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AGREEMENT

By and Between

WESTDEUTSCHE LANDESBANK GIROZENTRALE,
NEW YORK BRANCH

Acting Through its Agent

ENRON NORTH AMERICA CORP.

AND

ABB POWER T & D COMPANY

For

ELEVEN [TEN]
POWER TRANSFORMER PACKAGES

TABLE OF CONTENTS

ARTICLE I.  DEFINITIONS	9
ARTICLE II.  RESPONSIBILITIES OF PURCHASER	14
2.1   Purchaser Responsibilities	14
ARTICLE III.  RESPONSIBILITIES OF SELLER	15
3.1   General Obligations	15
3.2   Delivery of Equipment and Documentation	15
3.2.1   Delivery to Delivery Point	15
3.2.2   Installation Services	15
3.2.3   Impact Recorders	15
3.2.4   Maximize Assembly	15
3.2.5   Documentation Delivery	15
3.3   Relevant Information	15
3.4   Hazardous Materials Notification	16
3.5   Employment of Licensed Personnel	16
3.6   Customs Clearance	16
3.6   Customs Clearance	16
3.7   Not Used	16
3.8   Compliance with Governmental Rules	16
3.9   Purchaser Review of Vendors	18
3.10  Packing and Insurance Surveyor	18
3.10.1   Packing Recommendation	18
3.10.2   Insurability Certificate	19
3.10.3   Notice of Shipment	19
3.10.4   Compliance with Recommendation	19
3.11  Financing Assistance	19
3.12  Purchaser Permit Support	20
3.13  Not Used	20
3.14  Spare Parts	20
3.14.1   Commissioning Spares	20
3.14.2   O & M Spare Parts	20
3.14.2.1   O & M Spare Parts	20
3.14.2.2   Purchase of O & M Spare Parts	20
3.14.2.3   Delivery of O & M Spare Parts	20
3.14.2.4   Use of O & M Spare Parts	21
3.15  Key Personnel	21
3.16  Project Planning and Control	21
ARTICLE IV.  REPRESENTATIONS AND WARRANTIES	22
4.1   Representations and Warranties of Purchaser	22
4.2   Purchaser Supplied Information	22
4.3   Representations and Warranties of Seller	22
ARTICLE V.  PURCHASE AMOUNT AND OTHER CHARGES	25
5.1   Purchase Amount	25
5.1.1   Purchase Amount	25
5.2   Taxes and Contributions	25
5.2.1   Seller Responsibility for Personnel Taxes	25
5.2.2   Seller’s Responsibility for Taxes	25
5.2.3   Not Used	25
5.2.4   Tax Penalties	25
5.3   Changes to the Purchase Amount	26
5.4   Cancellation	26
5.4.1   Cancellation by Purchaser	26
5.4.2   Marketing Agreement	27
5.5   Suspension of Work	27
ARTICLE VI.  PAYMENT TERMS	29
6.1   Payment of Purchase Amount	29
6.1.1   Payment Periods.	29
6.1.2   Payment Milestones	29
6.1.3   Retention	29
6.1.4   Not Used	30
6.2   Payment Disputes	30
6.3   Payments Withheld or Offset	30
6.3.1   Payments Withheld	30
6.3.2   Offset for Liquidated Damages	30
6.3.3   Payment of Subcontractors.	31
6.4   Payment of Liquidated Damages	31
6.4.1   Payment of Document Delivery Damages	31
6.4.2   Payment of Installation Liquidated Damages	31
6.4.3   Payment of Operable Delay Liquidated Damages	31
6.4.4   Payment of Electrical Losses Liquidated Damages	31
6.5   Notices of Nonpayment	31
6.6   Lien Release	32
6.7   Invoices	32
6.7.1   Contract Reference	32
6.7.2   Address for Invoices	32
6.7.3   Date of Receipt	32
6.8   Method of Payment	32
6.9   Payments Not Acceptance of Work	32
ARTICLE VII.  EFFECTIVE DATE, COMMENCEMENT OF THE WORK, TERMINATION	33
7.1   Effective Date	33
7.2   Commencement of Work	33
7.3   Termination......................................................................................................................34
ARTICLE VIII.  RELATIONSHIP OF PURCHASER AND SELLER	34
8.1   Status of Contractors	34
ARTICLE IX.  INSPECTION AND CORRECTION OF WORK	35
9.1   Inspections	35
9.2   Resident Facilities	35
9.3   Quality Plan	35
9.4   Notice	35
9.5   Correction of Equipment	35
9.6   Not Used	36
9.7   Release for Delivery	36
ARTICLE X.  DELIVERY AND PERFORMANCE	37
10.1   Delivery of Documentation	37
10.2   Delivery and Installation of Equipment	38
10.2.1   Guaranteed Installation Date	38
10.2.1.2   Delivery Restrictions	38
10.2.4   Not Used	38
10.2.5   Extensions of the Guaranteed Installation Date	38
10.2.6   Not Used	39
10.3   Delay Liquidated Damages	39
10.3.2   Not Used	39
10.4   Electrical Losses Guarantee	39
10.4.1   Electrical Losses Guarantee	39
10.4.2   Minimum Electrical Losses Guarantee	40
10.4.3   Loss Evaluation Guarantee	40
10.4.4   Guarantee Value Table	40
10.5   Most Recent Performance Test	40
10.5.1   Performance Test Required	40
10.5.2   Setting Out of Electrical Losses Performance Liquidated Damages	40
10.5.3   Remedy for Failures to Meet Minimum Electrical Losses Guarantee	40
10.6   Maximum Liabilities for Liquidated Damages	40
10.6.1   Maximum Document Liquidated Damages	40
10.6.3   Maximum Electrical Losses Liquidated Damages	41
10.6.4   Maximum Operable Delay Liquidated Damages	41
10.6.5   Maximum Aggregate Liquidated Damages	41
10.7   Liquidated Damages Not Penalty	41
10.8   Not Used	41
10.8.1   Seller Presence at Tests	41
10.8.2   Test Results	41
10.8.3   Consumable Spare Parts During Retests	41
10.9   Acceptance	42
10.10  Manufacturing Slots	42
ARTICLE XI.  CHANGE ORDER	43
11.1   Adjustment of Purchase Amount	43
11.2   Purchaser Requested Change Order	43
11.3   Seller Requested Change Order	43
11.4   Other Change Order	43
11.5   Disputes	43
11.6   Change Order Pricing	44
11.6.1   Method of Pricing	44
11.6.2   Cost Plus Basis	44
ARTICLE XII.  INTENTIONALLY OMITTED	46
ARTICLE XIII.  ORDER OF PRECEDENCE	46
13.1   Order of Precedence	46
ARTICLE XIV.  WARRANTY	47
14.1   Seller’s Warranty	47
14.1.1   Primary Warranty Period	47
14.1.2   Warranty Clarification	47
14.1.3   Warranty Breach Notice	48
14.2   Extended Warranty Period	48
14.2.1   Continued Warranty on Corrections or Repairs Performed During the Primary Warranty Period	48
14.2.2   Extension of Warranty Due to Unavailability	48
14.3   Remedy	48
14.3.1   Obligations, Responsibilities and Recourse	48
14.4   Vendor Warranty	48
14.5   Limited Warranty	49
14.6   Defective Equipment	49
14.7   Termination of Warranty	49
14.8   Damage to Other Facility Equipment	49
ARTICLE XV.  RISK OF LOSS AND TITLE	50
15.1   Risk of Loss	50
15.2   Title	50
15.2.1   Passage of Title	50
15.2.2   Infringement Cures and Defense	50
15.3   Seller’s Drawings, Etc. for Use by Purchaser	51
15.4   Licensing Procedure	51
ARTICLE XVI.  INTENTIONALLY OMITTED	53
ARTICLE XVII.  DEFAULT	53
17.1   Event of Default by Seller	53
17.2   Purchaser's Remedies Against Seller	53
17.3   General Obligations	53
17.4   Payment Obligations	54
17.4.1   Determination of Obligations	54
17.4.2   Damages and Expenses	54
17.4.3   Excess Amounts	54
17.4.4   Settlement	54
17.5   Events of Default by Purchaser	55
17.6   Seller Remedies	55
ARTICLE XVIII.  FORCE MAJEURE	56
18.1   Failure to Perform Due to an Event of Force Majeure	56
18.2   Events of Force Majeure	56
18.3   Notice of Force Majeure	56
18.4   Events of Force Majeure	57
18.5   Certain Events Not Excused	57
18.6   Continued Performance	57
18.7   Not Used	58
18.8   Force Majeure - Delays	58
18.9   Force Majeure - Cost	58
ARTICLE XIX.  INSURANCE	59
19.1   Insurance - General	59
19.1.1   All Risk	59
19.1.2   Workers Compensation and Employers Liability Insurance	59
19.1.3   Commercial General Liability Insurance	59
19.1.4   Hull and Protection and Indemnity Insurance	59
19.1.5   Business Automobile Liability Insurance	60
19.1.6   Aircraft Liability Insurance	60
19.1.7   Excess Umbrella Lability Coverage	60
19.1.8   Vendors	60
19.1.9   Certificate of Insurance	60
19.1.10  Other Requirements	60
19.1.11  Vendor Waiver of Subrogation	61
19.1.12  Compliance with Insurance	61
19.1.13 Limitation	61
19.2   Purchaser Provided Insurance	62
19.2.1   Builder's All Risk	62
19.2.2   Marine Cargo Insurance	62
19.2.3   Comprehensive General Liability	62
19.3   Purchaser Policies	62
19.3.1   Purchaser's Policies	62
19.3.2   Not Used	63
19.3.3   Primary Insurance	63
ARTICLE XX.  INDEMNIFICATION	64
20.1   Third Party	64
20.2   Notice	64
20.3   Employees	65
20.4   Survival of Obligation	65
ARTICLE XXI.  NON-DISCLOSURE OF INFORMATION	66
21.1   Proprietary Information	66
21.2   Press Releases	66
21.3   Confidentiality	66
ARTICLE XXII.  ASSIGNMENT	68
22.1   Assignment by Seller	68
22.2   Assignment by Purchaser	68
22.3   Agreement with Lender	69
ARTICLE XXIII.  RELATIONSHIP OF THE PARTIES	70
23.1   Independent Contractor	70
23.2   Responsibilities of Seller as Principal for its Employees	70
23.4	Purchaser as Agent	70
ARTICLE XXIV.  LIENS AND CLAIMS	71
ARTICLE XXV.  NOTICES AND COMMUNICATIONS	72
25.1   Notices	72
25.2   Effectiveness of Notices	72
25.3   Technical Communications	72
ARTICLE XXVI.  ARBITRATION	74
26.1   Negotiation of Disputes and Disagreements	74
26.2   Arbitration Resolution	74
26.3   Continuation of Work	75
ARTICLE XXVII.  LIMITATION OF LIABILITY	76
27.1   Maximum Liability	76
27.2   Consequential Damages	76
27.3   Releases Valid in All Events	76
ARTICLE XXVIII.  DRUG AND ALCOHOL-FREE WORKPLACE	77
ARTICLE XIX.  MISCELLANEOUS	78
29.1   Validity and Enforceability	78
29.2   Governing Law	78
29.3   Entire Agreement	78
29.4   Agreement Modification	78
29.5   Waiver	78
29.6   Headings	78
29.7   Third-Party Beneficiaries	78
29.8   Counterparts	78
29.9   Equal Employment Opportunity	78
29.10  Cooperation on Site	79
EXHIBIT A  NOT USED	80
EXHIBIT B  SCOPE OF SUPPLY	81
EXHIBIT B-1  SPECIFICATION	82
EXHIBIT B-2  DRAWING LIST	83
EXHIBIT B-2  DRAWING LIST	83
EXHIBIT B-3  DOCUMENT REVIEW STATUS	84
EXHIBIT B-4  APPROVED VENDORS	85
EXHIBIT C  NOT USED	87
EXHIBIT D  SAMPLE SURETY BOND	88
EXHIBIT E  PERFORMANCE TESTS	89
EXHIBIT F  NOT USED	90
EXHIBIT G-1  PERFORMANCE TEST CERTIFICATE	91
EXHIBIT G-2  PERFORMANCE TEST CERTIFICATE	92
EXHIBIT H  NOT USED	93
EXHIBIT I  CANCELLATION CHARGE	94
EXHIBIT J  QUALITY	95
EXHIBIT K  PROJECT PLANNING	99
EXHIBIT L  NOT USED	100
EXHIBIT M  NOT USED	101
Exhibit M - 1  SPARE PARTS	102
EXHIBIT N – PURCHASE AMOUNT RECONCILIATION	103
EXHIBIT N-2  NOT USED	104
EXHIBIT N-3 ASSEMBLY OF GENERATOR STEP-UP TRANSFORMERS	105
EXHIBIT O  HAZARDOUS MATERIAL NOTIFICATION	107
EXHIBIT P  NOT USED	108
EXHIBIT Q  NOT USED	109
EXHIBIT R  WITNESS - HOLD POINTS	110
EXHIBIT S  WAIVER LIENS	111
EXHIBIT S-1  SELLER’S CONDITIONAL WAIVER	113

AGREEMENT

This Agreement is made and entered into on the [   ]  day of June, 2000 and effective as of the 7th day of March 2000 (the “Effective Date”) by and between WESTDEUTSCHE LANDESBANK GIROZENTRALE, NEW YORK BRANCH, a duly licensed branch of Westdeutsche Landesbank Girozentrale, a public law banking institution organized under the laws of North Rhine-Westphalia, Germany (“WestLB”), acting through its agent, ENRON NORTH AMERICA CORP., a corporation organized under the laws of the State of Delaware (“Agent”), and ABB Power T  & D Company, a corporation organized under the laws of Connecticut (“Seller”).

	RECITALS
    
WHEREAS, Purchaser has the need to acquire generator step-up transformer packages of various ratings (the “Units”) and associated equipment and services for installation in multiple electricity generation plants (herein referred to singularly and in the plural as the “Facility”); and

WHEREAS, Seller is in the business of designing, engineering, manufacturing, and supplying such Units and auxiliary services in connection therewith;

WHEREAS, Purchaser, acting through its Agent, desires to contract with Seller for the design, engineering, manufacture, supply of eleven (11) [ten (10)] Units and auxiliary services for the Facility; 

WHEREAS, the parties desire to set forth the terms and conditions under which Seller will provide and Purchaser will pay for such Units and related services;

WHEREAS, Purchaser has assigned and delegated certain of its rights, responsibilities and obligations under this Agreement to Agent and Agent has accepted same assignments and delegations as set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants herein contained, and intending to be legally bound, the parties hereto agree as follows:

ARTICLE I.  DEFINITIONS

Terms used in this Agreement without other definition shall have the meanings specified in this Article I, unless the context requires otherwise.

As used in this Agreement, the terms "herein", "herewith" and "hereof" are references to this Agreement, taken as a whole, the term "includes" or "including" shall mean "including, without limitation," and references to a "Section", "subsection", "clause", "Article", "Exhibit", "Appendix" or "Schedule" shall mean a Section, subsection, clause, Article, Exhibit, Appendix or Schedule of this Agreement, as the case may be, unless in any such case the context requires otherwise.  All references to a given agreement, instrument or other document shall be a reference to that agreement, instrument or other document as modified, amended, supplemented and restated through the date as of which such reference is made, and reference to a law, regulation or ordinance includes any amendment or modification thereof.  A reference to a person includes its successors and permitted assigns.  The singular shall include the plural and the masculine shall include the feminine, and vice versa.  

The terms and the definitions set forth herein apply when capitalized.

1.1	Acceptance.  Shall have the meaning as set forth in Section 10.9.

1.2	Affiliate.  Shall mean a person or entity who, with respect to a specified person or entity, directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, the person or entity specified.

1.3	Agent.  Shall have the meaning as set forth in the preliminary statements.

1.4	Agreement.  Shall mean this Agreement for the purchase of the Equipment, including all Exhibits attached hereto, as amended from time to time as provided herein.

1.5	Applicable Laws.  Shall mean any applicable federal, state, municipal or local statute, ordinance or other U.S. or Canadian law, regulation or by-law or any rule, code or direction or any license, consent, permit, authorization or other approval including any conditions attached thereto (whether relating to the environment or otherwise) which has appropriate jurisdiction pertaining to a particular Unit. 

1.6	[Business Day.  Shall mean any calendar day on which commercial banks are not authorized or required to close in the State of Texas.

1.7]	Buy Back Amount.  Shall have the meaning set forth in Section 5.4.3.

1.7 [1.8]	Buy Back Option.  Shall have the meaning set forth in Section 5.4.3.

1.8 [1.9]	Cancellation Charge.  Shall have the meaning as set forth in Section 5.4.1(c).

1.9 [1.10]	Change in Law.  Shall mean any change in, or binding change in the judicial or administrative interpretation of, or adoption of, any Applicable Law, which is implemented after the Effective Date, and which has an adverse affect on Seller’s performance under this Agreement; provided, however, that a change in any federal, commonwealth, state or local income or franchise tax law, workers' compensation, or payroll or withholding tax law shall not constitute a change in law hereunder.

1.10 [1.11]	Change Order.  Shall have the meaning as set forth in Section 11.2. 

1.11 [1.12]	Commercial Operation.  Shall mean the reliable operation of the Unit by Purchaser in accordance with industry standards while the associated turbine is connection to the utility grid and producing electrical energy for sale.

1.12 [1.13]	Day.  Shall mean a calendar day, including weekdays, weekends, and holidays[, except that, if an obligation to be performed under this Agreement falls due on a Saturday, Sunday or day which is not a Business Day, the obligation shall be due on the next Business Day thereafter.].

1.13 [1.14]	Delay Event.  Shall have the meaning set forth in Section 10.3.1.

1.14 [1.15]	Delay Liquidated Damages.  Shall have the meaning set forth in Section 10.3.

1.15 [1.16]	Delivery Point.  For all Equipment, delivery shall mean Purchaser’s designated location. 

1.16 [1.17]	Delivery Liquidated Damages.  Shall have the meaning set forth in Section 10.3.2.

1.17 [1.18]	Document Delivery Date.  Shall have the meaning as set forth in Section 10.1.

1.18 [1.19]	Document Liquidated Damages.  Shall have the meaning as set forth in Section 10.1.

1.19 [1.20]	Due Date.  Shall have the meaning set forth in Section 10.1.

1.20 [1.21]	Effective Date.  Shall have the meaning as set forth in Section 7.1.

1.21 [1.22]	Electrical Losses.  Shall mean the total losses of a Unit as defined in ANSI/IEEE, 1978, C57.12.80, Paragraph 3.7.2.

1.22 [1.23]	Electrical Losses Guarantee.  Shall have the meaning set forth in Section 10.4.1.

1.23 [1.24]	Electrical Losses Liquidated Damages.  Shall have the meaning set forth in Sections 10.4.3.

1.24 [1.25]	Equipment.  Shall mean the Units, equipment and materials required to manufacture, supply, and install the Units pursuant to this Agreement.

1.25 [1.26]	Event of Force Majeure.  Shall have the meaning as defined in Section 18.4.

1.26 [1.27]	Event of Purchaser Default.  Shall have the meaning as defined in Section 17.5.

1.27 [1.28]	Event of Seller Default.  Shall have the meaning as defined in Section 17.1.

1.28 [1.29]	Excess Termination Costs.  Shall have the meaning set forth in Section 17.4.3.

1.29 [1.30]	Extended Warranty Period.  Shall have the meaning as set forth in Section 14.2.1. 

1.30 [1.31]	Facility.  Shall have the meaning set forth in the Recitals. 

1.31 [1.32]	Facility Agreement.  Shall have the meaning set forth in Section 22.2.

1.32 [1.33]	Guaranteed Installation Date.  Shall have the meaning as set forth in Section 10.2.1. 

1.33 [1.34]	Guaranteed Unit Delivery Date.  Shall have the meaning as set forth in Section 10.3.2.

1.34 [1.35]	Hazardous Materials.  Shall mean any hazardous substance or hazardous waste as defined in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, the Resource Conservation and Recovery Act, as amended, the Hazardous Waste Transportation Act, as amended, and regulations promulgated pursuant to these Acts and any similar law or regulation in the United States defining hazardous substances or hazardous waste, and any equipment containing polychlorinated biphenyls or asbestos that may become friable. 

1.35 [1.36]	Installation Completion.   Shall have the meaning set forth in Section 10.2.1. 

[1.37	Installation Option.   Shall mean Purchaser’s option to have Seller install the Units at the Site in accordance with Section 3.2.2.

1.38] 1.36	Insurability Certificate.  Shall have the meaning as set forth in Section 3.10.2.

1.37 [1.39]	Indemnified Party.  Shall have the meaning as set forth in Section 20.2.

1.38 [1.40]	Insurance Representative.  Shall have the meaning as set forth in Section 3.10.1.

1.39 [1.41]	Interest Rate.  Shall mean the prime rate as published by Citibank at its New York office plus two percent (2%) per annum, provided however, that the Interest Rate shall never exceed the highest applicable lawful rate.

1.40 [1.42]	kW.  Shall mean kilowatt.

1.41 [1.43]	kWh or kwh.  Shall mean kilowatt hour.

1.42 [1.44]	Lender.  Shall mean any financial institution from which Purchaser or Agent is obtaining (or has obtained) financing in connection with the Facility and associated facilities and services.

1.43 [1.45]	Liquidated Damages.  Shall mean any or all Document Liquidated Damages, Delivery Liquidated Damages, Installation Liquidated Damages, Operable Delay Liquidated Damages and/or Electrical Losses Liquidated Damages. 

1.44 [1.46]	Liquidated Damages Event.  Shall have the meaning set forth in Section 10.7.

1.45 [1.47]	Marketing Agreement.  Shall have the meaning as set forth in Section 5.4.2.

1.46 [1.48]	Milestone.  Shall mean an event that triggers a responsibility of Purchaser to pay a Milestone Payment Amount as set forth and listed in Section 6.1.2.

1.47 [1.49]	Milestone Payment Amount.  Shall mean the percentage of the Purchase Amount due to Seller from Purchaser as set forth in Section 6.1.2.

1.48 [1.50]	Minimum Electrical Losses Guarantee.  Shall have the meaning as set forth in Section 10.4.2.

1.49 [1.51]	Net Cancellation Charge.  Shall have the meaning as set forth in Section 5.4.1(b).

1.50 [1.52]	Notice.  Shall mean any notification of one party hereto by the other party hereto with respect to any matter arising under or in connection with this Agreement, to be given as provided in Section 25.1 hereof.

1.51 [1.53]	O & M Spare Parts.  Shall have the meaning set forth in Section 3.14.2 and as set forth in Exhibit M-1.

1.52 [1.54]	O & M Spare Parts Amount.  Shall have the meaning as set forth in Section 3.14.2.

1.53 [1.55]	Operable Delay Liquidated Damages.  Shall have the meaning as set forth in Section 10.3.1.

1.54 [1.56]	Patent Indemnities.  Shall have the meaning as set forth in Section 15.2.2.

1.55 [1.57]	Performance Test.  Shall mean the factory and field test reports prepared by Seller and provided to Purchaser, certifying the results of the tests [tests as] listed in Exhibit E have been successfully completed. Such test reports shall also document the results of any other tests performed [and conducted on the Units] in accordance with this Specification.

1.56 [1.58]	Performance Test Certificate.  Shall mean the certificate(s) prepared by Seller in the format attached hereto as Exhibit G-1 or G-2 and provided to Purchaser, certifying that Performance Tests have been completed and set forth the results thereof in such detail to reflect the performance of the Units.  Such certificate(s) shall also document the results of any other tests performed in accordance with the Specification.  Purchaser shall co-sign such certificate and quantify Electrical Losses Liquidated Damages, if any.

1.57 [1.59]	Primary Warranty Period.  Shall have the meaning as set forth in Section 14.1.1.

1.58 [1.60]	Project Manager.  Shall mean the project manager designated by Seller pursuant to Section 3.3(a) hereof.

1.59 [1.61]	Proper Scope Value.  Shall have the meaning as set forth in Section 17.4.1.

1.60 [1.62]	Purchase Amount.  Shall have the meaning set forth in Section 5.1.1, as such amount may be adjusted from time to time.

1.61 [1.63]	Purchaser.  Shall have the meaning set forth in the preliminary statements.

1.62 [1.64]	Purchaser's Representative.  Shall mean the individual designated by Purchaser pursuant to Section 2.1(a) hereof, who shall have the responsibility and authority specifically delegated to such individual by Purchaser and made known in writing to Seller.

1.63 [1.65]	Related Dispute.  Shall have the meaning set forth in Section 26.2.

1.64 [1.66]	Refund Amount.  Shall have the meaning as set forth in Section 17.4.1.

1.65 [1.67]	Retention Amount.  Shall have the meaning as set forth in Section 6.1.3.

1.66 [1.68]	Retention Surety Bond.  Shall have the meaning as set forth in Section 6.1.3.

1.67 [1.69]	Scope of Supply.  Shall have the meaning as set forth in Exhibit B.

1.68 [1.70]	Scope of Work.  Shall mean the Equipment and all other design, engineering, manufacture, delivery, transportation, services, equipment, drawings, documentation, supplies and materials to be performed and/or furnished by Seller pursuant to this Agreement including the Scope of Supply.

1.69 [1.71]	Scope Value Due.  Shall have the meaning as set forth in Section 17.4.1.

1.70 [1.72]	Seller.  Shall have the meaning set forth in the preliminary statements.

1.71 [1.73]	Site.  Shall mean any part of the land where the referenced Facility is located.

1.72 [1.74]	Specification.  Shall mean the specifications issued by Purchaser for the design, manufacture, assembly, and supply of the Units as set forth in Exhibit B-1.

1.73 [1.75]	Termination Costs.  Shall have the meaning as set forth in Section 17.4.2.

1.74 [1.76]	Termination Settlement.  Shall have the meaning as set forth in Section 17.4.4.

1.75 [1.77]	Test Procedures.  Shall have the meaning as set forth in Exhibit B-1.

1.76 [1.78]	Unit.  Singularly, any of the eleven (11) [ten (10)] transformers and associated equipment that will be incorporated into the eleven (11) [ten (10)] generator step-up transformer packages that Seller is furnishing to Purchaser under this Agreement and equipment associated with said transformers.

1.77 [1.79]	Vendor.  Shall mean any vendor, supplier or subcontractor utilized by Seller in the performance of the Scope of Work hereunder.

1.78 [1.80]	WestLB.  Shall have the meaning as set forth in the preliminary statements.

ARTICLE II.  RESPONSIBILITIES OF PURCHASER AND AGENT

2.1	Purchaser and Agent Responsibilities.  Purchaser recognizes and acknowledges the duty to reasonably cooperate with Seller, and agrees not to wrongfully interfere with Seller’s agents, employees or Vendors during the performance of this Agreement.  Without limiting the generality of the foregoing, Purchaser or Agent shall be responsible for the following matters and actions to be performed on a timely basis:

      (a)		Agent shall designate a Purchaser's Representative and deliver a Notice to Seller identifying Purchaser's Representative, within thirty (30) Days of the Effective Date, who shall act as the primary point of contact for Seller with respect to the prosecution of the Scope of Work;

      (b)		Agent shall deliver a Notice within thirty (30) Days of the Effective Date to Seller identifying such persons within Purchaser's organization that have authority to approve Change Orders; 

(c)	Purchaser shall pay to Seller the sums required to be paid by Purchaser pursuant to the terms of this Agreement; 

(d)	provide adequate road access to the Facility from the nearest major highway;

(e)	the Units shall be installed, operated and maintained by either Purchaser or Agent (as the case may be) as identified in Exhibit B-1 and as otherwise stated in this Agreement.

2.2	Role of Agent.  Seller acknowledges and agrees that, subject to Section 22.2 hereof, it shall deal only with Agent with respect to this Agreement and the subject matter of this Agreement (including, without limitation, delivering Equipment or entering into any amendments, modifications or supplements of or to this Agreement) and in no event, without the prior written consent of Agent, shall Seller deliver any Equipment to WestLB, or enter into any contract, undertaking or other agreement with WestLB (other than this Agreement), amend, modify or supplement this Agreement or take directions from, give instructions to or otherwise communicate with WestLB.

ARTICLE III.  RESPONSIBILITIES OF SELLER

3.1   General Obligations.  Except as expressly set forth in this Agreement, Seller shall provide the materials and supplies, technical and professional personnel and supervision at Seller’s facilities and as required for Seller to fulfill its transportation responsibilities, tools and equipment, and the services required for performance and timely completion of the Scope of Work, and shall be responsible for timely completing the Scope of Work in accordance with the terms of this Agreement, including all Exhibits.  In furtherance of the foregoing, Seller shall ensure that all equipment and all material and articles incorporated into the Equipment shall be new and of suitable grade for the purpose intended, unless otherwise specifically provided in this Agreement.

References in the Specification to equipment, material, articles or patented processes by trade name, make, or catalog number, shall be regarded as the standard of quality to be met by Seller.  Seller may, with the written consent of Purchaser, use any equipment, material, article, or process that is operationally, technically and functionally equivalent (as judged by Purchaser in its sole discretion) to that named in the Specification.

3.2   Delivery of Equipment and Documentation.  

3.2.1   Delivery to Delivery Point. Seller shall deliver the Equipment to the Delivery Point.

3.2.2   Installation  Services .  If Purchaser elects the installation option, Seller shall offload and assemble the Units at the Site in accordance with Exhibit N-3.  Purchaser shall have the right to approve any subcontractor that Seller desires to employ in carrying out the transportation of the Units and the installation services.

3.2.3   Impact Recorders. If the Units are shipped by rail, the Seller shall furnish a two-way (horizontal and vertical) impact recorder for each Unit shipped.  Recorder shall be attached to the carrier on which Unit is shipped.  Upon arrival, and before unloading a Unit, the impact recorder tape will be removed and inspected by the Purchaser and the Insurance Representative.  If in the opinion of the Purchaser and the Insurance Representative or both that the impact recorder tape indicates rough handling during shipment, the Seller will be notified immediately. The recorder tape will be retained by the Purchaser for study and shall be returned to the Seller when studies are completed.  Seller shall furnish with the shipping instructions, the manufacturer, tape and model number of the impact recorder he proposes to use.  Seller shall also state the maximum limit the recorder can register both vertical and horizontal before the Seller considers the Unit may have been damaged during shipment.  The Seller shall furnish the necessary information for releasing and returning the impact recorder.  If Seller provides truck shipment as means of carrier, use of impact recorder is not required.

3.2.4   Maximize Assembly. Shipment of each item of Equipment shall be made so that it is complete with all accessories and will arrive at its destination simultaneously.

3.2.5   Documentation Delivery.  Seller shall deliver documentation as set forth in Section 10.1 by the dates set forth therein.

3.3   Relevant Information.  Seller shall provide on a timely basis to Purchaser information reasonably necessary to fulfill Seller’s obligation pursuant to this Agreement, including, without limitation:

(a)	within fifteen (15) Days of the Effective Date of this Agreement, the identity of a project manager (the "Project Manager") who shall have full supervision over the completion of  the Scope of Work and who shall act as the primary point of contact with Purchaser regarding all matters relating to the Scope of Work; 

(b)	such information as is requested by Purchaser in dealing with its customer and/or any governmental authority in matters relating to the Scope of Work; and 

(c)	the project management plan proposed for this Agreement to include, but  not limited to staffing, milestones, scheduling, quality control, transportation, technical interface, and other matters required to successfully manage the project to conclusion.

3.4   Hazardous Materials Notification.  

(a)	Seller warrants to Purchaser that in relation to the Scope of Work, it will use reasonable skill and care to ensure that there will not be Hazardous Material specified or incorporated into the Scope of Work; provided that where in the opinion of Seller this results in any conflict with any relevant statutory requirements or where the Scope of Work would be prejudiced through lack of suitable alternatives, then Seller shall immediately notify Purchaser in writing specifying the conflict or prejudice which has arisen and the substance which Seller wishes to stipulate or use and Seller shall not stipulate or use the same without, in each case, the prior written consent of Purchaser.

(b)	Seller shall immediately upon the request of Purchaser certify in writing that to the best of its knowledge that no Hazardous Materials have been specified or incorporated in the Scope of Work. In the event Seller, with Purchaser's approval, incorporates any Hazardous Materials into the Equipment, Seller shall provide Purchaser with notification as set forth in Exhibit O.

3.5   Employment of Licensed Personnel.  Whenever required by Applicable Law, rule or regulation (applicable under the terms of this Agreement) or prudent engineering and construction practices, Seller agrees to employ licensed personnel to perform engineering, and design, during fulfillment of its obligations under this Agreement or other professional services in the performance of the Scope of Work.  Seller shall be responsible for employing and utilizing personnel and for ensuring that its Vendors employ and utilize personnel who possess the proper training and experience and are capable of performing the tasks for which they are employed or utilized.  Seller shall not employ or permit any Vendor to employ in connection with its performance under this Agreement any unfit person or anyone not skilled in the work assigned to such person.
  
3.6   Customs Clearance.  Seller shall perform customs clearance for the Equipment through U.S. Customs. 

3.7   Not Used. 

3.8   Compliance with Governmental Rules.  Seller shall comply with government rules in the categories enumerated below.

(a)	Seller Conduct.  Seller shall comply with applicable regulatory requirements including, without limitation, all Applicable Laws issued or promulgated by units of government and regulatory bodies with jurisdiction over any aspect of the performance of this Agreement by Seller. Seller shall not act in violation of the U.S. Foreign Corrupt Practices Act, and in connection therewith shall not make any payments, loans, or gifts directly or indirectly, to or for the use or benefit of any official employee, agency or instrumentality of any government, political party or candidate thereof, or any other person or entity, the payment of which would violate the laws or policies of the United States, or the country or countries in which the Scope of Work is performed, in whole or in part.  Seller shall possess or procure all permits, certificates, and licenses necessary to allow Seller to perform this Agreement at all locations of performance and shall ensure that Vendors have all permits, certificates, and licenses necessary for such Vendors to perform under this Agreement. Seller shall answer promptly and in reasonable detail any questionnaire or other written or oral communications, to the extent the same pertain to compliance with this Section 3.8 (a) or (b) whether such questionnaires or communications are from Purchaser, their outside auditors, or other representatives.  Seller further agrees to pay any government assessed penalties, fines, and charges, and associated damages, costs, losses, and expenses (including, without limitation, court costs and attorneys' fees) of whatever kind which Purchaser may incur, be required to pay or be liable for as a result of, in connection with, arising out of or related to any noncompliance of Seller’s performance of this Agreement or any portion thereof with any or all of the above laws, regulations, rules, orders, codes, criteria, standards, ordinances or resolutions.  

(b)	Employment Practices.

(1) 	Seller agrees that it shall be at all times during the term of this Agreement in full compliance with all Applicable Laws relative to Seller’s employment of employees and agents of Seller.

(2)	Seller agrees to pay any government assessed penalties, fines, and charges, and associated damages, costs, losses, expenses (including, without limitation, court costs and attorneys' fees) of whatever kind which Purchaser may incur, be required to pay or be liable for as a result of, based on, in connection with, related to or arising from Seller or any of their Vendors' noncompliance with this Section 3.8(b).

(c)	Scope of Work to Comply with Applicable Laws.  Subject to the provisions of Section 3.8 (c) (4);

(1)	Seller shall cause the Scope of Work to comply with the Specification and Applicable Laws that were:

(i)	in effect on the date this Agreement was signed; or 

(ii)	were not yet in effect on the date this Agreement was signed, but at such time a change to such valid Applicable Laws, issued or promulgated by units of government and regulatory bodies had passed but was not yet effective.

In the event Seller fail to cause the Scope of Work to so comply with the Specification and Applicable Laws, Seller shall correct such noncomplying Scope of Work or portion thereof as necessary to comply with the above.  Seller shall bear the costs of correction of such noncomplying Scope of Work. In the event that Purchaser reasonably determines that Seller is either not capable of performing the corrections or not capable of performing such corrections in time to meet Purchaser's requirements, Purchaser may, at Seller’s expense, have the corrections made by a third party or make them itself; provided, however prior to Purchaser having the corrections performed by a third party or itself Purchaser shall have provided Seller Notice of its determination that it believes Seller is not capable of such performance of work or performing such corrections in a timely manner. 

(2)	In the event that Seller does not comply with the Specification and Applicable Law, and Purchaser at its sole determination agrees Seller cannot reasonably incorporate the changes necessary for Seller to comply, Purchaser, in its sole discretion, may either terminate the Agreement in accordance with Article XVII, or direct Seller to complete the Equipment without such changes, in which case Purchaser shall assume full responsibility for obtaining any necessary waivers from the appropriate federal, state or local authorities.

(3)	Seller shall, on a reasonable efforts basis, advise Purchaser of pending Applicable Laws so that Purchaser may make an informed decision as to whether to have the Equipment designed in anticipation of such pending change as it affects the Scope of Work.

(4)	In the event a Change in Law occurs subsequent to the times set forth in Section 3.8(c)(1), Seller shall prepare a request for a Change Order to Purchaser identifying the nature of the change, including any extensions of time to the performance of the Scope of Work and the Purchase Amount.  In the event that Purchaser elects to not have Seller comply with such change, Purchaser shall indemnify Seller for such failure to the Scope of Work to comply with such new law requirement.

3.9   Purchaser Review of Vendors.  Seller will notify Purchaser as to the Vendors to be used in performance of the Scope of Work for an item of Equipment or performance of a particular portion of the Work.  Purchaser shall have the right to disapprove any Vendor proposed by Seller for an item of Equipment, other than those listed in Exhibit B-4 for such particular item of Equipment.

3.10  Packing and Insurance Surveyor.

3.10.1   Packing Recommendation.  Seller shall perform all packaging of the Equipment to the highest commercial standard practices of the industry to prevent damage during handling and transportation to the Delivery Point. Seller shall respond to Purchaser's insurance representative's (Salvage Association or similar insurance surveyor as appointed by Purchaser) (the "Insurance Representative") reasonable recommendations concerning:
 
(i)	packaging of the Equipment; 
(ii)	Seller’s execution of the load plan on vehicle or vessel to preclude damage during transit;
(iii)	offloading at the Delivery Point; and
	(iv)	delivery to the Site, including dock and route.

In the absence of such recommendations, Seller shall employ the method of packing which shall be suitable to protect the tank, radiators, core and coils, bushings and another auxiliary devices or accessories against corrosion, dampness, breakage or vibration injury that might reasonably be encountered in transportation and handling.  
All auxiliary equipment shall be shipped in weatherproof packages.  Packing material shall be such that it will provide weatherproof protection for the period of one year in outdoor storage areas.

The Units may be shipped filled with oil.  All valves, shipping covers, etc., shall be sealed and effectively crated to prevent tampering or removal while in transit.  If the Unit is shipped without oil it shall be pressurized with nitrogen and the oil will be shipped to the Site separately.

Each item, crate or package shall be clearly marked or tagged showing Contract number, item number, equipment description and Seller identification number.

3.10.2   Insurability Certificate.  Seller expressly acknowledges and agrees that it will not commence transport of the items of Equipment unless;

(i)	the Insurance Representative conducts a load and stowage survey and issues an insurance certificate, (the "Insurability Certificate") attesting that its reasonable recommendations were carried out for such shipment; or
(ii)	Purchaser's Representative expressly waives such requirement for that shipment.

3.10.3   Notice of Shipment.  Seller recognizes that failing to comply with this Section 3.10 may jeopardize Purchaser's insurance program.  Seller shall provide Purchaser with an initial fourteen (14) Day advance Notice of the expected packing date and the expected loading date of any such shipment, and shall provide two business days [Business Days] advance Notice of the actual packing date and the actual loading date of such shipment.  Purchaser may designate its Insurance Representatives as recipient of such Notice.  Seller shall provide the Insurance Representative with a stowage and packing plan forty-five (45) Days prior to loading. Seller acknowledges that all efforts and delays (other than as set forth in this Section 3.10) associated with receiving the Insurability Certificate shall not be grounds for extension to the Guaranteed Installation Date. 

3.10.4   Compliance with Recommendation.  Seller’s compliance with the Insurance Representative's recommendations shall not relieve Seller of its responsibility for risk of loss and damage of the Equipment in accordance with this Agreement through delivery to the Delivery Point.

3.11  Financing Assistance.  Seller shall provide such information as Purchaser may reasonably request in connection with obtaining financing for the Facility including without limitation providing information related to design, engineering and status of the completion of the Scope of Work and Seller’s credentials and experience, and as required perform reasonable travel.  Purchaser shall reimburse Seller at commercially reasonable rates for its time in providing information not related to the Scope of Work.  Lender and the Lender's engineers and consultants shall have the right to participate in all inspections conducted by Purchaser under this Agreement and to attend all tests of the Equipment.  At Purchaser's request, Seller shall furnish to Purchaser and/or Lender copies of Notices given to Purchaser hereunder. 

3.12  Purchaser Permit Support.  Seller shall provide all information, data and documents in a timely fashion that Purchaser may reasonably require for Purchaser to obtain applicable permits.

3.13  Not Used.  

3.14  Spare Parts.

3.14.1   Commissioning Spares.  Seller’s representative price list of start-up and commissioning spares and a representative list of special tools needed during start-up and commissioning are set forth in Exhibit M.  Seller shall within the Purchase Amount provide (i) all spare parts necessary to achieve installation, start up, commissioning, Performance Testing, and (ii) all installation and maintenance tools that are not normally found available in the market place and therefore the attached lists may not be all inclusive.

3.14.2   O & M Spare Parts.

3.14.2.1   O & M Spare Parts.   Exhibit M-1, sets forth the description, estimated quantity, and price of Seller’s best estimate of the O & M Spare Parts required to support operations and maintenance program for a period of two (2) years (“O & M Spare Parts”).  The prices set forth in Exhibit M-1, shall remain fixed for a period of six months from the date of the Notice to Proceed. The prices of the O & M Spare Parts set forth in Exhibit M-1 are not included in the Purchase Amount. 

3.14.2.2   Purchase of O & M Spare Parts. Purchaser may purchase O & M Spare Parts at the prices set forth in Exhibit M-1, if purchased within the price validity period set forth in Section 3.14.2.1.  In the event Purchaser purchases such O & M Spare Parts hereunder, the transaction shall be accomplished by a Change Order pursuant to the provisions of this Agreement or by separate agreement issued by Purchaser.  The value of such Spare Parts purchase shall be known as the “Spare Parts Amount”.

	3.14.2.3   Delivery of O & M Spare Parts.  In the event Purchaser acquires O & M Spare Parts during the price validity period, Seller shall deliver such O & M Spare Parts in accordance with the provisions of this Agreement.  Seller shall ensure that all such spare parts are delivered to Purchaser, at the Delivery Point, before energization, but in any case prior to Acceptance. Title to O & M Spare Parts procured by Purchaser hereunder shall pass to Purchaser upon the earlier to occur of (a) arrival at the Delivery Point or (b) payment by Purchaser in accordance with Section 3.14.2.2 above.

3.14.2.4   Use of O & M Spare Parts. Should any component fail during energization, commissioning, or testing, spare parts may be withdrawn from the operations and maintenance stores, and the failed component shall be returned to operating condition.  Seller shall be responsible, at its cost, for replacing any such withdrawn spare parts prior to Acceptance; provided that any long-lead item which cannot be replaced by Seller within such period (the use of which has been approved in advance by Purchaser, such approval not to be unreasonably withheld or delayed), Seller shall be entitled to deliver such item to Purchaser following Acceptance if Seller demonstrates to Purchaser that such item has been ordered by Seller and Seller provides Purchaser with reasonably security, as requested by Purchaser, for the delivery of such item after Acceptance.

3.15  Key Personnel.  Seller shall provide Purchaser with biographical data for Project Manager, the Units engineering manager, Units production manager and TDI staff.  If, in the reasonable opinion of Purchaser, Purchaser determines such a key person is not adequately performing, Purchaser may require Seller to remove such person from work on the Scope of Work under this Agreement and replace with a satisfactory replacement.

3.16  Project Planning and Control.  Exhibit K sets forth the Project Planning and Control system for tracking the progress of the Scope of Work.  Seller shall establish a program, submit reports and data as set forth therein.   

ARTICLE IV.  REPRESENTATIONS AND WARRANTIES

4.1   Representations and Warranties of Agent.  Agent makes the following representations and warranties to Seller, each of which is true and correct on the date hereof:

      (a)		Agent is a corporation organized, existing and in good standing under the laws of the state Delaware; Agent possesses all requisite power and authority to enter into and perform this Agreement, and to carry out the transactions contemplated herein; and Agent has all legal power and authority to own and use its properties, and to transact the business in which it is engaged and holds or expects to obtain all franchises, licenses, and permits necessary and required therefor;

      (b)		Agent’s execution, delivery, and performance of this Agreement have been duly authorized by, and are in accordance with, its articles of incorporation and by-laws; this Agreement has been duly executed and delivered for it by the signatories so authorized; and this Agreement constitutes Agent’s legal, valid, and binding obligation;

      (c)		Agent is not in breach of, in default under, or in violation of, any Applicable Laws, or the provisions of its articles of incorporation or by-laws, or any franchise or license, or in breach of, in default under, or in violation of any provision of any indenture or any evidence of indebtedness or security therefor, lease, contract, license or other agreement by which it is bound, if such breach, default or violation may result in a material adverse effect on the business or financial condition of Agent; and the execution and delivery of this Agreement and the performance of its obligations hereunder will not constitute or result in any such breach, default or violation; and

      (d)		no suit, claim, action, arbitration, or legal, administrative or other proceeding is pending or threatened against Agent that would affect the validity or enforceability of this Agreement, the ability of Agent to fulfill its commitments hereunder in any material respect, or that could result in any material adverse change in the business or financial condition of Agent.

4.2   Purchaser Supplied Information.  PURCHASER DISCLAIMS ALL WARRANTIES, WHETHER EXPRESS OR IMPLIED, OF ANY KIND CONCERNING INFORMATION PROVIDED TO SELLER BY OR ON BEHALF OF PURCHASER PURSUANT TO OR IN FURTHERANCE OF THE SERVICES PROVIDED PURSUANT TO THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTY THAT THE INFORMATION IS ACCURATE, CORRECT, COMPLETE, FIT FOR ANY PARTICULAR USE OR CAN BE USED WITHOUT INFRINGING ANY PATENT, COPYRIGHT, TRADEMARK, OR OTHER INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES UNDER THE INTELLECTUAL PROPERTY RIGHTS OF THE WORLD.  Except to the extent that the information provided by Purchaser to Seller is in the form of a specification or performance requirement specifically called out in this Agreement, it is Seller’s responsibility to ensure that the information provided to Seller by Purchaser is accurate, correct, complete and fit for the particular purpose(s) for which Seller may utilize it. 

4.3   Representations and Warranties of Seller.  Each Seller makes the following representations and warranties to Purchaser, each of which is true and correct on the date hereof:

(a)	It is duly organized, existing and in good standing under the laws of its jurisdiction of formation; that each possesses all requisite power and authority to enter into and perform this Agreement, to carry out the transactions contemplated herein, and to conduct business in each of the locations where any portion of the Scope of Work is to be performed; and Seller has all legal power and authority to own and use its properties and to transact the business in which it is engaged and holds or expects to obtain all franchises, licenses, and permits required therefor;

(b)	Seller’s execution, delivery, and performance of this Agreement have been duly authorized by, and are in accordance with, its articles of incorporation and by-laws; this Agreement has been duly executed and delivered for it by the signatories so authorized; and this Agreement constitutes Seller’s legal, valid, and binding obligation;

(c)	Seller is not in breach of, in default under, or in violation of, any applicable statute, law, ordinance, decree, rule, or regulation of any governmental authority, or the provisions of  its articles of incorporation or by-laws or any franchise or license, or in breach of, in default under, or in violation of, any provision of any indenture or any evidence of indebtedness or security therefor, lease, contract, license or other agreement by which it is bound if such breach, default or violation may result in a material adverse effect on the business or financial condition of Seller; and the execution and delivery of this Agreement and the performance of its obligations hereunder will not constitute or result in any such breach, default or violation;  

(d)	no suit, claim, action, arbitration, or legal, administrative or other proceeding is pending or threatened against Seller that would affect the validity or enforceability of this Agreement, the ability of Seller to fulfill its commitments hereunder in any material respect, or that could result in any material adverse change in the business or financial condition of Seller; 

(e)	Seller will use its utmost skill, efforts and judgment to further the interests of Purchaser, to furnish efficient business administration and supervision, and to furnish at all times an adequate supply of workers and materials;

(f)	Seller has the right and authority to convey and grant all the rights of ownership as set forth in Section 15.2.  Without limiting the foregoing, Seller represents and warrants that the design, engineering, manufacture, delivery, training and other services, and equipment, materials and information provided to Purchaser by Seller hereunder will not infringe on any third party's patent, copyright, trademark, trade secret or other intellectual property rights;

(g)	All services, equipment, materials and information, including without limitation the documentation delivered pursuant to Section 10.1, presented to Purchaser for acceptance hereunder are complete, accurate, and authentic and meet the requirements of this Agreement; and 
    
(h)	Equipment of the same type and model number which is sold by Seller or its Affiliates to other clients is of the same manufacturing technology as the Equipment provided under this Agreement; such equipment has not demonstrated trends of failure due to design, engineering, manufacturing processes or materials used therein during normal installation, start-up, commissioning, testing or operation of the equipment through periods equivalent to the Primary Warranty Period, or Extended Warranty Period as applicable, except as expressly stated in writing to Purchaser;  and

(i)	Any and all hardware, software and firmware product delivered (as a component of a system, part of a piece of Equipment, or as a stand alone item) under this Agreement shall be able to:

(1)	accurately process date data (including but not limited to accepting input, providing output and calculating comparing and sequencing) from, into and between the Twentieth and Twenty-First Centuries, including (but not limited to) leap year calculations;

(2)	operate accurately, without interruption, and without any change in performance on and in respect of any and all dates before during and/or after January 1, 2000;

(3)	respond to and process two digit year input without creating any ambiguity as to the century; and

(4)	store and provide date input information without creating an ambiguity as to the century, provided that such hardware, software and/or firmware is operated in accordance with the manufacturer recommendations, (a copy of which shall be provided to and explained to the Purchaser).

ARTICLE V.  PURCHASE AMOUNT AND OTHER CHARGES

5.1   Purchase Amount. 

5.1.1   Purchase Amount.  The purchase amount for the supply of the transformers Purchaser may elect to purchase as set forth in Exhibit N (the “Purchase Amount”). The Purchase Amount shall be paid in accordance with Article VI and is subject to increases or decreases only as provided in Section 5.3. 

Exhibit N lists options, prices and times by which the options must be exercised by Purchaser.  If an option is exercised by Purchaser, the applicable option amount as set forth in Exhibit N shall be used to adjust the Purchase Amount.

Seller shall prepare the initial invoices in the name of Purchaser and forward such invoices to Agent for approval and payment pursuant to Section 6.1.1.

5.2   Taxes and Contributions.

5.2.1   Seller’s Responsibility for Personnel Taxes.  Seller assumes full responsibility for and agrees to pay all contributions and taxes payable under all Applicable Laws pertaining to social security laws, unemployment compensation laws and income tax laws as they apply to Seller’s and Vendor’s employees engaged in the performance of the Scope of Work.  Seller acknowledges that Purchaser has no responsibility for such taxes as they apply to Seller or Seller’s employees. 

5.2.2   Seller’s Responsibility for Taxes. Seller is responsible for taxes arising out of its performance of the Work including import duties (if any), harbor taxes, personal and corporate taxes.  The Purchase Amount excludes any US federal, state or local jurisdiction imposed property, license privilege, sales, use, excise, gross receipts, valued added, or similar tax which may now or hereafter be applicable to, measured by, or imposed upon with respect to the transaction, Seller’s Scope of Work, its sale, its value, its presence in such taxing jurisdiction or its use, or any services performed in connection therewith.  Such taxes are for the account of Purchaser and Purchaser agrees to any such tax when due or reimburse Seller within twenty-five (25) Days after the date of Seller’s invoice to Purchaser for any such tax which it is required to pay.  Seller shall provide timely documentation and assistance to Purchaser regarding any tax to be paid.  Should Purchaser be exempted from any such tax it shall provide Seller with certification prior to transfer of title of such Work, or at the time the certification is obtained, whichever first occurs.

5.2.3   Not Used.

5.2.4   Tax Penalties.  Seller further agrees to pay any tax, interest, penalty, fines, costs, losses and expenses (including, without limitation, court costs and attorney’s fees) of whatever kind, which Purchaser may incur, be required by law to pay, or be liable for as a result of, arising from, in connection with, related to or based on any failure to withhold any amounts from any payments made or any amounts which Seller fails to pay in connection with, as a result of, arising from or based on the Scope of Work or otherwise comply with this Section 5.

5.3   Changes to the Purchase Amount. The Purchase Amount may be adjusted by Change Order in the following circumstances:

(i)	Change in Law requiring changes to the Equipment as provided in Section 3.8(c)(4);
(ii)	suspension of performance in the Scope of Work by Purchaser [as provided in Section 5.5.];
(iii)	material breach or default of contract by Purchaser or Seller;
(iv)	delay in Notice to Proceed;
(v)	Event of Force Majeure; exceeding a duration in the aggregate of ninety (90) Days; and

Seller’s entitlement to an increase in the Purchase Amount shall be conditional upon:

(i)	Seller having used reasonable endeavors to mitigate the cost increase (except for Purchaser’s exercise of options);
(ii)	Seller having given Notice in accordance with the terms of this Agreement; and
(iii)	the cost increase not being attributable to Seller’s default.

5.4   Cancellation.

5.4.1   Cancellation by Purchaser.  Purchaser may cancel the Agreement, in whole or in part, if Purchaser determines that such cancellation is in Purchaser’s interest. 

The following terms shall govern cancellation:

(a)	Seller shall immediately cease all work on the canceled portion of the Scope of Work, cancel all orders for components and supplies relating to the canceled Scope of Work on best terms available (whether pursuant to Seller’s rights under its agreements with its Vendors or otherwise) and return to the stock of its Vendors any reusable components and supplies. Purchaser shall have the right to require completion of any portion of the Scope of Work canceled;

(b)	If Purchaser cancels this Agreement, Purchaser shall pay to Seller a net cancellation charge (the “Net Cancellation Charge”) which is equal to the Cancellation Charge less: 

(i)	any amounts previously paid with respect to the canceled Scope of Work; and
(ii)	credits for components and supplies of the canceled Scope of Work that are returned to Seller’s or Vendor’s stock.

(c)	The cancellation charge (the “Cancellation Charge”) shall not exceed the values set forth in Exhibit I at the time Purchaser issues a cancellation Notice to Seller;

(d)	In the event Purchaser cancels the Agreement for its convenience, Purchaser shall pay as a Net Cancellation Charge the applicable Cancellation Charge less any amounts previously paid or refund of any amounts overpaid with respect to this Agreement. Purchaser shall pay the Net Cancellation Charge to Seller within ten (10) business days [Business Days] of determination of the charge by mutual agreement of the parties.  Any dispute regarding the amount to be paid not resolved within thirty (30) Days of a Notice canceling all or a portion of the Scope of Work will be resolved pursuant to the provisions of Article XXVI hereof; and

(e)	Upon cancellation, the work in progress and other supplies identified as the material or Equipment which was specifically produced for this Agreement and canceled shall be the property of Purchaser (title shall pass to Purchaser upon Purchaser’s payment of the Cancellation Charge) and shall be disposed of according to Purchaser’s instructions.

5.4.2   Marketing Agreement.  At Purchaser’s request, Purchaser and Seller shall enter into good faith negotiations to establish a marketing agreement (the “Marketing Agreement”) whereby Seller shall attempt to sell the principal canceled Equipment to another party or parties.  Such Marketing Agreement shall have no effect on Purchaser’s obligations to pay the Net Cancellation Charges.  The net proceeds (if any) from the resale of the canceled Equipment pursuant to the Marketing Agreement shall be promptly refunded by Seller to Purchaser.

5.4.3	Buy Back Option.   [At Purchaser’s option, Seller will arrange for storage of the Unit or Units to be stored for up to one year following the successful conclusion of factory testing.  Purchaser shall pay the Purchase Amount in full, and will pay the actual storage charges, billed quarterly during the year the Unit or Units are stored.  Title and risk of loss shall be with Purchaser during this storage period.  Purchaser shall have the right (but not the obligation) to sell the Unit(s) back to Seller for thirty percent (30%) of the Purchase Amount of the Unit(s) after the end of the one year storage period.  Payment will be due thirty (30) Days after receipt of written notification by Purchaser of its intent to exercise this option.  Title and risk of loss shall be with Seller as of the time of payment.

If Purchaser desires to sell the Unit(s) prior to the expiration of the one year storage period, Purchaser may request, and Seller agrees to act, as broker for the re-sale of the Unit((s).  The terms of the remarketing agreement will be subject to mutual agreement.]

5.5   Suspension of Work.

5.5.1   Purchaser shall be entitled to suspend at any time the carrying out of the whole or any part of the Scope of Work.

5.5.2   In the event Purchaser suspends the Agreement, Seller shall be entitled to a pro rata payment of the next due Milestone Payment for the Scope of Work completed, but in no case shall such pro rata amount exceed the value of the next Milestone Payment.

5.5.3   Seller shall during any suspension store, preserve, protect and otherwise secure and protect the Equipment and advise Purchaser of such.

5.5.4   Upon Purchaser rescinding such a suspension, unless such suspension was issued in accordance with Section 5.5.5, Seller may submit a request for an equitable adjustment for all reasonable costs associated with such suspension in the Purchase Amount and the affected Installation Date in accordance with Section 10.2.

5.5.5   Seller shall not be entitled to an equitable adjustment as a result of a suspension directed by Purchaser nor shall it be eligible for a payment in accordance with Section 5.5.2, if such suspension is necessary:

(i)	by reason of default (including but not limited to default under Section 17.2 on the part of Seller; or
(ii)	to cause proper or safe execution of the Scope of Work,

unless (i) or (ii) arose from any act or default of Purchaser.

5.5.6   Upon Purchaser lifting a suspension, Seller shall examine the Scope of Work and make good any deterioration or loss in the suspended Scope of Work.  Seller in its request for an equitable adjustment in accordance with Section 5.5.4 may request a Change Order for additional compensation for such inspection and making good except that Seller shall not be entitled to such increase if such defect, loss or deterioration was a result of poor workmanship, defects in material or failure to protect and preserve the suspended Scope of Work in accordance with good industry practice.

5.5.7	If Purchaser suspends the Agreement for more than twelve (12) consecutive months, Seller may terminate this Agreement for its convenience.  Before taking such action, Seller must give Purchaser the option by written notification to rescind the suspension.  Any work in progress or Equipment which was specifically produced for this Agreement and canceled shall be the property of Purchaser and shall be disposed of according to Purchaser’s instructions.  

ARTICLE VI.  PAYMENT TERMS

6.1   Payment of Purchase Amount. 

6.1.1   Payment Periods.  Payment of the respective Milestone Payment Amount for each Unit shall be due and payable by Purchaser to Seller within fifteen (15) Days of:

(i)	Seller achieving the applicable Milestone; and 
(ii)	Purchaser's receipt of a properly prepared invoice for such Milestone Payment Amount, in accordance with the Milestone Payment Schedule set forth in Section 6.1.2.

6.1.2   Payment Milestones. 

MILESTONE PAYMENT SCHEDULE FOR EACH UNIT

PAYMENT	
MILESTONE #	
MILESTONE	

10%	
1	One business day [Business Day] following receipt of Purchaser’s order for each Unit	

25%	
2	Upon receipt of copper and steel at factory for each Unit	

40%	
3
	
Upon completion of core and coil assembly for each Unit	

15%	
4	
Delivery of each Unit to the Delivery Point	
10%	5	Acceptance of each Unit (See Note 1)	

Note 1:  Payment of the final ten percent (10%) of the Purchase Amount (Payment Number 5) is subject to Section 6.1.3.
 
6.1.3   Retention.  Purchaser shall retain the last ten percent (10%) of the Purchase Amount (Payment Number 5) (the "Retention Amount") until the expiry of the Primary Warranty Period; provided, however, Purchaser shall pay Seller the Retention Amount as earned when:

(i)	Seller satisfies the requirements set forth in Section 6.6; 
(ii)	Seller provides the Retention Surety Bond; 
(iii)	Acceptance occurs; 
(iv)	Seller delivers all documentation required by this Agreement; and
(v)	"Punchlist" items, if any, have been corrected.

Seller shall present a “Retention Surety Bond” as security against Seller’s remaining obligations for the full Retention Amount in a form generally in accordance with the sample set forth in Exhibit D.  Such Retention Surety Bond shall be valid until the expiry of the Primary Warranty Period and shall be from a U.S. surety company acceptable to Purchaser.

6.1.4   Not Used.	

6.1.5	Payment of the O & M Spare Parts Amount, to the extent Purchaser orders O & M Spare Parts, shall be due and payable by Purchaser to Seller within thirty (30) Days of:

(i)	Seller’s proper delivery of all of the O & M Spare Parts to the Delivery Point in accordance with terms of the Change Order issued hereunder; and
(ii)	Purchaser's receipt of a properly prepared invoice for such Spare Parts Amount.

6.2   Payment Disputes.  Payment of any invoices or portions of invoices shall not prejudice the right of Purchaser to protest or question the correctness thereof or compliance of the Scope of Work or any portion thereof with this Agreement or prejudice or constitute a waiver of any right of Purchaser hereunder.  Any amount questioned by either party and found to be in such party's favor shall be refunded or paid, as appropriate.  In the event an amount is withheld because of a dispute, and it is subsequently determined that the disputed amount or a portion of the disputed amount was due and payable, interest shall accrue at the Interest Rate commencing on the date the payment would have been payable if the dispute had not occurred.  Seller’s acceptance of partial payment of the Purchase Amount shall not be deemed to constitute a waiver of the right to receive amounts which are then in dispute, and Seller and Purchaser shall use their best efforts to resolve all disputed amounts as soon as practicable.  Any undisputed amounts not paid when due shall bear interest at the Interest Rate. 

6.3   Payments Withheld or Offset.

6.3.1   Payments Withheld.  Purchaser may withhold payment on an invoice or a portion thereof in an amount and to such extent as may be reasonably necessary, subject to the dispute resolution provisions of Article XXVI, to protect Purchaser from loss because of:

(a)	defective work or Equipment not remedied pursuant to Section 9.5 or the warranty provisions of Article XIV or the failure of Seller to perform work or provide Equipment in accordance with the provisions of this Agreement;

(b)	third party suits, stop Notices or liens for which Seller is liable under this Agreement, whether directly or pursuant to any indemnification obligation hereunder, (other than those provided for by insurance, bonds or other security) made on or filed with Purchaser or with respect to the Site or the project and not cleared by Seller by payment, deposit or otherwise to the reasonable satisfaction of Purchaser within ten (10) Days after receipt by Seller of written Notice from Purchaser requesting such action; and

(c)	uninsured damage to Purchaser which results solely from Seller’s failure to obtain or maintain the insurance required by the provisions of Article XIX or from any action or inaction by Seller or any Vendor which excuses any insurer from liability for any loss or claim otherwise covered by insurance.

6.3.2   Offset for Liquidated Damages.  Purchaser shall have the right to offset from any payments due to Seller any amounts due to Purchaser from Seller, including, but not limited to, the amount of any Liquidated Damages due from Seller.  In the event the Liquidated Damages exceed the payment amount, Purchaser shall retain the payment amount and invoice the excess amount of Liquidated Damages in accordance with Section 6.4.  In the event Purchaser offsets a Liquidated Damage which Seller disputes and it is subsequently determined that amount or a portion of the disputed amount should not have been offset, interest on the portion of the offset that should not have been offset shall accrue at the Interest Rate commencing on the date the payment that was offset would have been payable if the amount had not been offset.

6.3.3   Payment of Subcontractors.  Seller shall promptly pay, in accordance with the terms and conditions set forth in the respective subcontract, each Vendor the amount to which said Vendor is entitled.  Seller shall, by an appropriate agreement with each Vendor, require each Vendor to make timely payments to its laborers, contractors and Vendors in a similar manner.

6.4   Payment of Liquidated Damages.  

6.4.1   Payment of Document Delivery Liquidated Damages.  Purchaser may upon the fifth (5th) Day of each month invoice Seller for any Document Liquidated Damages that accrued during the preceding month.  To the extent Purchaser has not declared that it has offset such Document Liquidated Damages Seller shall pay such invoiced amount within thirty (30) Days of receipt of Purchaser's invoice. 

6.4.2   Payment of Delivery Liquidated Damages .  Purchaser may upon the fifth (5th) Day of each month invoice Seller for any Delivery Liquidated Damages that accrued during the preceding month.  To the extent Purchaser has not declared that it has offset such Delivery Liquidated Damages Seller shall pay such invoiced amount within thirty (30) Days of receipt of Purchaser's invoice.

6.4.3   Payment of Installation Liquidated Damages (If Purchaser Elects the Installation Option) .  Purchaser may upon the fifth (5th) Day of each month invoice Seller for any Installation Liquidated Damages that accrued during the preceding month.  To the extent Purchaser has not declared that it has offset such Installation Liquidated Damages Seller shall pay such invoiced amount within thirty (30) Days of receipt of Purchaser's invoice.

6.4.4   Payment of Operable Delay Liquidated Damages.  Purchaser may upon the fifth (5th) Day of each month invoice Seller for any Operable Delay Liquidated Damages that accrued during the preceding month.  To the extent Purchaser has not declared that it has offset such Operable Delay Liquidated Damages, Seller shall pay such invoiced amount within thirty (30) Days of receipt of Purchaser's invoice.

6.4.4   Payment of Electrical Losses Liquidated Damages. Electrical Losses Liquidated Damages, if any, shall be calculated in accordance with Section 10.4.3 and set out in the Units' Performance Test Certificate as prepared by Purchaser after completion of the factory Performance Test demonstrating that the Units have not met the Electrical Losses Guarantee. Payment of the Electrical Losses Liquidated Damages shall be due within thirty (30) Days of delivery of the effective date of delivery of the invoice.
 
6.5   Notices of Nonpayment.  If Purchaser receives written Notice from any Vendor of Seller that Seller has failed to pay such Vendor for labor, materials, services and/or equipment related to the Scope of Work, Purchaser may, upon thirty (30) Days Notice to Seller, withhold payment from Seller in the amount claimed by the Vendor as due and owing, unless Seller notify Purchaser in writing within such thirty (30) Days that Seller disputes the Vendor's claim.  Purchaser may continue to withhold such amount until Purchaser receives written Notice from such Vendor that such amount has been paid in full by Seller.

6.6   Lien Release.  Seller represents that all amounts reflected on invoices submitted by Seller for payment are accurate, just, due and owing under the terms of this Agreement.  Purchaser shall not be required to make a Milestone Payment Amount unless such invoice is accompanied with the conditional waiver of liens as set forth in Exhibit S-1.  Seller represents that all services, equipment, materials and information for which Seller seeks payment are free and clear of liens, claims, security interests and encumbrances arising in favor of Seller and its Vendors, and other persons or entities able to make a claim by reason of having provided labor, materials or equipment relating to performance of this Agreement or any portion thereof.  Seller agrees and represents that in submitting an invoice, Seller waives and releases all liens, claims, security interests and other encumbrances arising in favor of Seller by reason of having provided labor, materials or equipment relating to performance of this Agreement or any portion thereof, to the extent of such invoice.  In the case of payment of the Retention Amount, Seller shall not be entitled to payment of such Retention Amount unless and until Seller submits to Purchaser an affidavit in the form set forth in Exhibit S.

6.7   Invoices.

6.7.1   Contract Reference.  Each invoice will reference CONTRACT LM6K-2001.

6.7.2   Address for Invoices.  Invoices will be mailed or hand carried to:

	Enron North America Corp.
	1400 Louisiana
	Houston, Texas  77002
	Attn:  Ben Jacoby
      
Purchaser anticipates that this address may change, and will notify Seller of such change, prior to the change. 

6.7.3   Date of Receipt.  Date of receipt of invoice by Purchaser will be evidenced by date stamp, or other generally accepted date receipting system.

6.8   Method of Payment.  If payment will be made by wire transfer: Routing: 071000013, Account Number: 5809614, Bank One, or to the following address: ABB Power T & D Company, 4350 Semple Avenue, St. Louis, MO  63120-2241 to the attention of Lisa Baere, telephone number: 314-679-4580.
	
6.9   Payments Not Acceptance of Work.  No payment made by Purchaser hereunder shall be considered or deemed to represent that Purchaser has inspected the work or Equipment or checked the quality or quantity thereof or that Purchaser knows or has ascertained how or for what purpose Seller has used sums previously paid, and shall not be deemed or construed as an approval or acceptance of any work or Equipment or as a waiver of any claim or right Purchaser may have hereunder.  All payments shall be subject to correction or adjustment in subsequent progress reviews and payments.

ARTICLE VII.  EFFECTIVE DATE, COMMENCEMENT OF THE WORK, TERMINATION

7.1   Effective Date.  The effective date of this Agreement shall be March 7, 2000, (the "Effective Date"). 

7.2   Commencement of Work.  Seller shall have been deemed to receive Notice to proceed as of the Effective Date of this Agreement.  Such Notice authorized Seller to proceed with the full Scope of Work subject to the terms of this Agreement. 

7.3   Termination.  This Agreement shall terminate upon the earlier of:

(i)	the cancellation by Purchaser of all the Scope of Work under Section 5.4 and the payment by both parties of all amounts due hereunder, including payment by Purchaser of any applicable cancellation charges; or
(ii)	termination due to an event of default by Seller or Purchaser under Article XVII;  or
(iii)	when all obligations of the Parties under this Agreement are complete;  or

after payments by the parties of any amounts due by each party under this Agreement; provided, however, that the rights and obligations of the parties under Sections 2.2 (Role of Agent) and 22.2 (Assignment by Purchaser) and Articles IV (Representation and Warranties), XIV (Warranties), XVII (Default), XX (Indemnification), XXI (Non-Disclosure of Information), XXVI (Arbitration) and XXVII (Limitation of Liability)  and the indemnities set forth in the Agreement shall survive termination of the Agreement.

ARTICLE VIII.  RELATIONSHIP OF PURCHASER AND SELLER

8.1   Status of Contractors.  Seller shall perform and execute the provisions of this Agreement as independent contractor, and none of Seller or its subcontractors, nor any of their respective employees or agents shall be deemed for any purpose to be an agent, servant, employee or representative of Purchaser.  Seller shall be solely responsible for the performance of the Work, and the Work shall be performed by Seller according to its own methods and at its own risk, subject only to compliance with the provisions of this Agreement.

ARTICLE IX.  INSPECTION AND CORRECTION OF WORK

9.1   Inspections.  Seller shall provide Purchaser and Lender, or their designated representatives access to the Scope of Work at all times wherever in preparation or progress and shall work closely with Purchaser in performing this Agreement.  Purchaser, or its designated representative, shall have the right from time to time during this Agreement to audit, observe, inspect, examine, review and test, Seller’s performance of this Agreement.  Purchaser's rights to inspect under this Section 9.1 shall include but not be limited to manufacturing schedules; compliance with Specification; workmanship; dimensional tolerances; production tests; production inspections; assembly of components; panel inspection and testing; or witnessing testing of Equipment at any stage of design, procurement, production, or manufacture at Seller’s work or those of its Vendors to verify that the Equipment conforms to the specified requirements of this Agreement. However, any observance, inspection or review of performance of this Agreement shall not constitute or be deemed to be actual control or a right to control Seller, its employees, agents, personnel, Affiliates, or Vendors.  Purchaser's inspection of any part of the Equipment shall in no way affect Seller’s obligations to perform the Scope of Work in accordance with the Specification and all other terms of this Agreement, and any audit, examination, inspection, review, or testing by Purchaser shall not constitute acceptance or prejudice, be a waiver, or be deemed to be a waiver of any of Purchaser's rights hereunder or of its rights to reject defective performance of this Agreement or release Seller from any obligation under this Agreement.

9.2   Resident Facilities.  If reasonably requested by Purchaser, Seller will provide facilities as reasonably available for a resident quality representative in Seller’s work and those of its major component vendors.  

9.3   Quality Plan.  Seller shall maintain quality plan compliant with ISO 9001, 1994 and with the quality assurance plan set forth in Exhibit J, detailing:

(i)	specific authorities and responsibilities;
(ii)	procedures, methods and work instructions; and
(iii)	inspection and test plans.

In the event of a conflict between Exhibit J and ISO 9001, 1994 the higher standard of the two (2) shall prevail.

9.4   Notice.  Seller shall provide not less than fourteen (14) Days Notice prior to reaching any of the witness or hold points as set forth in Exhibit R.  Seller shall not proceed past an established hold point prior to the date for such hold point specified in the advance Notice of such hold point given by Seller to Purchaser, unless Purchaser has witnessed the activity or given written approval to proceed past the hold point.  In the event Seller provides the appropriate advance Notice to a hold point and Purchaser does not either witness the hold point or give written Notice to Seller releasing the hold point, Seller shall be granted an appropriate extension to the respective Guaranteed Installation Date. 

9.5   Correction of Equipment.  Prior to Acceptance, Seller shall, at its sole cost and expense, promptly correct any part of the Equipment which is defective or not in accordance with this Agreement, regardless of the stage of its completion or the time or place of discovery of such defects and regardless of whether Purchaser has previously paid for or accepted such part of the Equipment through oversight or otherwise. Seller shall replace or correct such defective work or condition such that the Equipment is in accordance with this Agreement, including the Specification.  Seller may repair (making an item functional, but not necessarily conforming the work to its original specification) the Equipment or a portion of the Equipment only with Purchaser's prior written consent.

9.6   Not Used. 

9.7   Release for Delivery.  In addition to other conditions set forth in this Agreement, prior to Seller performing any Equipment export packing and prior to actual shipment, Seller shall, at least seven (7) Days in advance, request in writing to Purchaser's Quality Assurance Manager for release to ship such Equipment.  Purchaser's approval shall not be unreasonably withheld provided Seller has met the requirements of this Agreement.

ARTICLE X.  DELIVERY AND PERFORMANCE

10.1   Delivery of Documentation.  In addition to the documentation specifically described within the articles of this Agreement, Seller shall supply the documentation deliverables as set forth in Document Delivery Schedule set forth in Exhibit B-2 by the due dates therein. In the event Seller fails to deliver any item of documentation listed below by its respective due date (the "Due Date"), Liquidated Damages ("Document Liquidated Damages") shall be assessed by Purchaser and Seller agrees to pay Purchaser at the rate of One Thousand Dollars ($1,000) per Day per document from the respective Due Date until the actual date of delivery of such item of documentation (the "Document Delivery Date").

For the purpose of assessing Document Liquidated Damages, the Document Delivery Date shall be the date Seller delivers such document to Purchaser, provided that upon Purchaser's review of such document Purchaser reasonably determines and assigns a "Status 1", "Status 2" or "Status 4".  In the event that Purchaser reasonably determines and assigns a "Status 3" to a document the Document Delivery Date shall not occur until the date of resubmittal which results in Purchaser assigning a "Status 1", "Status 2", or "Status 4".  The criteria for Status 1,2,3, and 4 are set out in Exhibit B-3, Document Review Status, including the following:

(a)	Upon delivery of each item of documentation, Purchaser shall within fifteen (15) Days of receipt of such document review the document and provide Seller the applicable status code and comments;

(b)	Upon receipt of any comments from Purchaser, Seller shall diligently work to correct and resubmit such returned documentation within thirty (30) Days; and

(c)	If Purchaser does not provide comments within the fifteen (15) Day period, the Due Date shall be extended on a day-for-day basis and provided Seller has given Notice to Purchaser such other Seller schedule obligations may also be adjusted in accordance with Article XI.

As soon as Purchaser determines that a document will receive a "Status 3", it will notify Seller of such.

Purchaser's review of any drawing or document hereunder shall not be construed as constituting approval of Seller’s work, nor shall Purchaser's failure to review or failure to comment be construed as approval or disapproval.  Seller at all times shall retain responsibility for a Scope of Work that meets the requirements of this Agreement, regardless of whether or not Purchaser has reviewed Seller’s drawings or documents.  For the avoidance of doubt, Document Liquidated Damages are not applicable to the submittal of “as built” or “final” drawings.

Seller shall deliver nine (9) complete sets of drawings, (two of which shall be reproducible), and one electronic file of each deliverable to Purchaser as follows:

(a)	deliver one (1) set of reproducible drawings and one (1) set of black line drawings to Purchaser at the Site;

(b)	deliver one (1) set of reproducible black line drawings to Agent or its designee at the address given in Section 25.3; 

(c)	deliver one (1) set of reproducible drawings and four (4) sets black line drawings (blue line is NOT acceptable) to Agent or its designee at the address given in Section 25.3; and

(d)	deliver one (1) electronic file (disk or electronic mail as applicable) of all documentation produced to Purchaser as shown in Section 25.3, using standard commercially available software useable by Purchaser without conversion.  

Seller acknowledges and agrees to evaluate and incorporate comments to drawings from Purchaser as submitted by Agent or its designee.  Seller shall (i) co-operate with the Agent or its designatee; and (ii) send all drawings to both parties simultaneously.  Purchaser shall cause Agent or its designee to submit all comments within the time frames set forth in Section 10.1.

10.2   Delivery and Installation of Equipment.  

10.2.1   Guaranteed Installation Date (If Purchaser Elects the Installation Option).

Seller shall (i) cause the Equipment to be delivered to the Delivery Point in undamaged condition in accordance with the Specification and Guaranteed Unit Delivery Date(s) and  (ii) conduct and satisfactorily complete the field Performance Tests at the Site (“Installation Completion”) by no later than the dates as may be agreed to by the Parties.

10.2.2   Delivery Restrictions.  Seller shall use appropriately licensed and insurable carriers.  Seller may not transport more than one Unit per carrier, and no tandem tows shall be permitted.  Seller may not transport the Units on the same carrier.

Delivery of each Unit shall be considered complete when the Unit is delivered (and other such items of Equipment as necessary so as to not impede the continuous progress of assembly and erection of the Unit) to the Delivery Point in a complete and undamaged condition.  Purchaser shall have the right to inspect the Equipment for completeness, condition and packing prior to loading on Seller’s carrier.  Purchaser shall have the right to inspect the Equipment for completeness and condition upon delivery to the Delivery Point as applicable for the purposes of determining actual delivery.  Purchaser reserves the right to reject damaged Equipment at any location.  In the event a portion of the Equipment is damaged or defective upon delivery to the Delivery Point, delivery will not be considered to have occurred, unless as determined by Purchaser:

(i)	such damage will not prevent erection of such Equipment and/or Unit; and
(ii)	Seller is able to repair or replace such damaged Equipment without delaying or interrupting assembly, erection and testing of the Equipment; and
(iii)	Such damage once repaired by Seller will not adversely affect the performance, reliability, or longevity of the Unit.

10.2.4   Not Used.

10.2.5   Extensions of the Guaranteed Unit Delivery and Installation Dates.

10.2.5.1  A Guaranteed Unit Delivery and/or Installation Date may be extended by Change Order if and to the extent there has been a delay due to:

(a)	a suspension of the Scope of Work ordered by Purchaser;
(b)	an Event of Force Majeure which justifies an extension under the terms of this Agreement;
(c)	breach of the Agreement or default thereunder by Purchaser; or
(d)	Change in Law requiring changes to the Equipment as provided in Section 3.8(c)(4);

10.2.5.2  Seller’s entitlement to an extension of time shall be conditional upon:

(a)	its having used reasonable endeavors to mitigate the delay;
(b)	its having given proper and timely Notice in accordance with the terms of this Agreement; and
(c)	the delay not being attributable to Seller’s default.

10.2.6   Not Used. 

10.3	Delay Liquidated Damages.  

10.3.1	 Installation Liquidated Damages (If Purchaser Elects Installation Option). For each Day that Seller achieves Installation Completion of a Unit after the respective Guaranteed Installation Date, Purchaser may assess and Seller shall pay to Purchaser Liquidated Damages (the "Installation Liquidated Damages") for such lateness at the rate of per Day as agreed to by the parties upon Purchaser’s election of the installation option for such Unit until Installation Completion occurs.  However, in the event that upon completion of all the activities required for achieving Installation Completion it is determined through field Performance Testing that (i) the Unit does not operate reliably, (ii) the Unit will not operate at its rated load, or (iii) the Unit is otherwise defective and such defect renders the Unit inoperable (each of (i), (ii) and (iii) a (“Delay Event”), Purchaser may assess and Seller agrees to pay to Purchaser Liquidated Damages (the “Operable Delay Liquidated Damages”) at the agreed upon rate per Day per Unit for each Day that the corresponding phase of the Facility (where a phase includes the related combustion turbine and associated Facility equipment necessary to allow the combustion turbine to export electrical power from the Facility) is delayed in achieving the scheduled Commercial Operations for such phase as a result of one or more Delay Events.  For the purpose of this Section 10.3.1, the scheduled Commercial Operations date of a phase shall be deemed to be 30 Days after the Guaranteed Installation Date.

10.3.2   Delivery Liquidated Damages.  For each day that Seller delivers a Unit to the Delivery Point after its respective Guaranteed Unit Delivery Date as agreed to by the Parties in a Facility Agreement, Purchaser may assess and Seller shall pay to Purchaser, the agreed upon amount of Delivery Liquidated Damages (the “Delivery Liquidated Damages”) for such lateness.

10.4   Electrical Losses Guarantee.

All numerical values applicable to this Section 10.4 shall be defined and set forth in Exhibit A.

10.4.1   Electrical Losses Guarantee.  Seller guarantees that the Electrical Losses measured for each of the Units 
as demonstrated during the most recent Performance Test carried out at Seller’s factory, shall be less than or equal to the loss set forth in Exhibit A (the "Electrical Losses Guarantee"). 

10.4.2   Minimum Electrical Losses Guarantee.  Seller further guarantees that the Electrical Losses measured for each of the Units, as demonstrated during the most recent Performance Test carried out at Seller’s factory, shall be no more than one hundred and ten percent (110%) of the respective Electrical Losses Guarantee (“Minimum Electrical Losses Guarantee”).  In the event the Electrical Losses exceeds the Minimum Losses Guarantee, Seller shall take all necessary actions to correct, retest the deficient Unit and cause the deficient Unit to meet the Minimum Electrical Losses Guarantee.  Seller shall not ship the deficient Unit until such time that Seller is able to demonstrate to Purchaser by carrying out a Performance Test that the Unit has achieved the Minimum Electrical Losses Guarantee while meeting all other conditions of the Agreement.

10.4.3   Electrical Losses Liquidated Damages.  Provided the respective Minimum Electrical Losses Guarantee is met by Seller, Liquidated Damages shall be assessed by Purchaser and Seller agrees to pay, at a rate per kW that the Electrical Losses of a Unit exceeds the corresponding Electrical Losses Guarantee while the Unit is operating at the base rated load which is set forth in Exhibit A.

10.4.4   Guarantee Value Table. All values for Electrical Losses Guarantees and associated Liquidated Damages are as set forth in Exhibit A.

10.5   Most Recent Performance Test.  Electrical Losses Liquidated Damages shall be assessed by Purchaser, and Seller agrees to pay on the results of the most recent Performance Test conducted in Seller’s factory, including any reperformance of the Performance Tests regardless of whether the performance improves or worsens upon the later Performance Test. 

10.5.1   Performance Test Required.  In the event Purchaser elects not to have conducted the Performance Tests carried out at Seller’s factory, no Electrical Losses Liquidated Damages shall be assessed or payable.

10.5.2   Setting Out of Electrical Losses Liquidated Damages.  Electrical Losses Liquidated Damages, if any, shall be due and payable in accordance with Section 6.4 from Seller in accordance with the rates set forth in the calculations set forth in the Performance Test Certificate prepared by Purchaser after completion of the Performance Test conducted to the Performance Test standards set forth in Exhibit B-1.

10.5.3   Remedy for Failures to Meet Minimum Electrical Losses Guarantee.  In the event of any failure to achieve the Minimum Electrical Losses Guarantee for all of the Units within ninety (90) Days or at a later time approved by Purchaser of the completion of the initial Performance Test, Purchaser shall have the right to terminate the Agreement in accordance with Section 17.1.

10.6   Maximum Liabilities for Liquidated Damages.

10.6.1   Maximum Document Liquidated Damages.  Seller’s maximum liability for Document Liquidated Damages shall be five percent (5%) of the Purchase Amount. 

10.6.2   Maximum Electrical Losses Liquidated Damages.  Seller’s maximum liability for Electrical Losses Liquidated Damages shall be ten percent (10%) of the Purchase Amount.

10.6.3   Maximum Operable Delay Liquidated Damages. Seller’s maximum liability for Operable Delay Liquidated Damages shall be twenty percent (20%) of the Purchase Amount.

10.6.4   Maximum Aggregate Liquidated Damages.  Notwithstanding anything in this Agreement to the contrary, including Section 10.1, Section 10.3 and Section 10.4, Seller’s maximum aggregate liability for Liquidated Damages, if any, under this Agreement shall be thirty percent (30%) of the Purchase Amount.

10.7   Liquidated Damages Not Penalty.  The parties acknowledge and agree that because of the unique nature of the Equipment and the time requirements for performance:

(iv)	Purchaser shall be damaged by:

(v)	(a)  Seller failing to accomplish delivery of documents in accordance with Section 10.1;
(b)  Seller failing to delivery a Unit by the Guaranteed Unit Delivery Date;
(c) Seller failing to achieve Installation Completion of a Unit by the respective Guaranteed Installation Date;
c	(d) Seller failing to cause the Units to achieve Electrical Losses Guarantee,
d	(e) Seller failing to cause the Units to achieve operating reliability prior to Commercial Operation of the combustion turbines.

(the “Liquidated Damages Events”);

(vi)	it would be impracticable or extremely difficult to fix the actual damages resulting the Liquidated Damages Events;

(vii)	any sums which would be payable under this Article X are in the nature of Liquidated Damages, and not a penalty, and are fair and reasonable; and 

(viii)	such payment represents a reasonable estimate of fair compensation for the losses that may reasonably be anticipated from such Liquidated Damages Events.  Except as provided for under Article XVII, such payments are Purchaser’s sole and exclusive remedy for Liquidated Damages Events.  Such payment shall not relieve Seller of its obligations hereunder.

10.8   Not Used.

10.8.1   Seller Presence at Tests. Seller shall have the right to be present or to have a representative present at the Performance Tests.  Purchaser shall provide Seller with thirty (30) Days initial Notice and five (5) Days confirmation Notice in advance of the Performance Test. 

10.8.2   Test Results. Upon the completion of each Performance Test Purchaser will issue a Performance Test Certificate setting forth the results achieved during such test.  

10.8.3   Consumable Spare Parts During Retests.  The cost of consumable spare parts during retests caused by Seller’s failure to achieve the Electrical Losses Guarantee shall be to Seller’s account.  

10.9   Acceptance.  Acceptance shall occur on a Unit basis when all of the following have occurred: 

(a)	upon the issuance of a Performance Test Certificate by Purchaser as a result of a Performance Test carried out at Seller’s factory evidencing that the Electrical Losses Guarantee has been achieved (such Performance Test Certificate to be issued within thirty (30) Days after successful completion of testing); or Seller has paid Liquidated Damages in accordance with Section 10.4.3 hereof with respect to any Electrical Losses Guarantee levels not achieved;

(b)	all special tools provided hereunder shall have been delivered to Purchaser;

(c)	Seller has delivered to Purchaser a waiver of liens in form as shown in Exhibit S that have been or could have been placed upon the Equipment and that there are no outstanding claims of Seller or any Vendor with respect to the Equipment;

(d)	The Unit has achieved Installation Completion (If Purchaser Elects Installation Option);

(e)	Seller has paid any Liquidated Damages due in accordance with Article X;  and

(f)	upon the issuance of a Performance Test Certificate by Purchaser as a result of a Performance Test carried out at the Site evidencing that the Units are capable of operating at rated capacity and in a reliable manner so as to not cause a delay in the startup, commissioning or testing of the Facility.

Upon the occurrence of these events, Seller may submit a certificate to Purchaser indicating it has achieved Acceptance.  Purchaser shall within ten (10) Days of receipt of such certificate, either sign such certificate acknowledging concurrence or reject such certificate specifically stating the reasons for such rejection.

10.10  Manufacturing Slots.  Seller has identified the manufacturing slot in Seller’s manufacturing schedule and Seller shall not change the manufacturing slots without Purchaser's prior written agreement. Purchaser shall only withhold such written agreement if, based upon the reasons given by Seller and verified by Purchaser, Purchaser reasonably believes that such change would result in a delay of the Units.

ARTICLE XI.  CHANGE ORDER

11.1   Adjustment of Purchase Amount.  The Purchase Amount shall be subject to adjustment solely for (a) Purchaser-directed changes in the Scope of Work in accordance with Section 11.2 (b) changes in the Scope of Work proposed by Seller and approved in writing by Purchaser in accordance with Section 11.3, and (c) changes permitted under Section 5.3.1.

11.2   Purchaser Requested Change Order.  If Purchaser desires to make any change in the Scope of Work (a "Change Order") including, without limitation, any alteration in the Scope of Work, (which whether by way of additions, modification or omission is not intended to cover that which a prudent Seller should have provided as part of the Scope of Work) Purchaser shall advise Seller, and Purchaser and Seller shall consult concerning the estimated cost and impact on the Guaranteed Installation Date or the Guaranteed Unit Delivery Date and the Purchase Amount. Thereafter, Purchaser may request, and Seller shall upon receipt of such request prepare, a detailed estimate of the cost of such change, taking into account the effect of such change on the Scope of Work and other agreed upon and contemplated Change Orders.  Purchaser shall review Seller’s estimate, and if Purchaser accepts or the parties otherwise agree as to the Change Order, it shall be endorsed by Purchaser. Thereafter, the parties shall promptly adjust the delivery date set and the Purchase Amount and any other Exhibits requiring adjustment to reflect the Change Order.  In the event Seller proceeds with any proposed changes in the Scope of Work prior to execution of a Change Order, Seller shall do so at its own risk.  Purchaser has no obligation to pay Seller for any additional cost and Seller is not entitled to any extension of time for performance as a result of any change implemented by Seller without an executed Change Order. 

11.3   Seller Requested Change Order.  If Seller determines that a condition or the occurrence of an event requires a change in the Scope of Work, Seller shall within fifteen (15) Days of being aware of the occurrence or condition of the event prepare and deliver to Purchaser a request for a Change Order which shall describe such condition or event in detail.  Within fifteen (15) Days following delivery of such request, or such other period as may be agreed upon by the parties, Seller shall specify the adjustment to the Scope of Work, the Guaranteed Installation Date or the Guaranteed Unit Delivery Date and/or the Purchase Amount requested by it.  Following receipt of such request, Purchaser shall determine whether any changes to the Scope of Work, the Guaranteed Unit Delivery Date and/or the Purchase Amount shall be effected, but failure by Purchaser to approve any such changes shall not affect or modify any of Seller’s obligations hereunder or cause an increase in the Purchase Amount and/or extension of the Guaranteed Installation Date or the Guaranteed Unit Delivery Date.  If Seller propose changes in the Scope of Work to Purchaser, Seller shall not make such changes without receiving the prior written consent of Purchaser which shall be reflected on a Change Order, in accordance with the procedures as described in Section 11.2.

11.4   Other Change Order.  Except as otherwise provided by Sections 3.8(c), if after the date of this Agreement there shall be any change of or in Applicable Laws that will require a material change in the Specification, Seller shall prepare a Change Order form in accordance with the provisions of Section 11.3.  Upon Purchaser's consent, which shall not be unreasonably withheld, such Change Order shall be implemented.

11.5   Disputes.  In the event of an unresolved dispute regarding a Change Order, the parties agree that the matter shall be submitted to expedited arbitration in accordance with Article 26. 

11.6   Change Order Pricing.

11.6.1   Method of Pricing.  All changes to the Purchase Amount resulting from a Change Order shall be either lump sum, or unit price.  If either method cannot be agreed upon, the additional work shall be paid on a cost plus basis.

11.6.2   Cost Plus Basis.  The following procedures will be used for all cost plus Change Order:  

(a)	For all labor up to and including Project Manager, engineers, designers and foreman actually engaged in scope change work, Seller will receive their actual payroll plus fifteen percent (15%) thereof for overhead and profit, plus employer's actual contribution or payment for insurance coverage rated on basis of payroll, together with social security and unemployment tax or other employer's tax contribution based payroll.  Time sheets for direct labor expended in the performance of scope change on cost plus basis, will be approved daily by both Seller’s Project Manager and Purchaser's Representative. No cost plus payment will be made for the services of the superintendent or other supervisory or administrative personnel unless specifically authorized and specifically approved by Purchaser's Representative on an individual case basis; and 
(b)	Actual material costs (as evidenced by invoices from suppliers or vendors showing Seller as purchaser, plus ten per cent (10%) thereof for Seller’s overhead and expenses plus any applicable sales or use taxes assessed and paid in conjunction with such material purchases; and 
(c)	Charges for use of equipment shall be by agreement of Purchaser's Representative and Seller’s Project Manager, which agreement shall be noted on Purchaser's authorization for such work.
(d)	Charges for third party shop equipment or services as evidenced by their invoices, plus five percent (5%) thereof.
(e)	All such billings for work on the cost plus basis shall comprise the total of charges accumulated under subparagraphs (a) through (d) above and be supported by certified daily payroll records approved by both Seller’s Project Manager and Purchaser's Representative, a detailed list of equipment and material used and any third party invoices. 
(f)	Should Seller perform any scope change without advance written authorization from Purchaser's Representative, as specified above, such work will be at Seller’s expense. 
(g)	Modifications or changes in the Specification which are within the general scope of the Agreement documents may be made at any time by written order of Purchaser's Representative to Seller.

ARTICLE XII.  INTENTIONALLY OMITTED

ARTICLE XIII.  ORDER OF PRECEDENCE

13.1   Order of Precedence.  This Agreement shall be read as a whole and in the event of a conflict between documents, the following order of precedence shall govern:

a:  Articles of this Agreement
b:  Exhibits (except the Specification)
c:  Specification

ARTICLE XIV.  WARRANTY

14.1   Seller’s Warranty.

14.1.1   Warranty .  Seller warrants that:

(a)	the Equipment and all other materials and articles furnished hereunder are new, unrepaired (except as permitted by Purchaser) and of suitable grade for the purpose intended;
(b)	the Scope of Work was performed in a good and workmanlike manner and in accordance with the degree of care, skill and diligence consistent with industry standards, and the Equipment is free from defects in design, materials and/or workmanship; 

(c)	the Equipment conforms to the Specification and other requirements of this Agreement;
	This warrant shall be effective until the earlier of thirty-six (36) months after Acceptance or twenty-four (24) months after Owner places the associated combustion turbine phase of the Facility into Commercial Operation (the “Primary Warranty Period”). 
 
14.1.2   Warranty Clarification.  Seller shall have no obligation for correction, repair or replacement of the Equipment in accordance with this Article XIV to the extent that a defect is the result of:

(i)	normal wear and tear; 
(ii)	normal degradation in the performance of the Equipment; 
(iii)	Purchaser's misuse or negligence;
(iv)	assembly, use or service of the Equipment or any relevant part thereof by Purchaser or its contractors other than in conformance with Seller’s or their Vendor's specifications, manuals or written instructions (except as specifically set forth in this Agreement); or 
(v)	a Purchaser directed change in the design or construction of the Equipment which Seller reasonably disputes as not being in accordance with good workmanship or generally accepted professional engineering standards, provided that Seller has given Purchaser written Notice of its dispute prior to performing any such change and such dispute ultimately is resolved in Seller’s favor.

Seller also shall have no obligation for defect in the Equipment under item (ii) of this Section 14.1.2 after the commencement of the Primary Warranty Period to the extent such defect arises out of, Purchaser failing to: 

(i)	operate or maintain the Equipment in accordance with good engineering practice and accepted codes and standards and in accordance with the provisions of the written operation or maintenance instructions provided by Seller to Purchaser, to the extent that such failure by Purchaser is the cause of any defect or damage to the Equipment; or 

(ii)	notify Seller within a reasonable time after an Equipment defect becomes apparent, not to exceed thirty (30) Days from the date supervisory level personnel of Purchaser responsible for the Facility become aware of such defect.

14.1.3   Warranty Breach Notice.  In the event Purchaser determines that a defect exists, Purchaser shall notify Seller of such a defect in writing (fax notification followed by mailed Notice) describing the nature of the breach.

14.2   Extended Warranty Period.

14.2.1   Continued Warranty on Corrections or Repairs Performed During the Primary Warranty Period.  With respect to any portion of the Equipment corrected, repaired, modified or replaced as a result of a defect manifesting during the Primary Warranty Period, Seller shall warrant such portion of the Equipment in accordance with 14.1.1.for a period of twelve (12) months from the date of such modification or correction (the "Extended Warranty Period"), but in no event shall the Extended Warranty Period extend more than twelve (12) months beyond the expiry of the Primary Warranty Period. 

14.2.2   Extension of Warranty Due to Unavailability.  Notwithstanding Section 14.2.1, the Primary Warranty Period or Extended Warranty Period shall be extended by a period equal to the period during which the Units were unable to operate due to Seller failing to perform one or any of its obligations.

14.3   Remedy.

14.3.1   Obligations, Responsibilities and Recourse.  If the warranties set forth in Section 14.1 and 14.2 hereof are breached, Seller shall repair, replace, and/or correct the applicable portion of the Scope of Work such that it meets the requirements of this Agreement immediately on an expedited basis but at no cost to Purchaser. Seller shall provide a service engineer to begin corrective action on the Equipment as soon as reasonably possible after receipt by Seller of Purchaser's Notice referred to in Section 14.1.4 but not later that five (5) Days after receipt of such Notice.  Seller shall as its sole expense disassemble, remove, replace and reinstall the Equipment to the extent necessary while minimizing the downtime required for Seller to perform its Warranty obligation.  Purchaser shall provide Seller with full and free access to the Equipment to perform its warranty obligations under this Agreement, so long as such access does not unreasonably interfere with operation of the Facility.  Any change to parts or Equipment that would alter conformance with the Specification may be made only with prior written approval of Purchaser in accordance with the terms of Article XI hereof.  If, after notification of such defect in materials or workmanship, Seller shall unreasonably delay to commence, continue or complete making good such defect(s), Purchaser may then, following written Notice to Seller, correct such defect(s) in accordance with this Agreement, and Seller shall be liable for all reasonable costs, charges and expenses incurred by Purchaser in connection with such reasonable repair or replacement and shall forthwith pay to Purchaser an amount equal to such costs, charges and expenses upon receipt of invoices certified by Purchaser.  In an emergency where delay would cause serious risk of loss or damage, Purchaser may take such actions as necessary to mitigate such risk and correct the deficiency with oral Notice followed up immediately with written confirmation of the Notice to Seller in accordance with Section 14.1.4.  Such emergency actions shall be to the account of Seller.

14.4   Vendor Warranty.  Seller shall be responsible for enforcing the warranties of all Vendors through the Primary Warranty Period, or, if applicable, the Extended Warranty Period.  In the event of Seller insolvency or Purchaser's termination of Seller for default, Vendor warranties shall automatically be assigned to Purchaser.  Any Vendor warranties that are still in existence at the end of the Primary Warranty Period, or the Extended Warranty Period, as the case may be, shall automatically be assigned on such date to Purchaser.  Thereafter, Seller shall provide reasonable assistance to Purchaser in connection with the enforcement by Purchaser of any Vendor warranty. 

14.5   Limited Warranty.  THE WARRANTIES AND REMEDIES FOR BREACH OF WARRANTY CONTAINED IN THIS AGREEMENT ARE THE EXCLUSIVE WARRANTIES AND WARRANTY REMEDIES BY SELLER APPLICABLE TO THE EQUIPMENT AND IS EXPRESSLY IN LIEU OF ANY OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF SATISFACTORY QUALITY (MERCHANTABILITY) OR FITNESS FOR A PARTICULAR PURPOSE, OR ANY OTHER WARRANTY EXPRESS OR IMPLIED AGAINST VICES OR DEFECTS, LATENT OR OTHERWISE.  SELLER NEITHER ASSUMES NOR AUTHORIZES ANY OTHER PERSON TO ASSUME FOR IT ANY OTHER WARRANTY OBLIGATION IN CONNECTION WITH THE EQUIPMENT OR ANY PART THEREOF. 

14.6   Defective Equipment.  Notwithstanding the foregoing, Seller shall have no obligation hereunder if the Equipment becomes defective in whole or in part as a result of repairs not made by Seller (unless Seller has defaulted in making such repairs), or as a result of the Equipment not having been operated and maintained in accordance with Seller’s written operating limitations and maintenance instructions, or accepted industrial practice.

14.7   Termination of Warranty.  In the event that Purchaser or a third party undertakes major unauthorized alterations or repairs to the Equipment (other than normal maintenance as set out in Seller’s instruction manuals, approved emergency repairs, and replacing defective parts with Seller approved spares) without Seller’s written consent, any warranty applicable to the Equipment adversely affected by such alterations or repairs shall be terminated.  If a defect covered by the warranty is discovered by Purchaser and Purchaser does not:

(i)	immediately take reasonable action to mitigate the damage consequent to the occurrence of the defect;  or
(ii)	notify Seller and allow Seller to correct the defect,

Seller shall not be responsible for repair of that part of the damage attributed to Purchaser's failure to take such action.

14.8   Damage to Other Facility Equipment.  Seller shall be responsible for replacing/repairing damage to any part of the Units caused by a failure of the Equipment during the Primary Warranty Period, or Extended Warranty Period as the case may be.  In the event that an Equipment failure during the Primary Warranty Period or Extended Warranty Period causes damage to portions of the Facility other than the Unit, Seller shall, in addition to repairing the Unit, be responsible for the deductibles for physical loss or damage associated with Purchaser's operating insurance.  Seller’s liability for the deductible shall be the lesser of the actual deductible or $500,000. In the event the Equipment is of new technology, and as such is not insurable under Purchaser's operating insurance, Seller at its expense shall be responsible for all damage to the Equipment and Facility arising out of an Equipment failure during the Primary Warranty Period, or Extended Warranty Period, if applicable.

ARTICLE XV.  RISK OF LOSS AND TITLE

15.1   Risk of Loss.  Seller shall bear the risk of loss and damage with respect to the Equipment until delivery to the Delivery Point or Seller achieves Installation Completion (if the Installation Option is exercised); provided, however, if Seller is required to perform any work on the Equipment after Installation Completion, Seller shall reassume risk of loss for such affected Equipment for the period that such later work is being performed.

15.2   Title.

15.2.1   Passage of Title.  Title to Equipment, drawings, specifications, O & M Manuals and like materials will pass from Seller to Purchaser upon delivery of the Equipment to the Delivery Point (to the extent payment has been made). Seller warrants that legal title to and ownership of the Equipment (including, subject to the use and disclosure limitations in Article XXI, all calculations, as-built, arrangements drawings, detailed engineering drawings and other drawings and documentation required by Purchaser in connection with the operation and maintenance of the Equipment) shall be free and clear of any and all liens, claims, security interests or other encumbrances when title thereto passes to Purchaser. 

15.2.2   Infringement Cures and Defense.  In the event a suit or proceeding is brought against Purchaser, Agent, Lender, operator or their Affiliates, (the "Patent Indemnitees") for infringement of any patent, copyright, trademark, trade secret or other intellectual property right, Seller shall Indemnify and hold harmless Patent Indemnitees, their authorized agents, and anyone directly or indirectly employed by them from and against all claims, damages, losses and expenses (including attorneys' fees) arising out of any infringement of patent rights or copyrights incident to the use or production of the Equipment or incorporation therein of any invention, design process, product or device not specified in the Agreement, and shall defend all such claims in connection with any alleged infringement of such rights.  Seller shall pay all costs and expenses of any such action or suit or threat thereof, including compensation and expenses of experts and counsel of its choice and selection and Seller shall also pay and hold Patent Indemnitees free and harmless from expenses incurred or any damages or other sums awarded or assessed in any such action or suit including costs resulting from imposition of any injunction against Patent Indemnitees.  Patent Indemnitees may be represented by counsel of their own selection and expense, but agrees to cooperate fully in the defense of any such action or suit and to furnish all the evidence in its control.

Nothing herein shall authorize Seller to settle any such suit or action as referred to in this Section 15.2.2 without prior authorization from the affected Patent Indemnitee if, by such settlement, the affected Patent Indemnitee shall be obliged to make any monetary payment, part with any property or any interest therein, to assume any obligation or restriction upon operation of the Equipment or Facility or production of electricity, to be subject to any injunction or to grant licenses or other rights under its patent or other industrial or intellectual property rights.

In the event a Patent Indemnitee is as a result of such suit or proceeding prevented from using such alleged infringing Equipment or other deliverables, Seller shall at its option and expense:

(i)	obtain the right to continued use of the Equipment or other deliverables under this Agreement;
(ii)	correct or modify the infringing aspect of the Equipment or other deliverables under this Agreement so that it becomes non-infringing; or
(iii)	replace the infringing Equipment or other deliverables under this Agreement with equivalent non-infringing Equipment or other deliverables.

THIS SECTION IS AN EXCLUSIVE STATEMENT OF ALL THE DUTIES OF THE PARTIES RELATING TO PATENTS AND DIRECT OR CONTRIBUTORY PATENT INFRINGEMENT AND OF ALL THE REMEDIES OF PURCHASER RELATING TO ANY CLAIMS, SUITS, OR PROCEEDINGS INVOLVING PATENTS.  Compliance with this Section as provided herein and Article XXI shall constitute fulfillment of all liabilities of the parties under the Agreement with respect to patents, copyright, trademark, trade secret or other intellectual property rights. 

15.3   Seller’s Drawings, Etc. for Use by Purchaser.  All drawings, documents, engineering and other data furnished or to be furnished by Seller (other than proprietary data furnished by Seller and Vendors) in performing the Scope of Work may be used by Purchaser, Purchaser's operator or subsequent owner for the purpose of constructing the Facility, including but not limited to operation, maintenance, repair and alteration of the Equipment.  In the event any information covered by this Section 15.3 includes intellectual property rights, proprietary information, copyrighted information of a third party, or any information or property requiring a license to use, manufacture, sell, reproduce, distribute by any means, perform publicly or display such material, Seller shall secure the necessary copyright, license or release to allow Purchaser, Purchaser's operator or subsequent owner to use such information for the purposes stated in the preceding sentence.

15.4   Licensing Procedure.  Seller grants Purchaser a non-exclusive license to use the software and hardware supplied under this Agreement for operating, maintaining and repairing the Facility.  Purchaser shall have no right to the source code; provided, however in the event Seller or Seller’s Vendor discontinues maintenance of such software, Seller shall on a best efforts basis attempt to obtain such source code for Purchaser.  The non-exclusive license granted herein to Purchaser may transferred by Purchaser (and Purchaser's operator for the sole purpose of operating the Facility), Lender(s), or successor owners of the Facility.

Seller and/or their licensors shall at all times remain owners of the software/firmware licensed.

ARTICLE XVI.  INTENTIONALLY OMITTED

ARTICLE XVII.  DEFAULT

17.1   Event of Default by Seller.  Seller shall be in default hereunder upon the occurrence of any one of the following events, which shall be events of default (each an "Event of Seller Default") if not cured within thirty (30) Days following delivery to Seller of a Notice of such event from Purchaser, or, if not curable in such thirty (30) Day period, if Seller has not commenced the cure within such period as agreed by Purchaser and Seller and does not thereafter diligently pursue such cure to completion as agreed, Purchaser retains it rights to  Liquidated Damages as the case may be, with the right of termination for Seller Default in the event such cure is not completed within such period as agreed; provided that the event described in paragraph (d) below shall be an Event of Seller Default upon its occurrence without the aforesaid Notice or cure period:

(a)	Seller shall have assigned or transferred this Agreement or any right or interest herein except as expressly permitted by this Agreement;

(b)	any representation made by Seller in this Agreement shall have been materially false or misleading when made;

(c)	Seller shall have defaulted in its performance under any material provision of this Agreement; 

(d)	Seller’s performance is such that it has failed to meet the Minimum Electrical Losses Guarantee as required pursuant to Sections 10.4.2 and 10.5.3 or Seller has reached its maximum liability for any of the Liquidated Damages referenced in Section 10.6;

(e)	any proceeding is instituted against Seller seeking to adjudicate Seller as a bankrupt or insolvent, or Seller make a general assignment for the benefit of its creditors, or a receiver is appointed on account of the insolvency of Seller, or 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), such proceeding is not dismissed within sixty (60) Days of such filing. 

17.2   Purchaser's Remedies Against Seller.  The provisions of Article XXVI hereof notwithstanding, and without limitation of Purchaser's rights under Article X for those Liquidated Damages paid or due prior to an Event of Seller Default, if an Event of Seller Default shall have occurred and be continuing, Purchaser or its assignee shall have the right to terminate this Agreement in whole or in part by delivery of a Notice of termination to Seller, in addition to any rights and remedies that may be available at law or in equity or as provided herein. In the case of Event of Seller Default as set forth in Section 17.1(c), Purchaser shall be entitled to such Liquidated Damages plus other amounts as associated with the termination.  In the event of Seller Default under Section 17.1(d) based upon an action or proceeding instituted against Seller, such Notice of termination by Purchaser shall not be given until sixty (60) Days after such filing.

17.3   General Obligations.  If Purchaser elects to terminate this Agreement pursuant to Section 17.2 hereof, Seller shall, at Purchaser's request and at Seller’s expense, perform the following services relative to the Scope of Work so affected: 

(a)	assist Purchaser in preparing an inventory of all Equipment and documentation to which Purchaser has not already taken title;

(b)	assign to Purchaser, or to any person designated by Purchaser without any right to compensation not otherwise provided for herein, title to all portions of the Equipment and documentation not already owned by Purchaser, together with all subcontracts and other contractual agreements (including warranties) as may be designated by Purchaser, all of which subcontracts and contractual agreements shall be so assignable without such subcontractor’s prior approval, and assign to Purchaser to the extent assignable all issued licenses, authorizations, approvals and rights to complete and to use the Equipment under patents and other proprietary or intellectual property rights then held by Seller or their Vendors pertaining to the Equipment; 

(c)	deliver to Purchaser all design and other information as may be reasonably requested by Purchaser for the completion and/or operation of the Equipment (subject to the requirements of Section 21.1. hereof);  and 

(d)	supply any proprietary components needed for the completion and operation of the Equipment.

17.4   Payment Obligations. 

17.4.1   Determination of Obligations.  If Purchaser terminates this Agreement pursuant to Section 17.2 hereof, Purchaser shall determine the value of the properly completed Scope of Work, if any (the "Proper Scope Value"). If Purchaser has paid Seller in excess of the Proper Scope Value the difference between the amount of the Purchase Amount paid to Seller and the Proper Scope Value (the "Refund Amount") shall be due to Purchaser by Seller. In the event that the amount of the Purchase Amount paid by Purchaser to Seller is less than the Proper Scope Value, such amount shall be referred to as the "Scope Value Due". 

17.4.2   Damages and Expenses.  Purchaser shall determine the total damages and reasonable and necessary expenses incurred and accrued in connection with:

(i)	the termination of this Agreement (including all reasonable legal fees and expenses for,  inter alia, the negotiation of an agreement with an alternate supplier);
 
(ii)	any repairs, rework, modifications or replacement, completion of the Scope of Work and all associated incidental costs; and
 
(iii)	amounts otherwise due Purchaser from Seller pursuant to this Agreement (including but not limited to Liquidated Damages).

The total of items (i) through (iii) above shall be referred to as the "Termination Costs".
  
17.4.3   Excess Amounts.  If the sum of the Proper Scope Value and Termination Costs is greater than the Purchase Amount, Seller shall be responsible for paying to Purchaser the excess, and such amount shall be termed as the "Excess Termination Cost".

17.4.4   Settlement.  Upon determining the Proper Scope Value and the Excess Termination Costs, if any, Purchaser shall invoice Seller for the termination settlement (the "Termination Settlement"):

If SVD is greater than zero (0),
then the Termination Settlement = ETC - SVD.

If RA is greater than zero (0),
then the Termination Settlement = RA + ETC.

When:
ETC = Excess Termination Cost (but not less than zero)
RA  = Refund Amount (but not less than zero)
SVD = Scope Value Due (but not less than zero) 

Seller shall be responsible for making payment of such invoice within thirty (30) Days of receipt of such invoice. Any such amounts not paid when due shall accrue interest at the Interest Rate. 

17.5   Events of Default by Purchaser.  Purchaser shall be in default hereunder upon the occurrence of any one of the following events, which shall be events of default (each an "Event of Purchaser Default") if not cured within thirty (30) Days following delivery to Purchaser of a Notice of such event from Seller or if not curable in such thirty (30) Day period, if Purchaser has not commenced the cure within such period and does not thereafter diligently pursue such cure, provided that the event described in paragraph (d) below shall be an Event of Purchaser Default upon its occurrence without the aforesaid Notice or cure period:

(a)	Purchaser shall have assigned or transferred this Agreement or any right or interest herein except as expressly permitted by this Agreement;

(b)	any representation made by Purchaser in this Agreement shall have been materially false or misleading when made;

(c)	Purchaser shall have defaulted in its performance under any material provision of this Agreement; or 

(d)	any proceeding is instituted against Purchaser seeking to adjudicate Purchaser as a bankrupt or insolvent, or Purchaser makes a general assignment for the benefit of its creditors, or a receiver is appointed on account of the insolvency of Purchaser, or Purchaser files a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, winding up or composition or readjustment of debts and in the case of any such proceeding instituted against Purchaser (but not by Purchaser) such proceeding is not dismissed within sixty (60) Days of such filing.

17.6   Seller Remedies.  The provisions of Article XXVI hereof notwithstanding, if an Event of Purchaser Default shall have occurred and be continuing, Seller shall have the right to terminate this Agreement by delivery of a Notice of termination to Purchaser, in addition to any rights and remedies that may be available at law or in equity.  In the event of Purchaser Default under Section 17.5(d) based upon an action or proceeding instituted against Purchaser, such Notice of termination by Seller shall not be given until sixty (60) Days after such filing. 

ARTICLE XVIII.  FORCE MAJEURE

18.1   Failure to Perform Due to an Event of Force Majeure.  Subject to the terms of this Article XVIII, either party shall be excused from performance and shall not be considered to be in default with respect to any obligation hereunder, to the extent its failure of performance is due to an Event of Force Majeure.  

18.2   Events of Force Majeure.  Events of Force Majeure shall be limited to the circumstances set forth in clause 18.4 but only if, and to the extent:

(i)	such circumstance is not within the reasonable control of the Affected Party;

(ii)	such circumstance, despite the exercise of reasonable diligence, can not be prevented, avoided or removed by the Affected Party;

(iii)	such event materially adversely affects (in cost and/or time) the ability of the Affected Party to fulfill its obligations under the Agreement;

          (iv)	the Affected Party has taken all reasonable precautions, due care and reasonable alternative measures in order to avoid the effect of such event on the Affected Party's ability to fulfill its obligations under the Agreement and to mitigate the consequences thereof;

(v)	that such event is deemed as a Event of Force Majeure under any related project document(s); and

(vi)	such event is not the result of any failure of the Affected Party to perform any of its obligations under the Agreement, provided however that each such circumstance invoked by a party as affecting its ability to perform shall be an Event of Force Majeure if such party has acted in a reasonable and prudent manner.  

18.3   Notice of Force Majeure.  As soon as possible following the date of commencement of any Event of Force Majeure, if either party desires to invoke such Event of Force Majeure as a cause for delay in the performance of any obligation hereunder or as potential adjustment of the Purchase Amount, it shall promptly (but not later than forty eight (48) hours upon learning of such Event of Force Majeure), advise the other party in writing of such date.  Notices shall be in accordance with Section 25.1.  Within seven (7) Days, the Affected Party shall provide in writing a description of the event and reasonable alternative measures which the Affected Party has taken in order to avoid the effect of such event on the Affected Party's ability to fulfill its obligations under the Agreement and to mitigate the consequences thereof, and the nature and expected duration of such Event of Force Majeure.  The Affected Party shall provide additional information concerning the event as reasonably requested by other party (including, without limitation, updating of any information already provided under this Section 18.3).  As soon as practicable after the commencement of the Event of Force Majeure, the Affected Party shall allow the other party’s professional advisers access to its premises and equipment to enable the other party to assess the event and the steps to avoid or remove the circumstances constituting the event.  Within a reasonable time following the date of termination of such Event of Force Majeure, the Affected Party shall submit to the other party as soon as practicable, reasonable proof of the nature of such delay and its effect upon the Guaranteed Installation Date(s) or Guaranteed Unit Delivery Date(s), the basis for an adjustment of the Purchase Amount or any other material term under this Agreement .  The burden of proof to demonstrate that a Force Majeure event has occurred and affects the claiming parties ability to perform, rests with the claiming party. The parties will meet within ten (10) Days after receipt of the Notice by the unaffected party to discuss appropriate measures that should be taken.  The parties shall thereupon consult with one another concerning the effect of such Event of Force Majeure and an extension of the Guaranteed Installation Date or the Guaranteed Unit Delivery Date an adjustment in the Purchase Amount or any other material term under this Agreement shall be made by the parties to take into account such effect on the ability of Purchaser and Seller to reschedule project activities to avoid or minimize overall delays or additional costs resulting from the Event of Force Majeure.  The parties:

(i)	shall make all reasonable efforts to prevent and reduce to a minimum and mitigate the effect of any delay or potential adjustment of the Purchase Amount occasioned by any Event of Force Majeure including recourse to alternate acceptable source of services, equipment and materials and construction equipment; and

(ii)	shall use their best efforts to ensure resumption of normal performance of the Agreement after the occurrence of any Event of Force Majeure and shall perform their obligations to the maximum extent practicable as agreed between the parties.

18.4   Events of Force Majeure.  Subject to the provisions of Sections 18.2 and 18.5, an Event of Force Majeure shall mean the following:

(a)	explosions, fires, nuclear radiation contamination, hurricanes, earthquakes, floods, natural disasters, epidemics, other acts of God, and any other similar circumstances;

(b)	war and other hostilities (whether declared or not), revolution, public disorders, insurrection, rebellion, sabotage, acts of public officials or terrorist action;

(c)	any action or relative material inaction taken by any national or local government or judicial authority after the date of this Agreement, including without limitation any order, legislation, enactment, judgement, ruling or decision; 

(d)	national or regional strikes which are not specific to Seller’s manufacturing facilities;

(e)	strikes at the Site not arising out of Seller’s performance of work at or near the Site;

(f)	accidents in transportation resulting from any of the Events of Force Majeure listed in Subsection 18.4 (a).

(g)	delays resulting from unforeseen extreme weather conditions.

18.5   Certain Events Not Excused.  Notwithstanding that an Event of Force Majeure may otherwise exist, the provisions of this Article XVIII shall not excuse: 

(a)	late delivery of equipment or materials caused by Seller, or caused by any of the subcontractors of Seller if Seller could have avoided such late delivery by exercising all reasonable endeavors as a prudent equipment supplier;

(b)	late performance by Seller caused by Seller’s failure to engage qualified subcontractors and suppliers or to hire an adequate number of personnel or labor or by inefficiencies on the part of Seller.

18.6   Continued Performance.  Upon the occurrence of any Event of Force Majeure, the parties shall endeavor to continue to perform their obligations under the Agreement so far as reasonably practicable and Seller shall during the period of such circumstances protect and secure the Works in such manner as Purchaser shall require.  Seller shall notify Purchaser of the steps it proposes to take including any reasonable alternative means for performance of the Works not prevented by the Event of Force Majeure. 

18.7   Not Used.  

18.8   Force Majeure - Delays.  If either party becomes unable to perform all or part of its obligations under the Agreement because of an Event of Force Majeure, and such party has properly invoked and observed the provisions of Section 18.3 in respect thereof, such party shall be permitted a delay in the performance of its obligations affected by the Event of Force Majeure and, to the extent affected, an extension of the Guaranteed Installation Date or Guaranteed Unit Delivery Date.

18.9   Force Majeure - Cost.  Seller shall bear its own delay costs occasioned by any event of Force Majeure for the first ninety (90) Day period during the occurrence or continuance of each such Event of Force Majeure.  If an Event of Force Majeure continues beyond such ninety (90) Day period, provided Seller has properly invoked and observed the provisions of Section 18.3 in respect thereof, Seller shall be entitled, subject to the provisions of Section 11.3, to recover costs occasioned by each such Event of Force Majeure which accrue after each such ninety (90) Day period pursuant to a Purchase Amount adjustment in accordance with Section 5.5 and Article XI hereof.

ARTICLE XIX.  INSURANCE

19.1   Insurance - General.  Seller shall procure insurance at its own expense and maintain in full force and effect at all times throughout Seller’s performance under this Agreement (to include Seller’s performance of its warranty obligations) with responsible insurance carriers as set forth in this Agreement. 

19.1.1   All Risk.  Seller shall purchase and maintain insurance to the full replacement cost of the Equipment during the process of fabrication, in the factory, and until transportation from Seller’s final assembly factory commences, for physical loss and damage including but not limited to theft, vandalism, and malicious mischief, collapse, water damage and such other perils as Seller deems appropriate.  Seller may self insure work in the process of fabrication.

19.1.2   Workers Compensation and Employers Liability Insurance.  Seller agrees to comply with workers compensation laws of each jurisdiction where the Scope of Work is performed, and to maintain a Workers Compensation and Employers Liability policy.   This policy shall be endorsed, if applicable, to provide all state coverage, alternate employer, voluntary compensation coverage and occupational disease with the limits set forth below. If the work is to be performed  on or near navigable U.S. waters, the policy shall include coverage for United State Longshoreman's and Harbor Worker's Act, Death on the High Seas Act, Jones Act, or their equivalent as required by the applicable laws in the jurisdiction where such work is performed.  

Workers Compensation		Statutory
Employers Liability		$1,000,000 Each Accident
$1,000,000 Disease 
Each Employee (Minimum)

19.1.3   Commercial General Liability Insurance.  Seller shall maintain Commercial General Liability Insurance, endorsed to provide coverage for: Explosion, Collapse and Underground hazards; Contractual Liability (particularly applicable to the provisions of the "General Indemnity" section of this Agreement);  and Products and Completed Operations (for a minimum of one year after completion of the Scope of Work) with the following limits:   

Bodily Injury and		$1,000,000 Combined Single Limit 
Property Damage		Each Occurrence, (Minimum)

19.1.4   Hull and Protection and Indemnity Insurance.  Seller shall ensure that if any owned or non-owned watercraft of any kind is used for performance of the Scope of Work, Hull and Protection and Indemnity Insurance shall be provided for the vessels in the amounts as follows:

Hull			Full replacement value of the watercraft.
P&I			$1,000,000 Each Occurrence or the full value of the vessel, whichever is greater.

Such insurance may be provided by the vessel operator, by the vessel charter agreement, or by Seller as Seller deems appropriate.

19.1.5   Business Automobile Liability Insurance.  Seller shall provide Business Automobile Liability Insurance which shall include the following coverage for all owned, non-owned and hired vehicles:

Bodily Injury 	  	$1,000,000 Each Person  (Minimum)
$1,000,000 Each Occurrence (Minimum)
Property Damage 	$1,000,000 Each Occurrence (Minimum)
or
Bodily Injury and 	$1,000,000 Combined Single Limit
Property Damage 	Each Occurrence (Minimum)  

19.1.6   Aircraft Liability Insurance.  If the Scope of Work necessitates the use of aircraft, Seller shall provide Aircraft Liability Insurance which shall be endorsed to provide coverage for non-owned as well as Guest Voluntary Settlement, with limits of:

Bodily Injury and	$10,000,000 Combined Single Limit
Property Damage	Each Occurrence

Such insurance may be provided by the aircraft operator, by the aircraft charter agreement, or by Seller as Seller deems appropriate.

19.1.7   Excess Umbrella Liability Coverage.  Seller shall provide Excess Umbrella Liability coverage with minimum limits of:

Bodily Injury and	$5,000,000 Combined Single Limit 
Property Damage 	Each Occurrence 

19.1.8   Vendors.  Seller shall require its Vendors and others connected with the Scope of Work to provide and maintain insurance at all times during the period that their agreement related to the Scope of Work under this Agreement is in force and effect at the Vendor's, or other's own cost, with insurance limits which at minimum meets levels as required for similar contracts and is customary for the applicable industry. 

19.1.9   Certificate of Insurance.  Within twenty (20) Days of execution of this Agreement, Seller shall submit to Purchaser a certificate of insurance, in form satisfactory to Purchaser, evidencing that satisfactory coverage of the type and limits set forth hereinabove are in effect.  Policies providing such coverage shall contain provisions that no cancellation or material changes in the policies shall become effective except on sixty (60) Days advance written Notice thereof to Purchaser.  Irrespective of the requirements as to insurance to be carried as provided for herein, the insolvency, bankruptcy or failure of any insurance company carrying insurance of Seller, the failure of any insurance company to pay claims accruing, shall not affect, negate or waive any of the provisions of this Agreement including, without exception, the indemnity obligations of Seller. 

19.1.10  Other Requirements.  Seller shall be responsible for the payment of all deductible and self insurance retention amounts with respect to the insurance required to be maintained by it pursuant hereto.  All Seller insurance shall:

(a)	Specify Purchaser’s Lender, and such other parties as Purchaser may require as additional insured for all insurance coverage other than Worker's Compensation Insurance, or its equivalent as required in jurisdictions other than the United States;

(b)	Provide that Purchaser shall have the right, but not any obligation, to pay any premiums if Seller shall fail to do so, and such payment of premiums by Purchaser shall be at Seller’s expense, either by direct charge or setoff;  

(c)	For all insurance coverage related to Scope of Work, waive any right of subrogation against Purchaser, Lender, their parent and affiliated companies and their directors, officers, employees and agents, and all other named and additional insured and any other right of the insurer to any setoff or counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of Purchaser, Lender, or any other named or additional insured; and

(d) 	For all other insurance other than as stated in (c) immediately above, waive any right of subrogation against Purchaser, Lender and all other named and additional insured and any other right of the insurer to any setoff or counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of Purchaser, Lender or any other named or additional insured.  

19.1.11  Vendor Waiver of Subrogation.  Seller agrees to require all policies of insurance which are in any way related to the Scope of Work and that are secured and maintained by Seller’s first tier Vendors to include clauses providing that each Underwriter shall waive its rights of recovery, under subrogation or otherwise, against Purchaser, Lender, their parent and affiliated companies and their directors, officers, employees and agents. In the event that an insurer of a second tier or below vendor attempts to exercise its rights of recovery under subrogation or otherwise, against Purchaser and Lender, their parent and affiliated companies and their directors, officers, employees and agents, Seller shall indemnify and defend Purchaser and Lender against such action if such action arises out of or is in any way related to this Agreement.

19.1.12  Compliance with Insurance.  Seller and their directors, officer, representatives, agents and employees shall comply with all the terms of the policies of insurance referred to in Section 19.1 and in any Delay in Start-Up and Business Interruption Insurance obtained by Purchaser.  Seller and their directors, officers, representatives, agents and employees shall comply with the procedures for claims, notification and administration under the aforesaid insurance policies and shall not do or omit to do anything which might render voidable policies of insurance or entitle insurers to avoid liabilities thereunder.  Seller shall ensure that all major subcontractors shall be subject to provisions identical to this Section 19.1.12.

19.1.13 Limitation.

19.1.13.1  In the event that Seller breaches its obligations under the first two sentences of Section 19.1.12 of the Agreement and such breach results in an insurer avoiding, in relation to Seller, any policy of insurance obtained by Purchaser pursuant to Section 19.2 of the Agreement, Seller shall not be regarded as an additional insured under such policy and any waiver of subrogation in favor of Seller included in that policy pursuant to Section 19.2 shall not apply.

19.1.13.2  In the event that any Subcontractor fails to comply with the procedures for claims notification and administration under any policy of insurance obtained by Purchaser pursuant to Section 19.2 of the Agreement or does anything which might render any such policy of insurance voidable or entitle insurers to avoid liability thereunder and as a result thereof an insurer avoids in relation to that Subcontractor any such policy of insurance, that Subcontractor shall not be regarded as an additional insured under such policy and any waiver of subrogation in favor of that subcontractor included in that policy pursuant to Section 19.2 of the Agreement shall not apply.

19.2   Purchaser Provided Insurance.   

19.2.1   Builder's All Risk.  Purchaser shall, or shall cause to be purchased and maintained, a Builder's "All Risk" insurance policy for the Facility covering all work at the Site in connection with the Work and all Equipment at the Site intended for incorporation in the Facility (including, but only during construction of, temporary buildings, Site huts and offices used for the purpose of the construction of the Facility but not intended for incorporation therein and excluding construction equipment) against the risk of physical loss or damage from whatever cause (including resultant loss or damage arising from faulty materials, workmanship or design), other than risks specifically excluded by the terms of the policy.  Such insurance shall be on a "replacement cost" basis insuring the total cost of the Facility and will also provide:

	(i)	coverage for removal of debris;
	(ii)	transit coverage, not including ocean marine coverage;
	(iii)	off-Site storage coverage;
	(iv)	cold and hot (operational) testing coverage; and
	(v)	24 months maintenance period coverage endorsement.

The deductibles shall be as follows:
	(a)	US$ 100,000 each and every loss during start up, commissioning, and Performance Testing at the Site.
	(b)	US $25,000 each and every other loss.

19.2.2   Marine Cargo Insurance. Purchaser shall or shall cause to be purchased and maintained, Marine Cargo Insurance on a "warehouse to warehouse" basis insuring the Equipment against loss or damage arising from customary "all risk" marine perils (including war, strikes, riots and civil commotion, if available) while in transit, provided such shipment involves “blue water” transport.  Such policy limit shall be equal to 110% of the cost (including cost of freight and insurance) of the largest single shipment.  The deductible under such insurance shall be $25,000 on a per occurrence basis.

19.2.3   Comprehensive General Liability.  Purchaser shall, or shall cause to be purchased and maintained, Comprehensive General Liability Insurance on a broad form with a U.S. $5,000,000 combined single limit for bodily injury and/or property damage for each occurrence, including Contractual Liability Insurance, Personal Injury, Products and Completed Operations Insurance for one year after completion of the Work, and coverage for Collapse, Explosion and Underground Hazards or insurance providing substantially similar coverage where all Work is performed. Such insurance shall be primary for performance of Work activities off Site including coverage for Purchaser and Seller but not extending to Subcontractors.

The deductible shall be US$10,000 for each and every loss in respect of property damage only.

19.3   Purchaser Policies.  

19.3.1   Purchaser's Policies.  The insurance policies required to be maintained by Purchaser or caused to be maintained by Purchaser under this Section 19.2 shall:

	(i)	provide for waivers of subrogation in favor of the Seller, its Vendor and their respective agents, officers and employees which do not extend to events occurring beyond the time necessary for Seller to fulfill its warranty obligations under Article XII of the Agreement; and

	(ii)	include the Seller and its Subcontractors as additional insureds for their respective interests.

19.3.2   Not Used.  

19.3.3   Primary Insurance.  All policies of insurance referred to in herein shall be endorsed to specify that for activities at the Site, they are primary to and not excess to or on a contributing basis with any insurance or self-insurance maintained by the Purchaser and Seller (and its affiliate) or any Subcontractors in respect of losses arising out of or in connection with the Works at the Site. Contractor's insurance under Section 19.1 shall be primary for losses away from the Site.

ARTICLE XX.  INDEMNIFICATION

20.1   Third Party.  SELLER AGREES TO INDEMNIFY, PROTECT, DEFEND, AND HOLD HARMLESS PURCHASER ITS DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, AFFILIATES AND CONTRACTORS, AND THE DIRECTORS, OFFICERS EMPLOYEES, AGENTS, AND CONTRACTORS OF PURCHASER'S AFFILIATES, FROM AND AGAINST ANY AND ALL DEMANDS, LIENS OR OTHER ENCUMBRANCES ON PURCHASER OR ITS PROPERTY (INCLUDING THE FACILITY), CLAIMS, SUITS AND CAUSES OF ACTION OF THIRD PARTIES AND ANY AND ALL LIABILITY, COSTS, EXPENSES, AND JUDGMENTS INCURRED IN CONNECTION THEREWITH (INCLUDING, WITHOUT LIMITATION, COURT COSTS AND ATTORNEY'S FEES), WHETHER ARISING IN EQUITY, AT COMMON LAW, OR BY STATUTE, OR UNDER THE LAW OF CONTRACTS, TORTS (INCLUDING, WITHOUT LIMITATION, NEGLIGENCE AND STRICT LIABILITY WITHOUT REGARD TO FAULT) PERTAINING TO PERSONAL INJURY OR PROPERTY CLAIMS, OF EVERY KIND OR CHARACTER, AND WHETHER OR NOT DUE IN PART TO PURCHASER'S CONCURRENT NEGLIGENCE OR OTHER FAULT, BREACH OF CONTRACT OR WARRANTY, OR STRICT LIABILITY WITHOUT REGARD TO FAULT,  BASED UPON, IN CONNECTION WITH, RELATING TO OR ARISING OUT OF THE AGREEMENT OR SELLER’S ACTIONS OR INACTIONS UNDER THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, ANY FAILURE TO COMPLY WITH ANY APPLICABLE LAWS, RULES, REGULATIONS, ORDINANCES, ORDERS, CODES, RESOLUTIONS OR STANDARDS AND INFRINGEMENT OF ANY THIRD PARTY'S OWNERSHIP OF INTELLECTUAL PROPERTY RIGHTS, AND EVEN IF DUE IN PART TO PURCHASER'S CONCURRENT NEGLIGENCE OR OTHER FAULT, BREACH OF CONTRACT OR WARRANTY, OR STRICT LIABILITY WITHOUT REGARD TO FAULT; PROVIDED, HOWEVER, THAT SELLER’S CONTRACTUAL OBLIGATION OF INDEMNIFICATION SHALL NOT EXTEND TO THE PERCENTAGE OF DAMAGES OR INJURIES ATTRIBUTABLE TO PURCHASER'S NEGLIGENCE OR OTHER FAULT, BREACH OF CONTRACT OR WARRANTY,  OR TO STRICT LIABILITY IMPOSED UPON PURCHASER AS A MATTER OF LAW.  THIS INDEMNIFICATION OBLIGATION SHALL APPLY REGARDLESS OF THE AMOUNT OF INSURANCE COVERAGE HELD BY SELLER, INCLUDING THAT UNDER ANY WORKER'S COMPENSATION ACT OR EQUIVALENT AS REQUIRED BY THE APPLICABLE JURISDICTION, DISABILITY ACT, OR OTHER ACT OR LAW WHICH WOULD LIMIT THE AMOUNT OR TYPE OF DAMAGES, COMPENSATION, OR BENEFITS PAYABLE BY OR FOR SELLER, AND SHALL NOT BE LIMITED BY ANY INSURANCE CARRIED OR PROVIDED BY SELLER IN ACCORDANCE WITH THIS AGREEMENT OR OTHERWISE. 

20.2   Notice.  If any party entitled to indemnification hereunder (the "Indemnified Party") intends to seek indemnification under this Article from Seller with respect to any action or claim, the Indemnified Party shall give Seller Notice of such claim or action upon the receipt of actual knowledge or information by the Indemnified Party of any possible claim or of the commencement of such claim or action, which period shall in no event be later than the lesser of:

(a)	fifteen (15) business [Business] Days prior to the last Day for responding to such claim or action; or
(b)	one-half of the period allowed for responding to such claim or action.

Seller shall have no liability under this Article XX for any claim or action for which such Notice is not provided, if the failure to give such Notice prejudices Seller.  Seller shall have the right to assume the defense of any such claim or action with counsel designated by Seller and reasonably satisfactory to the Indemnified Party; provided, however, that if the defendants in any such action include both the Indemnified Party and Seller, and the Indemnified Party shall have reasonably concluded that there may be legal defenses available to it which are different from or additional to those available to Seller, the Indemnified Party shall have the right to select separate counsel to assert such legal defenses and to otherwise participate. 

20.3   Employees.  Neither party nor its directors, officers, employees, agents, Affiliates or representatives, nor any independent contractor engaged by it in connection with the performance of this Agreement, shall be deemed an employee of the other party.  Neither party shall bring any claim against the other party or its directors, officers, Affiliates, agents, representatives, employees or independent contractors with respect to any liability for compensation under an applicable State or Federal Worker's Compensation Act or equivalent as required by the relevant jurisdiction, including, but not limited to, Worker's Compensation and/or employer's liability claims of employees. 

20.4   Survival of Obligation.  The duty to indemnify under this Article XX will continue in full force and effect notwithstanding the expiration or termination of this Agreement.

ARTICLE XXI.  NON-DISCLOSURE OF INFORMATION

21.1   Proprietary Information.  Any information concerning the parties which is designated in writing as proprietary and/or confidential and disclosed to the other party incident to the performance of Scope of Work pursuant to this Agreement in confidence shall not be published or otherwise discloses to others without the written approval of the disclosing party, provided, however, that nothing herein shall limit either party's rights to disclose data which: 

(a)	was developed on its own or furnished to it prior to this Agreement without restriction;

(b)	becomes generally available to the public through no fault of either party; or

(c)	is received by either party from a third party without restriction and not in breach of this Agreement or without fault or wrongdoing of the recipient.

Furthermore Purchaser or Seller may upon written Notice in advance to the other party provide any such information to any governmental authority having jurisdiction and asserting a right to obtain such information, but only to the extent required to do so by law. This clause shall survive the termination of this Agreement. 

21.2   Press Releases.  Seller agrees that it is in Purchaser's interest to limit information of strategic value disseminated to the independent power industry regarding this Facility.  To the extent that Seller desires to issue press releases, advertisements in the trade press, tombstones in the financial or trade press then Seller must obtain Purchaser's written release to do so.

21.3   Confidentiality.  Seller acknowledges that Purchaser's business is highly competitive and that Purchaser's books, records, documents and technical information concerning its products, equipment, services, processes, procurement procedures, pricing techniques, the names of and other information (such as credit and financial data) concerning Purchaser's customers and business affiliates, all comprise confidential business information and trade secrets of Purchaser which are valuable, special and unique proprietary assets.  Seller further acknowledges that protection of Purchaser's confidential business information and trade secrets against unauthorized disclosure and use is of critical importance to Purchaser in maintaining its competitive position.  Accordingly, Seller hereby agree that he will not, at any time during or after the term of this Agreement, make any unauthorized disclosure of any confidential business information or trade secrets of Purchaser or make any use thereof, except for the benefit of, and on behalf of Purchaser.  However, Seller’s obligation under this Section 21.3 shall not extend to information which is or becomes part of the public domain or is available to the public by publication or otherwise through no wrongful act or omission or noncompliance with this Section by Seller or their agents.  The provisions of this Section 21.3 shall survive the termination of this Agreement.  Seller agrees and acknowledges that money damages would not be sufficient to remedy for any breach of this Section 21.3 by Seller, and Purchaser shall be entitled to specific performance and injunctive relief as remedies for such breach or any threatened breach.  Such remedies shall not be deemed the exclusive remedies for a breach of this Section 21.3 by Seller but shall be in addition to all remedies available at law or in equity to Purchaser including recovery of damages from Seller. For the purposes of this paragraph, the term "Purchaser" shall also include affiliates of Purchaser.

Seller shall deliver to Purchaser all Purchaser confidential information provided or disclosed to or used or acquired by Seller, including all information developed, derived, or created therefrom, or portions thereof, upon the earlier of:

(i)	the ending of the need for the information relating to the  performance of the Scope of Work; or
(ii)	Purchaser's request;
(iii)	the completion of the Scope of Work for which it was provided, disclosed used or acquired; or
(iv)	termination or suspension of this Agreement.

Seller may retain a single copy of all information upon which its Scope of Work is based for record purposes only.  In the event Seller releases Purchaser's confidential information to a third party, Seller shall require such third party to enter into a confidentiality agreement similar to this Section 21.3 with Seller, and Seller shall retrieve all such released confidential information, including any and all copies of the confidential information and all information developed, derived, or created therefrom, upon the earlier of the events set forth above in this Section 21.3. 

No documents, data, materials or information available to Seller as set forth in this Section 21.3 or produced in whole or in part under this Agreement shall be the subject of an application for copyright by or on behalf of Seller without the prior written consent of Purchaser.

Either party shall be entitled to disclose the terms and conditions of this Agreement and any data or information acquired by it under or pursuant to this Agreement without the prior consent of the other party:

(a)	to any Affiliate of such party;
(b)	to any outside consultants or advisers engaged by or on behalf of such party in connection with the Works or the financing or operation of the Facility and acting in that capacity;
(c)	to Purchaser and Lenders;
(d)	to the extent required by the rules of a relevant and recognized stock exchange;
(e)	to the extent required by law or pursuant to an order of any court of competent jurisdiction, provided that the original disclosing party is given Notice and adequate time to seek a protective order applicable to the information before it is disclosed;
(f)	to any insurer under a policy of insurance required to be taken out by either party under the Agreement; or
(g)	to directors, employees and officers of such party;

provided that:
(h)	the disclosing party determines in good faith that the recipient has a legitimate need to see such data or information; and
(i)	the recipient has been made aware of and has agreed to be bound by the requirements of this Article XXI.

ARTICLE XXII.  ASSIGNMENT

22.1   Assignment by Seller.  This Agreement may not be assigned by Seller without the prior written consent of Purchaser, which shall not be unreasonably withheld.

22.2   Assignment by Purchaser.  This Agreement or any right or obligation contained herein may be assigned, from time to time, by Purchaser without Seller’s consent to:

(i)	Agent (in the case of an assignment by Purchaser) or an Affiliate of either WestLB or Agent;

(ii)	a joint venture, partnership, limited liability company or other similar entity in which Agent or any of its Affiliates is a venturer, partner or participant with no less than a nineteen and one-half percent (19.5%) equity interest;

(iii)	any Lender;

(iv)	any Indemnified Party;

(v)	any entity for the purposes of financing or sale of the Facility;

(vi)	any party (1) for which Agent or any of its Affiliates has agreed to construct or develop a facility using the Equipment, or (2) to which the Agent or any of its Affiliates has agreed to convey a power plant project which it has under development; or

(vii)	any contractor or developer (including, without limitation, Enron Engineering & Construction Company and/or NEPCO) which is retained by Agent or any of its Affiliates to construct or develop a Facility using the Equipment.

[In the case of an assignment to a party described in (ii), (vi), or (vii) (other than  Enron Engineering & Construction or NEPCO), Seller shall be entitled to request and receive an appropriate guaranty, letter of credit, payment bond or other reasonable form of payment security, in amount not to exceed the amount of the Purchase Amount remaining to be paid at the time of the assignment, unless the assignor agrees to remain liable for all future liabilities under this Agreement.  A letter of guaranty, letter of credit, or payment bond provided by an entity rated BBB+ or better shall be deemed to be an appropriate form of security for the purpose of this provision.]

Except for (i) through (vii) above, this Agreement may not be assigned by Purchaser to other parties without the prior written consent of Seller which shall not be unreasonably withheld, conditioned or delayed.  Seller agrees to respond to any request for consent within thirty (30) Days following its receipt of such request.  Any failure to respond within the foregoing time period shall be deemed to be a grant by Seller of its consent to the proposed assignment.  In determining whether Purchaser shall be permitted to assign this Agreement, Seller shall only be deemed to be reasonable in withholding its consent if the proposed assignee does not have substantially the same or better credit quality than Agent unless (a) the proposed assignee provides appropriate guaranties, letters of credit or other assurances of payment issued by an entity or person with substantially the same or better credit quality than Purchaser [Agent], or (b) the assignor agrees to remain liable for all future liability under this Agreement.  Purchaser shall have the right to assign or pledge, from time to time, all or any portion of its right, title and interest in, to and under the Agreement as collateral for financing of any Facility without Seller’s consent.

When duly assigned in accordance with the foregoing (including, following any collateral assignment, upon foreclosure by any collateral assignee) (i) this Agreement shall be binding upon and shall inure to the benefit of the assignee (and all rights hereunder, including, without limitation, any and all warranty rights, shall be assigned to the assignee as if such assignee were an original party hereto), and (ii) the assignor shall be irrevocably relieved and forever discharged of all liability under this Agreement so long as the assignee executes an assumption of such liabilities.  Any other assignment by Purchaser shall be void and without force or effect. 

Notwithstanding the generality of the foregoing, in connection with any assignment permitted under this Section 22.2 to any assignee, the Purchaser shall have the right, from time to time by Notice to Seller and without Seller’s consent, to (i) designate such assignee to be the successor of WestLB hereunder, (ii) designate such assignee to be the successor of  “Agent” hereunder, (iii) designate such assignee as a sub-agent of the Agent hereunder, and (iv) designate that such assignee has succeeded to all of the rights and obligations of both WestLB and Agent, whereupon (notwithstanding the first WHEREAS clause hereof, but subject to any subsequent appointment of an “Agent” hereunder) each reference to “Purchaser” hereunder shall be deemed a reference to such assignee acting in its individual capacity and each reference to an “Agent” herein shall be deemed deleted.

Upon any permitted assignment of the rights under this Agreement to acquire a Unit or Units, and the assumption (in accordance with the terms hereof) of the obligations related thereto, Seller shall enter into a separate purchase agreement with the permitted assignee (each, a “Facility Agreement”).  The terms of each Facility Agreement will be in strict conformity with the terms and conditions of this Agreement, except for site specific changes as agreed by the Seller and such assignee.  In no way shall the Facility Agreement increase the liability or responsibility of Seller, Purchaser, or Agent under this Agreement.

[The parties further agree that the provisions of this Agreement relating to assignment will only control the assignment of Purchaser’s or Agent’s rights and obligations under this agreement prior to Acceptance of the Unit to be assigned. Following Acceptance, Purchaser or Agent shall be permitted, without Seller’s consent, to: (i) assign its rights under this Agreement, (ii) convey any ownership interest that it may have in the Facility and/or (iii) convey any ownership interest that it may have in the entity which may own the Facility.] 

22.3   Agreement with Lender.  Seller agrees that if requested by Purchaser, Seller shall enter into a direct agreement with Lender under which Lender is permitted to "step into" this Agreement.

ARTICLE XXIII.  RELATIONSHIP OF THE PARTIES

23.1   Independent Contractor.  Seller undertakes performance of this Agreement as an independent contractor.  Nothing herein shall create a relationship of employer and employee, joint venture, or partnership between Purchaser and Seller, their agents, representatives, employees, Affiliates, Vendors or subcontractors, for any purpose whatsoever.  Nothing herein shall create a relationship of principal and agent between Purchaser and Seller, their agents, employees, representatives or subcontractors.  Neither party shall have the authority to bind or obligate the other in any manner as a result of the relationship created hereby.  Purchaser shall not have the right to control the manner(s) or prescribe the method(s) by which Seller performs this Agreement.  Seller shall be wholly responsible for supervision and the methods of performance.  Seller is entirely and solely responsible for its acts and the acts of its agents, employees, representatives, Affiliates, and Vendors engaged in the performance of this Agreement.  Seller shall provide qualified personnel who shall be and remain solely the employees of Seller, and at no time or in any manner shall said personnel be considered as or deemed to be employees of Purchaser.  Purchaser's general coordinative efforts, suggestions and procedures with respect to the Scope of Work and Purchaser's right of inspection, review and observation of the performance of this Agreement shall not make Seller or their employees, employees of Purchaser.

23.2   Responsibilities of Seller as Principal for its Employees.  Seller has complete and sole responsibility as a principal for its agents, Vendors and all other hires to perform or assist in performing the Scope of Work. 

23.4	Purchaser as Agent.     PURCHASER REPRESENTS AND WARRANTS THAT IT HAS APPOINTED AGENT AS ITS SOLE AND EXCLUSIVE ACQUISITION AGENT WITH RESPECT TO THIS AGREEMENT, HAS ASSIGNED TO AGENT CERTAIN RIGHTS OF PURCHASER UNDER THIS AGREEMENT, AND HAS DELEGATED TO AGENT CERTAIN RESPONSIBILITIES AND OBLIGATIONS OF PURCHASER UNDER THIS AGREEMENT.  AGENT REPRESENTS AND WARRANTS THAT IT HAS ACCEPTED APPOINTMENT AS PURCHASER’S SOLE AND EXCLUSIVE ACQUISITION AGENT WITH RESPECT TO THIS AGREEMENT.   NOTWITHSTANDING ANY OTHER TERM OR PROVISION OF THIS AGREEMENT, SELLER AGREES, ACCEPTS, ACKNOWLEDGES AND COVENANTS, FOR ITSELF, ITS SUCCESSORS AND ASSIGNS, (I) THAT PURCHASER HAS APPOINTED AGENT AS ITS SOLE AND EXCLUSIVE ACQUISITION AGENT WITH RESPECT TO THIS AGREEMENT, AND AGENT HAS ACCEPTED SUCH APPOINTMENT, AND  (II) THAT IT SHALL NOT SEEK OR CLAIM RECOURSE AGAINST OR PAYMENT FROM PURCHASER FOR ANY REASON WITH RESPECT TO OR ARISING FROM OR RELATED TO AGENT’S ACTIONS OR OMISSIONS WITH RESPECT TO THIS AGREEMENT OTHER THAN FOR THE PAYMENT OF THE PURCHASE AMOUNT HEREUNDER, OR FOR THE AMOUNTS PAYABLE TO SELLER PURSUANT TO SECTION 20.1(B) HEREOF.

Without limiting the generality of the foregoing, Seller acknowledges and agrees that it shall deal only with Agent with respect to the subject matter of this Agreement (including, without limitation, delivering Equipment or entering into any amendments, modifications or supplements of or to this Agreement) and in no event, without the prior written consent of Agent, shall Seller deliver any Equipment to Purchaser or enter into any contract, undertaking or other agreement with Purchaser (other than this Agreement), amend, modify or supplement this Agreement or take directions from or give instructions to the Purchaser (other than ministerial communications relating to the payment of the amounts described herein), in each case with respect to the subject matter of this Agreement.

ARTICLE XXIV.  LIENS AND CLAIMS

Seller shall not directly or indirectly create, incur, assume or suffer to be created by it or any Vendors, employees, laborers, materialmen or other suppliers of goods or services any claim, lien, security interest, charge or other encumbrance on the Equipment or any part thereof or interest therein and Seller shall immediately notify Purchaser of the assertion of any lien, claim, security interest or other encumbrance against the Equipment or any part thereof.  Seller shall remove immediately any lien, claim, security interest or other encumbrances against Purchaser, Purchaser's property, or Purchaser's Affiliates' property, or the Equipment arising in favor of Seller or their Vendors or other persons or entities by reason of having provided labor, materials or equipment related to performance of this Agreement and to pay any damages, costs, losses and expenses (including, without limitation, court costs and attorneys' fees) of whatever kind which Purchaser may incur, be required to pay or be liable for as a result of, in connection with, arising out of, or related to any such lien, claim, security interest or other encumbrance.  In the event of a lien from a Vendor, supplier or subcontractor is levied, Seller shall immediately post a letter of credit against such lien.  Upon the failure of Seller promptly to pay or discharge any lien claim, security interest or other encumbrance as required hereby within twenty (20) Days of Notice of the existence thereof from any source, Purchaser may, but shall not be obligated to, pay or discharge such lien claim, security interest or other encumbrance and, upon the payment or discharge thereof, shall be entitled to recover from Seller the amount thereof together with all expenses incurred by Purchaser in connection with such payment or discharge.

ARTICLE XXV.  NOTICES AND COMMUNICATIONS

25.1   Notices.  Any Notice pursuant to the terms and conditions of this Agreement shall be in writing and either:
(a)	delivered personally;
(b)	sent by certified mail, (return receipt requested);
(c)	sent by a recognized overnight mail or courier service with delivery receipt required; or
(d)	sent by confirmed facsimile transfer.

      Commercial - Legal:

 If to Seller:				If to Agent:

					Enron North America Corp.
ABB Power T & D Company, Inc.	c/o Enron Engineering & Construction Company
3010 Briarpark Drive			333 Clay Street, Suite 400
	Houston, Texas   77042		Houston, Texas 77002
	Attention: Michael Sandridge		Attention: General Counsel
	Copy:  Kathleen Clark

If to Purchaser:

Westduetsche Landesbank Girozentrale, New York Branch
1211 Avenue of the Americas
New York New York  10036
Attn: 
Tel:
Fax:	
	
Either party may change its address or the person to be notified by a Notice delivered in accordance with this section.

25.2   Effectiveness of Notices.  Notices shall be effective when received at the address or facsimile number specified.

25.3   Technical Communications.  Notwithstanding communications and Notices addresses as set forth in Section 25.1, the parties will route routine and technical communications as follows:

If to Seller:					If to Agent:	

ABB Power T & D Company, Inc.  		Enron North America Corp.
3010 Briarpark Drive				1400 Louisiana	
Houston, Texas  77042			Houston, Texas  77002
Attn:  Michael Sandridge			

If to Purchaser:

Westduetsche Landesbank Girozentrale, New York Branch
1211 Avenue of the Americas
New York New York  10036
Attn: 
Tel:
Fax:	

		 

ARTICLE XXVI.  ARBITRATION

26.1   Negotiation of Disputes and Disagreements.  In the event of any dispute or disagreement arising out of or relating to the implementation or performance of this Agreement, which the parties hereto have been unable to settle or agree upon within a period of thirty (30) Days after the dispute or disagreement arises, each party shall nominate a senior officer of its management to meet at a mutually agreed time and place not later than forty five (45) Days after the dispute or disagreement has arisen to attempt to resolve such dispute or disagreement.  Should a resolution of such dispute or disagreement not be obtained within fifteen (15) Days after the meeting of senior officers for such purpose, or if such meeting does not take place within sixty (60) Days after the dispute or disagreement has arisen either party may then by Notice to the other submit the dispute to arbitration in accordance with the provisions of Section 26.2.

26.2   Arbitration Resolution.  With respect to arbitration resolution, the parties agree that:

(a)	In the event of dispute between Purchaser and Seller concerning the interpretation of any provision of this Agreement or the performance of any of the terms of this Agreement such matter or matters in dispute shall be finally settled under the arbitration rules of the American Arbitration Association by three arbitrators, one appointed by each party, and the third, who shall be the chairman will be selected by the two appointed arbitrators, and failing agreement, by the chairman of the American Arbitration Association.  The language of the arbitration shall be English and the place of the arbitration shall be New York, New York;

(b)	The decision of the arbitrators shall be final and binding upon the parties;

(c)	If any dispute to be referred to arbitration under this Agreement raises issues which are, in the opinion of the Purchaser, substantially the same as or connected with issues raised in a dispute between any of the following entities (and their successor in title and assigns):

(i)	Purchaser; and
(ii)	Power Purchaser, 

then such latter dispute shall constitute a "Related Dispute";

(d)	If a Related Dispute has already been referred to arbitration in accordance with arbitration provisions identical (mutatis mutandis) to this clause or, if the dispute under this agreement has already been referred to arbitration under this clause, then:

(i)	the dispute under this Agreement shall be referred to the arbitrators appointed to determine the Related Dispute; and

(ii)	the arbitrators shall have power to join one or more defendants or third parties or consolidate actions as provided by applicable law.

26.3   Continuation of Work.  Pending final resolution of any dispute other than a dispute over Purchaser's failure to pay the Purchase Amount in accordance with Section 6.1, Purchaser and Seller shall continue to fulfill their respective obligations hereunder.

ARTICLE XXVII.  LIMITATION OF LIABILITY

27.1   Maximum Liability.  Seller’s maximum aggregate liability for claims by Purchaser arising out of Seller’s performance of this Agreement whether arising from tort (including negligence), breach of contract or any other cause of action is limited to one hundred percent (100%) of the Purchase Amount; provided, however, that the foregoing limitation of liability of Seller shall not apply to the following: 

(i)	under Article XX (Indemnification);

(ii)	under Article XXIV (Liens and Claims);

(iii)	Section 3.8(a) and 3.8(b), (Compliance with Governmental Rules);

(iv)	Section 5.2 (Taxes);

(v)	Article XIX obligation to maintain insurance; 

(vi)	arising from or related to environmental harm caused by an action or inaction of Seller, its agents, employees or Vendors during the performance of the Scope of Work;

(vii)	resulting from the gross negligence or willful misconduct of Seller, their agents, employees or Vendors;

(viii)	patent or copyright infringement in accordance with Section 15.2, or

(ix)	Article XXI (Non-Disclosure of Information).
      
which liabilities shall not be limited.  Additionally, any liability of Seller provided for by the proceeds of the insurance maintained pursuant to Article XIX shall not be counted toward any of the foregoing limitations of liability. 

27.2   Consequential Damages.  Except for liquidated damages specifically provided for herein, with respect to claims between the parties, in no event, whether as a result of breach of contract, breach of warranty, tort liability (including negligence or strict liability), strict liability, or otherwise, and whether arising before or after completion of the Scope of Work, shall Seller be liable to Purchaser for special, indirect, or consequential damages of any nature whatsoever, including losses or damages caused by reason of unavailability of the Equipment, shutdowns or service interruptions, loss of use, loss of profits or revenue, inventory or use charges, cost of purchased or replacement power, interest charges or cost of capital or claims of Purchaser's customers.  In no event, whether as a result of breach of contract, tort liability (including negligence or strict liability), strict liability or otherwise, shall Purchaser be liable hereunder for special, indirect, or consequential damages of any nature whatsoever, including, but not limited to, loss of use, loss of profits or revenue, or inventory or use charges. 

27.3   Releases Valid in All Events.  Releases, disclaimers and limitations on liability expressed herein shall apply even in the event of the negligence, strict liability, fault or breach of contract (including other legal bases of responsibility such as fundamental breach) of the party whose liability is released, disclaimed or limited. 

ARTICLE XXVIII.  DRUG AND ALCOHOL-FREE WORKPLACE

The parties desire to provide a safe and productive work environment.  The parties believe that the use, possession and/or distribution of illegal/unauthorized drugs and alcohol presents a serious threat to the safety of employees, visitors and others at the job site, or other premises owned, leased, or occupied by Purchaser.  All Seller’s and Seller’s Vendors' and Subcontractors' employees associated with the Work under this Agreement must agree to compliance with Purchaser's drug and alcohol policy [Number 1200-2, dated September 11, 1995] including: 

(1)	while on or entering the Site or other premises owned, leased, or occupied by Purchaser, search of personal and professional possessions, including but not limited to automobiles, trucks, briefcases, lunchboxes, and person for illegal drugs.  Failure to consent to such search shall be grounds for immediate removal from the Site or other premises owned, leased, or occupied by Purchaser;

(2)	drug testing at any time while on the Site or other premises owned, leased or occupied by Purchaser.  Failure to do so or failing any such test shall be grounds for immediate removal from the Site or other premises owned, leased, or occupied by Purchaser; and

(3)	failure of a Seller’s or Vendor's employee to agree and abide by these requirements will be grounds for immediate removal from the job site or other premises owned, leased, or occupied by Purchaser from any work associated with the Scope of Work under this Agreement.

ARTICLE XIX.  MISCELLANEOUS

29.1   Validity and Enforceability.  The invalidity or unenforceability of any portion or provision of this Agreement shall not affect the validity or enforceability of any other portion or provision.  Any invalid or unenforceable portion or provision shall be deemed severed from this Agreement, and the balance of the Agreement shall be construed and enforced as if the Agreement did not contain such invalid or unenforceable portion or provision.  Notwithstanding the provisions of the preceding sentence, should any term or provision of this Agreement be found invalid by any governmental authority having jurisdiction thereof, the parties shall immediately renegotiate in good faith such term or provision of the Agreement to eliminate such invalidity.

29.2   Governing Law.  This Agreement, its interpretation and any disputes relating to, arising out of or connected with this Agreement, shall be governed by the laws of the New York, without regard to its conflicts of law provisions (other than Section 5-1401 of the New York General Obligations Law). 

29.3   Entire Agreement.  This Agreement, and the Exhibits attached hereto constitute the entire agreement between the parties with respect to the subject matter hereof, and there are no oral or written understandings, representations or commitments of any kind, express or implied, not set forth herein.  This Agreement supersedes all prior agreements between the parties with respect to the subject matter hereof. 

29.4   Agreement Modification.  No oral or written modification of this Agreement either before or after its execution shall be of any force or effect unless such modification is in writing and signed by the party to be bound thereby. 

29.5   Waiver.  The waiver by any party of any breach or failure to enforce any of the terms, covenants or conditions of this Agreement shall not in any way affect, limit, modify or waive the future enforcement of such terms, covenants or conditions. 

29.6   Headings.  The headings contained herein are included solely for the convenience of the parties and are not to be used as a basis for interpreting the various sections of this Agreement.

29.7   Third-Party Beneficiaries.  The provisions of this Agreement are intended for the sole benefit of Purchaser and Seller, and there are no third-party beneficiaries other than assignees contemplated by the terms herein. 

29.8   Counterparts.  This Agreement may be executed in counterparts, each of which when so executed and delivered shall be an original, and all of which, when taken together, shall constitute one and the same instrument. 

29.9   Equal Employment Opportunity.  To the extent performance of any Scope of Work is performed in the United States, the parties hereto agree that the provisions of Executive Order 11246, as amended, and the Rehabilitation Act of 1973 (Section 503, Public Law 93-112, as amended), the Vietnam Era Veteran's Readjustment Assistance Act of 1974, as amended (including the provisions of the "Equal Opportunity" clauses), and the regulations promulgated pursuant to the above, are hereby incorporated into this Agreement by reference as if fully set out. 

29.10  Cooperation on Site To the extent Seller is required to perform services on Site it shall cooperate with other contractors on Site so as to coordinate work and schedules.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date and the year first above written.

ENRON NORTH AMERICA 				ABB POWER T & D COMPANY,
CORP. (as Agent for Westdeutsche			as Seller
Landesbank Girozentrale, New York
Branch)

By:  ____________________________			By:  ____________________________	                     
Title:  __________________________			Title:  __________________________   
Date:  __________________________ 			Date:  __________________________

WESTDEUTSCHE LANDESBANK			WESTDEUTSCHE LANDESBANK			
GIROZENTRALE, New York Branch), 			GIROZENTRALE, New York Branch),
as Purchaser  						as Purchaser  

By:  ____________________________			By:  ____________________________	                     
Title:  __________________________			Title:  __________________________   
Date:  __________________________ 			Date:  __________________________ 

EXHIBIT A  ELECTRICAL LOSSES GUARANTEE AND DAMAGES

Unit Description	Electrical Losses
Guarantee	Applicable    
Liquidated damages	
			
Generator Step Up Transformer* ( ) Phase	Total Losses   kW	$2,000/kW	
Generator Step Up Transformer* ( ) Phase	Total Losses  kW	$2,000kW	

* Electrical Losses to be based on the lower MVA (base) applicable to the Unit and the Electrical Losses Guarantee assumes the cooling fans are not in operation.  Total losses are defined to be the sum of the no load losses and the load losses.

EXHIBIT B  SCOPE OF SUPPLY

Transformers (11)[(10)]

EXHIBIT B-1  SPECIFICATION

EXHIBIT B-2  DRAWING LIST

1.	Preliminary Drawings			7-9 Weeks after receipt of order

2.	Outline Drawings (approval)		14 Weeks after receipt of order

3.	Nameplate Drawing			14 Weeks after receipt of order

4.	Electric Schematic Approval		14 Weeks after receipt of order

5.	Wiring Diagram				18 Weeks after receipt of order

EXHIBIT B-3  DOCUMENT REVIEW STATUS

A.	DEFINITION OF SELLER DOCUMENT REVIEW STATUS

The guidelines listed below are followed in assigning the document status number to Seller prints.  These status numbers serve as hold points for starting or continuing manufacture of the covered commodity.  The document and its transmittal letter indicate the reason for withholding permission to proceed with the work.

Status 1:  Work may proceed.
The document conforms to procurement document requirements.  The document requires no changes or additions.  Matters remaining to be resolved do not require document change and will be handled by correspondence.  Where it is known that the design information on a supplier document is not complete and resubmittals will be made, such as “hold” areas, the document is assigned another status number.
Status 2:  Revise and resubmit.  Work may proceed subject to resolution of indicated comments.
The document is in basic conformance with procurement document requirements.  Minor deviations from procurement document requirements have been noted or other minor technical or physical changes in the equipment are required.  Such changes may include those affecting dimensions, material, colors, etc.  Administrative type changes such as inclusion of equipment or tag numbers and shipping notes may be combined with technical changes in this status.  Seller shall resolve comments and resubmit documents prior to shipment of commodity.
Status 3:  Revise and resubmit.  Work may not proceed.
Work may not proceed because the document:
	The contents of the document do not reflect or materially contradict the requirements of this Agreement or the document is not useable by Purchaser for its intended purpose.
Status 4:  Review not required.  Work may proceed.
Document is not subject to Purchaser review.  Typical uses for this status are in the review of items that are supplier standard products, small internal parts of major equipment, or Seller standardized data.  Permission to proceed does not constitute acceptance or approval of design details, calculation analysis, test methods, or materials developed or selected by the supplier and does not relieve the supplier from full compliance with contractual obligations.

B.	Final Drawings

Upon receipt from Purchaser of drawings marked Status 1 or Status 4, Seller shall transmit to Purchaser, depending on the set-up, an electronic copy or one additional print and one reproducible of each drawing stamped “Approved for Installation”.  However, if during the submittal process, Seller makes further changes to drawings that have been stamped Approved for Installation, the changes shall be clearly marked on the drawings and the submittal process shall be repeated.  After completion of fabrication and release for shipment, all drawings shall be resubmitted stamped “As Built”.

EXHIBIT B-4  APPROVED VENDORS

	Commodity		Supplier			
						
1	Copper		Alcatel			
			Asta			
			Algonquin			
			Phelps Dodge			
						
2	Insulation		EHV-Weidmann			
			ABB Guelph			
			ABB Plast			
			ABB Brazil			
			Figeholms Bruk AB			
			Rushling			
						
3	Electrical Steel		Mitsui			
			Armco			
			Itochu			
			Cormag			
						
4	Tap  Changers/Bushings		ABB Power T&D Alamo			
			ABB Components			
			Lapp			
						
5	Steel Plate		Samuel & Sons			
						
6	Machining		Industries Varennes			
						
7	Radiators		Tranter			
			Menk			
						
8	Steel Profiles		Metaux Russel Inc.			
						
9	Bolts & Nuts		Attaches Metrican Ltee			
						
10	Transformer accessories		ABB Transformers			
						
11	Fans 		Krenz & Co. Inc.			
			Pier Eng.			
						
12	Arresters		ABB Switchgear			
			Coopers			
			Ohio Brass			
						
13	Transformer Bushings		Meramec Elect.Products			
			ABB Pinetops			
						
14	Paint		Chemcraft Sadolin			
						
15	Wire & cables		Northeast W & Co, Inc.			
			Anixter Canada Inc.			

16	Accessories					
	Oil & winding thermometers		Qualitrol			
	Oil level indicators, etc		Kihlstrom AB			
	Hydran		Syprotec Inc.			
						
17	Rubber bags, radiator valves,		Weidmann Sys. inter. Inc.			
						
18	Oil transformer		Cie Petroliere Imperiale			
			Shell			
						
19	Ball valves, flexibles, etc.		Thermoflex			
						
20	Electrical supply		Nedco			
			Pier Engineering Inc.			
						
21	Nameplates		Reproduction BLB			
						
22	Gas & welding accessories		Code Technologies Inc.			
						
23	Control cabinets		ABB Alamo			
	Design and Manufacturing		Anderson Tool & Engiuneering			
						
			46 suppliers			
						
	Others		70 suppliers			

EXHIBIT C  NOT USED

EXHIBIT D  SAMPLE SURETY BOND

KNOW ALL MEN BY THESE PRESENTS, that we, as Principal, and the FEDERAL INSURANCE COMPANY,  Warren, New Jersey, a corporation duly organized under the laws of the State of Indiana, (hereinafter called the Surety), as Surety, are held and firmly bound unto              (hereinafter called the Obligee), in the sum of                       Dollars ($        ), for the payment of which we, the said Principal and the said Surety, bind ourselves, our heirs, executors, administrators, successors and assigns, jointly and severally, firmly by these presents.  

Sealed with our seals and dated this                day of               , 200  .

WHEREAS, the Principal entered into a certain Agreement with the Obligee, dated                , 200  . for                         in accordance with the terms and conditions of said Agreement, which is hereby referred to and made a part hereof as if fully set forth herein.

NOW, THEREFORE, THE CONDITOIN OF THIS OBLIGATION IS SUCH, that if the above bounden Principal shall well and truly keep, do and perform each and every, all and singular, the matters and things in said Agreement set forth and specified to be by said Principal kept, done and performed, at the times and in the manner in said Agreement specified, or shall pay over, make good and reimburse to the above named Obligee, all loss and damage which said Obligee may sustain by reason of failure or default on the part of said Principal so to do, then the obligation shall be null and void; otherwise shall remain in full force and effect, subject, however, to the following conditions:

Any suit under this bond must be instituted before the expiration of two (2) years from the date on which final payment under the Agreement falls due.

No right of action shall accrue on this bond in or for the use of any person or corporation other than the Obligee named herein or the heirs, executors, administrators or successors of the Obligee.

								                                                               
								Principal

							By:	                                                                

								FEDERAL INSURANCE COMPANY

							By:	                                                                

EXHIBIT E  PERFORMANCE TESTS

Electrical Losses Tests 

•	Bushing power factor and capacitance
•	Core megger  (Core form designs only)
•	CT ratio and polarity
•	Transformer turns ratio at all taps
•	Insulation power factor
•	Insulation resistance
•	Functional check of unit control cabinet
•	Oil tests at receipt from refinery and after filling
a.  Moisture content
b.  Power factor
c.  Interfacial tension
d.  Dielectric strength
•	Provide formal written report of field test results

EXHIBIT F  NOT USED

EXHIBIT G-1  PERFORMANCE TEST CERTIFICATE

The undersigned duly authorized representative of [Name of Purchaser’s Company], under the provisions of this Purchase Contract dated _________________, the “Agreement”, hereby certifies that:

1.	The undersigned has personally observed the Performance Test pertaining to Specifications of the Unit referred to in the Agreement as set forth therein.

2.	During the Sound Level Test the Unit conducted on [Date] (if such test is conducted) demonstrated the following:

a.	Near Field Sound Level ____________________

3.	Capitalized terms used herein and not defined herein shall have the respective meanings assigned to them in the Agreement.

IN WITNESS WHEREOF, the Purchaser’s representative has executed and delivered this Certificate as of the ___ day of _______________, 200_.

	BY:_________________________________

	TITLE:______________________________

	From and On Behalf of:

	____________________________________

EXHIBIT G-2  PERFORMANCE TEST CERTIFICATE

The undersigned duly authorized representative of [Name of Purchaser’s Company], under the provisions of this Purchase Contract dated _________, the “Agreement”, hereby certifies that:

1.	Performance Tests have been conducted pertaining to the performance of the Units as tested with respect to Electrical Losses referred to in the Agreement as set forth therein.

2.	Seller certifies that the Performance Tests have been completed and set forth the results in accordance with the Test Procedures set for in the Specifications of this Agreement.

3.	Seller certifies that the Electrical Losses of Unit #[  ] were [  ] kW during the Performance Test conducted on ___[date]_________.

4.	Capitalized terms used herein and not defined herein shall have the respective meanings assigned to them in the Agreement.

IN WITNESS WHEREOF, the Purchaser’s representative has executed and delivered this Certificate as of the ____ day of ___________________.

	BY:_________________________________

	TITLE:______________________________

	From and On Behalf of:

____________________________________

EXHIBIT H  NOT USED

EXHIBIT I  CANCELLATION CHARGE

In the event Purchaser cancels this Agreement in whole or in part, Purchaser's liability for cancellation charges in shall not exceed the values set forth below:

CANCELLATION PAYMENT	MILESTONE	
10%	Receipt of order	
50%	Upon Seller’s order entry of copper and steel	
80%	Upon receipt of copper and steel in Seller’s factory	
100%	Upon start of production in Seller’s factory	

In the case of partial cancellation, the cancellation charge shall be calculated using the applicable percentage as it relates to the cancelled Units only.
EXHIBIT J  QUALITY

1.0   QUALITY ASSURANCE AND CONTROL

1.1	Quality Assurance Arrangements

Seller, and their nominated Vendors shall work to defined quality assurance arrangements compliant with ISO 9001.  Seller shall indicate the results of any recent audits.

In addition to requirements detailed in ISO 9001, Seller shall:

#	Ensure that all quality related activities are planned and that adequate resources are made available for these activities.
#	Establish means by which all materials and components are identified through each stage of performance of the Scope of Work.  These measures will facilitate the traceability of materials as identified in the agreed Quality plans.
#	Arrange for the protection of the quality of the product to include delivery to the specified destination.

1.2	Vendors

Seller shall specify all Quality Assurance requirements to its Vendor and shall ensure that all Vendors comply with these requirements.

Seller shall undertake in respect of its nominated Vendors, where no such acceptable information is available or where the Vendor has not been subject to a quality audit within the previous 12 months, to carry out an audit of that Vendor in order to ensure that completion of works will be compliant with contract requirements.

Seller and its nominated Vendors maybe subject to a quality audit by Purchaser.

1.3	Quality Plans

Quality Plans shall be prepared by Seller for all areas of activity.  These quality plans shall be submitted to Purchaser for review.

Specific Quality Plans shall be prepared and issued as early as possible but no later than seven Days prior to the commencement of the portion of the Scope of Work which in the subject of the Plan.

The format of the Quality Plans shall be agreed with Purchaser.  Seller shall ensure that all activity is carried out in accordance with the Quality Plans and will notify Purchaser of any deviations as they occur. 

1.4	Review Of Documents

Seller shall submit for review all Quality Plans and Design Documentation as may reasonably be required by Purchaser.  A schedule of drawings and documentation shall be maintained by Seller to show the current status and revision of each document.

1.5	Records

Seller shall maintain records as required by the quality plans.  All records including audit reports shall be made available for inspection by Purchaser, as required.

Seller shall generate records in a manner coincidental with the activities to which they refer, such that the quality status of each item can be readily verified.

All records shall be concisely compiled and coded.  They shall, in addition be clearly cross-referenced to the parts or assemblies to which they refer.

Records shall in general, be available at the time of equipment delivery.  Such records shall include relevant certifications and build documentation together with any information which would facilitate the general traceability of component items or materials.

All records generated during the course of performance of the Scope of Work shall be retained by Seller for a minimum period of ten years from the date of Acceptance or supplied to Purchaser for its retention.

1.6	Seller’s Responsibility

Review and comment by Purchaser of the quality assurance procedures, quality plans, inspection and test arrangements operated by either Seller or his Vendors, will not relieve Seller of their obligation to provide Equipment which complies with the requirements of the Agreement.

2.0	QUALITY SURVEILLANCE

2.1	Quality Surveillance Requirements

Seller shall define the items which it proposes to Vendor together with all items for which quality plans (inspection and test plans) will be submitted.  Seller shall provide Purchaser's Quality Assurance Manager the name of his representative authorized as having responsibility for resolving or obtaining resolution, of any problems arising in respect of the acceptability of raw materials, components, and assemblies.

Seller shall establish and maintain a documented inspection system capable of producing objective evidence that all material manufactured parts and assemblies comply with the quality requirements of the Agreement. 

General information on the type of system in use by Seller shall be provided. 

Seller’s inspection system shall include procedures used for controlling the following functions:

#	Availability at inspection points of applicable drawings, instructions, etc and prompt removal of obsolete documents.
#	Maintenance and calibration of suitable inspection and test equipment, which should comply with requirements set out in ISO 9001
#	Inclusion (or referencing) on purchase orders of the necessary technical inspection and test details to meet the specified requirements and of Purchaser's possible involvement at the Vendor's facilities.
#	Incoming, in process and final inspection and inspection of packing and marking.
#	Means of identifying inspection status throughout manufacture.
#	Provisions of complete inspection and test records.

Seller shall submit for review within 30 Days of the effective date, a quality plan  (inspection and test plan) defining the program of quality control and inspection activities which it or its Vendors will perform in order to ensure that the manufacture and completion of the plant complies with the specified requirements.  The quality plan may be of any form to suit Seller’s system, but it shall as a minimum:

#	Indicate each inspection and test point and its relative location in the production cycle including incoming, packing and site inspections.
#	Indicate where Vendor's services will be employed (e.g. Vendor NDT or heat treatment).
#	Identify the characteristics to be inspected, examined, and tested at each point and specify procedures and acceptance criteria to be used.
#	Indicate mandatory hold points for an item or process before the work can proceed.
#	Define or refer to sampling plans if proposed and where they will be used. 
#	Where applicable, specify where lots or batches will be used. 

Seller shall include in all its orders to Vendors, a note advising that all materials and equipment are subject to inspection by Purchaser.

Four copies of such purchase orders shall be forwarded simultaneously to Purchaser.

In order to verify compliance with engineering, procurement, manufacturing requirements and program, Purchaser shall have access at all times as arranged by Seller, to all places where materials or equipment are being prepared or manufactured, including the works of Vendor's raw materials.

Seller shall advise Purchaser or its nominated representative of the readiness for inspection at least fourteen (14) working Days prior to a nominated witness or hold point.

Inspection of the Equipment may be by Purchaser and may include the following activities:

#	Evaluation of Seller’s system and Quality Plans.
#	Periodic monitoring to confirm the effectiveness of and Seller’s compliance with the established system procedures, quality plan and inspection and test instructions.
#	Witnessing of inspections and test and/or verification of inspection records including:

a.	Compliance of raw material with specified requirements.
b.	Compliance of manufactured parts, assemblies and final items with specifications, drawings, standards and good engineering practice.
c.	Periodic inspection of Seller’s design manufacturing, installation work and the production of progress reports. 
d.	Witnessing of inspections and tests.
e.	Packing for shipment including check for completeness of shipment, handling requirements, and identification.

Seller’s compliance with equipment documentation, drawing, delivery and commissioning schedules shall be monitored by Purchaser.

Raw materials, components, shop assemblies and the installation thereof, shall be subject to inspection and test by Purchaser as required by the specification and the extent practicable at all times and places during the period of manufacture.

Seller shall keep Purchaser informed, in advance, of the time of starting and of the progress of the Scope of Work in its various stages so that arrangements can be made for inspection and for test.  He shall also provide without additional charge, all reasonable facilities and assistance for the safety and convenience of Purchaser in the performance of his duties.  All of the required tests shall be made to Seller’s expense, including the cost of all samples used.

In the event of the postponement, by Seller, of tests previously scheduled, or of the necessity tests due to unsatisfactory results of the original tests, or other reasons attributable to Seller, Seller will bear all costs for new tests and the costs incurred by Purchaser of his nominated representative in re-inspecting the non-conforming item or its replacement. 

Seller’s and nominated Vendor's quality assurance program shall identify and shall isolate items not conforming to the technical specification.  All such items shall be reported to Purchaser via a non-conformance report which shall identify:

#	The identification of the item.
#	The relevant specification, drawing etc including revision number. 
#	A sketch of the non-conformance.
#	The method by which the non-conformance was identified.
#	The cause of the non-conformance.
#	The proposal for resolution the con-conformance.
#	A concession application including the technical justification and the appropriate supporting documents if applicable.
#	The proposed action to prevent re-occurrence.

Purchaser shall authority to comment on any equipment or part thereof considered unsatisfactory and/or not in accordance with the specified requirements.

Seller shall not offer, unless otherwise agreed, any item of equipment for inspection to Purchaser until all planned inspections and tests to date have been completed to the satisfaction of Seller. 
Any non-conformances identified by Purchaser may be notified by issue of Purchasers Non-conformance Report to Seller.  Notification of re-inspection shall not be made until the completed non-conformance report together with any applicable concession application have been submitted to Purchaser. 

The inspection and tests by Purchaser of any components or lots thereof does not relieve Seller of any responsibility whatever regarding defects or other failures which maybe found before the end of the Primary Warranty Period. 

Seller shall provide a quality release certificate confirming compliance with the contract requirements and a data book which shall include as a minimum: 

#	Title page including client name, plate name, contract reference, Purchaser and Seller names and references.
	#	Quality Plan reference number.
#	List of approved procedures.
#	Chemical and Mechanical Test Certificates.
#	NDT Reports.
#	Heat Treatment Reports.
#	Non-Conformance Reports.
#	Concession Applications.

Seller shall furnish Purchaser with 4 copies of the data book.

EXHIBIT K  PROJECT PLANNING

1  PURPOSE AND OBJECTIVES
1.1 Seller shall provide information and data required for development of a Project Schedule for  the Work in accordance with the requirements of the Exhibit.  The purpose of the Project Schedule shall be to:
(1)	assure adequate planning, scheduling and reporting during the prosecution and progress of the Work by Seller in order to complete the Work in accordance with any and all milestones;
(2)	assure coordination of the efforts of Seller, his various Subcontractors and Purchaser furnished equipment and materials, if any;
(3)	assist Seller, and Purchaser, in monitoring the progress of the Work and in evaluating proposed changes to the Agreement and the Project Schedule.
1.2  The Critical Path Method (CPM) shall be used for the planning, scheduling, execution and reporting of the Work to be performed under the Agreement.
1.3  The primary objectives of the CPM Schedule are:
(1)	to insure adequate planning and execution of the Work by Seller;
(2)	to assist Purchaser in evaluating progress of the Work;
(3)	to provide for optimum coordination by Seller of his Subcontractors and Suppliers, and of his Work with or services provided by any separate vendors;
(4)	to permit the timely prediction or detection of events or occurrences which may affect the timely prosecution of the Work; and 
(5)	to provide a mechanism or tool for use by Purchaser and Seller in determining and monitoring any actions of Seller which may be required in order to comply with the requirements of the Agreement Documents relating to the completion of the various portions of the Work by the Specific Dates specified in the Agreement Documents.

EXHIBIT L  NOT USED

EXHIBIT M  NOT USED

EXHIBIT M - 1  SPARE PARTS  

ITEM NUMBER	PART DESCRIPTION	EXPECTED PURCHASE LEAD TIME	SUGGESTED STOCK LEVEL	UNIT PRICE	
1	Complete Gasket Set	6 weeks	1 set	$3,500	
2	Fan Assembly	6 weeks	1	$  650	

EXHIBIT N – PURCHASE AMOUNT RECONCILIATION

The prices and designs shown below are for 60/80/100 MVA OA/FOA/FOA GSU and 80/106/133 MVA OA/FOA/FOA GSU designs.  The designs will accommodate either the 138/69KV or 230/15 kV PRIMARY VOLTAGES.  

Table Item	Primary Voltage	ABB Neg. Number	ABB Data Sheet #	Price ($)/Each	
A	230 /115 kV	FC011400-1A	HU-Enron-1A.1	$814,750.00	
B	138 /69 kV	FC011400-2A	HU-Enron-2A.1	$729,890.00	
C	230 /115 kV	FC011400-1B	HU-Enron-1B	$928,000.00	
D	138 /69 kV	FC011400-2B	HU-Enron-2B	$843,000.00	

EXHIBIT N-2  NOT USED

EXHIBIT N-3 ASSEMBLY OF GENERATOR STEP-UP TRANSFORMERS

SECTION 1 -  Scope of Work

Heavy hauling

•	Unload units at the rail siding nearest to the Site, transport to the Site and position on the foundation to required tolerances as defined by Purchaser’s installation requirements. 
•	Clean and release rail car.  Any demurrage charges are to Seller’s account.
•	Conduct receiving inspection in accordance with vendor specification.
•	Clean and release rail car
•	Conduct receiving inspection in accordance with ABB IL 48-500-01G
•	Unload accessory parts in an area designated by customer.  

Site Activities

 Seller’s crew, supervisor and equipment will proceed to perform the assembly once the transformer has been placed on the pad.  The assembly and testing work will be composed of the following:

Assembly  

•	Assemble, connect and tape as necessary all bushings
•	Hang and brace radiators, fans and pumps.
•	Mount COPS Tank
•	Mount lightning arresters if integral to transformer
•	Mount control cabinet (if removed for shipment)
•	Mount any miscellaneous items removed for shipment

Oil Filling

•	Establish dewpoint in accordance with vendor specification
•	Elevate core/coil temperature to 50°F if necessary
•	Conduct vacuum leak test
•	Vacuum fill in accordance with vendor specification
•	Provide use of purification system for oil (truck/skid)

Testing

•	Bushing power factor and capacitance
•	Core megger
•	CT ratio & polarity
•	Transformer turns ratio at all taps
•	Insulation power factor
•	Insulation resistance
•	Functional check of unit control cabinet.
•	Oil tests at receipt from refinery and after filling
a.  Moisture content
b.  Power factor
c.  Interfacial tension
d.  Dielectric strength
•	Provide formal written report of field test results

Service engineer for instructions and testing

Class one service engineer for instructing the Purchaser’s personnel in the operation and maintenance of the equipment plus the presence as a consultant for the Purchaser’s personnel during the testing and initial operation of the equipment.  

EXHIBIT O  HAZARDOUS MATERIAL NOTIFICATION
	HAZARDOUS AND TOXIC SUBSTANCES
	DISCLOSURE REQUIREMENTS
	 CONTRACT NUMBER
                                                           
	Show the order identification 
	on all correspondence

Seller:                                          
Attention:                                               
Address:                                      ZIP:        
Phone Number: (     )                                    

HAZARDOUS AND TOXIC SUBSTANCES DISCLOSURE REQUIREMENTS

The Occupational and Health Act (OSHA) of 1970, and OSHA regulation 29CFR 1910.20 contain hazardous and toxic substances reporting requirements.

Seller shall be required to provide the following documents, as applicable to Purchaser at the time of Agreement, if possible, but not later than ten (10) Days thereafter. A copy of the Material Safety Data Sheet, (Form OSHA-20), or equivalent, must accompany each shipment of hazardous or toxic substances to Purchaser.  The following documents may be required for more than one item within the Agreement.

MATERIAL SAFETY DATA SHEET

The Material Safety Data Sheet (Form OSHA-20), or equivalent is required for each material containing a chemical substance which: (i) is regulated by any Federal law or rule, (ii) is listed in the latest edition of the National Institute for Occupational Safety and Health Registry of Toxic Effects of Chemical Substances. (iii) testing has yielded positive evidence of an acute or chronic health hazard, or (iv) has a Material Safety Data Sheet available to Seller indicating that the material may pose a hazard to human health.
                                           -AND/OR-   
SELLER DISCLAIMER STATEMENT
Seller may alternatively submit a disclaimer statement set forth below:

HAZARDOUS AND TOXIC SUBSTANCES DISCLAIMER

Seller hereby swears or affirms that the material furnished on this Purchase Order does not, to its best knowledge, contain any toxic substances or harmful physical agents as defined under 29CFR 1910.20.  In the event Seller discovers that such hazardous and toxic substances or agents are to be supplied, an appropriate Material Safety Data Sheet (Form OSHA-20), or equivalent shall be immediately supplied to Purchaser.  

Signature of Company Officer         Date:  _______________________________

____________________________                            
Title

NONCOMPLIANCE

Seller assumes all responsibility for its failure to supply Purchaser a completed Material Safety Data Sheet (Form OSHA-20), or equivalent or a Seller Disclaimer Statement as applicable.

EXHIBIT P  NOT USED

EXHIBIT Q  NOT USED

EXHIBIT R  WITNESS - HOLD POINTS

Seller shall provide ten (10) Days advance Notice to Purchaser and/or Purchaser’s designated third party test company of the witness points which shall be conducted as set forth in the Specifications of this Agreement incorporated herein.

EXHIBIT S  WAIVER LIENS

AFFIDAVIT AND RELEASE OF LIEN

THE STATE OF ________	'

COUNTY OF ___________	'

[Seller Name] hereby acknowledges the receipt and sufficiency of the sum of $                , (                                                           ), and other good and valuable consideration, in full payment for all design, labor, materials, equipment, supplies and services, for the supply of electrical equipment pursuant to the Purchase Contract No. WB#1-96 dated [--------] , between [Seller Name] (the "Seller") and [--------] (the "Purchaser").

[Seller Name] hereby acknowledges and certifies that [--------] paid                                            , all sums owing and that it has no further claims against [-------], or any subsidiary, affiliate or parent of [-------] except for the outstanding unresolved Change Order listed in Appendix A to this Affidavit.  [if none, delete all of paragraph after "except for..."]  

[Seller Name] further covenants and warrants that it has paid all of its subcontractors and suppliers for all work, services, equipment, material and supplies performed provided or supplied to the Project and that the Project is free from all liens and claims for payment by any subcontractor, materialman or employee.

In consideration for such full payment, [Seller Name], on behalf of itself and its predecessors, employees, agents, officers, directors, shareholders, representatives, attorneys, successors, insurers and assigns, and on behalf of any other persons claiming by, through or under [Seller Name], does hereby waive, release, and relinquish its rights to and discharge, release and acquit [-------], its subsidiaries, affiliates and parent and its employees, agents, officers, directors, shareholders, representatives, attorneys, successors, insurers and assigns, from any and all causes of action, claims, demands, debts, liabilities, expenses or costs of any kind and every character and nature whatsoever, including but not limited to any lien claims or rights, whether known or unknown, contingent or fixed, either in or arising out of the law of contracts, torts or property rights, whether arising under statutory law or common law, at law or in equity, with respect to the above-referenced property.  Furthermore, [Seller Name] agrees to Indemnify and hold harmless [-------]., its subsidiaries, affiliates and parent and all other persons or entities released by [Seller Name] above against the full amount of any liability, loss, claim, damage, or expense (including attorneys' fees and any judgment required to be paid) in connection with any of the matters it has released in the event any person should assert against such released person or entity a claim under assignment or title derivative from [Seller Name] and in connection with any claims made in connection with or relating to [Seller Name] provision of design, labor, materials, equipment, supplies and/or services on the above-referenced property.

EXECUTED this _________ day of ______________________, 200__.

[Seller Name]  
By:		 
Name:	 
Print or Type
Title:		 

SWORN TO AND SUBSCRIBED BEFORE ME, under my official hand and seal of office on this ____ day of ___________________, 200__.

      						Notary Public in and for
the State of            

My Commission Expires:

(SEAL)

AFFIDAVIT

THE STATE OF ________	'

COUNTY OF ___________	'

BEFORE ME, the undersigned Notary Public, on this day personally came and appeared                                     known to me to be the individual whose name is subscribed to the foregoing RELEASE OF LIEN and being duly sworn, did state and acknowledge on his oath that he is the                           of                                            , is authorized to execute and deliver the foregoing on behalf of                                              as an act and deed of that entity for the purposes and consideration therein expressed.

GIVEN UNDER MY HAND AND SEAL OF OFFICE this _______ day of ________________, 200__.

      						Notary Public in and for 
the State of ___________.
(SEAL)
My Commission Expires:

EXHIBIT S-1  SELLER’S CONDITIONAL WAIVER

	CERTIFICATION

This is to certify that all work covered by Invoice No. [__________]  is complete and that the invoice is correct, authentic and the only one issued for the work described therein.
	    [      NAME OF OFFICER      ]
	A C K N O W L E D G E M E N T

(COUNTRY) [                       ]
(CITY)    [                       ]

Before me, a Notary Public for and in the City of [     CITY     ], [     COUNTRY     ], this [     DATE      ] personally appeared    [     NAME OF OFFICER    ], exhibiting to me his Residence Certificate No. [               ] issued at [                    ], [     NAME OF OFFICER    ] on [               ] to be the same person who executed the foregoing Certification acknowledged to me that the same is a free and voluntary act and deed and to me known as the same person who acknowledged this certification.

In witness hereof, I have hereunto set my hand and affixed my notarial seal this [     ] of [               ], 200[---] in 
[   NAME OF CITY   ] [     COUNTRY     ].

[       NAME OF NOTARY       ]
Notary Public, State of ______.
My Commission Expires __________

Doc. No. ____________
Page No. ____________
Book No. ____________
Series of 200   

	W  I  T  N  E  S  S  :

[         NAME          ]	[          NAME          ]

SELLER’S CONDITIONAL WAIVER AND RELEASE
UPON PROGRESS PAYMENT

CONTRACT NO. ______________________
CONTRACT MODIFICATION _____________

KNOW ALL MEN BY THESE PRESENTS, THAT

WHEREAS, [                    ], ("Seller") and [                                                                                            ] ("Purchaser") have heretofore entered into a certain Agreement, (the "Contract") dated [               ] relating to the furnishing of [                                                                          ] in connection with the [      PROJECT NAME        ] MW Power Station [DESCRIPTION OF CONTRACT] Works (the "Project") located at [                                    ].

NOW THEREFORE upon actual receipt by Seller of payment from Purchaser in the sum of [                                                 ($                 )] to Purchaser, which sum represents the full amount due Seller as of [   DATE OF INVOICE   ] ("Release Date") under and pursuant to the Contract, this document shall become effective to release pro tanto any mechanic's lien, stop Notice or bond right that Seller has on the Project as of the Release Date.  Seller does hereby and thereby:

1.	Certify to Purchaser that all persons, firm, associations, corporations, or other entities furnishing labor, materials, equipment, supplies or services to Seller with respect to the Contract have been paid in full as of Release Date, including any and all federal, state and local sales, use, excise or similar taxes or import duties, licenses and royalties, except the following (none, unless noted):                                           .  And

2.	Release and waive any and all manner of liens, whatsoever which Seller, its successors or assigns may have upon any portion of the lands of Purchaser of the buildings thereon standing, or any personal or intangible property of Purchaser, for labor, materials, equipment or services furnished under the Contract, as of Release Date.  And

3.	Further remise, release and forever discharge Purchaser, its successors and assigns of and from any and all manner of claims, demands, and causes of action whatsoever arising under or out of the Contract, as of Release Date, except the following (none unless noted):                                                           .  And

4.	Agree to Indemnify and hold harmless Purchaser, their successors or assigns, against all loss, cost, damage of expense by reason of any and all manner of liens, claims or demands which anyone may have for labor performed, or for material, equipment or services furnished under the Contract as Release Date, except as specifically noted.

IN WITNESS WHEREOF, Seller has duly caused these presents to be signed and attested by its duly authorized owner, partner or office (and, if a corporation, its corporate seal to be hereunto affixed) on the [     DATE      ], 200[---], in [        CITY        ] [          STATE/COUNTRY          ], ON [       DATE       ].

SELLER

Signed:                                 
Typed Name:                        
Title:	                                 
[       NAME OF NOTARY       ]
Notary Public, State of _________.
My Commission Expires __________
Doc. No. ____________
Page No. ____________
Book No. ____________
Series of 200__