SCS Contract No. SCS-28699   Exhibit 10.46(b)

 

GENERAL CONDITIONS OF THE CONTRACT

FOR THE PURCHASE OF CHEMICAL AND/OR GAS PRODUCTS

TABLE OF CONTENTS

 

  1.0

   DEFINITIONS    1

  2.0

   SCOPE    2

  3.0

   EXECUTION AND INTERPRETATION    2

  4.0

   PROPRIETARY INFORMATION    3

  5.0

   WARRANTY    3

  6.0

   PROPRIETARY INTEREST INDEMNIFICATION    3

  7.0

   FORCE MAJEURE    4

  8.0

   ALLOCATION OF RESPONSIBILITY    5

  9.0

   INSURANCE    5

10.0

   INDEMNITY    6

11.0

   TAXES    9

12.0

   RESPONSIBILITY FOR FOREIGN MANUFACTURE    9

13.0

   RATE OF EXCHANGE    9

14.0

   LANGUAGE AND MEASUREMENT SYSTEM    9

15.0

   SUBCONTRACTS    9

16.0

   ASSIGNMENT OF CONTRACT    9

17.0

   COMPLIANCE WITH LAWS AND REGULATIONS    10

18.0

   COMPLIANCE AND ETHICS.    10

19.0

   GENERAL SERVICES ADMINISTRATION    11

20.0

   GOVERNMENTAL HEARINGS    11

21.0

   CANCELLATION BY THE PURCHASER FOR BREACH    12

22.0

   SUPPLIER LIMITATION OF LIABILITY    12

23.0

   SUPPLIER’S RIGHTS UPON BREACH BY COMPANY    12

24.0

   DELIVERY    12

25.0

   INVOICING AND PAYMENT    12

26.0

   AUDIT    13

27.0

   TITLE    13

28.0

   INDEPENDENT CONTRACTOR    13

29.0

   SURVIVAL OF REPRESENTATIONS    13

30.0

   SUPPLIER REPRESENTATIVE    13

31.0

   POLICIES AND PROCEDURES    14

32.0

   TIME OF THE ESSENCE    14

33.0

   NOTICES    14

34.0

   MISCELLANEOUS    14

 

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SCS Contract No. SCS-28699

 

GENERAL CONDITIONS THE CONTRACT

FOR THE PURCHASE OF CHEMICAL AND/OR GAS PRODUCTS

 

1.0 DEFINITIONS

1.1 The term “Affiliate” as used herein shall mean any present and future
corporation, partnership, association, joint stock company, joint venture,
limited liability company, limited liability partnership, or trust directly or
indirectly controlling, controlled by or under common control with SCS. Control
as used herein shall mean ownership. The Southern Company is the Parent Company
of Southern Company Services, Inc. (“SCS”) and some of SCS’s present Affiliates
are Alabama Power Company, Georgia Power Company, Gulf Power Company,
Mississippi Power Company, Savannah Electric Power Company, and Southern Power
Company.

1.2 The term “Bid” is hereby defined as meaning any and all pricing,
specifications, and other documents transmitted by the Supplier to Purchaser in
response to the written Request for Quote from Purchaser.

1.3 The term “Contract Price” means collectively the agreed upon price or prices
of the Product. The term “Supplier” is defined as meaning the entity responsible
for furnishing the chemical and/or gas Product(s) specified in the Contract.

1.4 The term “Contract Time” is defined as the period of time, including
authorized adjustments, if any, allotted for furnishing and delivering the
Product.

1.5 The “Contract” shall consist of: the Master Agreement (“Master Agreement”);
a Purchase Order issued by Purchaser in accordance with the terms of the Master
Agreement; these General Conditions of the Contract for the Purchase of Chemical
and/or Gas Products; any Special Conditions; Technical Specifications; The Bid
as may be revised and finally accepted in writing; any Modification, and; such
other documents as the parties may agree to in writing.

1.6 The “Master Agreement” is a document which, upon execution by SCS and
Supplier, establishes the terms and conditions of the Contract under which
Supplier shall furnish and Purchaser shall purchase the Products.

1.7 The term “Modification” is hereby defined as meaning a written (i) amendment
to the Contract signed by the authorized representatives of the parties,
(ii) addendum to the Contract signed by the authorized representatives of the
parties; or (iii) change in the Contract evidenced by a change order, memorandum
of change or other document effecting such change. Supplier’s execution or
acceptance of a Modification, or performance thereunder shall constitute a
change in or to the Contract.

 

1.8

The “Persons Indemnified” are the Purchaser, the Affiliates, the Southern
Company and the directors, officers, representatives, agents and employees of
each of them. In addition, for all work to be performed under the Contract at
Purchaser’s generating facility known as Plant Wansley, the “Persons
Indemnified” shall include the co-owners of Plant Wansley, and for all work to
be performed under the Contract at Purchaser’s generating facility known as
Plant Scherer, the “Persons Indemnified” shall include the co-owners of Plant
Scherer, and the directors, officers, representatives, agents and employees of
each of them. The co-owners of Plant Wansley are Oglethorpe Power Corporation
(“OPC”), Municipal Electric Authority of Georgia (“MEAG”), and City of Dalton,
Georgia (“Dalton”). The co-owners of Plant Scherer are OPC, MEAG, Dalton,
Jacksonville Electric Authority (“JEA”) and Florida Power and Light (“FPL”)

 

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1.9 The term “Product” means collectively, any and all chemical and/or gas
products to be furnished by Supplier under the Contract.

1.10 The term “Purchaser” is defined as meaning the company named in the
applicable Purchase Order, which may be any of the present and future affiliates
(collectively the “Affiliates” and individually an “Affiliate”) of The Southern
Company (“Parent Company”); provided, however, that the Purchaser shall be
solely responsible for its own contractual obligations and liabilities, and no
provision of the Contract shall be construed as making any Affiliate or the
Parent Company liable for any obligations or other liabilities of the Purchaser.
SCS will execute the Master Agreement and may otherwise act as Purchaser’s agent
for soliciting bids and for certain administrative matters under the Contract.

1.11 The “Purchase Order” is a document of purchase of the Product that is
issued by Purchaser pursuant to the Contract. The Purchase Order constitutes
Purchaser’s specific authorization of Supplier’s furnishing of such Product.

1.12 The term “Request for Quote” is defined as meaning any and all
instructions, Master Agreement, General Conditions of the Contract, Special
Conditions, if any, Technical Specifications, and other documents submitted by
Purchaser to Supplier in a request for Supplier to submit a Bid to furnish the
Product.

1.13 The term “Supplier” is defined as meaning the entity responsible for
furnishing the chemical and/or gas Product(s) specified in the Contract.

1.14 The term “Technical Specifications” is that portion of the Contract
consisting of Purchaser’s written requirements for the Product to be provided by
Supplier.

 

2.0 SCOPE

It is the object and intent of these General Conditions of the Contract along
with the other Contract Documents to establish the technical and commercial
terms and conditions of the Contract under which Supplier shall provide the
material, labor, supervision, and equipment necessary to sell and supply the
Product to Purchaser and under which Purchaser shall purchase the Product.

 

3.0 EXECUTION AND INTERPRETATION

3.1 The Supplier shall enter into the Contract with the Purchaser for the
furnishing of the Product. By entering into the Contract, the Supplier
represents that it:

3.1.1 has read and studied the Contract Documents and understands same;

3.1.2 has familiarized itself with the terms and conditions under which the
Contract is to be performed;

3.1.3 has correlated its observations with the requirements of the Contract
Documents; and,

3.1.4 is fully able to perform the Contract.

3.2 The Contract Documents are complementary, and any portion or part thereof
shall be as binding as if called for in all Contract Documents. Words that have
a well-known technical or trade meaning are used throughout the Contract
Documents in accordance with such recognized or well-known meaning unless
specifically defined otherwise.

3.3 If there is any conflict in the Contract Documents, the priority shall be as
follows in descending order: any Modifications, the Purchase Order exclusive of
any preprinted terms thereon, the Master Agreement, any Special Conditions,
these General Conditions, the Technical Specifications, and the Supplier’s Bid.
Any preprinted terms and conditions on Supplier’s acknowledgment, invoice,
delivery form or other Supplier documents are hereby deleted and declared null
and void. The preprinted terms and conditions on any Purchase Order issued to
Supplier are hereby deleted and declared null and void. Supplier’s written
acknowledgment of any Purchase Order or performance by shipment or otherwise

 

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pursuant to any Purchase Order shall constitute acceptance of all of the terms
and conditions of the Contract.

 

4.0 PROPRIETARY INFORMATION

4.1 In the performance of the obligations of the parties under the Contract or
in the contemplation thereof, each party, its Affiliates and its and its
Affiliates’ personnel may have access to private or confidential information,
including but not limited to information concerning costs, charges, operating
procedures and methods of doing business which may be owned or controlled by the
other party. The receiving party agrees that any such information which is
disclosed to it in a document or other media clearly indicated to be proprietary
and confidential by a label, legend or other notice included in or placed upon
the document or other media at all times shall remain the exclusive property of
the disclosing party and shall be used by the receiving party solely for the
purpose of performing its obligations under the Contract. The receiving party
also agrees to exercise reasonable efforts, consistent with the efforts that the
receiving party exercises to protect information of its own that it regards as
confidential, to keep such information in confidence and not to copy or permit
others to copy the information or disclose the same to unauthorized persons. The
receiving party is authorized to disclose such information only to personnel of
receiving party and its Affiliates who require the information in the course of
performance under the Contract. Notwithstanding the foregoing, the confidential
information of the disclosing party shall not be deemed to include the
following:

4.1.1 Information that was in the public domain prior to disclosure to the
receiving party hereunder or that subsequently becomes part of the public domain
through no wrongful act of the receiving party;

4.1.2 Information that was in the receiving party’s possession free of any
obligation of secrecy prior to the disclosure to the receiving party by the
disclosing party;

4.1.3 Information that was disclosed to the receiving party by a third party
which the receiving party reasonably believes has no obligation of secrecy with
respect thereto; and

4.1.4 Information that was developed by or for the receiving party independently
of and without reference to the confidential information of the disclosing
party.

4.2 If the receiving party is required to disclose the confidential information
of the disclosing party pursuant to any legal proceeding, the receiving party
shall notify the disclosing party in writing of the request for disclosure and
allow the disclosing party to seek an appropriate protective order in connection
with the disclosure. The receiving party shall not intentionally remove from the
confidential information of the disclosing party any labels, legends or other
notices indicating the confidential and proprietary nature of such information.

 

5.0 WARRANTY

5.1 Supplier warrants that all Products sold and delivered to Purchaser under
the Contract shall conform strictly to the Technical Specifications.

5.2 THE WARRANTY SET FORTH IN PARAGRAPH 5.1 ABOVE IS IN LIEU OF ALL OTHER
WARRANTIES, REPRESENTATIONS OR CONDITIONS OF ANY KIND OR NATURE, EXPRESS OR
IMPLIED, IN FACT OR BY LAW, INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

 

6.0 PROPRIETARY INTEREST INDEMNIFICATION

Supplier shall indemnify and hold Purchaser harmless from any suit or proceeding
brought against Purchaser which is based on a claim that the Product furnished
under the Contract constitutes an infringement of any patent of the United
States or any foreign nation or a breach of any trade secret, copyright,
trademark, or other proprietary right of any kind whatsoever of any third party
either in the United States or in a foreign nation. Supplier shall pay all costs
and expenses of investigation and defense, and pay any settlement or judgment
arising out of any such claim, suit or proceeding. In case

 

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the Product is in any such suit held to constitute infringement or breach and
Purchaser’s use of said Product or part is enjoined, Supplier shall, at its
expense, either (i) procure for Purchaser the right to continue using said
Product, (ii) replace said Product with non-infringing product which is
equivalent in function or (iii) modify said Product so it becomes non-infringing
yet equivalent in function. In the event it is impossible for Supplier to comply
with any of the alternatives set forth above, or if Supplier has for any reason
failed to comply with any of said alternatives within thirty (30) days of
Purchaser’s use of such Product being enjoined, then Supplier shall, if
requested by Purchaser, and upon terms and conditions satisfactory to Purchaser,
remove said Product and refund the Contract Price applicable to the quantity of
Product removed, the transportation costs thereof, and all other amounts
including, but not limited to, any sales and use taxes paid by Purchaser in
connection with said Product. Without limiting the generality of the above,
Without limiting the generality of the above, Supplier warrants that it has no
knowledge or notice of any claim or instance where the combination of Product
provided by Supplier with other equipment, components, materials, apparatus,
items or processes (regardless of whether such other equipment, components,
materials, apparatus, items or processes were furnished by Supplier) are or
would be the basis for a claim of such infringement or breach. (“Combination of
Product Claim”) In the event Supplier becomes aware any such Combination of
Product Claim, Supplier shall immediately notify Purchaser in writing, providing
all relevant details. Failure promptly to provide prompt notice of such
Combination of Equipment Claim shall expand the above described indemnification
and hold harmless obligation to such Combination of Equipment Claim(s). The
indemnification provided in this Section entitled, PROPRIETARY INTEREST
INDEMNIFICATION, shall survive the cancellation, termination or expiration of
the Contract.

 

7.0 FORCE MAJEURE

7.1 Definition of Force Majeure

“Force Majeure” shall mean an event or condition that prevents or delays the
performance by a Party of its obligations under this Agreement to the extent
beyond the reasonable control, and without the fault or negligence, of the party
claiming relief, and which by the reasonable exercise of due diligence such
claiming Party is unable to prevent or overcome. Force Majeure, includes, but is
not limited to, Acts of God, fires, floods, explosions, electrical storms,
windstorms, extremes of temperature, earthquakes, enactment of new Applicable
Law or changes in Applicable Law, landslides, cave-ins, war, riot, terrorism,
embargoes, acts of the public enemy or sabotage, and boycotts. For the sake of
clarity, new Applicable Law or Change in Applicable Law will include, without
limitation, such changes in Applicable Law that eliminate or materially change
the need for injection of carbon at Purchaser’s power plants. Force Majeure does
not include events of labor unrest, strike or work stoppage. In no event shall
an Event of Force Majeure excuse or delay the payment of any amount owed by one
Party to the other Party under this Agreement.

7.2 Effect of Force Majeure

If Force Majeure prevents a Party from performing any of its obligations under
this Agreement, and if such Party gives to the other Party Notice of the Force
Majeure (which Notice (i) shall identify the event of Force Majeure and, to the
extent known, the expected length of time during which the event of Force
Majeure will be in effect and the plan of the Party experiencing the Force
Majeure to correct or remove it and (ii) be delivered promptly), then the
obligations of the Party giving such Notice are excused to the extent made
necessary by the Force Majeure and during its continuance, which time period
shall be called the “Force Majeure Period.” However, an event of Force Majeure
shall excuse the obligations of the notifying Party only to the extent that such
Party takes all commercially reasonable actions necessary to overcome the Force
Majeure with all reasonable dispatch. Only the Party suffering a Force Majeure
may claim Force Majeure relief; however, the other Party shall be excused from
its obligations which depend upon the performance of the obligations excused by
the Force Majeure. An attempt by the Party suffering an event of Force Majeure
to perform its obligations notwithstanding the Force Majeure shall not
constitute a waiver of the right to claim Force Majeure if such attempt proves
unsuccessful. The Party affected by Force Majeure shall not be required to
submit to unreasonable conditions or restrictions

 

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imposed by any governmental authority or contract counterparty to overcome the
Force Majeure. To the extent that Supplier is unable to deliver Carbon due to
Force Majeure, Purchaser’s Carbon Purchase Commitment shall be reduced by the
amount of Carbon that Supplier was scheduled to deliver during the Force Majeure
Period as indicated in the Annual Nomination/monthly delivery schedule provided
however, that Purchaser will accept the delivery of such amount of Carbon at the
end of the Term over a period equal to the duration of the Force Majeure if
Purchaser still has need for delivery of Carbon. In the even that new Applicable
Law or Changes in Applicable Law eliminate the need for injection of carbon at
Purchaser’s power plants (i.e. changes in Applicable Law reduce Mercury control
obligations such that Purchaser’s plant(s) could comply with such new Law by
operating as configured prior to the injection of Carbon), then Pruchaser may
terminate this Agreement without further obligation.

 

8.0 ALLOCATION OF RESPONSIBILITY

8.1 Risk of loss with respect to all Product delivered by Supplier under the
Contract shall pass to Purchaser when the Product enters Purchaser’s storage
facilities or when the Product enters Purchaser’s pipelines if, under the
Contract, Supplier rents to, leases to, or otherwise provides to Purchaser the
storage facility or supply system to which the Product is delivered and to which
Purchaser’s pipelines are attached.

8.2 Purchaser acknowledges that there are hazards associated with the use of
Product. Supplier will provide Purchaser with Material Safety Data Sheets
setting forth the general hazards and safety information relating to Product.
Purchaser hereby assumes all responsibility for warning its employees and
independent contractors exposed to Product of all such hazards and shall hold
harmless and indemnify Supplier from and against all liability arising from any
failure to make such warnings. Supplier shall promptly notify Purchaser of any
additional hazards of which Supplier may, from time to time, become aware.

8.3 Final determination of the suitability of the Product for any use
contemplated by Purchaser is the sole responsibility of Purchaser, and Supplier
shall have no responsibility in connection therewith. Purchaser shall avail
itself of testing devices to determine the purity of Product before Purchaser
uses it at Purchaser’s discretion, but no error in, or failure to make, any such
test shall impair any right on the part of Purchaser to obtain a refund or
replacement Product.

 

9.0 INSURANCE

9.1 Supplier, at its expense, shall procure and maintain and shall require its
subcontractors to procure and maintain in effect without interruption during the
term of this Contract policies of insurance providing, at a minimum, the
coverages and limits specified, and complying with the other requirements stated
below:

 

9.1.1 Commercial General Liability insurance (or equivalent) on an occurrence
(not claims made) basis, in an amount not less than $2,000,000 (two million
dollars) for any one occurrence including broad form contractual liability
coverage, product liability, and at least two years completed operations, broad
form property damage and severability of interest for each insured.

 

9.1.2 Business Auto Liability insurance covering owned, non-owned, and hired
vehicles in an amount not less than $2,000,000 (two million dollars) combined
single limit for bodily injury and property damage for any one occurrence.

 

9.1.3 Statutory Workers’ Compensation covering the legal liability of Supplier
under the applicable worker compensation or occupational disease laws of the
State or Federal Government for claims for personal injuries and death resulting
therefrom to Supplier in amounts required by statute. Supplier shall have
Employer’s Liability insurance covering Supplier in an amount not less than
$1,000,000 (one million dollars).

 

9.1.4 Excess liability or umbrella liability insurance in an amount not less
than $3,000,000 (three million dollars) for any one occurrence. Any excess
liability or umbrella policy shall be applicable to the general liability, auto
liability and employer’s liability policies that are required.

 

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9.1.5 Subrogation. Supplier and its subcontractors hereby waive and relinquish
and agree to require its insurer(s) to waive and relinquish any right of
subrogation against the Purchaser it might possess for any policy of insurance
required under this Agreement or under any State or Federal Workers’
Compensation or Employers’ Liability Act.

 

9.1.6 Additional Insured. The coverages required in paragraphs 9.1.1, 9.1.2 and
9.1.4 shall name the Purchaser and Persons Indemnified as an additional insured
with respect to liability arising out of products, ongoing operations, work
(including completed operations), and Services performed by or on behalf of the
Supplier for Purchaser or the Persons Indemnified under this Agreement.

 

9.1.7 Written Certificate of Insurance. Supplier shall require its insurer to
notify Purchaser thirty (30) days prior to the Effective Date of any
cancellation or material change in any of the required policies. Prior to
beginning any Services and annually (by the policy renewal date of each year)
thereafter for every year that this Contract is in force, Supplier shall submit
to Purchaser, Certificates of Insurance evidencing the coverage prescribed by
this Contract and certifying the amount and nature of such coverage, the
expiration date(s) of each applicable policy and that such policies have been
endorsed as required by this Contract. All such Certificates of Insurance shall
be submitted to Purchaser at the address for deliver of such as indicated in the
Purchase Order. Supplier shall furnish to Purchaser such additional information
concerning its insurance coverage as Purchaser shall reasonably request in
writing.

 

9.1.8 Deductibles. To the extent that Supplier or its subcontractors utilize
deductibles in conjunction with the insurance required by this Contract, all
deductible expenses will be assumed by Supplier or its subcontractors and will
be considered as Supplier expenses and not part of the normal expenses
associated with this Contract.

 

9.1.9 Non-Limitation on Supplier Liability. The obligations for Supplier to
procure and maintain insurance shall not be construed to waive or restrict other
obligations of Supplier or limit the liability of Supplier whether or not same
is covered by insurance.

 

9.1.10 Additional Insurance Requirements. At any time during the life of this
Contract, Purchaser may require Supplier to obtain and maintain additional
insurance with coverage or limits in addition to those above described.

 

9.1.11 Insurance Providers. Insurance is to be placed with insurers with a
Best’s rating of no less than A VII or equivalent.

 

9.1.12 Primary Insurance. The Supplier or its subcontractors’ insurance shall be
primary insurance with respect to the Services for Purchaser, its employees and
agents, parent and affiliates, directors and officers. Any insurance or self
insurance maintained by Purchaser or any Affiliate shall be excess of the
Supplier’s and subcontractors’ insurance and shall not contribute with it.

 

9.1.13 Except as otherwise provided herein, Supplier shall be responsible for
and shall bear the risk of loss of or damage to any property of Supplier and any
property for which it is responsible, wherever located, and any insurance
provided for such property shall be at Supplier’s expense.

 

10.0 INDEMNITY

10.1 Applicable in Alabama. Supplier shall indemnify and hold harmless any
person or entity of Persons Indemnified from and against any and all loss,
damage or liability resulting from demands, claims, suits, or actions of any
character presented or brought for any injuries (including death) to persons and
for damages to property to the extent caused by or arising out of any negligent
(including strict liability), wanton or intentional act or omission of Supplier,
any of its subcontractors, anyone directly or indirectly employed by any of them
or anyone for whose acts any one of them may be liable, or in any way associated
with or connected with the performance of any work or obligations under the
Contract. The indemnity provided in this Section shall include, but not be
limited to court costs, attorney’s fees, costs of investigation, costs of
defense, settlements, and judgments associated with such demands, claims, suits
or actions. The indemnity provided in this Section is intended for the benefit
of Purchaser and also for the benefit of any other person or entity of Persons
Indemnified. Supplier’s indemnification obligations under the Contract shall in
no way be limited by the limitation on amount or type of damages, or by any
compensation or benefits payable by or for Supplier, or any of its
subcontractors, under any

 

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worker’s compensation act, employer liability act, disability act or other
employee benefit act. The Contractor shall pay any and all attorneys’ fees,
expenses, and costs incurred by the Indemnified Parties which relate to the
enforcement of the indemnity conditions and obligations of the Contractor,
including without limitation the additional insured protection and other
obligations of the Contractor, under the Contract. The indemnification
obligation stated in this Agreement shall be independent of and shall not be
limited by or limit the obligations of Contractor under the Paragraph above
entitled “Insurance”. The indemnification provided in this Section shall survive
the cancellation, termination or expiration of the Contract. Supplier hereby
waives any right Supplier may have under governing law to assert the
contributory negligence of any person or entity of Persons Indemnified as a
complete defense to Supplier’s foregoing indemnity obligation(s) and as an
absolute bar to such person’s or entity’s foregoing indemnity rights.

10.2 Applicable in Florida. LIABILITY:

 

10.2.1 Indemnity: In consideration for 1% of all sums paid by Persons
Indemnified to Supplier, Supplier hereby agrees to indemnify, defend and hold
any person or entity of Persons Indemnified harmless from any and all claims,
damages, costs (including attorneys’ fees and court costs), suits or actions of
any character for damages to persons and/or property to the extent arising out
of, related to, or in any way associated or connected with (1) the performance
of any work covered by this Contract, or any work on the project to which this
Contract relates., and (2) any wrongful or negligent act, omission, misconduct,
or violation of employment laws by the Supplier or by any agent, servant,
employee, contractor, subcontractor, sub-subcontractor, or materialman of
Supplier. Notwithstanding the foregoing, Supplier shall not be obligated to
indemnify any person or entity of Persons Indemnified for any claim of, or
damages resulting from, gross negligence or willful, wanton or intentional
misconduct of any person or entity of Persons Indemnified, or for statutory
violation(s) or punitive damages except and to the extent the statutory
violation(s) or punitive damages are caused by or result from the acts or
omissions of Supplier or any of Supplier’s contractors, subcontractors,
sub-subcontractors, materialman, or agents of any tier or their respective
employees. The Contractor shall pay any and all reasonable attorneys’ fees,
expenses, and costs incurred by the Indemnified Parties which relate to the
enforcement of the indemnity conditions and obligations of the Contractor,
including without limitation the additional insured protection and other
obligations of the Contractor, under the Contract. The indemnification
obligation stated in this Agreement shall be independent of and shall not be
limited by or limit the obligations of Contractor under the Paragraph above
entitled “Insurance”. The indemnity provided in this Section shall survive the
cancellation, termination or expiration of the Contract.

 

10.2.2 Waiver of Worker’s Compensation Defense: In the event of any suit, claim
or action of any character (including without limitation any action for
indemnity and/or contribution) by Persons Indemnified against Supplier for or in
any way relating to injuries to Supplier’s employees, Supplier hereby agrees to
waive any defense and/or claim of worker’s compensation immunity or any other
immunity defense as provided in Chapter 440, Florida Statutes. Supplier
understands, agrees and acknowledges that the waiver described in this paragraph
b. includes a waiver of any defense to any action by Persons Indemnified for
contribution against Supplier in which Supplier would or could otherwise assert
that there is no common liability between Persons Indemnified and Supplier for
injuries to Supplier’s employees. The term “employees” as used herein includes
but is not limited to any and all leased employees, temporary employees and/or
independent contractors.

 

10.2.3

Monetary Limitation on Indemnification (construction contracts only): This
paragraph applies only to this agreement to the extent that this agreement is
subject to the provisions of §725.06 of the Florida Statutes. In such case,
Supplier’s obligations to Persons Indemnified as set forth in subparagraph a.
above solely with regard to liability for damages to persons or property caused
in whole or in part by any act, omission, or default of Persons Indemnified
arising from this agreement or its performance, per occurrence, shall be limited
to $10,000,000.00 which amount Supplier understands, agrees and acknowledges
bears a reasonable commercial relationship to this Contract and was made part of
the Contract Documents, if any, that preceded this

 

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agreement. To the extent that any Technical Specifications and/or other Contract
Documents are applicable to the scope of Supplier’s work under this contract,
the terms of this paragraph (including, without limitation, this subparagraph
c.) are hereby incorporated into such Technical Specifications and/or other
Contract Documents. In the event that the amount specified above in this
paragraph c. is deemed to be unenforceable pursuant to §725.06 of the Florida
Statutes, the monetary limitation specified by this paragraph shall not be less
than $1 million per occurrence.

10.3 Applicable in Georgia. To the fullest extent permitted by law, Supplier
shall and does hereby agrees to indemnify, hold harmless and defend any person
or entity of Persons Indemnified from and against any and all claims, losses,
damages, expenses and all other liabilities to the extent arising out of or
resulting from Supplier’s, or any of its agents’, employees’ or subcontractors’,
performance or failure to perform under the Contract, including, without
limitation, demands, claims, suits, or actions of any character presented or
brought for any injuries (including death) to persons and for damages to
property to the extent caused by or arising out of any negligent (including
strict liability), wanton or intentional act or omission of Supplier, any of its
subcontractors, anyone directly or indirectly employed by any of them or anyone
for whose acts any one of them may be liable, or when such acts or omissions are
in any way associated or connected with the performance of any work or
obligations under the Contract in whatever manner the same may be caused The
foregoing indemnity shall include, but not be limited to, court costs,
reasonable attorney’s fees, costs of defense, settlements, and judgments
associated with such demands, claims, suits or actions. The indemnity provided
in this Section is intended for the benefit of Purchaser and also for the
benefit of any other person or entity of Persons Indemnified. Supplier’s
indemnification obligations under the Contract shall in no way be limited by the
limitation on amount or type of damages, compensation or benefits payable by or
for Supplier, or any of its subcontractors, under any workers’ compensation act,
employer liability act, disability act or other employee benefit act. Supplier
shall pay any and all reasonable attorney’s fees, expenses and other costs
incurred by Persons Indemnified, which relate to the enforcement of the
indemnity conditions and obligations of Supplier under the Contract. The
Contractor shall pay any and all reasonable attorneys’ fees, expenses, and costs
incurred by the Indemnified Parties which relate to the enforcement of the
indemnity conditions and obligations of the Contractor, including without
limitation the additional insured protection and other obligations of the
Contractor, under the Contract. The indemnification obligation stated in this
Agreement shall be independent of and shall not be limited by or limit the
obligations of Contractor under the Paragraph above entitled “Insurance”. The
indemnity provided in this Section shall survive the cancellation, termination
or expiration of the Contract.

10.4 Applicable in Mississippi. Supplier shall indemnify, hold harmless and
defend any person or entity of Persons Indemnified from and against any and all
loss, damage or liability resulting from demands, claims, suits, or actions of
any character presented or brought for any injuries (including death) to persons
and for damages to property to the extent arising out of, related to, or in
anyway associated or connected with any wanton or intentional or negligent act
or omission of Supplier in performance of the work obligations under the
Contract. In the event such losses, damages or liabilities are caused by or
arise out of the joint, concurrent or contributory negligence of any person or
entity of Persons Indemnified, the loss shall be borne by Supplier and Purchaser
proportionally to their degree of negligence. In no event shall Supplier’s
obligation to indemnify hereunder exceed Supplier’s proportionate share of
negligence. Supplier will be responsible for all damages and injury to property
of any character during its prosecution of the work under the Contract which may
result from any act, omission, negligence, or misconduct in the manner or method
of executing the work, or from any failure to perform it satisfactorily, or
resulting from the non-execution of the work at any time, or any defective work
or materials. The responsibility of Supplier to indemnify for all damages and
injury to property shall extend to damages caused by acts or omissions of any of
the subcontractors of Supplier, or the agents, servants, or employees, of any
such subcontractor. The indemnity provided in this Section shall include, but
not be limited to court costs, reasonable attorney’s fees, costs of
investigation, costs of defense, settlements, and judgments associated with such
demands, claims, suits or actions. The indemnity provided in this Section is
intended for the benefit of Purchaser and also for the benefit of any other
person or entity of Persons Indemnified. Supplier’s indemnification obligations
under the Contract shall in no way be limited by the limitation on amount or
type of damages, compensation or benefits payable by or for

 

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Supplier, or any of its subcontractors, under any workers’ compensation act,
employer liability act, disability act or other employee benefit act. Supplier
shall pay any and all attorney’s fees, expenses and other costs incurred by
Persons Indemnified which relate to the enforcement of the indemnity conditions
and obligations of Supplier under this Section. The Contractor shall pay any and
all attorneys’ fees, expenses, and costs incurred by the Indemnified Parties
which relate to the enforcement of the indemnity conditions and obligations of
the Contractor, including without limitation the additional insured protection
and other obligations of the Contractor, under the Contract. The indemnification
obligation stated in this Agreement shall be independent of and shall not be
limited by or limit the obligations of Contractor under the Paragraph above
entitled “Insurance”. The indemnity provided in this Section shall survive the
cancellation, termination or expiration of the Contract.

 

11.0 TAXES

Except for domestic sales and use taxes, all applicable Federal, State and other
governmental division taxes (or, if applicable, all foreign taxes) levied
against the Supplier and/or the Product shall be included in the Contract Price.
In addition, all taxes or contributions for unemployment compensation, social
security, labor and any other laws with respect to Supplier and its employees,
now or hereafter effective shall also be included in the Contract Price.
Domestic taxes levied on sales or use of the Product sold hereunder shall not be
included in the Contract Price and will be compensated for or paid by Purchaser
separately to the extent of legal requirements only.

 

12.0 RESPONSIBILITY FOR FOREIGN MANUFACTURE

Supplier shall make or provide for the payment of all taxes and import duties,
charges, assessments, deposits, bonds or security to governmental authorities
(both United States and foreign) necessary to import and to deliver the Product
to Purchaser’s designated destination point within the Contract Time. Supplier
understands that Purchaser has no responsibility whatsoever for any of such
import duties, charges, assessments, deposits, bonds or security.

 

13.0 RATE OF EXCHANGE

The Contract Price shall not be adjusted due to changes in the rate of exchange
of currency between the United States and any foreign country, and Supplier
shall be solely liable and responsible for any additional cost associated with
foreign manufacture.

 

14.0 LANGUAGE AND MEASUREMENT SYSTEM

Supplier shall furnish all specifications, documentation, etc. in the English
language, and if capacities or quantities are prepared using the Metric System
of measurement, they shall be modified by Supplier to also include measurements
in the United States customary system of measurement.

 

15.0 SUBCONTRACTS

Supplier shall bind all subcontractors to the applicable terms of the Contract
Documents. Purchaser may require a list of subcontractors. Supplier shall obtain
each subcontractor’s written acceptance of such terms and conditions and shall
require each subcontractor to assume toward Supplier all of the obligations and
responsibilities that Supplier, by the Contract, assumes toward Purchaser.
Should Supplier fail to obtain the written acceptance of such terms and
conditions by each subcontractor or fail to require each subcontractor to assume
toward Supplier all the said obligations and responsibilities that Supplier
assumes toward Purchaser, and should such failure cause or contribute to a loss
or damage to any person or entity of the Persons Indemnified, then, in such
event Supplier shall indemnify and hold such person or entity harmless from any
and all losses or damages, and claims or suits so incurred, including expenses
and reasonable attorneys fees with respect thereto. The indemnity provided in
this Section entitled, SUBCONTRACTS, is intended for the benefit of Purchaser
and also for the benefit of Persons Indemnified. Supplier shall be as fully
responsible to Purchaser for the acts and omissions of its subcontractors and of
the persons either directly or indirectly employed by its subcontractors as
Supplier is for the acts of the persons directly or indirectly employed by
itself.

 

16.0 ASSIGNMENT OF CONTRACT

The Contract shall be binding upon the parties, their partners, successors,
assigns and legal representatives. Supplier shall not assign or transfer,
directly or indirectly, the whole or any part of the

 

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Contract, the Product, or any of Supplier’s rights or obligations or any moneys
at any time payable to Supplier under the Contract, without the prior written
consent of Purchaser. Any attempted assignment without Purchaser’s prior written
consent shall be null and void and of no effect. Purchaser reserves the right to
assign the Contract and all related rights (with respect to all or part of the
Product) to any one or more of the Affiliates upon written notice to, but
without the consent of, Supplier.

 

17.0 COMPLIANCE WITH LAWS AND REGULATIONS

17.1 Supplier shall comply, and shall require its employees, agents,
representatives, subcontractors and subcontractors’ employees to comply, at all
times with all applicable Federal, state, county, and municipal laws,
regulations, rules, codes, ordinances, policies, guidance, directives, orders
and decrees which in any manner affect the Contract or its performance. Without
limiting the generality of the foregoing statement, such laws and regulations
shall include, but are not limited to, all such laws and regulations with
respect to labor laws, including, without limitation, use of U. S. citizens or
properly documented alien workers under the Immigration Act of 1990 and the
Immigration and Nationality Act of 1952, as amended, and observance of
applicable occupational safety and health standards promulgated pursuant to the
Occupational Safety and Health Act of l970.

17.2 To the fullest extent permitted by law, Supplier agrees to and shall
indemnify, release and hold harmless each person or entity of the Purchaser, its
affiliates, its parent, and the directors, officers, representatives, agents,
employees and assigns of each of them, and all parties claiming through them
(“Persons Indemnified”) from and against all claims, demands, suits or actions
of every kind and nature presented or brought for any claim or liability and for
all damages and costs incurred by the Persons Indemnified, including, without
limitation, reasonable attorneys’ fees and costs, arising from or related to the
violation of any such law, regulation, rule, code, ordinance, policy, guidance,
directive, order or decree by Supplier or its employees, agents,
representatives, subcontractors or subcontractors’ employees.

17.3 Supplier shall maintain complete documentation and records concerning
compliance with all applicable legal requirements. Throughout the term of this
Contract, and for the longer of: (a) six years after termination of the
Contract; or (b) as required by applicable legal requirements, Supplier shall
maintain and permit Purchaser representatives, during normal business hours, to
examine, audit and make copies of all documentation and records of Supplier
(and, if applicable, its parent, affiliates and subsidiaries) relating to
compliance with applicable legal requirements.

 

18.0 COMPLIANCE AND ETHICS.

18.1 Electronic Communications. Supplier and its directors, officers, employees,
sub-contractors, suppliers, or agents (all of whom, including Supplier, are
collectively referred to in this Article as “Supplier Representatives”) who
access any computer system of Purchaser or any of its affiliates (collectively
referred to in this Article as “Purchaser”) while on Purchaser’s premises or by
remote access shall comply with Purchaser’s electronic communications, e-mail,
and internet use policies.

18.2 On-Site Activities. If any Supplier Representative is to be on the premises
of or under the control of Purchaser the following provisions shall apply:

 

18.2.1 Site Rules and Regulations/ Drug and Alcohol Screening / Eligibility
Guidelines. Supplier represents and warrants that it and its Supplier
Representatives will comply with all site rules, regulations, policies and
guidelines including, but not limited to, the Purchaser policies which may
require certain personnel to undergo drug and alcohol screening, background
screening and to meet certain eligibility guidelines. Without limitation, if any
Supplier Representative fails to comply with Purchaser site rules, regulations,
policies and guidelines including, but not limited to, those related to
electronic communications, e-mail, internet use, drug and alcohol screening,
background screening and eligibility, the Purchaser reserves the right, in its
sole discretion, to refuse site entry to or remove from the site any or all
Supplier Representatives.

 

18.2.2

No Toleration of Unacceptable Behaviors (Ethics). Supplier Representatives shall
at all times conduct their business activities pursuant to this Contract in a
highly ethical manner and in compliance with all laws and regulations. It shall
not, at any time, exhibit the following behaviors

 

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(collectively, the “Behavior Standards”): (a) Harassment or discrimination of
any kind or character, including but not limited to conduct or language
derogatory to any individual on the basis of race, gender, color, religion, age,
national origin, disability, veteran status or sexual orientation that creates
an intimidating, hostile, or offensive working environment. Specific examples
include, but are not limited to jokes, pranks, epithets, written or graphic
material, or hostility or aversion toward any individual or group; (b) Any
conduct or acts such as threats or violence that creates a hostile, abusive, or
intimidating work environment. Examples of such inappropriate behaviors include,
but are not limited to fighting, abusive language, inappropriate signage, use or
possession of firearms on Purchaser property, and destruction of Purchaser or
Purchaser’s employee property or the threat of any of the foregoing; (c) Work
practices that are unsafe or harmful to the environment; (d) Use of Purchaser’s
computers, email, telephone or voice-mail system that in any way involves
material that is obscene, pornographic, sexually oriented, threatening, or
otherwise derogatory or offensive to any individual on the basis of race,
gender, color, religion, age, national origin, disability, veteran status or
sexual orientation; (e) The use of, being under the influence of, or possession
of alcoholic beverages or unlawful drugs on Purchaser property; or,
(f) Engagement in any activity that creates a conflict of interest or appearance
of the same, including but not limited to providing gifts and gratuities to
Purchaser’s employees. Supplier is responsible for communicating the Behavior
Standards to Supplier Representatives who enter the Purchaser’s facility or
facilities.

 

18.2.3 Termination From Non-Compliance With Behavior Standards. Notwithstanding
anything in this Contract to the contrary, in the event that Purchaser shall at
any time in its sole discretion conclude that any Supplier Representative shall
have breached its obligations under this section, Purchaser shall have the
right, in addition to all remedies which may be available at law or equity, to
immediately cancel this Contract. If a Supplier Representative observes a
Purchaser employee doing, or is ever asked by a Purchaser employee to do,
something the Supplier Representative considers to be unethical, illegal, or in
violation of these behavior standards, Purchaser expects the Supplier
Representative to notify Purchaser’s management immediately or call Workplace
Ethics at (1-800-754-9452).

 

19.0 GENERAL SERVICES ADMINISTRATION

General Services Administration: The Purchaser is a government contractor under
an Areawide Public Utility Contract with the General Services Administration of
the United States Government. Supplier agrees that each of the clauses contained
in the Federal Acquisition Regulations referred to below shall, as if set forth
herein in full text, be incorporated into and form a part of the Contract, and
Supplier shall comply therewith if the amount of the Contract and the
circumstances surrounding its performance require Purchaser to include such
clause in contracts between Purchaser and others:

 

  (1) 52.203-6   Restrictions on Subcontractor Sales to the Government (JUL
1985);   (2) 52.203-7   Anti-Kickback Procedures (OCT 1988);   (3) 52.219-8  
Utilization of Small, Small Disadvantaged and Women-Owned Small business
concerns (OCT 1995);   (4) 52.219-9   Small, Small Disadvantaged and Women-Owned
Small Business Subcontracting Plan (OCT 1995);   (5) 52.222-26   Equal
Opportunity (APR 1984); and   (6) 52.223-14   Toxic Chemical Release Reporting.

Upon written request, Purchaser will provide the full text of any of the above
clauses incorporated herein by reference.

Supplier hereby represents and warrants that Supplier is not debarred, suspended
or proposed for debarment as a contractor or subcontractor to any department,
agency or other division of the United States Government.

 

20.0 GOVERNMENTAL HEARINGS

20.1 Supplier understands and acknowledges that as a result of its performance
of the Contract and the special knowledge it possesses, and in order to defend
and explain the decisions, procedures and

 

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standards applicable to its furnishing of the Product, Supplier may be called
upon to appear as an expert witness at governmental and other hearings. Supplier
agrees that it shall appear in such hearings when required by Purchaser.
Supplier shall also participate in the preparation of testimony; reports or
other documents required in any lawsuits or governmental or other hearings when
called upon to do so by Purchaser. All reasonable and actual costs incurred by
Supplier for the foregoing shall be reimbursed to Supplier by Purchaser.

 

21.0 CANCELLATION BY THE PURCHASER FOR BREACH

Purchaser may cancel the Contract or any part thereof for breach in the event of
any default, or notification of Purchaser by Supplier of Supplier’s intent to
default or if the Supplier fails to comply with any of the provisions of the
Contract. Failure to provide Product within the time specified, supply of
defective or non-conforming Product and failure to provide Purchaser, upon
request, with reasonable assurance of future performance shall be causes
allowing Purchaser to terminate the Contract. In the event of such cancellation
Supplier shall be liable to Purchaser for any and all damages as may be provided
by law or equity. If it should be determined that Purchaser has improperly
canceled the Contract, for breach, Purchaser’s action shall be deemed to have
constituted a termination of the Contract pursuant to the Section above,
entitled TERMINATION BY THE COMPANY FOR CONVENIENCE.

 

22.0 SUPPLIER LIMITATION OF LIABILITY

Neither Party shall be liable to the other Party for consequential damages,
including but not limited to, (i) loss of profit or revenue resulting from the
failure of Supplier to make delivery as specified herein or resulting from its
failure to meet the Technical Specifications herein in regard to the Product,
(ii) damages suffered by Purchaser as a result of the loss of the use of its
power system or production facilities, (iii) cost of purchased or replacement
power, (iv) damages suffered by customers of Purchaser for service interruptions
or (v) cost of capital, whether such liability is based on contract, warranty,
tort (including negligence and strict liability) or otherwise.

With the exception of third party claims for which Supplier is obligated to
Purchaser under paragraphs 10.1, 10.2, 10.3 and 10.4 (Indemnity), or Supplier’s
obligations to Purchaser under paragraph 6 (Proprietary Interest
Indemnification),or Supplier’s obligations under Article 27 (Title), the total
cumulative liability of a Party to the other Party and/or its Affiliates under a
Purchase Order, as defined herein, shall not exceed one and a quarter
(1.25) times the amount of the applicable Purchase Order.

 

23.0 SUPPLIER’S RIGHTS UPON BREACH BY COMPANY

23.1 Supplier agrees that it can absolutely be compensated by money damages for
any breach of the Contract which may be committed by Purchaser, and Supplier
agrees that no default, act or omission of Purchaser shall constitute a material
breach of the Contract entitling Supplier to cancel or rescind the Contract or
to suspend or abandon performance. Supplier further waives any and all rights
and remedies to which it might otherwise be entitled because of any act or
omission of the Purchaser, saving only its rights to money damages.

23.2 Supplier shall have no right to consequential damages by reason of
Purchaser’s breach of the Contract or any acts of Purchaser under the Contract,
and Supplier hereby waives any and all rights to consequential damages.

 

24.0 DELIVERY

Unless agreed otherwise, the Product shall be shipped F.O.B. destination,
freight pre-paid and added as a separate line item to the applicable invoice.
Title and risk of loss to the Product shall pass to Purchaser upon delivery at
the destination point designated in the Section entitled, ALLOCATION OF
RESPONSIBILITY. Supplier shall file claims for loss or damage, if any.

 

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25.0 INVOICING AND PAYMENT

25.1 Purchaser shall pay to Supplier, within thirty (30) days after receipt of
an accurate and properly substantiated invoice or acceptance of the Products by
Purchaser, whichever is later, one hundred percent (100%) of the undisputed
invoice amount of the Contract Price for the Products.

25.2 Supplier must submit all invoices to the Purchaser address and to the
attention of the Purchaser representative designated in the Contract. Purchaser
shall not be responsible for any delays in payment or failure to pay any
invoices which are improperly addressed.

25.3 Any terms and conditions included in an invoice shall be deemed solely for
the information of Purchaser and no such term or condition shall be binding upon
Purchaser, and no action by Purchaser, including without limitation the payment
of any invoice in whole or in part, shall be construed as binding or estopping
Purchaser with respect to any such term or condition unless the invoice term or
condition has been agreed to by Purchaser in, and is binding upon Purchaser with
respect to such invoice by virtue of the Contract or a binding Modification
thereto.

 

26.0 AUDIT

Supplier shall maintain books and records, in accordance with generally accepted
accounting principles and practices. The accounting records shall be adequately
safeguarded and protected at their source locations for the longer of three
(3) years after final payment or as may be required by law. Purchaser, its
auditors and other authorized representatives have the right to review and
audit, and shall be afforded access to, Supplier’s pertinent books, accounts,
ledgers, bank records, receipts, vouchers, purchase orders and other records to
verify amounts, deposits, disbursements and accounting in order to determine
whether Supplier has properly computed the amounts and charges invoiced to
Purchaser. Information obtained by Purchaser in examining Supplier’s accounting
books and records shall not be disclosed to third parties without Supplier’s
consent, unless such disclosure is ordered by a governmental agency or a court
of competent jurisdiction with respect to any litigation or other proceeding
involving the Contract.

 

27.0 TITLE

27.1 Supplier warrants that title to the Product shall pass to Purchaser free
and clear of all liens, claims, security interests or encumbrances.

27.2 Supplier shall, whenever requested to do so, furnish Purchaser, in such
detail as may be required by Purchaser, statements in writing of all sums owed
by Supplier or subcontractors for services rendered, labor performed, or
equipment, materials, provisions, supplies, tools, or equipment furnished or
used, or to be used in the performance of the Contract. If at any time there
shall appear to be any claim, lien, garnishment, attachment, or suit
(collectively “a Lien”) chargeable to Supplier or any of its subcontractors for
which, if established, Purchaser might become liable, or Purchaser’s property,
including the Product, might become affected. Purchaser shall have the right to
retain out of any payments then due or thereafter to become due, an amount
sufficient to completely indemnify it against such Lien, including reasonable
attorneys’ fees and other expenses in connection therewith. If any such Lien is
filed or remains unsatisfied after all Contract payments are made, Supplier
shall indemnify and hold harmless Purchaser for all moneys that Purchaser may be
compelled to pay in discharging such Lien, including all expenses and reasonable
attorneys’ fees.

 

28.0 INDEPENDENT CONTRACTOR

Supplier shall be deemed an independent contractor in the performance of the
Contract and shall not be considered or permitted to be an agent, servant, joint
venturer or partner of Purchaser. All persons furnished, used, retained or hired
by or on behalf of Supplier shall be considered to be solely the employees or
agents of Supplier and Supplier at all times shall maintain such supervision and
control over its employees and agents as is necessary to preserve its
independent contractor status. Supplier shall be responsible for payment of any
and all unemployment, social security, and other payroll taxes for its employees
and agents, as applicable, including any related assessments and contributions
required by law.

 

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29.0 SURVIVAL OF REPRESENTATIONS

The rights and responsibilities of the parties under such Sections that by their
sense and context are intended to survive shall be effective notwithstanding any
other provisions of the Contract and shall survive the completion, expiration,
termination or cancellation of the Contract or final acceptance of the work.

 

30.0 SUPPLIER REPRESENTATIVE

Supplier shall designate in writing a representative who shall have full
authority to execute any and all instruments requiring the signature of
Supplier, and to otherwise act on behalf of Supplier with respect to all matters
arising out of the Contract.

 

31.0 POLICIES AND PROCEDURES

Any of Supplier’s personnel who perform any work at Purchaser’s plants or
offices shall comply with the security, drug and alcohol, and other policies and
procedures in effect at said plants or offices. Supplier’s personnel may be
required to attend specific indoctrination prior to their admission to said
plants or offices. Purchaser reserves the right to refuse plant entry to any or
all Supplier personnel.

 

32.0 TIME OF THE ESSENCE

Time is of the essence for performance under the Contract and all obligations of
Supplier must be performed in a prompt and timely manner and in accordance with
any schedules agreed to under the Contract. The acceptance of any late
performance with or without objection or reservation by Purchaser shall not
waive any rights of Purchaser nor constitute a waiver of the requirement of
timely performance of any obligation of Supplier remaining to be performed.

 

33.0 NOTICES

All notices permitted or required to be given under the Contract shall be in
writing and shall be deemed duly given upon personal delivery or on the fourth
day following the date on which each such notice is deposited postage prepaid in
the United States Mail, registered or certified, return receipt requested or on
the next business day after being sent by a nationally recognized overnight
courier service which provides proof of receipt. All notices shall be delivered
or sent to the other Party at the address(es) shown in the applicable Purchase
Order or to any other address(es) as a Party may designate by ten (l0) days
prior written notice given in accordance with this provision.

 

34.0 MISCELLANEOUS

 

34.1 No Waiver

No waiver by Purchaser, either by act or failure to act, of any default by or
obligation of Supplier in the performance of its obligations under the Contract
shall be deemed or construed to be a waiver, whether prior or subsequent, of the
same or any other default by or obligation of Supplier.

 

34.2 Amendment

Except as provided herein, the Contract may be changed only by a written
instrument duly executed by authorized personnel of the parties.

 

34.3 Governing Law, Cumulative Remedies

By choice of the parties, all disputes relating to the execution,
interpretation, construction, performance, or enforcement of the Contract and
the rights and obligations of the parties hereto shall be governed by the laws
of, and resolved in the State or Federal courts in, the state of the principal
place of business of Purchaser; and, Supplier hereby consents to and waives any
objection to venue and jurisdiction in such courts. Subject to any applicable
limitation of liability set forth herein, the rights and remedies of Purchaser
herein are cumulative and in addition to any and all rights and remedies which
may be provided by law or equity.

 

34.4 Captions

 

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The Section and Section headings in each of the Contract Documents are for ease
of reference only and shall not be used to interpret the meaning thereof.

 

34.5 Severability

The Contract is made subject to all laws, regulations and orders of the State
and Federal Governments and their duly constituted agencies and boards having
jurisdiction over the subject matter thereof. In the event that the Contract or
the performance thereof shall violate any existing or future such law,
regulation or order, or in the event that such existing or future law,
regulation or order materially hinders or interferes with Purchaser’s intended
utilization of the Product, then, in either event the Contract shall terminate
and Purchaser and Supplier shall adjust their accounts, effective as of such
termination. The unenforceability or invalidity of any provision of any of the
Contract Documents shall not affect the validity or enforceability of the
remaining provisions thereof, but such remaining provisions shall be construed
and interpreted in such a manner as to carry out fully the intent of the
parties; provided, however, that should any judicial body interpreting any of
the Contract Documents deem any provision thereof to be unreasonably broad in
time, scope or otherwise, it is the intent and desire of the parties hereto that
such judicial body, to the greatest extent possible, reduce the breadth of such
provision to the maximum legally allowable parameters rather than deeming such
provision totally unenforceable or invalid.

 

34.6 Publicity

Supplier shall submit to Purchaser all advertising, sales promotion or other
publicity matter relating to the Contract wherein the Purchaser’s name or the
name of its Parent Company or of any of its Affiliates is mentioned, and
Supplier shall not use or publish such advertising, sales promotion or publicity
matter without the prior written consent of Purchaser.

 

34.7 Successors and Assigns

The Contract shall inure to the benefit of and be binding upon the respective
successors and permitted assigns, if any, of the parties, provided that this
Section entitled, Successors and Assigns, shall not be construed to permit any
attempted assignment which would be unauthorized or void pursuant to any other
provision of the Contract.

 

34.8 Conditions to Close

This contract is contingent upon the Financial Close of the debt financing for
Red River Environmental Products, LLC’s. LLC’s first production line prior to
December 31, 2008, and Supplier shall so advise Purchaser when such financing
closes, identifying the lead bank. In the event that Supplier fails to close the
Financing then this Contract shall terminate and the Parties shall have no
further obligation whatsoever to each other.

 

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