new Program Part in lieu of the Program Part being Shop Repaired and
an outage occurs which requires the installation of such Program Part, then for
each Day of such outage that such Program Part is not Turned-Around, Seller
shall pay Buyer liquidated damages in the amount of $10,000 per Day. Seller's
aggregate liquidated damage payments pursuant to this Section 8.4 shall not
exceed a maximum annual cap of $250,000. If Seller reaches the maximum cap on
aggregate liquidated damages under this Section 8.4, and Seller still has not
Turned-Around such Program Part, Seller shall be considered to have failed to
perform its material obligations under this Contract, and Buyer may elect to
terminate this Contract pursuant to Section 12.2. In such case, unless Seller
has made and is continuing to make diligent efforts to cure such failure in
accordance with (and subject to the maximum cure set forth in) Section 12.2,
then Seller shall have waived its right to, and shall not be entitled to the
benefits of, the cure periods specified in Section 12.2.
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8.5 WARRANTY CONDITIONS. The warranties and remedies set forth herein and the
obligations and remedies set forth in Section 3.2 and Article 5 shall not apply
if and to the extent that a claim hereunder arises as a result of, or is
contributed to by, buyer's failure to do any of the following:
(1) Buyer's receipt, handling, storage, operation and maintenance during
any storage, operation and maintenance, including tasks incident
thereto, of the Project, including any Program Parts and Miscellaneous
Hardware, being in all material respects in accordance with the terms
of the Combustion Turbine instruction manuals and operating criteria
provided by Seller under the CTG Subcontract or the original equipment
manufacturer subject to any mutually agreed upon variance thereto,
and, to the extent not inconsistent with the foregoing, in general
accordance with Prudent Utility Practices;
(2) the Combustion Turbine being operated using Natural Gas and Water that
are consistent with the specifications set forth in Exhibit F, Natural
Gas & Water Specification and shall not have been subject to
alteration (other than in accordance with this Contract or the CTG
Subcontract), abuse or misuse (as determined by reference to Prudent
Utility Practices, and excluding any such abuse or misuse arising out
of or resulting from work performed by or on behalf of Seller
hereunder or under the CTG Subcontract);
(3) any accidental damage to the Combustion Turbine being repaired
consistent with the original equipment manufacturer's reasonable
recommendations, and
(4) Buyer, without cost to Seller:
(a) providing working access to the non-conforming New Program Parts,
Miscellaneous Hardware, Shop Repaired Program Parts or Services
including disassembly and reassembly of the Combustion Turbine;
(b) providing reasonable access to plant and operating and
maintenance data;
(c) making its Site facilities and Site operators available to assist
Seller in the performance of its warranty obligations, to the
extent they are reasonably available; and
(d) unless otherwise provided as part of a Seller's warranty
obligation, hiring Seller to provide TFA Services, Program Parts,
Shop Repairs and Miscellaneous Hardware required to disassemble
the Combustion Turbine, to repair, and install or replace the
Program Parts or
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Miscellaneous Hardware in the Combustion Turbine after it has
been disassembled and to reassemble the Combustion Turbine.
8.6 EXCLUSIVITY OF WARRANTIES AND REMEDIES. WITHOUT LIMITING SELLER'S
OBLIGATIONS, WARRANTIES OR GUARANTEES UNDER SECTIONS 3.3 AND 3.4 AND ARTICLE 5
OR ANY OBLIGATIONS, WARRANTIES OR GUARANTEES OF SELLER UNDER THE CTG SUBCONTRACT
(WHICH MAY BE ASSIGNED TO BUYER PURSUANT TO THE EPC CONTRACT), THE WARRANTIES
SET FORTH IN THIS ARTICLE 8 ARE EXCLUSIVE AND ARE IN LIEU OF ALL OTHER
WARRANTIES WHETHER STATUTORY, EXPRESS, OR IMPLIED (INCLUDING ALL WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, AND ALL WARRANTIES ARISING
FROM COURSE OF DEALING OR USAGE OF TRADE). Without limiting any remedies or
liabilities arising under or in connection with Sections 3.3 and 3.4, Article 5
or the CTG Subcontract, the remedies set forth in this Article 8 shall
constitute Seller's sole liability and Buyer's exclusive remedies arising under
or in connection with this Contract for failure of Seller to meet its warranty
obligations hereunder, whether claims of Buyer are based in contract, in tort
(including negligence and strict liability), or otherwise.
8.7 RELATIONSHIP TO CTG SUBCONTRACT. Seller and Buyer acknowledge and agree
that the warranties, remedies and other benefits provided by Seller to Buyer
under this Contract are independent of and complimentary to the warranties,
remedies and other benefits provided by EPC Contractor to Buyer under the EPC
Contract and by Seller to the EPC Contractor under the CTG Subcontract (which
may be assigned to Buyer pursuant to the EPC Contract).
ARTICLE 9. INTELLECTUAL PROPERTY
9.1 PATENT, COPYRIGHT, OR TRADE SECRET INFRINGEMENT. Seller will, at its own
expense, defend or at its option settle any suit or proceeding brought against
Buyer in so far as it is based on an allegation that any Program Parts,
Miscellaneous Hardware or any of the processes used by Seller used in connection
with the Shop Repairs or Services, supplied by Seller hereunder or use thereof
for its intended purpose, constitutes an infringement of any United States
patent, copyright or trade secret, if Seller is notified promptly in writing and
given authority, information and reasonable assistance in a timely manner for
the defense of said suit or proceeding. Seller will pay the damages and costs
awarded in any such suit or proceeding. Seller will not be responsible for any
settlement of such suit or proceeding made without its prior written consent. In
case any of the Program Parts, Miscellaneous Hardware or processes used by
Seller in connection with the Shop Repairs or Services supplied by Seller
hereunder, as a result of any such suit or proceeding, is held to constitute
infringement of any United States patent, copyright or trade secret, or
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its use by Buyer is enjoined, Seller will, at its option and its own expense,
either: (a) procure for Buyer the right to continue using said Program Part, but
still satisfy Seller's Workscope Obligations, Miscellaneous Hardware or process,
at no additional cost to Buyer; (b) replace it with substantially equivalent
noninfringing Program Part, Miscellaneous Hardware or process; or (c) modify it
so it becomes noninfringing and still satisfies Seller's obligations hereunder.
9.2 LIMITATION OF INTELLECTUAL PROPERTY OBLIGATIONS. Seller will have no
duty or obligation to Buyer under this Article 9 to the extent that the
Program Parts, Miscellaneous Hardware or any of the processes used by Seller
in connection with the Shop Repairs or Services supplied by Seller hereunder
is (a) supplied according to Buyer's design or instructions wherein
compliance therewith has caused Seller to deviate from its normal course of
performance; PROVIDED that, prior to deviating in such a manner from its
normal course of performance, Seller has given Buyer written notice of such
deviation and the resulting effect on Seller's obligations hereunder, (b)
modified by Buyer or its contractors after Delivery, or (c) combined by Buyer
or its contractors with items not furnished hereunder or under the CTG
Subcontract and by reason of said design, instruction, modification, or
combination a suit is brought against Buyer. In addition, if by reason of
such design, instruction, modification or combination, a suit or proceeding
is brought against Seller, Buyer shall protect Seller in the same manner and
to the same extent that Seller has agreed to protect Buyer under the
provisions of Section 9.1.
9.3 EXCLUSIVITY OF DUTIES AND REMEDIES. THIS ARTICLE 9 IS AN EXCLUSIVE
STATEMENT OF ALL THE OBLIGATIONS OF THE PARTIES, RELATING TO PATENTS,
COPYRIGHTS OR TRADE SECRETS AND DIRECT OR CONTRIBUTORY INFRINGEMENT THEREOF,
AND OF ALL THE REMEDIES OF BUYER OR SELLER RELATING TO ANY CLAIMS, SUITS, OR
PROCEEDINGS INVOLVING PATENTS, COPYRIGHTS OR TRADE SECRETS WITH RESPECT TO
SELLER'S WORKSCOPE OBLIGATIONS. Compliance with this Article 9 as provided
herein shall constitute fulfillment of all obligations of the parties under
this Contract with respect to patents, copyrights or trade secrets.
ARTICLE 10. COMPLIANCE WITH LAWS
10.1 GENERALLY. Subject to the provisions of Section 10.2, Seller shall
at all times comply, and shall assure that the Program Parts, Miscellaneous
Hardware, Shop Repairs and Services supplied by Seller, at the time of
Delivery or performance comply in all material respects with all Laws
applicable to the design, manufacture of the Program Parts and Miscellaneous
Hardware, the Shop Repair of Program Parts, and the performance by Seller of
its other obligations hereunder.
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10.2 CHANGES IN LAW, ETC. Without limiting Article 8, in the event that any
change in Laws enacted or otherwise approved after the date of this Contract
requires or makes necessary any modifications to the Workscope Obligations
including a change in Law which necessitates Buyer or Seller to vary from the
instruction manuals and operating criteria provided to Buyer by the EPC
Contractor or the original equipment manufacturer, Buyer or Seller, as the case
may be, shall reasonably promptly notify the other thereof in writing upon its
discovery of such change in Laws. If any such modification is required by any
changes in Laws, Seller shall make such modification provided such modification
is reasonably technically feasible, and if such modification increases or
decreases Seller's cost of providing the Workscope Obligations, or delays
Seller's schedule or affects any other provision of this Contract, the parties
shall negotiate in good faith and enter into a Change Order in accordance with
the provisions of Section 6.2 (For changes in Law which necessitate Buyer or
Seller to vary from the instruction manuals and operating criteria provided to
Buyer by the EPC Contractor or the original equipment manufacturer, Buyer and
Seller shall mutually and reasonably agree in writing to such variance and shall
thereafter comply with such instruction manuals and operating criteria with the
variance applied.). Seller shall use reasonable efforts and due diligence to
mitigate the effect of any such changes in Laws on the performance of its
Workscope Obligations and the cost thereof to Buyer.
ARTICLE 11. INSURANCE
11.1 SELLER'S INSURANCE. Without limiting Seller's liability under this
Contract, Seller shall self insure or maintain in full force and effect during
the term of this Contract with insurance companies authorized to do business in
the State of New Jersey and reasonably satisfactory to Buyer, the insurance
described below with coverage at levels normal in the ordinary course of its
business, but at levels no less than the minimums indicated, and shall provide
to Buyer certificates evidencing such coverages:
(a) Commercial general liability insurance, including bodily injury,
property damage, products/completed operations, contractual, and
personal injury liability, with a combined single limit of
$1,000,000 per occurrence with a $2,000,000 annual aggregate;
(b) Umbrella excess liability coverage providing excess general
liability, automobile, liability and employer's liability with
a combined single limit of $6,000,000;
(c) Workers' Compensation insurance with statutory limits, and
Employers Liability insurance with limits of not less than
$1,000,000 per accident; and
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(d) Business automobile liability insurance covering owned, non-owned
and hired automobiles for a combined single limit of $1,000,000 per
occurrence with a $2,000,000 annual aggregate.
11.2 BUYER'S INSURANCE. Without limiting Buyer's liability under this
Contract, Buyer shall maintain in full force and effect during the term of
this Contract with insurance companies authorized to do business in the State
of New Jersey and reasonably satisfactory to Seller, the insurance described
below, with coverage at levels normal in the ordinary course of its business,
but at levels no less than the minimums indicated, and shall provide to
Seller certificates evidencing such coverages:
(a) Property insurance, including boiler and machinery coverage covering
all real and personal property of Buyer on a 100% replacement cost
basis (as reasonably determined by Buyer) and business interruption
insurance coverage to cover "gross earnings," which will include all
fixed expenses and interest for twelve (12) months, in each case to
the extent available on commercially reasonable terms (and the
parties agree that Buyer shall not be required to have a deductible
period on such business interruption coverage of less than
90 Days);
(b) Commercial general liability insurance, including bodily injury,
property damage, products/completed operations, contractual, and
personal injury liability, with a combined single limit of
$1,000,000 per occurrence with a $2,000,000 annual aggregate;
(c) Umbrella excess liability coverage providing excess general
liability, automobile, liability and employer's liability with a
combined single limit of $6,000,000;
(d) Workers' Compensation insurance with statutory limits, and Employers
Liability insurance with limits of not less than $1,000,000 per
accident; and
(e) Business automobile liability insurance covering owned, non-owned and
hired automobiles for a combined single limit of $1,000,000 per
occurrence with a $2,000,000 annual aggregate.
11.3 POLICIES. Seller agrees to cause the insurance policy specified in
Section 11.1(c) to include a waiver of subrogation rights against Buyer. Buyer
agrees to cause the insurance policies specified in Sections 11.2(a) and
11.2(d) to include waivers of subrogation rights against Seller.
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[*]
ARTICLE 12. TERMINATION
12.1 TERMINATION FOR SELLER'S INABILITY TO PERFORM. If any proceeding is
instituted against Seller seeking to adjudicate Seller as a bankrupt or
insolvent, or if Seller makes a general assignment for the benefit of its
creditors, or if a receiver is appointed on account of the insolvency of Seller,
or if Seller files 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
Seller (but not by Seller) if such proceeding is not dismissed within forty-five
(45) Days of such filing, Buyer may terminate this Contract by written notice to
Seller.
12.2 TERMINATION FOR SELLER'S FAILURE TO PERFORM. Buyer may terminate this
Contract by written notice to Seller, if Seller fails to perform or observe in
any material respect any provision of this Contract and (a) fails to promptly
commence to cure and diligently pursue the cure of such failure or (b) fails to
remedy any such failure within (i) forty-five (45) Days after Seller receives
written notice of such failure, or (ii) PROVIDED that if Seller diligently
pursues the cure of such failure in such a manner and within such time to avoid
any material adverse effect on the Project or Buyer's rights hereunder or under
the Power Purchase Agreement, or if a material adverse effect cannot be avoided,
in such a manner and within such time so that the expected effects of such cure
are in all respects no more adverse to the Project and Buyer's rights hereunder
and under the Power Purchase Agreement than the expected effects of terminating
this Contract and pursuing any or all other options that may be available to
Buyer, such longer period, not to exceed one hundred eighty (180) Days as may be
necessary for Seller to cure such failure. In addition, Buyer may terminate this
Contract if (i) Buyer terminates the EPC Contract due to the EPC Contractor's
default or inability to perform thereunder and Buyer does not assume the rights
and obligations of the EPC Contractor under the CTG Subcontract or due to
Buyer's inability to obtain construction financing or environmental operating
permits for the Project, (ii) the EPC Contractor terminates the EPC Contract for
any reason other than Buyer's default thereunder and Buyer does not assume the
rights and obligations of the EPC Contractor under the CTG Subcontract, or (iii)
the CTG Subcontract is terminated for any reason.
12.3 BUYER'S AND SELLER'S RIGHTS AND OBLIGATIONS WHEN BUYER TERMINATES FOR
SELLER'S INABILITY OR FAILURE TO PERFORM. If Buyer elects to terminate this
Contract pursuant to Section 12.1 or 12.2, Seller shall be entitled to retain or
receive only those amounts paid
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or payable hereunder at the time of termination for any Workscope Obligations
which Seller had manufactured or performed at the time of termination. Upon such
a termination, Seller shall stop work on the terminated portion of this Contract
and place no further orders or lower tier subcontracts for such terminated
portion. Seller shall protect Buyer's property which is in Seller's possession,
and shall direct suppliers and subcontractors on orders or subcontracts
outstanding to do the same. Upon Buyer's instructions, Seller shall transfer
title to and deliver any New Program Parts and Miscellaneous Hardware paid for
by Buyer as provided in this Section 12.3, which are in the possession of
Seller, its suppliers or subcontractors, at the time of such termination, and
shall deliver any of Buyer's property which is in the possession of Seller, its
suppliers or subcontractors at the time of such termination. The cost of such
Delivery will be paid by Seller. No further rights or obligations shall exist
between the parties with respect to this Contract except for any accrued claims
existing at the time of such notice of termination and those rights that
expressly survive, per Section 16.22, Survival. If the payments that were made
by Buyer to Seller prior to or at the time of termination exceed the amounts
paid or payable pursuant to this Section 12.3, Seller shall reimburse Buyer the
excess.
12.4 TERMINATION FOR BUYER'S CONVENIENCE. Buyer may, at its sole option,
terminate this Contract in whole or in part by written notice to Seller, (i) at
any time after completion of the first Major Outage of the Combustion Turbine
Generators, (ii) if Buyer terminates the EPC Contract for any reason other than
(a) the default or inability to perform of the EPC Contractor or (b) Buyer's
inability to obtain construction financing or environmental operating permits
for the Project, or (iii) if the EPC Contractor terminates the EPC Contract for
Buyer's default thereunder.
12.5 BUYER'S AND SELLER'S RIGHTS AND OBLIGATIONS WHEN BUYER TERMINATES FOR ITS
CONVENIENCE. Upon Buyer's termination pursuant to Section 12.4, Seller shall
stop work on the terminated portion of this Contract and place no further orders
or lower tier subcontracts for such terminated portion. Seller shall protect
Buyer's property which is in Seller's possession, and shall direct suppliers and
subcontractors on orders or subcontracts outstanding to do the same. Upon
Buyer's instructions, Seller shall transfer title to and deliver any New Program
Parts and Miscellaneous Hardware, which are in the possession of Seller, its
suppliers or subcontractors, at the time of such termination, subject to Buyer's
payment of the amount due under this Section 12.5 following such termination,
and shall deliver any of Buyer's property which is in the possession of Seller,
its suppliers or subcontractors at the time of such termination. Within one (1)
month after receipt of such notice of termination, Seller will submit to Buyer
in writing its claim for reimbursement of reasonable costs incurred as a result
of the termination. Such claim, which may include reasonable termination costs,
if any, from lower tier subcontractors, shall follow the requirements
hereinafter set forth. If the parties cannot
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agree within 45 Days after receipt of such notice of termination upon the fair
compensation to Seller, Buyer will pay Seller within 60 Days after receipt of
such notice of termination, without duplication:
(a) The Fees due and payable for Workscope Obligations already performed
by Seller and received by Buyer at the time of termination which
have not previously been paid by Buyer.
(b) Reasonable state of completion expenses for New Program Parts,
Miscellaneous Hardware, Shop Repairs and Services performed by
Seller at the time of such termination, including reasonable
overhead and profit; [*]
(c) Reasonable expenses actually incurred by Seller and approved in
writing by Buyer in settling Seller's terminated orders and
subcontracts hereunder and the protection of property in which
Buyer has or may have an interest, including reasonable overhead
and profit.
(d) Reasonable expenses of demobilization, equipment storage,
transportation, and handling, including reasonable overhead and
profit.
If the payments that were made by Buyer to Seller prior to or at the time of
termination exceed the amounts paid or payable pursuant to this Section 12.5,
Seller shall reimburse Buyer the excess. Payments under this Section 12.5,
excluding all payments made under this Contract prior to the termination,
shall in no event exceed the amount of the Contract Price payable to Seller
during the year in which this Contract is so terminated. If there is a
dispute as to the reasonableness of expenses listed in items (a) - (d) above
such dispute shall be resolved in accordance with Section 16.5.2. [*] No
further rights or obligations shall exist between the parties with respect to
this Contract except for any accrued claims existing at the time of such
notice of termination and those rights that expressly survive, per Section
16.22, Survival.
12.6 TERMINATION BY SELLER. If, (i) with respect to any invoice delivered
pursuant to Section 4.3, Buyer neither makes payment thereon in accordance
with Section 4.4 nor provides a notice of dispute relating thereto in
accordance with Section 4.5, in either case within the twenty-five (25) Day
period provided in such Sections, (ii) a proceeding is instituted against
Buyer seeking to adjudicate Buyer as a bankrupt or insolvent and such
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proceeding is not dismissed or stayed within forty-five (45) Days of such
filing, (iii) Buyer makes a general assignment for the benefit of its
creditors, (iv) a receiver is appointed on account of the insolvency of
Buyer, or (v) Buyer files a petition seeking to take advantage of any other
Law relating to bankruptcy, insolvency, reorganization, winding up or
composition or readjustment of debts, then Seller may at its option terminate
this Contract by written notice to Buyer; PROVIDED that, no such termination
notice shall be effective if Buyer pays the amount due within ninety (90)
Days of Buyer's receipt of such notice.
12.7 BUYER'S AND SELLER'S RIGHTS AND OBLIGATIONS WHEN SELLER TERMINATES.
Upon Seller's termination pursuant to Section 12.6, Seller shall stop work on
the terminated portion of this Contract and place no further orders or lower
tier subcontracts for such terminated portion. Seller shall protect Buyer's
property which is in Seller's possession, and shall direct suppliers and
subcontractors on orders or subcontracts outstanding to do the same. Upon
Buyer's instructions, Seller shall transfer title to and deliver any New
Program Parts and Miscellaneous Hardware, which are in the possession of
Seller, its suppliers or subcontractors, at the time of such termination,
subject to Buyer's payment of the amount due under this Section 12.7
following such termination, and shall deliver any of Buyer's property which
is in the possession of Seller, its suppliers or subcontractors at the time
of such termination. Within one (1) month after receipt of such notice of
termination, Seller will submit to Buyer in writing its claim for
reimbursement of reasonable costs incurred as a result of the termination.
Such claim, which may include reasonable termination costs, if any, from
lower tier subcontractors, shall follow the requirements hereinafter set
forth. If the parties cannot agree within 45 Days after receipt of such
notice of termination upon the fair compensation to Seller, Buyer will pay
Seller within 60 Days after receipt of such notice of termination, without
duplication:
(a) The Fees due and payable for Workscope Obligations already
performed by Seller and received by Buyer at the time of which
have not previously been paid by Buyer.
(b) Reasonable state of completion expenses for New Program Parts,
Miscellaneous Hardware, Shop Repairs and Services performed by
Seller at the time of such termination, including reasonable
overhead and profit; [*]
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(c) Reasonable expenses actually incurred by Seller and approved in
writing by Buyer in settling Seller's terminated orders and
subcontracts hereunder and the protection of property in which
Buyer has or may have an interest, including reasonable overhead
and profit.
(d) Reasonable expenses of demobilization, equipment storage,
transportation, and handling, including reasonable overhead and
profit.
If the payments that were made by Buyer to Seller prior to or at the time of
termination exceed the amounts paid or payable pursuant to this Section 12.7,
Seller shall reimburse Buyer the excess. Payments under this Section 12.7,
excluding all payments made under this Contract prior to the termination,
shall in no event exceed the amount of the Contract Price payable to Seller
during the year in which this Contract is so terminated. If there is a
dispute as to the reasonableness of expenses listed in items (a) - (d) above
such dispute shall be resolved in accordance with Section 16.5.2. [*] No
further rights or obligations shall exist between the parties with respect to
this Contract except for any accrued claims existing at the time of such
notice of termination and those rights that expressly survive, per Section
16.22, Survival.
12.8 EXCLUSIVITY OF RIGHTS AND REMEDIES. WITH THE EXCEPTION OF ANY ACCRUED
CLAIMS EXISTING AT THE TIME OF SUCH NOTICE OF TERMINATION AND THOSE RIGHTS,
DUTIES, OBLIGATIONS AND REMEDIES THAT EXPRESSLY SURVIVE PURSUANT TO SECTION
16.22, THIS ARTICLE 12 IS AN EXCLUSIVE STATEMENT OF ALL THE RIGHTS, DUTIES,
OBLIGATIONS and Remedies OF THE PARTIES RELATING TO TERMINATION. Compliance
with this Article 12 as provided herein shall constitute fulfillment of all
liabilities of the parties under this Contract with respect to termination.
ARTICLE 13. INDEMNIFICATION
13.1 SELLER'S INDEMNITY. To the fullest extent permitted by Law, Seller
shall defend, indemnify and hold harmless Buyer from and against liability
resulting from injury to or death of persons and from damage to or loss of
third party property, caused by or arising in whole or in part out of, but
only to the extent of the negligent acts or omissions of Seller while
performing Services at or near the Site. Seller's indemnity obligation under
this Section 13.1 shall not apply to any liabilities arising out of or
relating to events or circumstances occurring more than one (1) year after
end of the Term.
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13.2 BUYER'S INDEMNITY. To the fullest extent permitted by Law, Buyer shall
defend, indemnify and hold harmless Seller from and against liability
resulting from injury to or death of persons and from damage to or loss of
third party property, caused by or arising in whole or in part out of, but
only to the extent of the negligent acts or omissions of Buyer while
performing its obligations under this Contract at or near the Site or while
otherwise operating and maintaining the Project. Buyer's indemnity obligation
under this Section 13.2 shall not apply to any liabilities arising out of or
relating to events or circumstances occurring more than one (1) year after
end of the Term.
ARTICLE 14. LIMITATION OF LIABILITY
14.1 NO CONSEQUENTIAL DAMAGES. EACH PARTY AGREES THAT, EXCEPT TO THE EXTENT
LIQUIDATED DAMAGES PROVIDED HEREIN ARE SO CONSIDERED, NEITHER SELLER, NOR ITS
SUPPLIERS, NOR BUYER WILL UNDER ANY CIRCUMSTANCES BE LIABLE UNDER ANY THEORY
OF RECOVERY, WHETHER BASED IN CONTRACT, IN TORT (INCLUDING NEGLIGENCE AND
STRICT LIABILITY), UNDER WARRANTY, OR OTHERWISE, FOR ANY INDIRECT, SPECIAL,
INCIDENTAL OR CONSEQUENTIAL LOSS OR DAMAGE WHATSOEVER, INCLUDING WITHOUT
LIMITATION: DAMAGE TO OR LOSS OF PROPERTY OR EQUIPMENT; LOSS OF PROFITS OR
REVENUE; LOSS OF USE OF MATERIAL, EQUIPMENT OR POWER SYSTEM; INCREASED COSTS
OF ANY KIND, INCLUDING BUT NOT LIMITED TO CAPITAL COST, FUEL COST AND COST OF
PURCHASED OR REPLACEMENT POWER; OR CLAIMS OF CUSTOMERS.
14.2 EXCLUSIVE REMEDY AND CAP ON LIABILITY. BUYER EXPRESSLY AGREES THAT THE
REMEDIES PROVIDED HEREIN ARE EXCLUSIVE AND THAT UNDER NO CIRCUMSTANCES SHALL
THE TOTAL AGGREGATE LIABILITY OF SELLER ARISING OUT OF ALL OBLIGATIONS
HEREUNDER, [*], DURING A GIVEN YEAR UNDER ANY THEORY OF RECOVERY, WHETHER
BASED IN CONTRACT, IN TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY), UNDER
WARRANTY, OR OTHERWISE, [*] PAYABLE TO SELLER FOR THAT GIVEN YEAR UNDER THIS
CONTRACT. BUYER FURTHER EXPRESSLY AGREES THAT UNDER NO CIRCUMSTANCES SHALL
THE TOTAL AGGREGATE LIABILITY OF SELLER ARISING OUT OF ALL OBLIGATIONS
HEREUNDER, [*], UNDER ANY THEORY OF RECOVERY, WHETHER BASED IN CONTRACT, IN
TORT
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(INCLUDING NEGLIGENCE AND STRICT LIABILITY), UNDER WARRANTY, OR OTHERWISE, [*]
PAYABLE TO SELLER UNDER THIS CONTRACT.
14.3 EXTENT OF WAIVERS. THE WAIVERS AND DISCLAIMERS OF LIABILITY, RELEASES
FROM LIABILITY, AND LIMITATIONS ON LIABILITY EXPRESSED IN THIS ARTICLE 14
SHALL EXTEND TO THE PARTNERS, PRINCIPALS, SHAREHOLDERS, DIRECTORS, OFFICERS,
EMPLOYEES AND AGENTS OF SELLER AND BUYER AND THEIR RESPECTIVE AFFILIATES OR
SUCCESSORS.
14.4 EXTENT OF CONFLICTS. THE PROVISIONS OF THIS ARTICLE 14 SHALL PREVAIL OVER
ANY CONFLICTING OR INCONSISTENT PROVISIONS SET FORTH ELSEWHERE IN THIS CONTRACT.
ARTICLE 15. FORCE MAJEURE
15.1 EXCUSE BY FORCE MAJEURE. Neither party will be liable for failure to
perform any obligation or delay in performance, excluding payment, to the
extent such failure or delay is caused by any act or event beyond the
reasonable control of the affected party or Seller's Suppliers; PROVIDED that
such act or event is not the fault or the result of negligence of the
affected party and such party has been unable by exercise of reasonable
diligence to overcome or mitigate the effects of such act or event ("FORCE
MAJEURE"). Force Majeure includes, without limitation, any act of God; act of
civil or military authority; act of war whether declared or undeclared; act
(including without limitation unreasonable delay or failure to act) of any
governmental authority; civil disturbance; insurrection or riot; sabotage;
fire; inclement weather conditions; earthquake; flood; strikes, work
stoppages or other labor difficulties of a regional or national character
which are not limited to only the employees of Seller or its subcontractors
or suppliers and which are not due to the breach of an applicable labor
contract by the party claiming Force Majeure; embargo; fuel or energy
shortage; delay or accident in shipping or transportation to the extent
attributable to another Force Majeure; changes in Laws which substantially
prevents a party from complying with its obligations in conformity with its
requirements under this Contract or failure or delay beyond its reasonable
control in obtaining necessary manufacturing facilities, labor, or materials
from usual sources to the extent attributable to another Force Majeure; or
failure of any principal contractor to provide equipment to the extent
attributable to another Force Majeure. Force Majeure shall not include: (1)
economic hardship, (2) changes in market conditions, or (3) except due to an
event of Force Majeure, late Delivery of Program Parts or Other Equipment.
PROPRIETARY INFORMATION 32 AES RED OAK LTP CONTRACT
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15.2 EFFECT OF FORCE MAJEURE. In the event of a delay in performance
excusable under this Article 15, the date of Delivery or time for performance
of the work will be extended by a period of time reasonably necessary to
overcome the effect of such Force Majeure and if the Force Majeure lasts for
a period longer than thirty (30) Days and such delay directly increases
Seller's costs or expenses, Buyer, after reviewing Seller's additional direct
costs and expenses, will reimburse Seller for its reasonable additional
direct costs and expenses incurred after thirty (30) Days from the beginning
of the Force Majeure resulting from said delay. Buyer's may, as part of its
review, audit Seller's additional direct costs and expenses; PROVIDED that
such audit is conducted by Seller's independent accounting firm used for
Corporate Accounts and is done without unreasonably disrupting Seller's
normal business operations.
ARTICLE 16. MISCELLANEOUS
16.1 COOPERATION IN FINANCING. Subject to the obligations specified in
Section 16.2, Seller shall furnish to Buyer such information, consents,
certifications, opinions of counsel and other documents or assistance as may
reasonably be requested by the parties providing financing to the Project.
16.2 PROPRIETARY INFORMATION.
16.2.1 PROPRIETARY INTEREST. Seller may have a proprietary interest in
information that may be furnished pursuant to this Contract including
Seller's proposal and this Contract itself, and including any information
which provides Seller a competitive advantage in the marketplace in the field
of design, engineering, manufacturing, operation, maintenance, procurement
and construction of power generation, transmission and distribution
facilities.). Buyer will keep in confidence and will not disclose any such
information which is specifically designated as being proprietary to Seller
in writing, or if given orally and designated as proprietary at such time,
reduced to writing within a reasonable amount of time thereafter, without the
prior written permission of Seller or use any such information for other than
the purpose for which it is supplied. The provisions of this paragraph shall
not apply to information, notwithstanding any confidential designation
thereof, which is known to Buyer without any restriction as to disclosure or
use at the time it is furnished, which is or becomes generally available to
the public without breach of any agreement, or which is received from a third
party without limitation or restriction on said third party or Buyer at the
time of disclosure, or which is developed independently by Buyer.
Notwithstanding the foregoing, Buyer may disclose information which it
receives from Seller, which Seller has a proprietary interest in, to (i)
credit rating agencies (any such agency, a "RATING AGENCY") and entities
providing construction or term financing, including an independent
engineering firm (the "INDEPENDENT ENGINEER") acting on behalf of such
entities, PROVIDED that such entities
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are not in competition with Seller in Seller's power generation, distribution
and transmission business, (ii) GPU, or (iii) any of Buyer's Affiliates,
PROVIDED that such entities or GPU have entered into a confidentiality
agreement with Buyer that is reasonably acceptable to Seller.
Notwithstanding any other provision of this Section 16.2.1 to the contrary,
(a) Buyer shall be permitted to summarize the material terms and conditions
of this Contract for purposes of including such summary in any offering
statements or similar disclosure documents relating to the financing of the
Facility ("OFFERING STATEMENTS"), which will be provided to Rating Agencies
that may provide a rating for such debt and to prospective purchasers of such
debt (any such prospective purchaser, an "OFFEREE") and (b) the Independent
Engineer may utilize certain information relating to the Project in a report
(the "REPORT") which will be included in such Offering Statements; PROVIDED,
HOWEVER, that prior to the distribution of the summary referred to in clause
(a) above and the Report referred to in clause (b) above to any Rating Agency
or Offeree, Buyers shall provide Seller a copy thereof and Seller have a
reasonable period of time to review and provide comments thereon to Buyer in
the case of the summary and to Buyer and the Independent Engineer in the case
of the Report. Buyer shall give due consideration to such comments in
finalizing the summary and shall cause the Independent Engineer to give due
consideration to such comments in finalizing the Report, in both cases in
light of Seller's interest in protecting its proprietary information and in
light of Buyer's and the Independent Engineer's disclosure obligations under
applicable securities laws and Buyer shall use its best efforts to prevent
inclusion of the pricing and any individual parts life provisions of this
Contract in any such summary or Report. The parties shall attempt in good
faith to resolve any disagreement concerning information to be included in
such summary and Report. No Offeree shall be given a copy of this Contract
without the prior written consent of the Seller (such consent not to be
unreasonably withheld), but an Offeree may inspect a copy of this Contract at
the offices of Buyer or its designee PROVIDED that such Offeree has entered
into an appropriate confidentiality agreement and such Offeree is not in
competition with Seller in Seller's power generation, distribution and
transmission business.
Seller recognizes that in the event that Buyer files a registration statement
with the Securities and Exchange Commission ("SEC") in respect of any debt
offering, it will be required to submit a copy of this Contract to the SEC.
In the event that this Contract is filed with the SEC in accordance with SEC
rules, Seller may designate portions of this Contract with respect to which
Seller wishes Buyer to use its best efforts to obtain confidential treatment
thereof in any filing with the SEC, and Buyer shall provide Seller a
reasonable opportunity (not less than ninety (90) days) prior to such filing
to deliver such designations to Buyer, accompanied by a written explanation
of such designations and Buyer shall reimburse Seller for any reasonable
costs Seller incurs with respect to such
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designations and written explanation of such designations within (25) Days of
Buyer's receipt of Seller's invoice therefor. Buyer shall comply with
Seller's designations regarding confidential treatment in connection with any
such filing, PROVIDED that Seller recognizes that any decision regarding the
confidential treatment of any portion of this Contract shall be made by the
SEC in its sole discretion and Buyer (provided that Buyer has complied with
the provisions of this paragraph) shall have no obligation under this Section
16.2.1 with respect to any portion of this Contract for which the SEC elects
not to grant confidential treatment.
16.2.2 INDEMNITY. Buyer shall indemnify and hold Seller harmless for any
direct liability suffered by Seller as a result of Buyer's disclosure to
third parties or Buyer's improper use of the proprietary information.
16.2.3 DISCLOSURE PURSUANT TO GOVERNMENT MANDATE. When required by any
appropriate governmental or regulatory authority or a court of competent
jurisdiction (hereinafter collectively referred to as a "GOVERNMENTAL
AUTHORITY"), whether pursuant to applicable law or regulation or lawful
subpoena or other order or mandate issued by a Governmental Authority, Buyer
may disclose such proprietary information to such Governmental Authority;
PROVIDED, HOWEVER, that prior to making any such disclosure, Buyer will: (a)
provide Seller with timely advance written notice of the proprietary
information requested by such Governmental Authority and Buyer's intent to so
disclose; (b) minimize the amount of proprietary information to be provided
consonant with the interests of Seller and its Suppliers and the requirements
of the Governmental Authority involved; and (c) make every reasonable effort
(which shall include participation by Seller in discussions with the
Governmental Authority involved but shall not include Buyer incurring costs
or expenses) to secure confidential treatment and minimization of the
proprietary information to be provided. In the event that efforts to secure
confidential treatment are unsuccessful, Seller shall, in the event and to
the extent permitted under Law, have the prior right to revise such
information to minimize the disclosure of such information in a manner
consonant with its interests and the requirements of the Governmental
Authority involved.
16.2.4 PROPRIETARY INTEREST. Buyer may have a proprietary interest in
information that may be furnished pursuant to this Contract including this
Contract itself, and including any information which provides Buyer a
competitive advantage in the marketplace in the field of development and
ownership of power generation, transmission and distribution facilities.).
Seller will keep in confidence and will not disclose any such information
which is specifically designated as being proprietary to Buyer without the
prior written permission of Buyer or use any such information for other than
the purpose for which it is supplied. The provisions of this paragraph shall
not apply to information, notwithstanding any confidential designation
thereof, which is known to Seller without
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any restriction as to disclosure or use at the time it is furnished, which is
or becomes generally available to the public without breach of any agreement,
or which is received from a third party without limitation or restriction on
said third party or Seller at the time of disclosure, or which is developed
independently by Seller. Notwithstanding the foregoing, Seller may disclose
information which it receives from Buyer, which Buyer has a proprietary
interest in, to any of Seller's Affiliates; PROVIDED that such entities have
entered into a confidentiality agreement with Seller that is reasonably
acceptable to Buyer and such entities are not in competition with Buyer or
Buyer's Affiliates in the field of development, operation or ownership of
power generation, transmission and distribution facilities.
16.2.5 INDEMNITY. Seller shall indemnify and hold Buyer harmless for any
liability suffered by Buyer as a result of Seller's disclosure to third
parties or improper use of the proprietary information.
16.2.6 DISCLOSURE PURSUANT TO GOVERNMENT MANDATE. When required by any
Governmental Authority, whether pursuant to applicable law or regulation or
lawful subpoena or other order or mandate issued by a Governmental Authority,
Seller may disclose such proprietary information to such Governmental
Authority; PROVIDED, HOWEVER, that prior to making any such disclosure,
Seller will: (a) provide Buyer with timely advance written notice of the
proprietary information requested by such Governmental Authority and Seller's
intent to so disclose; (b) minimize the amount of proprietary information to
be provided consonant with the interests of Buyer and the requirements of the
Governmental Authority involved; and (c) make every reasonable effort (which
shall include participation by Buyer in discussions with the Governmental
Authority involved but shall not include Seller incurring costs or expenses)
to secure confidential treatment and minimization of the proprietary
information to be provided. In the event that efforts to secure confidential
treatment are unsuccessful, Buyer shall, in the event and to the extent
permitted under Law, have the prior right to revise such information to
minimize the disclosure of such information in a manner consonant with its
interests and the requirements of the Governmental Authority involved.
16.3 SUBCONTRACTORS. Seller shall have the right to have individual items
of the Program Parts or Miscellaneous Hardware supplied to it or Services
performed by subcontractors or subvendors, PROVIDED that no such
subcontractor or subvendor is intended to be or shall be deemed a third-party
beneficiary of this Contract. Notwithstanding the foregoing, no arrangements
between Seller and any subcontractor or subvendor shall create any
contractual relationship between any subcontractor or vendor and Buyer or
relieve Seller from any of its obligations hereunder. Seller shall be solely
responsible for the engagement and management of subcontractors and
subvendors in the performance of work, for all work performed and items
provided by subcontractors and
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vendors and for all acts and omissions of subcontractors and vendors. For
work performed at the Site, if Buyer requests an employee, subcontractor or
subvendor be removed for cause and demonstrates reasonable grounds for such
request, Seller shall remove such employee, subcontractor or subvendor and
shall not allow such person or entity to participate further in the
performance of Services under this Contract.
16.4 THIRD PARTIES. Except as otherwise expressly provided in this
Contract, nothing in this Contract shall be construed to create any duty to,
standard of care with respect to or any liability to any person who is not a
party to this Contract.
16.5 DISPUTE RESOLUTION.
16.5.1 FORMAL DISPUTE RESOLUTION PROCESS. In the event a dispute arises
between Seller and Buyer regarding the application or interpretation of any
provision of this Contract, the aggrieved party shall promptly notify the
other party and the Parties shall negotiate in good faith and attempt to
resolve such dispute. If the parties shall have failed to resolve the dispute
within thirty (30) Days after delivery of such notice, each party shall have
the right to require, by written notice to the other party containing a brief
description of the dispute, that each party nominate and have a senior
officer of its management meet with the other party's nominated senior
officer at the Site, or at any other mutually agreed to location, within
fifteen (15) Days of such request, in order to attempt to resolve the
dispute. Should the Parties be unable to resolve the dispute to their mutual
satisfaction within fifteen (15) Days after such meeting, each party shall
have the right to pursue any and all remedies available to it at law or in
equity.
16.5.2 INDEPENDENT EXPERT DISPUTE RESOLUTION PROCESS. If any dispute
hereunder involves technical issues, either party could request that such
matter be referred to a mutually acceptable independent expert for resolution
in an expedited manner pursuant to procedures and timing to be mutually
agreed upon by the Parties; PROVIDED that if the other party does not agree
to such request or the Parties are unable to reach an agreement on such
independent expert or such governing procedures (in each case in the sole
discretion of each party) in any case within thirty (30) Days after the
initial request, then either party may require that the dispute be submitted
to resolution pursuant to Section 16.5.1. The findings of any such mutually
acceptable independent expert with respect to any technical issues so
presented to it for resolution hereunder shall be final and binding upon the
Parties.
16.5.3 PERFORMANCE DURING DISPUTE. During the pendency of a dispute,
neither party shall be entitled to terminate or suspend its performance under
this Contract as a result of any such dispute or dispute resolution
proceedings. The provisions of this Section 16.5 shall survive the
termination or expiration of this Contract.
PROPRIETARY INFORMATION 37 AES RED OAK LTP CONTRACT
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16.6 ASSIGNMENT AND DELEGATION. Except as is otherwise set forth in this
paragraph, this Contract will not be assigned by either party without the
prior written consent of the other party, which consent will not be
unreasonably withheld. Any purported assignment without such prior written
consent shall be null and void. Seller may assign this Contract without prior
written consent, in whole but not in part, to a Seller's Affiliate or a
wholly owned subsidiary or successors thereof, PROVIDED that such assignee's
financial and technical capabilities are either greater or substantially
similar to Seller's at such time or are otherwise such that the assignment
could not reasonably be expected to have a material adverse effect on Buyer's
rights and obligations hereunder. Buyer may assign this Contract without
prior written consent to (i) entities providing construction or term
financing for the Project as security for such entities' loans and (ii) any
transferee of the Project or a substantial portion thereof, PROVIDED that
such assignee has financial and operational capabilities that either are
substantially similar to Buyer at such time or otherwise are such that the
assignment could not reasonably be expected to have a material adverse effect
on Seller's rights and obligations hereunder.
16.7 SEVERABILITY. The invalidity of one or more phrases, sentences,
clauses, Sections or Articles contained in this Contract shall not affect the
validity of the remaining portions of this Contract so long as the material
purposes of this Contract can be determined and effectuated.
16.8 AMENDMENTS. No change, amendment or modification of this Contract
shall be valid or binding upon the parties hereto unless such change,
amendment or modification shall be in writing and duly executed by both
parties hereto.
16.9 JOINT EFFORT. Preparation of this Contract has been a joint effort of
the parties and the resulting document shall not be construed more severely
against one of the parties than against the other.
16.10 CAPTIONS. The captions contained in this Contract are for convenience
and reference only and in no way define, describe, extend or limit the scope
or intent of this Contract or the intent of any provision contained herein.
16.11 NON-WAIVER. Any failure of any party to enforce any of the provisions
of this Contract or to require compliance with any of its terms at any time
during the pendency of this Contract shall in no way affect the validity of
this Contract, or any part hereof, and shall not be deemed a waiver of the
right of such party thereafter to enforce any and each such provision.
16.12 APPLICABLE LAW. This Contract shall be, for all purposes, pursuant to
New York General Obligations Law Section 5-1401, governed by and construed in
accordance with
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MAINTENANCE PROGRAM PARTS, SHOP REPAIRS
AND SCHEDULED OUTAGE TFA SERVICES CONTRACT
the laws of the State of New York of the United States of America, exclusive of
the United Nations Convention on Contracts for the Sale of Goods.
16.13 SUCCESSORS AND ASSIGNS. This Contract shall be binding upon and inure
to the benefit of the parties hereto, their successors and permitted assigns.
16.14 COUNTERPARTS. This Contract may be signed in any number of counterparts
and each counterpart shall represent a fully executed original as if signed by
both parties.
16.15 NOTICES. Any written notice, direction, instruction, request, or
other communication required or permitted under this Contract, including
payment invoices from Seller to Buyer, shall be deemed to have been duly
given on the date of receipt, and shall be either served personally, or
mailed to the party to whom notice is to be given, by first class registered
or certified mail, return receipt requested, postage prepaid, and addressed
to the addressee at the address stated opposite its name below, or at the
most recent address specified by written notice given to the other party in
the manner provided in this Section l6.15.
BUYER: AES Red Oak, LLC
1001 North 19th Street
Arlington, Virginia 22209
Attention: Bart Rossi
Fax: (703) 528-4510
SELLER: Siemens Westinghouse Power Corporation
4400 North Alafaya Trail MC-560
Orlando, FL 32826-2399
Attention: Manager Longterm Programs
Telephone: (407) 281-2830
Fax: (407) 281-5645
16.16 COMPLETE CONTRACT. This Contract, including all Exhibits attached
hereto, constitutes the complete agreement between the parties as of the date
of this Contract, and supersedes any and all agreements made or dated prior
thereto.
16.17 SITE ACCESS. Seller's personnel performing Services at the Site shall
comply with Buyer's Site safety and security measures at the Site.
16.18 PERMITS AND LICENSES. Buyer shall be responsible for obtaining all
necessary approvals, permits and licenses for the Project from governmental
agencies having jurisdiction including any import and export licenses (except
as may be otherwise provided in the CTG Subcontract with respect to the
Program Parts supplied under the
PROPRIETARY INFORMATION 38 AES RED OAK LTP CONTRACT
<PAGE>
MAINTENANCE PROGRAM PARTS, SHOP REPAIRS
AND SCHEDULED OUTAGE TFA SERVICES CONTRACT
CTG Subcontract). [*] Seller shall be responsible for obtaining all necessary
approvals, permits and licenses for the provision of the Workscope
Obligations hereunder from government agencies having jurisdiction.
16.19 SPECIAL PACKING. Seller will pack for standard shipment via truck or
rail transportation. When this packing will not meet Buyer's requirements
covering preparation of Program Parts or Miscellaneous Hardware for special
shipments, Buyer shall notify Seller thereof. The charge made for such
special packing will be based on its cost to Seller and will be shown as a
separate item on the invoice.
16.20 RETURN OF PROGRAM PARTS OR MISCELLANEOUS HARDWARE. Program Parts or
Miscellaneous Hardware must be returned with complete identification in
accordance with instructions furnished by Seller. In no event will Seller be
responsible for Program Parts or Miscellaneous Hardware returned without
proper authorization and identification.
16.21 TRANSFER. Prior to the transfer to another party of any Program Parts
and Miscellaneous Hardware or of Buyer's power generation facility in which
said Program Parts and Miscellaneous Hardware are installed, Buyer shall
obtain for Seller from the transferee its acceptance of provisions of
limitation of and protection against liability following the proposed
transfer at least equivalent to that afforded Seller and its suppliers under
this Contract. Transfer contrary to the provisions of this Section 16.21
shall make Buyer the indemnitor of Seller and its suppliers against any
liabilities incurred by Seller and its suppliers in excess of those that
would have been incurred had such transfer taken place in accordance with the
first sentence hereof.
16.22 SURVIVAL. The provisions of Articles 9, 13, and 14, and Sections 3.4,
16.2, 16.5 and 16.21 of this Contract shall survive the expiration or other
termination of this Contract.
16.23 ENVIRONMENTAL COMPLIANCE. (a) Buyer recognizes that the performance
of Service at the Site may involve the generation of Hazardous Waste.
(b) Buyer shall at its expense furnish Seller with containers for Hazardous
Wastes and shall designate a waste storage facility at the Site where such
containers are to be placed by Seller. Seller shall, or shall cause its
contractors or subcontractors to, place any Hazardous Wastes that it, its
contractors or subcontractors generate, as a result of their work at the
Site, into such containers and shall place such containers in the waste
storage
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facility at the Site designated by Buyer. Buyer shall handle, store and
dispose of Hazardous Waste in accordance with all Laws.
(c) [*]
(d) Buyer shall indemnify Seller from any fines, penalties, expense, loss
or liability incurred by Seller as a result of Buyer's failure to meet its
obligations under the second paragraph of this Section 16.23. [*]
(e) [*]
PROPRIETARY INFORMATION 41 AES RED OAK LTP CONTRACT
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MAINTENANCE PROGRAM PARTS, SHOP REPAIRS
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16.24 LIQUIDATED DAMAGES NOT PENALTY. The parties acknowledge and agree
that it would be difficult or impossible to determine with absolute precision
the amount of damages that would or might be incurred by Buyer as a result of
Seller's failure to perform those matters hereunder for which liquidated
damages are provided. The parties agree that the amounts of liquidated
damages provided under this Contract are in lieu of actual damages and are
the parties' reasonable estimates of fair compensation for the losses that
may reasonably be anticipated from such failures in respect of such matters,
and do not constitute a penalty. Liquidated damages are limited to those
outlined in Section 8.4.
[*]
[*]
PROPRIETARY INFORMATION 42 AES RED OAK LTP CONTRACT
<PAGE>
MAINTENANCE PROGRAM PARTS, SHOP REPAIRS
AND SCHEDULED OUTAGE TFA SERVICES CONTRACT
NOW, THEREFORE, the parties hereto have entered into this Contract as of the
date first appearing above.
SELLER BUYER
SIEMENS WESTINGHOUSE POWER AES RED OAK, LLC
CORPORATION.
By: /s/ Randy H. Zwirn By: /s/ Bart R. Rossi
-------------------------------- -------------------------------
Name: Randy H. Zwirn Name: Bart R. Rossi
-------------------------- -------------------------
Title: President Title: Vice President
------------------------- ------------------------
PROPRIETARY INFORMATION 43 AES RED OAK LTP CONTRACT
<PAGE>
Exhibit 10.4
AMENDMENT NO. 1
TO
MAINTENANCE, PROGRAM PARTS, SHOP REPAIRS
AND SCHEDULED OUTAGE TFA SERVICES CONTRACT
AMENDMENT NO. 1 dated as of February 15, 2000 (this AMENDMENT
NO. 1), between AES Red Oak LLC (BUYER) and Siemens Westinghouse Power
Corporation (SELLER).
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, Buyer and Seller have entered into the Maintenance,
Program Parts, Shop Repairs and Scheduled Outage TFA Services Contract dated as
of December 8, 1999 (the MAINTENANCE AGREEMENT); and
WHEREAS, Buyer and Seller desire to amend the Maintenance
Agreement in accordance with Section 16.8 thereof in the manner set forth
herein;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. All capitalized terms used but not defined herein shall have the
meanings set forth therefor in the Maintenance Agreement.
2. From and after the effective date of this Amendment No. 1, the
Maintenance Agreement is hereby amended as follows:
(a) By deleting the words ", exclusive of the United Nations Convention
on Contracts for the Sale of Goods" from the third and fourth lines
of Section 16.12 thereof;
(b) By deleting the words "Combustion Turbine" in the tenth (10th) line
of Section 2.4 of Exhibit A to the Maintenance Agreement and
substituting therefor the word "combustor"; and
(c) By deleting the words "January 1, 1998" in the second (2nd) line of
the second (2nd) paragraph of Exhibit E to the Maintenance Agreement
and substituting therefor the words "January 1, 2000".
3. Except as expressly provided in this Amendment No. 1, the Maintenance
Agreement and all provisions thereof in effect as of the date hereof shall
continue in full force and effect without any modification or amendment.
<PAGE>
4. This Amendment No. 1 shall be, for all purposes, pursuant to New York
General Obligations Law Section 5-1401, governed by and construed in accordance
with the laws of the State of New York of the United States of America.
5. This Amendment No. 1 shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and permitted assigns.
6. This Amendment No. 1 may be executed in any number of counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute the same agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
2
<PAGE>
IN WITNESS WHEREOF, the parties hereto, intending to be
legally bound, have caused this Amendment No. 1 to be executed by their duly
authorized signatories and effective as of the date first above written.
AES RED OAK LLC
By: /s/ Bart R. Rossi
-----------------------------
Name: Bart R. Rossi
Title: Vice President
SIEMENS WESTINGHOUSE POWER CORPORATION
By: /s/ R. M. Morgan
-----------------------------
Name: R. M. Morgan
Title: Director, Contract Policy
