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AGREEMENT

By and Between

[ENRON [NORTH AMERICA CORP.]] 

AND

FUELCELL ENERGY, INC.
For

 Direct Fuel Cell® Powerplants

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
3.2.4   Maximize Assembly	15
3.3   Relevant Information	15
3.4   Hazardous Materials Notification	16
3.5   Employment of Licensed Personnel	16
3.6   Customs Clearance	17
3.6   Customs Clearance	17
3.7   Not Used	17
3.8   Compliance with Governmental Rules	17
3.9   Purchaser Review of Vendors	19
3.11  Financing Assistance	19
3.12  Purchaser Permit Support	19
3.13  Not Used	19
3.14  Spare Parts	19
3.14.1   Commissioning Spares	19
3.14.2   O & M Spare Parts	19
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	20
3.15  Key Personnel	20
ARTICLE IV.  REPRESENTATIONS AND WARRANTIES	21
4.1   Representations and Warranties of Purchaser	21
4.2   Purchaser Supplied Information	21
4.3   Representations and Warranties of Seller	21
ARTICLE V.  PURCHASE AMOUNT AND OTHER CHARGES	24
5.1   Purchase Amount	24
5.1.1   Purchase Amount	24
5.2   Taxes and Contributions	24
5.2.1   Seller Responsibility for Personnel Taxes	24
5.2.2   Seller’s Responsibility for Taxes	24
5.2.3   Not Used	24
5.2.4   Tax Penalties	24
5.3   Changes to the Purchase Amount	25
5.4   Cancellation	25
5.4.1   Cancellation by Purchaser	25
ARTICLE VI.  PAYMENT TERMS	26
6.1   Payment of Purchase Amount	26
6.1.1   Payment Periods.	26
6.1.4   Not Used	26
6.2   Payment Disputes	26
6.3   Payments Withheld or Offset	26
6.3.1   Payments Withheld	26
6.3.3   Payment of Subcontractors.	27
6.4   Payment of Liquidated Damages	27
6.5   Notices of Nonpayment	27
6.6   Lien Release	28
6.7   Invoices	28
6.7.1   Contract Reference	28
6.7.2   Address for Invoices	28
6.7.3   Date of Receipt	28
6.8   Method of Payment	28
6.9   Payments Not Acceptance of Work	28
ARTICLE VII.  EFFECTIVE DATE, COMMENCEMENT OF THE WORK, TERMINATION	29
7.1   Effective Date	29
7.2   Commencement of Work	29
3.16  Project Planning and Control	30
10.2.1   Guaranteed Installation Date	30
ARTICLE IX.  INSPECTION AND CORRECTION OF WORK	31
9.1   Inspections	31
9.2   Resident Facilities	31
9.3   Quality Plan	31
9.4   Notice	31
9.5   Correction of Equipment	32
ARTICLE X.  DELIVERY AND PERFORMANCE	33
10.1   Delivery of Documentation	33
10.2   Delivery and Installation of Equipment	33
10.2.5   Extensions of the Guaranteed Installation Date	33
10.2.6   Not Used	33
10.3.1   Installation Liquidated Damages	33
10.3.2   Not Used	33
10.4   Electrical Losses Guarantee	33
10.4.1   Electrical Losses Guarantee	33
10.4.2   Minimum Electrical Losses Guarantee	33
10.4.3   Loss Evaluation Guarantee	33
10.4.4   Guarantee Value Table	33
10.5.3   Remedy for Failures to Meet Minimum Electrical Losses Guarantee	34
10.8   Not Used	34
10.8.1   Seller Presence at Tests	34
10.8.2   Test Results	34
10.5   Most Recent Performance Test	34
10.8.3   Consumable Spare Parts During Retests	34
10.9   Acceptance	34
ARTICLE XI.  CHANGE ORDER	36
11.1   Adjustment of Purchase Amount	36
11.2   Purchaser Requested Change Order	36
11.3   Seller Requested Change Order	36
11.4   Other Change Order	36
11.5   Disputes	36
11.6   Change Order Pricing	37
11.6.1   Method of Pricing	37
11.6.2   Cost Plus Basis	37
ARTICLE XII.  INTENTIONALLY OMITTED	38
15.3   Seller’s Drawings, Etc. for Use by Purchaser	38
15.4   Licensing Procedure	38
15.2.2   Infringement Cures and Defense	38
ARTICLE XIII.  ORDER OF PRECEDENCE	40
13.1   Order of Precedence	40
ARTICLE XIV.  WARRANTY	41
14.1   Seller’s Warranty	41
14.1.1   Primary Warranty Period	41
14.1.2   Warranty Clarification	41
14.1.3   Warranty Breach Notice	41
14.3   Remedy	41
14.3.1   Obligations, Responsibilities and Recourse	42
14.2.1   Continued Warranty on Corrections or Repairs Performed During the Primary Warranty Period	42
14.2   Extended Warranty Period	42
14.2.2   Extension of Warranty Due to Unavailability	43
14.4   Vendor Warranty	43
14.5   Limited Warranty	43
14.6   Defective Equipment	43
14.7   Termination of Warranty	43
14.8   Damage to Other Facility Equipment	44
ARTICLE XV.  RISK OF LOSS AND TITLE	45
15.1   Risk of Loss	45
15.2   Title	45
15.2.1   Passage of Title	45
ARTICLE XVI.  INTENTIONALLY OMITTED	46
3.10  Packing and Insurance Surveyor	46
3.10.1   Packing Recommendation	46
3.10.4   Compliance with Recommendation	46
3.10.3   Notice of Shipment	46
9.7   Release for Delivery	46
10.2.1.2   Delivery Restrictions	46
ARTICLE XVII.  DEFAULT	47
17.1   Event of Default by Seller	47
17.2   Purchaser's Remedies Against Seller	47
17.3   General Obligations	47
17.4   Payment Obligations	47
17.5   Events of Default by Purchaser	48
17.6   Seller Remedies	48
ARTICLE XVIII.  FORCE MAJEURE	49
18.1   Failure to Perform Due to an Event of Force Majeure	49
18.2   Events of Force Majeure	49
18.3   Notice of Force Majeure	49
18.4   Events of Force Majeure	50
18.5   Certain Events Not Excused	50
18.6   Continued Performance	51
18.7   Not Used	51
18.8   Force Majeure - Delays	51
18.9   Force Majeure - Cost	51
ARTICLE XIX.  INSURANCE	52
19.1   Insurance - General	52
19.1.1   All Risk	52
19.1.2   Workers Compensation and Employers Liability Insurance	52
19.1.3   Commercial General Liability Insurance	52
19.1.4   Hull and Protection and Indemnity Insurance	52
19.1.5   Business Automobile Liability Insurance	52
19.1.6   Aircraft Liability Insurance	53
19.1.7   Excess Umbrella Lability Coverage	53
19.1.8   Vendors	53
19.1.9   Certificate of Insurance	53
19.1.10  Other Requirements	53
19.1.11  Vendor Waiver of Subrogation	54
19.1.12  Compliance with Insurance	54
19.1.13 Limitation	54
19.3   Purchaser Policies	55
19.3.2   Not Used	55
19.3.3   Primary Insurance	55
ARTICLE XX.  INDEMNIFICATION	56
20.1   Third Party	56
20.2   Notice	56
20.4   Survival of Obligation	57
ARTICLE XXI.  NON-DISCLOSURE OF INFORMATION	58
21.1   Proprietary Information	58
21.2   Press Releases	58
21.3   Confidentiality	58
ARTICLE XXII.  ASSIGNMENT	59
22.1   Assignment by Seller	59
22.2   Assignment by Purchaser	59
22.3   Agreement with Lender	59
ARTICLE XXIII.  RELATIONSHIP OF THE PARTIES	60
23.1   Independent Contractor	60
23.2   Responsibilities of Seller as Principal for its Employees	60
ARTICLE XXIV.  LIENS AND CLAIMS	61
ARTICLE XXV.  NOTICES AND COMMUNICATIONS	62
25.1   Notices	62
25.2   Effectiveness of Notices	62
25.3   Technical Communications	62
ARTICLE XXVI.  ARBITRATION	63
26.1   Negotiation of Disputes and Disagreements	63
26.2   Arbitration Resolution	63
26.3   Continuation of Work	63
ARTICLE XXVII.  LIMITATION OF LIABILITY	64
27.1   Maximum Liability	64
27.2   Consequential Damages	64
27.3   Releases Valid in All Events	64
ARTICLE XXVIII.  DRUG AND ALCOHOL-FREE WORKPLACE	65
ARTICLE XIX.  MISCELLANEOUS	66
29.1   Validity and Enforceability	66
29.2   Governing Law	66
29.3   Entire Agreement	66
29.4   Agreement Modification	66
29.5   Waiver	66
29.6   Headings	66
29.7   Third-Party Beneficiaries	66
29.8   Counterparts	66
29.9   Equal Employment Opportunity	66
29.10  Cooperation on Site	67

AGREEMENT

This Agreement is made and entered into and effective on the ___ day of  ___,  (the “Effective Date”) by and between [ENRON {].} [NORTH AMERICA CORP.].], incorporated under the laws of the state of Delaware, with offices located at [] ("Purchaser"), and FuelCell Energy, Inc., a corporation incorporated under the laws of Connecticut (“Seller”), with offices located at [].

	RECITALS
      
      WHEREAS, Purchaser has the need to acquire Fuel Cell Power Plants and associated equipment and services; and

      WHEREAS, Seller is in the business of designing, engineering, manufacturing, and installing such equipment and other services related thereto;

      WHEREAS, Purchaser wishes to contract with Seller for the design, engineering, manufacture, and installation of such equipment and other services related thereto;

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

      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

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

“Acceptance” shall have the meaning as set forth in Section {10.9} [10.6].

“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 or ownership with, the person or entity specified.

“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.

“Applicable Laws” shall mean any applicable federal, state, municipal or local statute, ordinance or other 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.  

[“Average Purchase Amount” shall mean the total of the purchase amounts for each unit subject to release under this Agreement divided by the total number of units subject to release under this Agreement.

“Base Stack Price” shall have the meaning set forth in Section 14.4.]

“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. 

“Change Order” shall have the meaning as set forth in Section 11.2.

“Day or day” shall mean a calendar day, including weekdays, weekends, and holidays.

{“Delay Event” shall have the meaning set forth in Section 10.3.1.}

“Delivery Point” for all Equipment, delivery shall mean a location [in Connecticut] designated by Purchaser [pursuant to Section 2.1(c). 

“Earliest Delivery Date” shall have the meaning set forth in Section 6.4].

“Effective Date” shall have the meaning as set forth in Section 7.1.

“Equipment” shall mean the Units, equipment and materials required to manufacture, supply, and install the Units pursuant to this Agreement, specifically including the Scope of Work.

“Event of Force Majeure” shall have the meaning as defined in Section 18.4.

“Event of Purchaser Default” shall have the meaning as defined in Section 17.5.
 
“Event of Seller Default” shall have the meaning as defined in Section 17.1.

“Expected Delivery Date” shall be the preliminary delivery date for a Unit as estimated within thirty days of Release for that Unit, subject to revision pursuant to the terms of this Agreement.

[“Expected Delivery Date” shall mean the date that the Major Components of a given Unit are expected to be delivered to a site pursuant to Section 8.2.

“Expected Delivery Date” shall mean the latest date in the most recent Project Management Plan where all the Major Components for a given Unit are expected to be delivered to the Delivery Point.]

“Extended Warranty Period” shall have the meaning as set forth in Section 14.2.1.

“Facility” shall mean each electric generation plant comprised of the specified number of Units and the Balance of Plant.

[“Fuel Cell Power Plants” shall mean power generation facilities using fuel cell units manufactured and licensed by FuelCell Energy Inc.]

“Guaranteed Delivery Date” shall mean the final date that the parties agree that a Unit will be delivered to a Site, with the Guaranteed Delivery Date being at least ninety (90) days prior to the Guaranteed Installation Date unless otherwise agreed. The Guaranteed Delivery Date will be established at least [] months prior to [].

“Guaranteed Installation Date” shall have the meaning as set forth in Section 10.2.1.

“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.

“Heat Rate” shall mean the actual fuel energy consumed during the Performance Test determined from the actual lower heating value of the fuel multiplied by the quantity of fuel consumed and expressed in British Thermal Units (BTU), divided by the Electrical Output measured in kilowatt hours (kWh) at the [generator terminals] during the Performance Tests in accordance with the testing guidelines set forth in [Exhibit F], expressed as BTU/kWh(LHV).

“Heat Rate Guarantee” shall have the meaning set forth in Section {10.4.1} [10.2.1].

“Indemnified Party” shall have the meaning as set forth in Section 20.2.

{“Installation Completion” shall have the meaning set forth in Section 10.2.1.

“Insurability Certificate” shall have the meaning as set forth in Section 3.10.2.

“Insurance Representative” shall have the meaning as set forth in Section 3.10.1.}

“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.

“kW” shall mean kilowatt.

“kWh or kwh” shall mean kilowatt hour.

“Lender” shall mean any financial institution from which Purchaser is obtaining financing in connection with the Facility and associated facilities and services.

[[]“Major Components” shall mean [fuel cell stack modules, water treatment system, compressed air system, fuel treatment system, oxidant suppy system, heat recovery system, compressed air system and nitkogen supply system as defined in Exhibit ___.]]

“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.

{”O &}[“O&]M Spare Parts” shall have the meaning set forth in Section 3.14.2 and as set forth in Exhibit M-1.

“O & M Spare Parts Amount” shall have the meaning as set forth in Section 3.14.2.

“Patent Indemnities” shall have the meaning as set forth in Section {15.2.2}[__________].

“Performance Standards” shall have the meaning as set forth in Article {10} [10.2].

“Performance Test” shall mean the test(s) conducted at each Site on each Unit in accordance with the Test Procedures to determine whether the tested Unit meets {Emissions,} Heat Rate, Electrical Output {and}[, Emissions,] Water Consumption Guarantees[, Reliability and Sound].

“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.

[“Permit Notice” has the meaning set forth in Section 3.12.]

“Primary Warranty Period” shall have the meaning as set forth in Section 14.1.1.
	
[“Project Management Plan”] shall mean [the plan set forth in Section 8.1.]

“Project Manager” shall mean the project manager designated by Seller pursuant to Section 3.3(a) hereof.  

“Punchlist” shall mean the list of incomplete or deficient work or materials associated with Seller’s Scope of Work, which is comprised of those times which are minor in nature and do not affect the performance of the Equipment, safety of  personnel working on or operating the Equipment or the ability of the Equipment to function properly.  Punchlists shall be prepared by Seller and approved by Purchaser.

“Purchase Amount” shall have the meaning set forth in Section 5.1.1, as such amount may be adjusted from time to time [in accordance with the terms of the Agreement].

“Purchaser” shall have the meaning set forth in the preliminary statements.

“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.

“Refund Amount” shall have the meaning as set forth in Section 17.4.1.

{[}“Related Dispute” shall have the meaning set forth in Section 26.2.{]}

“Release” shall have the meaning as set forth in Section 7.2.

“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. The Scope of Work is generally described in Exhibit B.

“Seller” shall have the meaning set forth in the preliminary statements.

“Site” shall mean any part of the land where a Facility is located.

“Specification” shall mean the final specifications issued by Purchaser pursuant to Section 8.3 for the design, manufacture, assembly, and supply of the Units, which will be  generally in conformity with [Exhibit B-1].

[“Stack Purchase Amount” shall have the meaning set forth in Section 14.4.]

“Termination Costs” shall have the meaning as set forth in Section 17.4.2.

{“Termination Settlement” shall have the meaning as set forth in Section 17.4.4.

[}“Test Procedures” shall have the meaning as set forth in Exhibit B-1.{]}

“Unit” singularly, any of the fuel cell powerplants and associated equipment that Seller is furnishing  under this Agreement. 

“Vendor” shall mean any vendor, supplier or subcontractor utilized by Seller in the performance of the Scope of Work hereunder.

.

ARTICLE II.  RESPONSIBILITIES OF PURCHASER

2.1   Purchaser 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 or Purchaser’s other obligations under this Agreement, Purchaser shall be responsible for ensuring that the following occur on a timely basis:

      (a)		designation of a representative (“Purchaser’s Representative”) and delivery of a Notice to Seller identifying Purchaser's Representative, within thirty (30) days of the Effective Date (and from time to time thereafter), who shall act as the primary point of contact for Seller with respect to the prosecution of the Scope of Work and shall have the authority to bind Purchaser but not to amend this Agreement;

(b)	delivery of Notice, within thirty (30) days of the Effective Date (and from time to time thereafter) to Seller identifying such persons within Purchaser's organization that have authority to approve Change Orders; 

(c)	designation of the Units to be delivered to up to five (5) sites within ninety (90) days of Release, with such designation to be subject to change by Purchaser upon ten (10) days notice until {four (4)} [six (6)] months prior to the {Guaranteed} [Expected] Delivery Date for the Unit;

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

(e)	provision or arrangement for adequate road access to the Facility from the nearest highway; and,

(f)	provision or arrangement for those materials, items and services specifically identified in Exhibit _ .

(g)	[Purchaser agrees to start the permitting of the Facilities within ten (10) days of receipt of a favorable ruling from the Conn. Dupc (??)]

ARTICLE III.  RESPONSIBILITIES OF SELLER

3.1   General Obligations.  Except as expressly set forth in this Agreement, Seller shall provide the materials and supplies, competent personnel and supervision required for Seller to fulfill its responsibilities, tools and equipment, and the services required for performance and timely completion of 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 prior written consent of Purchaser, use any equipment, material, article, or process that is operationally, technically and functionally equivalent 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 .  Seller shall offload and install the Units at the Site in accordance with Exhibit [scope exhibit].  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, such approval not to be unreasonably withheld.

3.2.3   Maximum Assembly. Seller shall use commercially reasonable efforts to maximize the assembly of the Equipment prior to {Shipment} [shipment].

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:

(a)	within thirty (30) 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 reasonably requested by Purchaser in dealing with its customers and/or any governmental authority in matters relating to the Scope of Work;

{and }[(c)	within thirty (30) days of a Release and for every month thereafter, a Project Management Plan detailing the expected manufacturing, shipping and installation schedule for each unit which is subject to the Release; and ]

{(c) }[(d)]	such documents as required by or as reasonably required to implement [or evaluate] the Project Management Plan.

3.4   Hazardous Materials.  

(a)	Seller warrants that it will use reasonable skill and care to ensure that there will not be any Hazardous Material specified or incorporated into the Equipment installed at the site; 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 wish to stipulate or use and Seller shall not stipulate or use the same without, in each case, the prior written consent of Purchaser.  Seller shall upon the request of Purchaser promptly 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 to be installed at the Site, Seller shall provide Purchaser with notification.

(b)	Seller shall be responsible for the proper collection, removal, and disposal of any Hazardous Materials furnished, used, applied, consumed, or stored at the Site by Seller, including used oils, greases, and solvents from flushing and cleaning processes and shall assume generator status for disposal of any Hazardous Materials introduced by Seller at the Site.  All costs, fines, liabilities, penalties, and other expenses associated with the handling, transporting, and disposing of Hazardous Materials introduced on or to the Site by Seller paid by Seller without reimbursement by Purchaser.

(c)	SELLER SHALL BE LIABLE FOR AND SHALL INDEMNIFY, PROTECT, DEFEND AND HOLD HARMLESS PURCHASER AND ITS DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS FROM AND AGAINST ANY AND ALL DEMANDS, CLAIMS, SUITS AND CAUSES OF ACTION AND ANY AND ALL LIABILITY, COSTS, EXPENSES, SETTLEMENTS AND JUDGMENTS OF THIRD PARTIES INCURRED BY PURCHASER (INCLUDING ATTORNEYS FEES AND COURT COSTS) ARISING OUT OF THE CIRCUMSTANCES DESCRIBED IN THIS SECTION 3.4.

3.5   Employment of Licensed Personnel.  Whenever required by Applicable Law or generally accepted engineering and construction practices, Seller agrees to employ licensed personnel to perform engineering, and design services in the performance of its obligations under this Agreement.  Seller shall be responsible for employing and utilizing personnel, including vendors and subcontractors, who possess the proper training and experience, and who are capable of performing the tasks for which they are employed or utilized.  Seller shall not employ or permit any Vendor to utilize 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, if applicable. 

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} [fails] to cause the Scope of Work to so comply with the Specification and Applicable Laws, Seller shall correct such non-complying Scope of Work or portion thereof as necessary to comply with the above, and shall not be entitled to a change order.  Seller shall bear the costs of correction of such non-complying 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 the 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 of which Seller is aware 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 for good cause.

[3.10  Not used]

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  that Purchaser is entitled to attend pursuant to this Agreement. 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.  [Purchaser shall from time to time keep Seller appraised of the status of key permitting activities as such activities relate to the specifications and performance standards of the units.  If Purchaser becomes aware of a permitting issue related specifically to the level of the Performance Standards of a unit and after exercising commercially reasonable efforts to resolve such issue, determines that a permit allowing the unit or units tooperate at full capacity for a mnimum of [8,760] hours per year is unlikely to be obtained, Purchaser at its sole discretion can issue to Seller a Permit Notice.  This Permit Notice will detail the nature of the problem and the change needed to the Performance Standards to resole the problem.  Aong with the Permit Notice, Purchaser shall supply all relevant documentation received from permitting agencies supporting the proposed change to the Performance Standard. Seller shall have thirty (30) days from receipt of such Permit Notice to amend this Agreement for the new Performance standard or Purchaser shall have the right to terminate the order pursuant to Section ______.]

3.13  Not Used.  

3.14  Spare Parts.[FCE to provide suggestions on this section. Concept is to provide a conceptual/functional list with not to exceed pricing for budget purposes. The price list will be firm for (12) months after order.]

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 resumes for the Project Manager and Site Manager.  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.

.   

ARTICLE IV.  REPRESENTATIONS AND WARRANTIES

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

      (a)		Purchaser is a corporation organized, existing and in good standing under the laws of the state of Delaware; Purchaser possesses all requisite power and authority to enter into and perform this Agreement, and to carry out the transactions contemplated herein; and Purchaser 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)		Purchaser'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 Purchaser's legal, valid, and binding obligation;

      (c)		Purchaser 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 Purchaser; 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 Purchaser that would affect the validity or enforceability of this Agreement, the ability of Purchaser 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 Purchaser.

4.2   Purchaser Supplied Information. 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.  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 it 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, 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 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 in the Equipment;  

(g)	All services, equipment, documentation, materials and information, presented to Purchaser for acceptance hereunder are complete, and accurate,  and meet the requirements of this Agreement; 
[ISSUE?]
(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;  

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

(3)	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).

(j)	Seller has the manufacturing capacity to meet the requirements of this Agreement and a Release thereunder, and shall identify manufacturing slots for any Equipment ordered in accordance with the terms of this Agreement [and the Project Management Plan], and will devote sufficient resources to meet the requirements of this Agreement, including the Project Schedule.
ARTICLE V.  PURCHASE AMOUNT AND OTHER CHARGES

5.1   Purchase Amount. 

5.1.1   Purchase Amount.  The purchase amount for the Equipment and their associated services shall be as stated in Exhibit A (the "Purchase Amount"), which is fixed and not subject to escalation for any Release submitted prior to March 1, 2001. The Purchase Amount for any Release submitted after March 1, 2001 shall be as agreed [at or before the time of the Release]. The Purchase Amount shall be complete compensation for Seller to perform its obligations under this Agreement, with the exception of the cost of any replacement modules under Section {[module warranty]}[(“Stack Purchase Amount”)] and shipping charges.  Shipping charges shall be invoiced at the lesser of the actual cost or $87,000 per Unit [(“ShippingChange”)].

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 [and the warranty].  Seller acknowledges that Purchaser has no responsibility for such taxes as they apply to Seller, Seller’s employees or the employees of Vendors. 

5.2.2   Seller’s Responsibility for Taxes. Except as set forth herein, 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 [and Stack Purchase amount] excludes any US federal, state or local jurisdiction imposed property, 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. 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    Intentionally Deleted.

5.2.4   Tax Penalties. Each party agrees to timely pay any tax, interest, penalty, fines, costs, losses and expenses (including, without limitation, court costs and attorney’s fees) of whatever kind, which said party is required to pay in accordance with this Agreement. Each party shall indemnity the other for any which the other party 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 the responsible party  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   Increases to the Purchase Amount. After Release, the Purchase Amount may only be increased by Change Order pursuant to Article XI. 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. Once a Unit has been included in a Release, neither party may cancel the order for the Unit for convenience.  

. 

ARTICLE VI.  PAYMENT TERMS

6.1   Payment of Purchase Amount. 

6.1.1   Payment.  Upon Acceptance of a Unit, Seller shall invoice Purchaser for the Purchase Amount[, Shipping Change and Stack Purchase Agreement (in accordance with Section 14.4)] related to that Unit, including any approved Change Orders. Payment of the Purchase Price for the Unit shall be due within ten (10) days of receipt of the invoice.

6.1.2	Payment for Spare Parts. 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; and
(ii)	Purchaser's receipt of a properly prepared invoice for such Spare Parts Amount.

6.2   Payment Disputes.  Payment 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 reasonable 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 or a portion thereof in an amount and to such extent as may be reasonable 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 or Vendor 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   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  Purchaser Delay; Payment.  The following shall constitute an event or act of Purchaser Delay: (i) failing to make the site available as of the latest date allowed under this Agreement and the Final Project Schedule, assuming Seller has given notice of readiness to ship in accordance with this Agreement[,] (ii) changing the site to which a Unit is to be delivered after the latest time for making the change has passed[,] (iii) failing to commence the Performance Tests within fourteen (14) days of Installation Completion, and Purchaser’s receipt of proper notice thereof, or (iv) Purchaser failing to complete its construction obligations in accordance with the Final Project Schedule, so long as Seller has delivered the Major Components to the {site} [Site] in accordance with said schedule. Seller shall be entitled to an extension in the Project Schedule (including the termination dates referenced in Section 17.1 (d)) for any Units for which a  Purchaser Delay directly causes the Acceptance of a Unit to be delayed, so long as Seller is in compliance with the Project Schedule. The failure to obtain necessary permits shall not constitute and event of Purchaser Delay so long as (a) Purchaser has initiated the permitting process within ninety (90) days of Release (b) the failure to obtain a permit is the result of insufficient information being provided by Seller, or (c) the Performance Standards are not acceptable to the authority issuing the permit [pursuant to Section 3.12]. If an event or act of Purchaser Delay continues for forty-five (45) days or more, then upon the later of {[}one hundred and five (105) days {] from the Guaranteed Delivery Date or the actual delivery date} [from the Earliest Delivery Date for such unit set forth in Exhibit ___ or the date on which all the Masjor Compenents for a unit are delivered to the Site], Purchaser shall pay Seller the Purchase Amount for the affected Unit. Seller’s right to receive payment shall be contingent upon Seller providing five (5) days Notice of actual delay caused by the above, shall be subject to any offset permitted under this Agreement, and shall be subject to refund should the Unit fail to successfully pass the Performance Tests. 

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.  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, and shall provide Purchaser with a lien release in conformity with [Exhibit S?].  

6.7      Invoices.

6.7.1   Contract Reference.  Each invoice will reference CONTRACT #].

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

	[Enron .
	Houston, Texas  77002
	Attn: ]  
      
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.  Payment will be made by wire transfer unless otherwise requested by Seller.  Payments to the Seller shall be made to the following address:
	[]

6.9   Payments Not Acceptance of Work.   Purchaser waives no rights under this Agreement by making payment hereunder, including any partial payment or payments prior to Acceptance for a particular Unit.[hall 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.  RELEASE

7.1   Effective Period for Submitting Release.  This Agreement shall terminate one year after the Effective Date if Purchaser has not submitted a Release (as defined below) by that date.

7.2   Release. Should Purchaser desire to place an order for Equipment, it shall submit a Release to Seller.  The date the Release is submitted shall be the Release Date. Such Release shall specify which Units shall be delivered to a specified Site, subject to change in accordance with this Agreement.

ARTICLE VIII.  PROJECT DOCUMENTS

8.1	Project Management Plan. Within thirty days of the Effective Date the Seller shall submit a proposed Project Management Plan.  Such plan shall include the project schedule{,} [for manufacturing, shipping and installation of each unit, a] staffing plan, [a] quality control plan, [a] subcontracting plan, [a] list of major {vendors,} [Vendors, a] transportation plan, [a] document review schedule, performance test procedures, technical interface, and other matters required to successfully manage the project to conclusion. Seller shall update the plan monthly, specifically including any deviations in the project schedule. 

8.2	Project Schedule.  {[}Six months following the Release Date[,] Seller and Purchaser shall agree to the initial [project schedule contained in the] Project {Schedule} [Management Plan], which shall set {for} [forth] the critical path for each Unit to achieve Acceptance prior to the termination dates under Section {__}[17.1(d)] related to such Unit.  {Seller shall advise the Purchaser of the expected delivery date for the order, which shall be at least sixty days prior to the estimated Installation Completion Date} [This initial Project Management Plan shall set forth the Expected Delivery Date for each Unit].  Seller may revise the Expected Delivery Date, however, {Seller shall give Purchaser at least four months notice of the Final Delivery Date, said Final Delivery Date to be prior to the Guaranteed Delivery Date} [the Expected Delivery Date for a given Unit may not be before the Earliest Delivery Date for such Unit and cannot be changed by more than ___ months during any six month planning period].  Purchaser shall not be obligated to have the site ready for installation prior to the {Final Delivery Date.] }[latter of (1) the date by which the Major Components for the first Unit to be installed at the Site are delivered to the Delivery Point or (2) the Exptected Delivery Date for the Unit.  ]

8.3  Specifications.  Exhibit __contains the preliminary specifications for the Equipment.  No later than [ ] months following Release, Purchaser shall submit final Specifications to Purchaser, which shall be in general conformity with the preliminary specifications.  

8.4   Establishment of Delivery and Acceptance Dates. Each Release shall specify the expected Delivery and Acceptance Dates for each Unit and its associated Equipment. Such dates may be adjusted in accordance with the terms of this Agreement. Seller shall (i) cause the Equipment to be delivered to the Delivery Point in undamaged condition in accordance with the Specification and the Release on or before the Delivery Date, (ii) use commercially reasonable efforts to manufacture, deliver and install the Equipment in accordance with the Scope of Work, (“Installation Completion”)]  and (iii) and conduct and satisfactorily complete the Performance Tests at the Site on or before the Acceptance Date.

ARTICLE IX.  INSPECTION AND CORRECTION OF WORK 

9.1   Inspections.  Purchaser or its designated representatives, shall have the right from time to time during this Agreement and during normal business hours to review Seller’s performance of this Agreement; provided, however that Purchaser has provided Seller with seven (7) days notice of such desire to observe Seller’s performance.   Purchaser's rights to inspect under this Section 9.1 shall include those actions reasonably necessary to verify that the Equipment conforms to the specified requirements of this Agreement (including the Specifications and Project Schedule), is being produced in accordance with the manufacturing schedules, and that Seller is acting in conformity with its quality plan. These inspection and observation rights may include but not be limited to the right to review manufacturing schedules and observe certain agreed production inspections and tests of Equipment at Seller’s workplace or those of its Vendors. 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 shall act in a commercially reasonable manner to accommodate Purchaser’s request to have a quality representative resident at Seller’s facilities and the Site.  

9.3   Quality Plan.  Seller shall maintain a quality plan compliant with ISO 2000, in general conformity with [Exhibit J], detailing:

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

In the event of a conflict between [Exhibit J] and ISO 2000, the higher standard shall prevail.

9.4   Notice of Witness Points.  In establishing the Project Management Plan the parties shall agree on witness points and factory acceptance tests. Seller shall provide not less than fourteen (14) days notice prior to any of the witness or hold points as set forth in the Project Management Plan.  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, Purchaser shall be deemed to have waived the right to witness the test. Witnessing a test (or waiving the right to witness such test) does not constitute an acceptance of any work, or waiver of any rights under this Agreement. 

9.5   Correction of Equipment.  Prior to Acceptance, Seller shall, at its sole cost and risk, 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 written consent, which will not be unreasonably withheld.

.

ARTICLE X.  PERFORMANCE GUARANTEES AND ACCEPTANCE

10.1   Performance Guarantees. Seller guarantees that each Unit will meet the Performance Standards for Electrical Output, Efficiency, Water Consumption, Noise and Emissions as set forth in Section 10.2, when Performance Tests are conducted in accordance with the Performance Test Procedures.

10.2  Performance Standards. Each Unit shall meet Performance Standards as described in this Article and as set forth in the following table below in order to achieve Acceptance:

	2MW Power Plants	2.4MW Power Plants	3.0 MW Power Plants	
Electrical Output, kW	2000 kW	2400 kW		
Heat Rate (LVH)	48%	48%		
Water Consumption	600 gal/h	620 gal/h		
Sound level	65 dB(A) at 100 feet	65 dB(A) at 100 feet		
Emissions				
Nox	<1 ppmv	<1 ppmv		
 {SOx} [Sox]	<0.1 ppmv	<0.1 ppmv		
CO	<20 ppmv	<20 ppmv		
VOC	<20 ppmv	<20 ppmv		
Particulates	<100 mg/m3	<100 mg/m3		

10.2.1   Heat Rate Guarantee.  Seller guarantees that the Heat Rate as measured for each of the Units 
as demonstrated during the Performance Test, shall be __BTU/kWh. In the event the Heat Rate exceeds the Minimum Heat Rate Guarantee, Seller shall take all necessary actions to correct, retest the deficient Unit and cause the deficient Unit to meet the Minimum Heat Rate Guarantee.  Failure to meet the Heat Rate Guarantee shall prevent Acceptance, unless Purchaser explicitly waives this guarantee in writing.  

10.3.2   Electrical Output Guarantee.  Seller guarantees that the Electrical Output of each Unit as demonstrated in the  most recent Performance Test shall be equal or greater than 2000 kW (for a 2.0 MW Unit), 2400 kW (for a 2.4 MW) Unit, and 3000kW (for a 3.0 MW Unit). [Is this a net number?  Where is it measured?]
  
10.3.3   Emissions Guarantee. Seller guarantees that the emissions of the [Unit] for the above listed categories when the [Unit] is operated [conditions?]

10.3.4   Water Consumption Guarantee. 

10.3.5	[Sound Guarantee. Seller guarantees that the near field average A-weighted sound pressure levels of the [Unit?  Facility?] shall not exceed 65dB(a) 9referenced to 20 micropascals) when measured during the Performance Test at one and a half (1.5) meters above the ground level and one (1) meter from the surface of the Equipment.]

10.3.6	Reliability.

10.4    Remedy for Failures to Meet Performance Guarantees.  Except as specified in Section 10._] the failure to achieve the Performance Guarantees by the Acceptance Deadline [to be defined] shall constitute a default under this Agreement, and Purchaser shall have the remedies specified in Article [].

10.5   Testing.

10.5.1   Notice of Installation Completion; Conducting Tests. Seller shall deliver Notice to Purchaser that a Unit has achieved Installation Completion so that the Unit is ready to be tested.  Within [fourteen (14) days] of receipt of this Notice, Purchaser shall perform the Performance Tests in accordance with the Performance Test Procedure; however, Purchaser shall not be required to conduct Performance Tests prior to [] days from the Delivery Date, or date of actual delivery, whichever is latest. Purchaser shall give Seller five (5) days notice of the time of the Performance Tests. Seller shall be present or to have a representative present at the Performance Tests, and shall provide technical advice during the tests; however, Purchaser may at its option conduct the test without Seller, assuming notice was properly given in accordance with this section.

10.5.2   Test Results. Performance Tests shall be conducted on a unit-by-unit basis. Upon the completion of each Performance Test Purchaser will issue a Performance Test Certificate setting forth the results achieved during such test.  In the case of multiple Performance Tests on a Unit, performance shall be measured by the most recent Performance Test.

10.5.3   Costs of  Retests.  If one or more additional Acceptance Tests are required doe to the failure of a Unit to pass its Acceptance Test, Seller will bear the additional costs (if any) incurred by Purchaser [in excess of those costs normally associated with operating the Unit]. Such additional costs may include, but not be limited to, cost of testing, instrumentation, fuel, consumable spare parts, and additional personnel required to conduct the tests.

10.6   Acceptance.  Upon the successful completion of the Performance Test for a Unit, Seller shall submit a Performance Test Certificate to Purchaser indicating that a Unit has achieved the Performance Standards and it ready for Acceptance.  Purchaser shall within ten  (10) days of receipt of such Performance Test Certificate, either sign such certificate acknowledging concurrence or reject such certificate specifically stating the reasons for such rejection. Acceptance for each Unit (and its associated Equipment) shall occur upon the issuance of the Performance Test Certificate by Purchaser as a result of the Unit having met the Performance Guarantees.  Acceptance of the each Unit to be installed in a Facility shall occur when all of the following have occurred: 

(a)	the issuance of a Performance Test Certificate by Purchaser as a result of a Performance Test indicating that the final Unit has met the Performance Standards;

(b)	all completion of training  and the delivery of O & M Manuals and special tools required hereunder shall have occurred;

(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 for that particular Facility;

(d)	all of the Units in the Facility have achieved Installation Completion. [and there are no punch list items remaining to be completed.]

10.7	Obligation to Improve Performance.  If the Performance Test should indicate that a Unit has met the Specific Performance Guarantees but not the Guaranteed Performance Criteria, then for a period of ninety (90) days following the Performance Test Seller shall have the obligation to use reasonable efforts to improve performance so that the Guaranteed  Performance Criteria are met. Such efforts shall be at Seller’s sole cost and risk. Performance Tests shall be conducted in accordance with this Article.  

10.8    Reduced Purchase Amount for Failing to Meet Guaranteed Performance Levels.  Should the Performance Test of a Unit demonstrate that the Unit has met the Performance Standards except for the Electrical Output Performance Standard, the Purchase Amount related to that Unit shall be reduced by the percent by which the Unit fails to meet the Power Output/kW Performance Standard, so long as the Unit has achieved ninety percent of the guaranteed level. Seller shall within 30 days refund any prior payment received for the Unit in excess of the reduced Purchase Amount. 

ARTICLE XI.  CHANGE ORDERS

11.1   Adjustment of Purchase Amount.  The Purchase Amount shall be subject to adjustment in accordance with the terms of this Agreement solely for (a) Purchaser-directed changes in the Scope of Work (b) changes in the Scope of Work proposed by Seller and approved by Purchaser (c) Change in Law, or (d) Force Majeure .

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 delivery date set forth in Section {10.2} [8.2], 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 forth in Section {10.2} [8.2], 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 delivery date as set forth in Section 10.2 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 delivery date set forth in Section 10.2 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 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 in Law 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 Section 26. 

11.6   Change Order Pricing.

11.6.1   Method of Pricing.  All changes to the Agreement 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 the calculation of cost plus Change Orders:  

(a)	For all Seller labor directly charging to an approved Change Order, Seller will be reimbursed in accordance with (c) below.  Time sheets for direct labor expended in the performance of [a] scope change {on} [using] cost plus basis [pricing] 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} [a] superintendent or other supervisory or administrative personnel unless specifically authorized and specifically approved by Purchaser's Representative on an individual case basis; and 
(b)	{For all Seller direct charged [in scope ?] Change Order material costs, equipment charges, third party service, or related travel made exclusively for change order work, plus any applicable sales or use taxes assessed and paid in conjunction with such material purchases, Seller will be reimbursed in accordance with (c) below.Seller’s direct charges for an approved cost plus} [Direct Costs for an approved ]Change Order may include, but are not limited to the following:  hourly labor charges for outside consultants and experts, technicians, engineers; new and clean materials, alternate materials; necessary travel, natural gas and other maintenance or operating materials; and other direct {charges as agreed. }[costs as agreed.  Direct costs will be billed on actual cost basis inclusive of any applicable sales or use taxes assessed and paid in conjunction with such direct costs.]  Indirect charges shall be based on Seller’s Federal Government Approved provisional billing rates{, which shall be subject to retroactive adjustment at the end of the Seller’s fiscal year to reflect actual indirect rates} [effective at the time of the work].  [In addition, a twelve percent (12%) fee shall be applied to the total  of direct and indirect costs].
(c)	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. 
(d)	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.
(e)	All such billings for work on the cost plus basis shall comprise the total of charges accumulated under subparagraphs (a) through (c) 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.

11.6.3  Audit Rights. For a period of three years following completion of any cost plus work performed under this Agreement, Purchaser shall have the right to audit all direct and indirect charges related thereto.  Seller shall cooperate with Purchaser in the audit, and will promptly supply all information reasonably necessary for Purchaser to conduct the audit.

ARTICLE XII.   INTELLECTUAL PROPERTY RIGHTS AND INDEMNITY

12.1   Seller’s Drawings 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 operation 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 Section {this} 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 operation or subsequent owner to use such information for the purposes stated in the preceding sentence.

12.2   Licensing Procedure.  Seller grants Purchaser a non-exclusive, irrevocable license to use the Equipment, 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 discontinue 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. Purchaser agrees to abide by the terms of any license or release so long as Seller as provided Purchaser with a copy of said license.

12.3   Infringement Cures and Defense.  Seller represents and warrants that the design, engineering, manufacture, delivery, installation, 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. In the event a suit or proceeding is brought against Purchaser, Purchaser, 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 Indemnities, their authorized agent, and anyone directly or indirectly employed by either of 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 INTELLECTUAL PROPERTY AND DIRECT OR CONTRIBUTORY INFRINGEMENT OR MISAPPROPRIATION AND OF ALL THE REMEDIES OF PURCHASER RELATING TO ANY CLAIMS, SUITS, OR PROCEEDINGS INVOLVING PATENTS. [[SHOULD THIS BE BOLD?]]  Compliance with this Section as provided herein 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.

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 Articles of this Agreement shall take precedence over the Exhibits, and the specific terms of a Release shall take precedence over both.

 

ARTICLE XIV.  WARRANTY

14.1   Seller’s Warranty.

14.1.1   Warranty.  Seller warrants that for a period of twelve months following the Acceptance Date (the “Primary Warranty Period”): 

(a) the Equipment and all other materials and articles furnished hereunder are new, not repaired (except as permitted by Purchaser); 
	(b) the Equipment is designed and fit for the purpose of generating electric power when operated in accordance             with Seller’s written instructions; 
(c) 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 electric industry standards, and the Equipment is free from defects in materials and/or workmanship;
(d) the Equipment conforms to the Specification and other material requirements of this Agreement;

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)	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 
(ii)	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.
	(iii)	{[}degradation in accordance with Seller’s [electrical output and heart rate] degradation curves included in the Specifications.{]}

Seller also shall have no obligation for defect in the Equipment under this Section 14.1.2 to the extent that such defect arises out of Purchaser failing to 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 or other breach of warranty exists, Purchaser shall provide Seller with Notice  such a defect or other breach describing the nature of the defect or breach.

[14.2	Not Used.]

14.3   Remedy.

14.3.1   Obligations, Responsibilities and Recourse.  During the Primary Warranty Period, if  Seller’s warranties {[(other than Seller’s warranty under Section 14.2)]} 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 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.

14.3.2   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 a like manner 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 expiration of the Primary Warranty Period. 

14.4  Stack Module Warranty. In addition to the other warranties contained herein, Seller warrants that for a period of thirty-six (36) months following Acceptance or forty-eight (48) months following delivery, whichever comes first, the combined measured Electrical Output and Heat Rate of the Stack Modules shall equal __ of the Electrical Output and Heat Rate measured at the latest Performance Test of the Unit performed in accordance with Article X. Should the Stack Modules fail to perform in accordance with the foregoing, Seller shall replace the non-performing Stack Module (including ordinary removal of the old Stack Module and ordinary Installation of the new one).  The [maximum] cost of the [stack] replacement shall be $380/kW{, and } [of the Electrical Output of each replacement unit as demonstrated in the most recent Performance Test (subject to successfully passing the Performance Tests outlined in Section 10 and subject to adjustment pursuant to Section Section 10.8) (“Base Stack Price”), and such Base Stack Price] shall be prorated based on the percentage of the Stack Module Warranty period completed at the time of such [unit] failure (for example, if a failure occurs two years after Acceptance, Purchaser shall pay 2/3 of the replacement cost) {and shall be subject to reduction pursuant to [Section 10.8].}[.  The pro rata portion of the Base Stack Price that Purchaser has to pay shall be the “Stack Purchase Amount.”]  Purchaser shall conduct a new Performance Test on the replacement Stack Module, and the replacement Stack Module shall be warranted for an additional thirty-six (36) months following successful completion of the Performance Tests in accordance with the terms of this section.

145   Extension of Warranty Due to Unavailability.  Notwithstanding Section 14.3.2, 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.

14.6   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. 

14.7   Limited Warranty.  THE WARRANTIES CONTAINED AND REMEDIES FOR BREACH OF WARRANTY CONTAINED IN THIS AGREEMENT ARE THE EXCLUSIVE WARRANTIES AND REMEDIES BY SELLER APPLICABLE TO THE EQUIPMENT AND THE ASSOCIATED SERVICES AND ARE EXPRESSLY IN LIEU OF ANY OTHER WARRANTIES, EXPRESSED OR IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF SATISFACTORY QUALITY (MERCHANTABILITY) OR FITNESS FOR A PARTICULAR PURPOSE, OR ANY OTHER WARRANTY EXPRESSED 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. 

14.8   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 have 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.

14.9   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; and
(ii)	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.

[14.10   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 their 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. Note: To be considered in connection with insurance]

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 Acceptance. [what if working to improve performance?]

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 at Acceptance, unless Purchaser has paid more than fifty percent of the Purchase Amount prior to delivery to the Delivery Point, in which case title passes to Purchaser upon delivery of the Equipment to the Delivery Point. 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. 

 

ARTICLE XVI. PACKING, SHIPPING AND DELIVERY
16.1  Packing.

3.10.1   Packing Recommendation.  Seller shall perform all packaging of the Equipment in accordance with commercially reasonably standards so as to prevent damage to the Equipment during handling and transportation. 

3.10.4   Compliance with Recommendation.  Purchaser shall be entitled to make packing recommendations; however, Seller shall use its best judgment in packing. Seller’s compliance with the Purchaser’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.

16.2   Notice of Shipment.  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 advance notice of the actual packing date and the actual loading date of such shipment.  Seller shall provide the Purchaser with a stowage and packing plan forty-five (45) days prior to loading. 

16.3   Release for Shipment.  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 Representative for release to ship such Equipment [(subject to the condition that such release will not result in a unit being delivered to a Site before the Earliest Delivery Date)].  Purchaser's approval shall not be unreasonably withheld provided Seller has met the requirements of this Agreement.

16.1.1   Shipping Restrictions.  Seller shall use appropriately licensed and insurable carriers in a commercially reasonable manner. 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 completion of the [Facility]) 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
(i)	Such damage once repaired by Seller will not adversely affect the performance, reliability, or longevity of the Unit.

ARTICLE XVII.  DEFAULT; TERMINATION

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; provided that the event described in paragraph (d) below shall be an Event of Seller Default upon its occurrence, with no 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 has failed to achieve Acceptance of the first Unit on or before the expiration of twenty-nine (29) months of Release, failed to achieve Acceptance of Units #2 through 8 on or before the expiration of thirty-five (35) months of Release, or failed to achieve Acceptance of all Units on or before the expiration of forty-two (42) months from Release (such dates subject to {a day-to-day extension} [extension for actual Delays, which Seller much reasonably provide supporting documentation if greater than day-to-day ]for any Units affected by Purchaser Delay in accordance with Section 6.4),

(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 file 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, in the case of default under Section 17.1 Purchaser shall have the right to terminate this Agreement in whole or in part, without further obligation to Seller, as to any Equipment not yet achieving Acceptance by giving Notice of termination to Seller, specifying which Equipment is being terminated. Seller shall be allowed sixty (60) days following the date of the termination notice to achieve Acceptance of any Equipment delivered to the appropriate site as of the date of the termination notice.   These rights are in addition to any rights and remedies that may be available at law or in equity or as provided herein. 

17.3   General Obligations.   In the case of a partial termination pursuant to Section 17.2, Seller shall continue performing its obligations under this Agreement for all Equipment and Services not terminated by Purchaser.

17.4   Payment Obligations. Seller shall not be entitled to any payment for any terminated Equipment, and shall refund any money paid for such terminated Equipment within ten (10) days of receipt of notice of termination. Should some Equipment be terminated for default, Purchaser shall pay the Average Purchase Amount for any Equipment which is not terminated and which achieves Acceptance.  The Average Purchase Amount shall be calculated by adding the Purchase Amounts of all Units ordered, then dividing this amount by the number of Units ordered.  Shipping costs shall not be included in the calculation of Average Purchase Amount, and Purchaser shall pay the lesser of the actual shipping costs and $87,000 for any Units achieving Acceptance. The Average Purchase Amount shall be used in the case of a reduction in the Purchase Amount due to failure to achieve the Performance Criteria.

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:

(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. 

17.7  Termination Due to Inability to Obtain a Permit. If  {Purchaser has attempted to obtain permits as required by this Agreement but is unable to obtain or cause to be obtained the necessary permits within [months] of Release}[(i) issued a Pemit Notice pursuant to Section 3.12 and (ii) Seller has failed to execute an Amendment to the Agreement in thirty (3) days of such Permit Notice which modifies the Performance Standards to the levels reasonably necessary to obtain applicable permits], then Purchaser may terminate this Agreement {(and any Equipment ordered pursuant to a Release) so long as the failure to obtain a permit is the result of insufficient information being provided by Seller or the Performance Standards being unacceptable to the authority issuing the permit} [with respect to the Units which cannot be permitted]. 
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 party affected;

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

(iii)	such event materially adversely affects (in cost and/or time) the ability of the affected party to fulfil 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 such party to perform any of its obligations under the Agreement, provided however that each such circumstance invoked by a party as affecting it's 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 seventy-two (72) hours upon learning of such Event of Force Majeure), advise the other party in writing of such date.    Within seven (7) days,  the affected party shall provide Notice to the other party a description the event and reasonable alternative measures which the affected party has taken in order to avoid the effect of such event on such 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 the other party  (including, without limitation, updating of any information already provided under this Section 18.3).  Within a reasonable time following the date of termination of such Event of Force Majeure, the party having invoked such Event of Force Majeure as a cause for such delay or potential adjustment of the Purchase Amount shall submit to the other party as soon as practicable, reasonable proof of the nature of such delay and its effect upon the delivery Date and/or the Guaranteed  Acceptance Date or the basis for an adjustment of the Purchase Amount.  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 Notice by the unaffected party to discuss appropriate measures to mitigate the impact of the Event.  The parties shall thereupon consult with one another concerning the effect of such Event of Force Majeure and an extension of the GuaranteedAcceptance Date described in Sections 10.2 or 10.3 or, if applicable, an adjustment in the Purchase Amount described in Section 5.1.1 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 sources 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 reasonably unforeseeable action or inordinately lengthy material inaction by any national or local government or judicial authority after the Release Date of the affected Equipment, 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 (such strikes not being Force Majeure Events);

(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, component manufacturers and suppliers 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.
	
	(c)	failures or delays due to problems relating to the development of the fuel cell technology or the manufacturing process to produce the technology.
	(d)	failure of Seller to act in accordance with industry standards, including, but not limited to, failure to ship the Equipment in a commercially reasonable manner.

           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 he 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, including an extension of the Guaranteed Acceptance Date, if applicable. Seller’s entitlement to an extension of time shall be conditional upon Seller having used reasonable endeavors to mitigate the delay and Seller not otherwise being in default under this Agreement.

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 a Purchase Amount adjustment in accordance with Section 5.5 and Article XI hereof.

ARTICLE XIX 
[Both parties to have this reviewed by others]
19.1   Insurance - General.  Seller shall procure 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 obligation with responsible insurance carriers insurance 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, during transportation, installation and testing, until Acceptance.  

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, 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.
	
19.3   Not Used..  

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 (“PURCHASER INDEMNIFIED PARTIES”), 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 AGAINST PURCHASER INDEMNIFIED 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  prompt 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 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   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 is disclosed in confidence and the transferee shall not publish or otherwise disclose it to others without the written approval of the transfer or, 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.

Furthermore Purchaser or Seller may 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.  Both parties shall agree in writing to any  press release, advertisement in the trade press, or tombstone in the financial or trade press issued by either concerning this Agreement, or any work related thereto .

21.3   Confidentiality.  [  To be consistent with existing CA.] 

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 potential engineering, procurement and construction contractors, and other such parties such parties in connection with the construction, operation, financing or operation of a Unit or Facility;
(c)	to potential Lenders and investors;
(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, agents and officers of such party;
	(h)	to Connecticut Resource Recovery Authority, and other potential assignees

provided that the disclosing party determines in good faith that the recipient has a legitimate need to see such data or information, and 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. {FEC has request regarding FCE’s right to assign the Agreement in the case of a merger or acquisition]

22.2   Assignment by Purchaser.  This Agreement or any right or obligation contained herein (including the right to place an order), or any Order may be assigned by Purchaser without Seller’s consent to:

(i)	an Affiliate;  

(ii)	a joint venture, partnership, or other similar entity in which Purchaser or Purchaser's Affiliate is a venturer, partner or participant;

(iii)	Lender;

(iv)	the Owner of a Facility, including, but not limited to, Connecticut Resource Recovery  Authority.

(v)	to any entity for the purposes of financing or sale of  a Facility, or for the construction of a Facility.

Except for (i) through (v) above, this Agreement may be assigned by Purchaser to other parties only upon the prior written consent of Seller  which shall not be unreasonably withheld or delayed.  When duly assigned in accordance with the foregoing, this Agreement shall be binding upon and shall inure to the benefit of the assignee, and Purchaser shall have no further liability under this agreement; any other assignment by Purchaser shall be void and without force or effect. For an assignment under (i) or (ii) above, Seller shall be entitled to receive a corporate guaranty or other commercially reasonable payment security, from an entity with a credit rating of [BBB] or better.

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.

22.4 Assignment after Acceptance.  Notwithstanding the foregoing, this Agreement (or any right or obligation arising hereunder) or any Order may be assigned without Seller’s consent following payment of the Purchase Amount. 

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 perform 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 Agents.  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.

23.3  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. 

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 provide Purchaser with lien releases from any contractors and vendors performing work on any site in conformity with the form set forth in [Exhibit S?]. 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 service provided 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 Purchaser:

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 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 Purchaser:	

ARTICLE XXVI.  ARBITRATION[FCE to provide mediation language]

[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.  [With respect to claims between the parties, in no event 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, whether as a result of breach of contract, breach of warranty, tort liability (including negligence or strict liability), or otherwise, and whether arising before or after completion of the Scope of Work. The preceding shall not limit Seller’s obligation to indemnify Purchaser under Article __ for third party claims. In no event 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, whether as a result of breach of contract, breach of warranty, tort liability (including negligence or strict liability) or otherwise.] 

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 state of [New York], without regard to its conflicts of law provisions. 

[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, except that this Agreement does not supercede the [Alliance Agreement, etc.]] 

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]							FUEL CELL ENERGY, INC.
Purchaser							Seller

By:  ____________________________			By:  ____________________________	                                      
Title:  _________________________			Title:  _________________________   

Date:  __________________________ 			Date:  __________________________                        

---------------------- REVISION LIST ----------------------

The bracketed numbers refer to the Page and Paragraph for the start of the paragraph in both the old and the new documents.

[1:3 1:3] Changed	"[ENRON]" to "[ENRON NORTH AMERICA CORP.]"
[3:2 3:2] Changed	"[ENRON].," to "[ENRON NORTH AMERICA CORP.].,"
[4:6 4:6] Changed	"10.9" to "10.6"
[4:10 4:10] Add Paras	"“Average Purchase  ...  in Section 14.4."
[4:13 4:15] Del Para	"“Delay Event” shall  ...  Section 10.3.1."
[4:14 4:15] Changed	"location designated" to "location in  ...  designated"
[4:14 4:15] Changed	"Purchaser." to "Purchaser  ...  Section 2.1(c). "
[4:14 4:16] Changed	"Purchaser." to "“Earliest  ...  Section 6.4."
[4:21 4:23] Add Paras	"“Expected Delivery  ...  Delivery Point."
[4:23 4:27] Add Para	"“Fuel Cell Power  ...  FuelCell Energy Inc."
[4:27 4:32] Changed	"10.4.1" to "10.2.1"
[4:29 4:34] Del Paras	"“Installation Completion”  ...  Section 3.10.1."
[4:36 4:38] Changed	"“Major" to "[“Major"
[4:36 4:38] Changed	"mean" to "mean fuel  ...  Exhibit ___.]"
[4:38 4:40] Changed	"”O & " to "“O&"
[4:40 4:42] Changed	"15.2.2" to "__________"
[4:41 4:43] Changed	"10" to "10.2"
[4:42 4:44] Changed	"meets Emissions, Heat" to "meets Heat"
[4:42 4:44] Changed	"and " to ", Emissions, "
[4:42 4:44] Changed	"Guarantees." to "Guarantees,  ...  and Sound."
[4:44 4:46] Add Para	"“Permit Notice”  ...  in Section 3.12."
[4:45 4:48] Changed	"mean" to "mean the plan  ...  Section 8.1."
[4:48 4:51] Changed	"time." to "time in accordance  ...  Agreement."
[4:52 4:55] Changed	"[“Related" to "“Related"
[4:52 4:55] Changed	"26.2.]" to "26.2."
[4:58 4:61] Add Para	"“Stack Purchase  ...  in Section 14.4."
[4:59 4:63] Del Para	"“Termination Settlement”  ...  Section 17.4.4."
[4:60 4:63] Changed	"[“Test" to "“Test"
[4:60 4:63] Changed	"B-1. ]" to "B-1."
[5:5 5:5] Changed	"four (4) " to "six (6) "
[5:5 5:5] Changed	"Guaranteed " to "Expected "
[6:1 5:9] Add Para	"Purchaser agrees  ...  Conn. Dupc (??)"
[6:7 6:7] Changed	"Shipment" to "shipment"
[6:10 6:11] Changed	"and " to "(c) within  ...  Release; and "
[6:11 6:12] Changed	"(c) " to "(d) "
[6:11 6:12] Changed	"implement the" to "implement or evaluate the"
[6:19 6:20] Changed	"[3.8" to "3.8"
[6:28 6:29] Changed	"fail " to "fails "
[6:31 6:32] Changed	"requirement.]
     " to "requirement."
[6:33 6:34] Add Para	"3.10 Not used"
[6:34 6:36] Changed	"permits." to "permits. Purchaser  ...  Section ______."
[7:16 7:16] Add Para	"ISSUE?"
[7:21 7:22] Changed	"this Agreement, and" to "this Agreement  ...  Plan, and"
[8:2 8:2] Changed	"agreed." to "agreed at  ...  the Release."
[8:2 8:2] Changed	"[module warranty] " to "(“Stack Purchase Amount”) "
[8:2 8:2] Changed	"Unit." to "Unit (“ShippingChange”)."
[8:4 8:4] Changed	"Work." to "Work and the warranty."
[8:5 8:5] Changed	"Amount excludes" to "Amount and  ...  amount excludes"
[9:3 9:3] Changed	"Amount related" to "Amount, Shipping  ...  14.4) related"
[9:14 9:14] Changed	"Agreement (ii)" to "Agreement, (ii)"
[9:14 9:14] Changed	"passed (iii)" to "passed, (iii)"
[9:14 9:14] Changed	"the site in" to "the Site in"
[9:14 9:14] Changed	"permit." to "permit pursuant to Section 3.12."
[9:14 9:14] Changed	"of [one" to "of one"
[9:14 9:14] Changed	"] from the  ...  delivery date" to "from the Earliest  ...  to the Site"
[11:2 11:2] Changed	"schedule,  ...  plan, quality" to "schedule for  ...  a quality"
[11:2 11:2] Changed	"plan, subcontracting plan, list" to "plan, a subcontracting plan, a list"
[11:2 11:2] Changed	"vendors, " to "Vendors, a "
[11:2 11:2] Changed	"plan, document" to "plan, a document"
[11:3 11:3] Changed	"Schedule. [Six" to "Schedule. Six"
[11:3 11:3] Changed	"Date Seller" to "Date, Seller"
[11:3 11:3] Changed	"initial Project Schedule" to "initial project  ...  Management Plan"
[11:3 11:3] Changed	"set for the" to "set forth the"
[11:3 11:3] Changed	"__ " to "17.1(d) "
[11:3 11:3] Changed	"Seller shall  ...  Completion Date" to "This initial  ...  each Unit"
[11:3 11:3] Changed	"Seller shall  ...  Delivery Date" to "the Expected  ...  planning period"
[11:3 11:3] Changed	"Final Delivery Date.] " to "latter of  ...  the Unit. "
[13:4 13:4] Changed	"SOx" to "Sox"
[14:3 14:3] Changed	"Section 10.2," to "Section 8.2,"
[14:3 14:3] Changed	"delivery date  ...  Amount and" to "delivery date  ...  Amount and"
[15:4 15:4] Changed	"of scope change on cost" to "of a scope  ...  using cost"
[15:4 15:4] Changed	"basis will" to "basis pricing will"
[15:4 15:4] Changed	"of the superintendent" to "of a superintendent"
[15:5 15:5] Del Para	"For all Seller  ...  with (c) below."
[15:6 15:5] Changed	"Seller’s direct  ...  cost plus " to "Direct Costs  ...  approved "
[15:6 15:5] Changed	"charges as agreed. " to "costs as agreed.  ...  direct costs. "
[15:6 15:5] Changed	", which shall  ...  indirect rates" to "effective  ...  of the work"
[16:2 16:2] Changed	"Section this 15.3" to "Section 15.3"
[16:10 16:10] Changed	"PATENTS. Compliance" to "PATENTS. [SHOULD  ...  Compliance"
[18:11 18:11] Changed	"(iii) [degradation" to "(iii) degradation"
[18:11 18:11] Changed	"Seller’s degradation" to "Seller’s electrical  ...  degradation"
[18:11 18:11] Changed	"Specifications.]" to "Specifications."
[18:14 18:14] Add Para	"14.2 Not Used."
[18:15 18:16] Changed	"warranties  ...  14.2)] are" to "warranties are"
[18:17 18:18] Changed	"The cost of the replacement shall" to "The maximum  ...  replacement shall"
[18:17 18:18] Changed	"$380/kW, and shall" to "$380/kW of  ...  Price shall"
[18:17 18:18] Changed	"such failure" to "such unit failure"
[18:17 18:18] Changed	"and shall  ...  [Section 10.8]. " to ". The pro  ...  Amount.” "
[20:6 20:6] Changed	"Equipment." to "Equipment  ...  Delivery Date)."
[21:6 21:6] Changed	"a day-to-day extension " to "extension  ...  day-to-day "
[21:17 21:17] Changed	"Purchaser  ...  of Release" to "(i) issued  ...  applicable permits"
[21:17 21:17] Changed	"(and any Equipment  ...  the permit" to "with respect  ...  permitted"