3Power Energy Group Inc.

 
Seawind Services Ltd.

 
SERVICES AGREEMENT

 
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AGREEMENT
 
This agreement dated this day of May 9, of 2011
   
between
       
3Power Energy Group Inc.
     
100 Wall Street
     
Manhattan
     
New York
     
NY10005
     
USA
   
(hereinafter called “the Client”) of the one part
   
and
       
Seawind Services Ltd.
     
Seawind House
     
98 – 99 Hotham Place
     
Plymouth
     
PL1 5NE
     
United Kingdom
   
(hereinafter called “the Consultant”) of the other part.

 
WHEREAS, the Client desires that certain Consultancy Services should be
performed by the Consultant, namely the preliminary design and engineering of
two Chilean wind farm projects with a maximum total nominal capacity of 58 MW,
as well as the project management during the engineering, procurement,
construction and commissioning of the wind farm projects and has accepted a
proposal by the Consultant for the performance of such Services.
 
 
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THE CLIENT AND THE CONSULTANT HEREBY AGREE AS FOLLOWS:
 
 
1.
In this Agreement words and expressions shall have the same meanings as are
respectively assigned to them in Clause 1.1 of the General Conditions.

 
 
2.
The following documents shall be deemed to form and be read and construed as
part of the Agreement, namely:

 
 
a.
this Agreement

 
b.
FIDIC General Conditions fourth Edition 2006 for Client/Consultant Model
Services Agreement

 
c.
Particular Conditions

 
d.
The appendices, namely:

 
i.
Appendix 1: Scope of Services

 
ii.
Appendix 2: Personnel, Equipment, Facilities and Services of Others to be
Provided by the Client

 
iii.
Appendix 3: Remuneration and Payment

 
iv.
Appendix 4: Time Schedule for Services.

 
In consideration of the payments to be made by the Client to the Consultant
under this Agreement, the Consultant hereby agrees with the Client to perform
the Services in conformity with the provisions of the Agreement.
 
The Client hereby agrees to pay the Consultant in consideration of the
performance of the Services such amounts as may become payable under the
provisions of the Agreement at the times and in the manner prescribed by the
Agreement.
 
 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
the day and year stated above in accordance with the Law of the Appointment.
 
AUTHORISED SIGNATURE(S) OF CLIENT
 
Signature:  /s/ Toby Durrant
     
Name:
Toby Durrant
   
Address:
100 Wall Street
     
Manhattan
     
New York
     
NY10005
     
USA
   
AUTHORISED SIGNATURE(S) OF CONSULTANT
 
Signature: /s/ Pieter D’haen
     
Name:
Pieter D’haen
   
Address:
Seawind House
     
98-99 Hotham Place
     
Plymouth
     
PL1 5NE
     
UK

 
 
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Particular Conditions
 
A.
Reference from Clauses in the General Conditions
     
1.1
Definitions
       
1.1.2
The Project is the design, engineering, procurement, construction and
commissioning of two Chilean wind farm projects, of a maximum total installed
nominal capacity of 58 MW.
       
1.1.5
Country:
Chile
         
1.1.10
Commencement Date:
Date of this Agreement
         
1.1.11
Time for completion:
ten months or as agreed between the Parties
         
1.1.14
Local Currency:
US Dollars
         
1.3
Language for Communications:
English
         
1.4
Languages (s) of the Agreement:
English
           
Ruling Language:
English
           
Governing Law:
Law of England
         
1.8
Notices:
           
The Client’s Address:
3Power Energy Inc. c/o Travis Gering
           
100 Wall Street
             
Manhattan
             
New York
             
NY10005
             
USA
         
E-mail:
travis.gering@wg-law.com
       
Telephone number:
+1 (212) 509-4723
       
Facsimile number:
+1 (610) 819 9104

 
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The Consultant’s address:
     
Seawind House
   
98 - 99 Hotham Place
   
Plymouth
   
PL1 5NE
   
United Kingdom
       
E-mail:
info@seawind.uk.com
       
Telephone number:
 +44 (0) 1752 565638
       
Facsimile number:
+44 (0) 1752 564308
       
5
Payment
           
5.2.2
Agreed Compensation for Overdue Payment (percent per day):
0.06%
         
6.
Liabilities
           
6.2
Duration of Liability
           
6.2.1
Period for making formal claim:
one year
           
Reckoned from:
completion of Normal Services
         
6.3.1
Limit of Compensation:
limited to 5% of the aggregate amount of fees for Normal Services paid to and
received by the consultant
         
8.3.2
Rules of Arbitration:
International Chamber of Commerce

 
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B. 
Additional etc  Clauses

 
Clause 1.1.1: insert “,Appendix 5 [Notice to Proceed]” after “Appendix 4 [Time
Schedule for Services]”
 
1.1.16
“Notice to Proceed” has the meaning given in Clause 4.2.1 of the Agreement.

 
Clause 1.7.1 shall be replaced with:
 
1.7.1
The Consultant retains the design rights and other intellectual property rights
and copyright of all documents prepared by him.  The Consultant shall grant the
Client an irrevocable non-exclusive licence to use, reproduce, copy etc. any IP
prepared by the Consultant.

 
3.7.2
Insert “or delegation” after “replacement” in the first sentence.

 
Clause 4.2.1 shall be replaced with:
 
4.2.1.
The Services shall be commenced after the Commencement Date, upon receipt by the
Consultant of a written Notice to Proceed from the Client in the form attached
to the Agreement in Appendix 5.  The Services shall proceed in accordance with
the Time Schedule in Appendix 4, and shall be completed within the Time for
Completion, subject to extensions or modifications in accordance with the
Agreement; or extensions or modifications attributable to factors outside of the
control of the Consultant; or mutually agreed adjustments to the Time Schedule.

 
4.3.2.
Delete the final sentence

 
4.6.1
Delete “at least 56 days” and replace with “28 days”

 
Clause 4.6.3 shall be replaced with:
 
4.6.3
after giving at least 7 days’ notice to the Client, the Consultant may, by a
further notice of at least 14 days, terminate the Agreement, or at his
discretion, without prejudice to the right to terminate, may suspend or continue
suspension of performance of the whole or part of the Services:

 
(a) when 7 days after the due date for payment of an invoice he has not received
payment of that part of it which has not by that time been contested in writing;
or
 
(b) when Services have been suspended under either Clause 4.5 or Clause 4.6.1
and the period of suspension has exceeded 30 days.
 
4.6.4
The Consultant may, after giving at least 7 days’ notice to the Client,
terminate the Agreement, if the Client has not issued the Notice to Proceed
within 60 days after the Commencement Date.

 
 
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Clause 5.2.1 shall be replaced with:
 
5.2.1
Amounts due to the Consultant shall be paid within 14 days of receipt by the
Client of the Consultant’s invoice.

 
7.1.4.
The Consultant shall maintain in force the insurances required under the
Agreement throughout his period of liability. Whenever requested by the Client,
the Consultant shall submit evidence of the relevant insurances, in a form
acceptable to the Client.

 
7.1.5
The Consultant shall maintain in force a Professional Indemnity insurance of USD
5m, for each and every occurrence and shall submit evidence of this cover, if
requested by the Client.

 
8.1.
Omitted from the Agreement

 
8.2.
Omitted from the Agreement

 
8.3.1
Omitted from the Agreement

 
8.3.3
The language to be used in the arbitral proceedings shall be English

 
8.3.4
The sole place for arbitration shall be London, England

 
Appendices

 
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Appendix 1: Scope of Services
 
The Normal Services to be provided by the Consultant comprise:
 
The Consultant will provide the following services to the Client for the
Project.
 
 
·
Design and engineering services:  to further develop the technical scope of the
Project, enhance Project value and define the Project budgetary and finance
requirements and finalise all the technical details in order for the EPC
contractors to provide binding offers.

 
 
·
Commercial advisory services: the Consultant shall provide services to
facilitate selection of the correct technical equipment suppliers and / or
contractors according to the Client’s requirements, in order to develop final
binding commercial agreements for the Client selection of suppliers /
contractors and to assist the Client in arranging the debt finance.

 
 
·
Construction supervisory services, where the Consultant will provide management
services for the implementation phase of the projects, up until Project handover
to the Client.

 
 
·
In particular, the Consultant shall carry out:

 
 
o
Review the designs proposed by the EPC contractor(s)

 
o
Ongoing constructability review

 
o
Ongoing value engineering review

 
o
Document control

 
o
Schedule reporting

 
o
Cost reporting

 
o
Contract administration

 
o
Verify compliance with bond insurance requirements

 
o
Quality / Audit control

 
o
Assistance to Client concerning Variations and Claims

 
o
General reporting

 
o
Inspections/preparation of defects lists on completion of the works

 
o
Supervise commissioning and testing during commissioning

 
o
Monitor contractor’s work during commissioning period

 
o
Monitoring site deliverables

 
o
Monitor and advise on Health and Safety

 
o
Act on behalf of the client with respect to permitting and Liaison with local
third party

 
 
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The deliverables from the Consultant to the Client shall include:
 
Civil engineering:
 
 
·
Soil investigation studies and reports for each project, suitable for the design
of the foundation of the wind turbines, control buildings, substations and
ancillary or temporary structures.  The actual works on site will be carried out
by a third party.

 
·
Preliminary design drawings and specification of foundation of the wind turbines

 
·
Preliminary design drawings and specifications of the foundation for ancillary
structures such as step-up transformer and control buildings

 
·
Preliminary design drawings and specification of onsite control/monitoring
buildings (if any)

 
·
Preliminary design drawings and specification of cable trenches for the Medium
Voltage (MV) network intra-wind farm

 
·
Preliminary design drawings and specification of the permanent onsite access
roads, storage areas and permanent car parks (if any)

 
·
Design drawings and specification of the lay-down areas at each turbine location

 
·
All other specifications, drawings, technical schedules and bills of quantities
for incorporation in EPC Package

 
Electrical engineering:
 
 
·
Preliminary Projects single line diagram

 
·
Preliminary Design specification of the Medium Voltage (MV) network intra-wind
farm

 
·
Preliminary Design specification of the collecting substations (if any)
including switchgear equipment, earthing system, and service equipment

 
·
Preliminary Design specifications for the  control/monitoring buildings (if any)

 
·
Preliminary Design specification for the export transmission line and associated
infrastructure to connect the wind farm to the national grid

 
·
Preliminary Design specification of the communications system, including fibre
optic inter-array cabling, cabling to the control/monitoring building, interface
to the outside world

 
·
Preliminary Design specification of the electrical and communication equipment
imposed by the relevant authorities including metering and billing equipment

 
·
All other specifications, drawings, technical schedules and bills of quantities
for incorporation in  EPC Package

 
Commercial:
 
 
·
Prequalification documentation for suppliers and contractors

 
·
Wind turbine supplier list

 
·
Commercial assessment wind turbine suppliers and recommended supplier

 
·
EPC dossiers

 
·
EPC quotations evaluation and recommended contractor

 
·
EPC contract documents

 
 
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In addition to the deliverables listed above, the Consultant shall provide
monthly progress reports for each of the wind farms in the Project, which shall
provide statements on engineering, permitting, procurement, construction, cost
and schedule of the Project, including:
 
 
·
Overview of meetings and attached minutes

 
·
Issues requiring Client’s input

 
·
Completed, ongoing and upcoming activities

 
·
Schedule of anticipated delivery of deliverables

 
·
Updated progress implementation programme, including clear indication of
Projects completion dates

 
·
Financial monitoring and budget forecasts

 
·
Cash flow forecast

 
·
Technical  issues

 
 
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Appendix 2: Personnel, Equipment, Facilities and Services of Others to be
provided by the Client
 
1.1
Facilities and Services

The Client shall provide the following facilities and services:
 
 
·
The provision of uninterrupted and unlimited free access to the sites as
required by the consultant in the performance of his duties.

 
 
·
To arrange and provide all relevant permissions, permits, agreements, licenses
and government approvals for the construction and commissioning of the wind farm
projects, subject to proper and timely performance of services by the
Consultant.

 
 
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Appendix 3: Remuneration and Payment
 
The fees to be paid to the Consultant for Normal Services are fixed, exclusive
of any taxes, are as scheduled in the table shown below and shall not be subject
to re-measurement for Normal Services.
 
The currency of the fees is US Dollars.
 
Month
 
Payment (in USD)
 
Month 1: Notice to Proceed issued
    463,000  
Month 2
    463,000  
Month 3
    463,000  
Month 4
    604,000  
Month 5
    604,000  
Month 6
    504,000  
Month 7
    504,000  
Month 8
    476,000  
Month 9
    418,000  
TOTAL
    4,499,000  

The following prices shall be used for the evaluation of Additional and
Exceptional Services:
 
Discipline
 
Daily rate
(USD)
 
Senior Manager
    1,800  
Manager
    1,500  
Principal engineer
    1,250  
Senior engineer
    950  
Engineer level 1
    850  
Engineer level 2
    780  
Engineer level 3
    700  
Assistant engineer
    550  

 
Any travel, subsistence or expenses shall be recharged at cost + 10%.
 
Any subcontracts for professional support and third party services shall be
considered Additional Services and a ten percent (10%) markup will be added to
cover overhead and insurance surcharge expenses.
 
The Consultant shall be paid into the following account:
Beneficiary Name
Seawind Services Ltd
Bank Name
HSBC, Plymouth branch
Address
4 Old Town Street, Plymouth, PL1 1DD, UK
Sort Code
40-05-15
Account No
60076800
Iban Number No
GB72MIDL40051560076800
BIC Code:
MIDLGB22

 
 
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Appendix 4: Time Schedule for Services
 
[ex10-28.jpg]
 
the Consultant shall, within 20 days of appointment, provide a fully detailed
breakdown of the Time Schedule in Appendix 4, showing inter alia when each part
of the Services shall be carried out, and dates upon which information is
required to be provided by the Client to the Consultant.
 
 
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Appendix 5: Notice to Proceed
 
 
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NOTICE TO PROCEED
 
Reference is made to that certain Agreement dated as of ___ ____ 2011 by and
between the Client and the Consultant (the “Agreement”).  Capitalised terms
used, but not defined, herein shall have the meanings set forth in the
Agreement.
 
This Notice to Proceed is hereby delivered to the Consultant pursuant to the
Agreement, and the Client hereby instructs the Consultant to commence with the
Normal Services.
 
Date issued: ___ ____ 2011
 
SIGNED FOR AND ON BEHALF OF THE CLIENT
     
[name]
     
[title]
               
SIGNED FOR AND ON BEHALF OF THE CONSULTANT
     
Mr. P. D’haen
     
Authorised signatory
           

 
 
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