Exhibit No. 10.2.a.

 

 
Contract Between
 
Kansas City Power & Light Company
 
and
 
ALSTOM Power Inc.
 
for
 
Engineering, Procurement, and Construction Services
 
for
 
Air Quality Control Systems and Selective Catalytic Reduction Systems
 
at
 
Iatan Generating Station Units 1 and 2
 
and the
 
Pulverized Coal-Fired Boiler
 
at
 
Iatan Generating Station Unit 2
 
 

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TABLE OF CONTENTS
 

 

 
ARTICLE 1
 
DEFINITIONS
 
1
 
ARTICLE 2
 
DESCRIPTION OF CONTRACT
 
8
 

2.1
Engagement of Contractor
9
2.2
Conflicting Provisions
9
2.3
Section and Exhibit References
9
2.4
Interpretation
9

ARTICLE 3
 
SCOPE OF WORK
 
10
 

3.1
General
10
3.2
Procurement
10
3.3
Commencement of Work
10
3.4
Management and Conduct of the Work
10
 3.5
Skill and Judgment
11
3.6
Manufacturer’s Directions
11
3.7
Written Progress Reports
11
3.8
Progress Meetings
12
3.9
Monitoring of Schedule
12
3.10
Quality Control
12
3.11
Safety, Loss Control and Emergencies
12
3.12
Protection of the Work and Adjacent Property
13
3.13
Storage and Related Matters
13
3.14
Royalties and License Fees
13
3.15
Project Procedures Manual
13
3.16
Contractor Permits
13
3.17
Operations Personnel Training
13

ARTICLE 4
CONTRACTOR PERSONNEL
14

4.1
Adequate and Competent Labor Force
14
4.2
Wages and Benefits
14
4.3
Labor Relations
14
4.4
Drug and Alcohol Testing
14
4.5
 
Federal Contracting Requirements
 
14
 

ARTICLE 5
 
LICENSING AND CODES
 
14
 

5.1
Licensed Engineers
14
5.2
Contractor License
15
5.3
 
Law, Codes, and Standards
 
15
 

 
 
i

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TABLE OF CONTENTS
 
(continued)
 
ARTICLE 6
OWNER REVIEW
15

6.1
Owner’s Right to Review and Inspect; Correction of Defects
15
6.2
Failure to Provide Notice of Inspection
15
6.3
 
Review Not Approval
 
15
 

 

ARTICLE 7
RESPONSIBILITIES OF OWNER
16

7.1
Fuel and Utilities
16
7.2
Review of Submittals
16
7.3
Designation of Owner’s Representative
16
7.4
Operating Personnel
16
7.5
Contractor Permits
16
7.6
Compliance with Contract and Laws
16
7.7
Asbestos, Lead-Based Paint, and any other Hazardous Substances
16
7.8
Surveys and Reports
16
7.9
Owner Permits
16
7.10
 
Performance Test Criteria
 
17
 

 

ARTICLE 8
PROJECT SCHEDULE AND PROJECT CONTROLS
17

8.1
Time For Performance of the Work
17
8.2
Level 1 Milestone Schedule
17
8.3
Level 3 Detailed CPM Schedule
17
8.4
Baseline Schedule
17
8.5
Work Breakdown Structure (WBS) and Earned-Value Reporting
19
8.6
Project Execution Plan
20
8.7
Material Laydown Plan
20
8.8
Crane Plan
20
8.9
Start-Up Schedule
20
8.10
Commissioning Schedule
21

ARTICLE 9
SITE
21

9.1
Site Availability
21
9.2
Conditions Affecting Work and Differing Site Conditions
21
9.3
Use of Owner’s Tools and Equipment at Site
21
9.4
Owner Control Over Work Scope
22
9.5
Owner Control Over Access
22
9.6
Signs
22
9.7
Disposal of Excavated Material; Archeological or Historical Finds
22
9.8
Security.
22
9.9
Site Coordination Between Owner and Contractor
23
9.10
Construction Plant and Temporary Facilities.
24
9.11
Construction Utilities
25
9.12
Construction Area.
26
9.13
Cleanliness
26
9.14
Fire Protection
27

  ii

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TABLE OF CONTENTS
 
(continued)
 
ARTICLE 10
THE PARTIES’ REPRESENTATIVES
28

10.1
Owner’s Representative
28
10.2
Contractor’s Representative
28
10.3
Representative’s Access
28
10.4
 
Compliance with Owner’s Representative’s Directives
 
28
 

 

ARTICLE 11
SUBCONTRACTORS AND EQUIPMENT SUPPLIERS
29

11.1
Award of Subcontracts for Portions of the Work
29
11.2
List of Subcontractors
29
11.3
Contracts with Subcontractors
29
11.4
Payments to Subcontractors
29
11.5
Owner/Subcontractor Communication
30
11.6
Approved Equipment Suppliers
30

 

ARTICLE 12
COMPENSATION, LETTERS OF CREDIT, AND INVOICING
                                                                     30

12.1
Total Compensation
30
12.2
Bonus.
30
12.3
Monthly Applications for Payments
30
12.4
Certification by Contractor
31
12.5
Lien Waivers
31
12.6
Payment of Undisputed Amounts
31
12.7
Payment of Disputed Amounts
32
12.8
Retainage
32
12.9
Not Used
32
12.10
Payments Withheld
32
12.11
Final Payment
32
12.12
 
Contractor’s Five Percent LOC
 
33
 

 

ARTICLE 13
CHANGE ORDERS
                                                                                                                           
33

13.1
Owner Initiated Change Orders
33
13.2
Contractor Change Requests
34
13.3
Change Order For Delays
34
13.4
Change Order for Contractor Delay or Error
34
13.5
Minor Changes in the Work
35
13.6
Duty to Continue the Work
34
13.7
 
Effect of Changes in the Law
 
35
 

 
 
iii

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TABLE OF CONTENTS
 
(continued)

ARTICLE 14
CONTRACTOR’S GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
35

14.1
Representations and Warranties of Contractor
35
14.2
Covenants of Contractor
36
14.3
Opinion of Counsel from Contractor
36
14.4
Additional Warranties and Representations of Contractor
36
14.5
Additional Documentation
36
14.6
 
Changes in Circumstances
 
36

ARTICLE 15
WARRANTY OF THE WORK AND REMEDIES
36

15.1
General Warranty of Work
36
15.2
Engineering and Design
37
15.3
Nonconforming Work
37
15.4
Standard Warranty Work
37
15.5
Operating Emergency Warranty Work
37
15.6
Unit 1 Warranty Callback Period
37
15.7
Unit 2 Warranty Callback Period
38
15.8
Catalyst Warranty
38
15.9
Baglife Warranty
38
15.10
Subcontractor Warranties
38
15.11
Root Cause Repairs
39
15.12
Cure Rights of Owner for Breach of Warranty
39
15.13
Warranty and Passage of Title
39
15.14
Extent of Warranty
39
15.15
Exclusive Warranties
39
15.16
Failure of Owner to Operate and Maintain Work
39

 

ARTICLE 16
DISPUTE RESOLUTION
40

16.1
Step Negotiations
40
16.2
Mediation
40
16.3
Arbitration
40
16.4
Continued Prosecution of the Work
40

ARTICLE 17
TAXES
40

17.1
Payment by Contractor
40
17.2
Tax Exemption
41
17.3
Indemnification
41
17.4
 
Assurances
 
41
 

ARTICLE 18
INDEMNIFICATION
41

18.1
Contractor Indemnity
41
18.2
Workers Compensation Waiver
41
18.3
Not Used
41
18.4
 
Patent Indemnity
 
41
 

 
 
iv

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TABLE OF CONTENTS
 
(continued)

ARTICLE 19
INSURANCE
42

 

ARTICLE 20
EVENTS OF DEFAULT AND TERMINATION
42

 

20.1
Termination Without Cause
42
20.2
Contractor Events of Default
43
20.3
Remedies for Contractor Default
43
20.4
Owner Termination for Cause
44
20.5
Additional Consequences of Termination
44
20.6
Limitation of Liability
44
20.7
Consequential Damages
44
20.8
Applicability
45
20.9
Books, Records and Right To Audit
45
20.10
 
Owner Default
 
45
 

 
ARTICLE 21
TESTING AND FINAL COMPLETION
45

 
21.1
Scheduling of Performance Testing
45
21.2
Achievement of Performance Guarantees
45
21.3
Failure of Performance Tests
45
21.4
 
Retainage for Punchlist Items
 
45
 

ARTICLE 22
LIQUIDATED DAMAGES
46

22.1
Performance Guarantees
46
22.2
Liquidated Damages for Failure to Meet Performance Guarantees
46
22.3
Liquidated Damages for Delay and Failure to Meet Schedule
46
22.4
Liquidated Damages Exclusive Remedy
46
22.5
No Liquidated Damages for Owner Delay
46
22.6
Liquidated Damages Reasonable
46

 

ARTICLE 23
RISK OF LOSS
46

 

ARTICLE 24
FORCE MAJEURE
47

24.1
Definition
47
24.2
Excused Performance
47
24.3
Settlement of Strikes
47
24.4
Burden of Proof
47
24.5
Termination for Force Majeure Delay
47
24.6
 
Force Majeure as a Change
 
47
 

 
ARTICLE 25
FEDERAL CONTRACTING REQUIREMENTS
48

 
 
v

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TABLE OF CONTENTS

 
(continued)
 

ARTICLE 26
MILLENNIUM COMPLIANCE
48

26.1
Millennium Compliant Software
48
26.2
Testing
48
26.3
Subcontractor Warranties
48
26.4
Non-Compliant Software
48
26.5
Owner Liability
48
26.6
 
Contractor Obligations
 
48
 

ARTICLE 27
UNDERGROUND INSTALLATIONS
49

27.1
Contractor Responsibility
49
27.2
 
Maintaining Records of Underground Facilities
 
49
 

 
ARTICLE 28
SAFETY AND FIRST AID
49

28.1
Responsibility and Liability
49
28.2
 
Safety Standards
 
49
 

ARTICLE 29
MISCELLANEOUS PROVISIONS
49

29.1
Entire Contract; Amendment
49
29.2
Independent Contractor
49
29.3
Title to Plans and Specifications
49
29.4
Binding Effect; Successors and Assignees
50
29.5
Auditing Rights for Non-Fixed-Price Work
50
29.6
Notices
51
29.7
Not for Benefit of Third Parties
51
29.8
Governing Law and Venue
51
29.9
Headings; Usage of Certain Words
51
29.10
Rules of Construction
51
29.11
No Waiver
51
29.12
Severability
51
29.13
Hazardous Substances
52
29.14
Environmental Compliance and Indemnification
52
29.15
 
Asbestos & Lead Paint
 
52
 

ARTICLE 30
PERFORMANCE LETTER OF CREDIT
53

30.1
Performance Letter of Credit
53

 
 
vi

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LIST OF EXHIBITS
 

 
EXHIBIT A
 
TECHNICAL SPECIFICATIONS
 
EXHIBIT B
 
MILESTONE DATES
 
EXHIBIT C
 
IATAN UNIT 1 EXISTING PERMIT LIMITS
 
EXHIBIT D
 
CONTRACT PRICE
 
EXHIBIT E
 
COMPLETION DATES
 
EXHIBIT F
 
KEY PERSONNEL
 
EXHIBIT G
 
FORM OF MONTHLY PROGRESS REPORTS
 
EXHIBIT H
 
NOT USED
 
EXHIBIT I
 
NOT USED
 
EXHIBIT J
 
NOT USED
 
EXHIBIT K
 
OWNER’S DRUG AND ALCOHOL SCREENING POLICY AND PROCEDURE
 
EXHIBIT L
 
REQUIRED SUBMITTALS
 
EXHIBIT M
 
FEDERAL SUBCONTRACTING REPORTS/REQUIREMENTS
 
EXHIBIT N
 
PREFERRED SUBCONTRACTORS AND EQUIPMENT SUPPLIERS
 
EXHIBIT O
 
PAYMENT DOCUMENTATION
 
EXHIBIT P
 
FIVE PERCENT LETTER OF CREDIT
 
EXHIBIT Q
 
MISSOURI TAX EXEMPTION CERTIFICATE
 
EXHIBIT R
 
INSURANCE REQUIREMENTS
 
EXHIBIT S
 
PERFORMANCE GUARANTEES AND LIQUIDATED DAMAGES
 
EXHIBIT T
 
NOT USED
 
EXHIBIT U
 
PERFORMANCE LETTER OF CREDIT
 
EXHIBIT V
 
RATE SCHEDULE
 
EXHIBIT W
 
PAYMENT SCHEDULE
 

vii

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ENGINEERING, PROCUREMENT, AND CONSTRUCTION CONTRACT
 
     This Engineering, Procurement, and Construction Contract is made and
entered into as of this 10th day of August, 2006 (“Effective Date”) by and
between Kansas City Power & Light Company, a Missouri corporation, and ALSTOM
Power Inc., a Delaware corporation, for the design, engineering, procurement,
construction, assembly, start-up, and testing of the AQC Systems for Units 1 and
2, the SCR Systems for Units 1 and 2, the Boiler for Unit 2, and all of their
collective appurtenances at the Iatan Electric Generating Station. 
 
 
RECITALS
 
     WHEREAS, Owner owns and operates the Iatan 1 Electric Generating Station
(“Unit 1”), a 670 mW pulverized coal-fired power generation facility located
near Iatan, Missouri.
 
     WHEREAS, Owner desires to install a new pulverized coal-fired power
generation facility and appurtenant structures (“Unit 2”) next to Unit 1 that is
nominally rated at 850 mW;
 
     WHEREAS, Owner desires to install pollution control equipment on Unit 1 and
Unit 2, including, without limitation, adding limestone based, wet scrubber flue
gas desulfurization systems, mercury control systems, limestone and gypsum
processing systems, and baghouses and appurtenant materials, as more
particularly described in the Technical Specifications for the AQC Systems;
 
     WHEREAS, Owner desires to install an SCR System on Unit 1 and Unit 2,
including, without limitation, the Catalyst, the material handling systems,
ammonia injection grid, ductwork, and appurtenant materials, as more
particularly described in the Technical Specifications for the SCR Systems;
 
     WHEREAS Owner desires to install a pulverized coal-fired boiler and
appurtenant materials on Unit 2, as more particularly described in the Technical
Specifications;
 
     WHEREAS, Contractor is experienced in the design, engineering, procurement,
construction, assembly, start-up, and testing of pollution control equipment
projects and systems utilized in connection with coal-fired power generation
facilities similar to the Plant; and
 
     WHEREAS, Owner desires to engage and Contractor agrees to be so engaged to
design, engineer, procure, construct, assemble, start-up, and test the AQC and
SCR Systems for Unit 1 and Unit 2 and the Boiler for Unit 2.
 
     Now, therefore, for and in consideration of the foregoing premises and of
the mutual covenants hereinafter contained, the Parties hereto have agreed as
follows:
 
ARTICLE 1  
 
DEFINITIONS
 
     Unless the context otherwise requires, the following definitions shall
apply to this Contract. The singular shall include the plural and the masculine
shall include the feminine, as the context requires. The terms “includes” or
“including” shall mean “including, but not limited to.” Any term not defined in
this Article 1 and used in an administrative or technical Division or Section,
Exhibit or Change Order shall have the meaning ascribed therein.
 
     1.1  Application for Payment means the invoices submitted by Contractor
pursuant to Article 12 for payments due for Work performed under the Contract
Documents.
 
     1.2  AQC Material Handling System means but is not limited to the limestone
and gypsum conveyance systems and appurtenances to be added to the Unit 1 and
Unit 2, respectively, and comprising a portion of the Work, as specified in the
Technical Specifications.
 
     1.3  AQC System means the FGD System, Baghouse, Mercury Control System, AQC
Material Handling System, ductwork and appurtenant Materials for Unit 1 and Unit
2, respectively, as specified in the Technical Specifications.
 
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     1.4  Asbestos means any material that contains more than 1% asbestos and is
friable or is releasing asbestos fibers into the air above current action levels
established by the United States Occupational Safety and Health Administration.
 
     1.5  Bag Failure means damage to the fabric filter bags specified in the
Technical Specifications, such as a breach, tear or opening in a bag, or
blinding or pluggage of the fabric such that the dust removal system in the
Baghouse does not function to remove the dust as specified.
 
     1.6  Baghouse means the fabric filter particulate removal Materials and
appurtenances specified in the Technical Specification.
 
     1.7  Baglife Failure means that any one or more of the following conditions
has occurred during the Guaranteed Baglife Period: (1) when a cumulative value
of one percent (1%) per year or 3% during the Guaranteed Baglife Period (the
“Attrition Allowance”) of the original total number of fabric filter bags have
suffered Bag Failure; (2) subject to the limitation set forth in Section 15.14,
when pressure drop of the fabric filter system exceeds the guaranteed system
operating pressure limit by greater than 10% to indicate unacceptable system
performance on more than one occasion in 90 consecutive operating days; (3) when
Bag Failure has occurred to 5% of the bags in any one compartment; or (4) when
filterable particulate emissions, including opacity, exceeds permitted emissions
on more than one occasion in 90 consecutive operating days.
 
     1.8  Boiler means the pulverized coal-fired boiler for Unit 2 including all
equipment and appurtenances required for pulverized coal combustion, as
specified in the Technical Specifications.
 
     1.9  Business Day means any Day except Saturday, Sunday, or a weekday that
is observed by Owner as a holiday.
 
     1.10  Catalyst means the surface specified in the Technical Specifications
used to promote the selective, low temperature reaction of NOx and ammonia
(NH3), converting them to nitrogen and water vapor.
 
     1.11  Catalyst Life Failure means the Catalyst fails to achieve the
guaranteed NOx emission or ammonia slip levels when operating within the range
of design fuels and operating conditions (collectively, “Design Conditions”) at
any time prior to the end of the Guaranteed Catalyst Period. Owner may
experience minor spikes or excursions outside the required Design Conditions.
The range of the acceptable excursions from the Catalyst Design Conditions are
as follows:
 
Inlet Flue Gas Temperature to the SCR (Temperature range from 545°F to 740°F for
Unit 2 and from 590°F to 740°F for Unit 1): Excursion for inlet flue gas
temperature: (a) Maximum operating temperature from the range listed above +
50°F (time period for excursion not to exceed 24 cumulative hours); or (b)
Minimum allowable operating temperature. Operation of the SCR system 25°F below
the minimum allowable temperature will not void the Catalyst Life Warranty as
long as SCR operation greater than 50°F above the minimum allowable temperature
occurs for at least an equivalent number of hours.  SCR operation is defined as
the injection of ammonia into the system.
 
Flue Gas Velocity. Excursion for flue gas velocity not to exceed +5% above
Boiler Maximum Continuous Rating (“BMCR”) conditions (time period not to exceed
24 cumulative hours).
 
Fuel Constituents and Ash Constituents. Excursion for fuel constituents and ash
constituents not to exceed 10% beyond the worst range of properties specifically
sulfur content, inlet ash loading, sodium, calcium, phosphorus and arsenic (time
period for excursion not to exceed 240 cumulative hours).
 
     1.12  Change Order means a written order issued to Contractor pursuant to
Article 13.
 
     1.13  Construction Aids means the materials, supplies, construction tools,
cranes and other construction equipment, field office equipment, field office
supplies, scaffolding, form lumber, temporary buildings and facilities, and all
other items provided by Contractor as part of, or necessary for, completion of
the Work, but which are not intended to become a permanent part of the Site.

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     1.14  Continuous Emission Monitoring System means the total equipment
necessary for the determination of a gas or particulate matter concentration or
emission rate using pollutant analyzer measurements and a conversion equation,
graph, or computer program to produce results in units of the applicable
emission limitation or standard.
 
     1.15  Contract means this Engineering, Procurement and Construction
Contract between Owner and Contractor for the engineering, procurement, and
construction services for the AQC and SCR Systems for Units 1 and 2 and the
Boiler for Unit 2.
 
     1.16  Contract Documents means: (a) this Contract including all Exhibits
hereto; (b) the Purchase Order; (c) the Technical Specifications; (d) any
applicable Contractor Specifications; (e) any applicable Drawings; (f) the
Change Orders; and (g) any other documents identified in this Contract and/or
the Purchase Order as incorporated into the Contract Documents.
 
     1.17  Contract Implementation Documents means the detailed, procurement
documents, engineering reports, Shop Drawings, and Submittals, including
drawings and other documents which are prepared by Contractor or its
Subcontractors, which are accepted in writing by Owner or Owner’s
Representatives, and which detail how Contractor or its Subcontractors will
perform the Work.
 
     1.18  Contract Price shall have the meaning set forth in Subarticle 12.1
and Exhibit D.
 
     1.19  Contract Time means the number of Days or the dates stated in the
Contract to complete the Work on or before all of the Milestone Dates identified
in Exhibit B, including but not limited to: (i) achieving Mechanical Completion,
Provisional Acceptance, Substantial Completion, and Final Completion of Units 1
and 2, respectively; and (ii) completing the Work so that it is ready for Final
Payment as delineated in Article 12.
 
     1.20  Contractor means ALSTOM Power Inc. with whom Owner has entered into
this Contract for the performance of the Work covered thereby.
 
     1.21  Contractor Change Request shall have the meaning set forth in
Subarticle 13.2.
 
     1.22  Contractor Specifications means the specifications prepared by
Contractor for the performance of all aspects of the Work developed by
Contractor and reviewed and accepted, in writing, by Owner. Such Contractor
Specifications as they are reviewed and accepted in writing by Owner shall
become part of the Contract Documents.
    
     1.23  Contractor’s Delay Costs shall have the meaning set forth in
Subarticle 13.3.1.
 
     1.24  Contractor’s Representative shall have the meaning set forth in
Subarticle 10.2.
 
     1.25  Day means a calendar day commencing at 12:00 a.m.
 
     1.26  Defective or Defect means, with respect to the Work performed
hereunder or any portion thereof, Work not conforming to the Contract Documents,
including without limitation, the standards and the requirements of Subarticles
15.1 and 15.2.
 
     1.27  Detailed CPM Schedule means the detailed critical path method
schedule required to be submitted by Contractor pursuant to Subarticle 8.3.
 
     1.28  Effective Date means the date Owner and Contractor made and entered
into this Contract.
 
     1.29  Engineer shall mean the consulting engineer retained by Owner, that
shall be designated as an Other Owner-Authorized Party. As of the date of this
Contract, Owner’s Engineer is identified as Burns & McDonnell Engineering
Company, Inc. (“Burns & McDonnell”), but is subject to change at the option of
the Owner during the course of the Project. If Burns & McDonnell ceases to be
the Engineer at any time during the course of the Project and Owner does not
retain a new consulting engineer, then the term “Engineer” shall mean Owner.

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     1.30  Environmental Laws means any and all Permits and all applicable
codes, laws, rules, and regulations relating to actual or potential effect on
human health, safety, or the environment; the disposal of materials; the
discharge or release of chemicals, gases, or other substances or materials into
the environment; or the presence of such materials, chemicals, gases, or other
substances. Owner shall be responsible for obtaining and complying with any
environmental Permits. Contractor shall be responsible for complying with any
Performance Guarantees contained herein.
 
     1.31  Event of Default shall have the meaning set forth in Subarticle 20.2.
 
     1.32  FGD System means the limestone based, wet scrubber component of an
AQC System, complete with the AQC Material Handling Systems and all other
components, accessories and appurtenances, necessary for a complete and operable
system, to be added to and placed in successful continuous operation at Unit 1
and 2 of the Plant and comprising a portion of the Project and the Work, as more
particularly described in the Technical Specifications.
 
     1.33  Final Completion means the full performance by Contractor of all of
Contractor’s obligations under the Contract Documents and all revisions and
amendments thereof, and shall require successful achievement of Mechanical
Completion, Provisional Acceptance, Substantial Completion (including passing of
all Performance Tests), the delivery of all required Lien waivers by Contractor
to Owner, Owner’s delivery to Contractor of a written Certificate of Final
Completion, a resolution of all Punchlist items, and Owner’s draw down of
liquidated damages (if any) from the Five Percent LOC, Performance LOC, or
Retainage, as the case may be.
 
     1.34  Final Completion Date means the date Contractor achieves all of the
requirements to complete all of the Work as set forth in Exhibit E.
 
     1.35  Five Percent LOC means “Five Percent Letter of Credit” and shall have
the meaning set forth in Section 12.12.
 
     1.36  Force Majeure shall have the meaning set forth in Subarticle 24.1.
 
     1.37  Force Majeure Delay Date means the date of commencement of a Force
Majeure event specified in the Notice provided by the Party claiming the
existence of a Force Majeure event pursuant to Subarticle 24.2.
 
     1.38  Governmental Agency means any department, commission, board,
regulatory authority, bureau, legislative body, agency, political subdivision,
or instrumentality, and their successors, of any federal, state, local, or
municipal government.
 
     1.39  Guaranteed Catalyst Period shall have the meaning set forth in
Subarticle 15.8.1.
 
     1.40  Guaranteed Unit 1 Mechanical Completion Date means the date set forth
in Exhibit B, as such date may be changed from time to time in accordance with
Article 13 of this Contract.
 
     1.41  Guaranteed Unit 1 Provisional Acceptance Date means the date set
forth in Exhibit B,, as such date may be changed from time to time in accordance
with Article 13 of this Contract.
 
     1.42  Guaranteed Unit 1 Substantial Completion Date means the date set
forth in Exhibit B, as such date may be changed from time to time in accordance
with Article 13 of this Contract.
 
     1.43  Guaranteed Unit 2 Mechanical Completion Date means the date set forth
in Exhibit B, as such date may be changed from time to time in accordance with
Article 13 of this Contract.
 
     1.44  Guaranteed Unit 2 Provisional Acceptance Date means the date set
forth in Exhibit B, as such date may be changed from time to time in accordance
with Article 13 of this Contract.
 
     1.45  Guaranteed Unit 2 Substantial Completion Date A means the date set
forth in Exhibit B, as such date may be changed from time to time in accordance
with Article 13 of this Contract.
 
 
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     1.46  Guaranteed Unit 2 Substantial Completion Date B means the date set
forth in Exhibit B, as such date may be changed from time to time in accordance
with Article 13 of this Contract.
 
     1.47  Hazardous Substances means any and all “hazardous substances,”
“hazardous waste,” “waste,” or “pollutant or contaminant” as any of such terms
may be defined in any Environmental Law, or the regulations promulgated
thereunder, or case law interpreting the same, or any other pollutant or
substance that is regulated under any Environmental Law or that may be the
subject of liability for costs of response or remediation under any
Environmental Law.
 
     1.48  Interim Notice to Proceed means the Notice issued on April 27, 2006
by Owner to Contractor authorizing the Work to proceed, including any amendments
thereto.
 
     1.49  Laws means (1) all applicable federal, state, and local laws,
treaties, ordinances, codes rules and regulations, judgments, decrees,
injunctions, writs and orders of any court, arbitrator or Governmental agency or
authority, (2) all applicable and generally recognized building and safety
standards governing performance of the Work, and (3) all applicable
Environmental Laws and applicable Permits.
 
     1.50  Liens means any mortgage, lien, pledge, claim, charge, lease,
easement, servitude, right of others, security interest or encumbrance of any
kind, including any lien arising pursuant to any statutory or equitable right
permitting Contractor, or its Subcontractors and/or laborers to place a Lien
against any Unit, the Plant, the Site or the Project, as the case may be, for
the value of labor bestowed in connection therewith and/or materials furnished
thereto.
 
     1.51  Limited Notice to Proceed means the Notice issued on February 28,
2006 by Owner to Contractor authorizing limited Work release for selected
engineering, procurement, and fabrication.
 
     1.52  Losses means claims, damages, losses, liabilities, demands, costs,
and expenses, including but not limited to reasonable attorneys’ fees.
 
     1.53  Materials means the materials, supplies, apparatus, equipment,
machinery, and other goods to be provided by Contractor or any Subcontractor, as
part of, or necessary for completion of, the Work and that becomes a permanent
part of the Plant.
 
     1.54  Mercury Control Systems means the systems installed, as part of the
AQC Systems and as specified in the Technical Specification, to reduce the
mercury emissions of Unit 1 and Unit 2.
 
     1.55  mW means megawatt.
 
     1.56  Notice shall have the meaning set forth in Subarticle 29.6.
 
     1.57  Notice to Proceed means the written Notice by Owner to Contractor
releasing Contractor to perform the entire scope of Work under this Contract.
 
     1.58  Operating Emergency means any equipment or Materials failure at the
Plant which causes, or imminently will cause, a reduction in the output of the
affected Unit.
 
     1.59  Other Owner-Authorized Party means any Person so designated by Owner
pursuant to Subarticle 10.1 and Engineer.
 
     1.60  Owner means Kansas City Power & Light Company, with whom Contractor
has entered into this Contract and for whom the Work is to be provided.
 
     1.61  Owner Indemnitees shall have the meaning set forth in Subarticle
18.1.
 
     1.62  Owner’s Representative means the individual(s) appointed by Owner
pursuant to Subarticle 10.1 and any successors.
 
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     1.63  Performance Guarantees means Contractor’s performance guarantees set
forth in Exhibit S while Unit 1 and Unit 2, respectively, are operated by the
Owner in accordance with the design conditions stated in the Contract Documents,
including the Technical Specifications.
 
     1.64  Performance Tests means the operation of the AQC Systems, SCR
Systems, and Unit 2 Boiler in accordance with the requirements contained in
Exhibit S for the purpose of determining the AQC and SCR Systems’ and the
Boiler’s level of achievement with respect to the Performance Guarantees.
 
     1.65  Permits means all permits, licenses, approved plans, contracts,
filings, authorizations, approvals, easements or rights-of-way required by or
entered into with any Governmental Agency in connection with the proper conduct
and performance of the Work, including all building permits, contractor’s
licenses, zoning and land use permits, environmental permits, conditional use
permits, and all necessary licenses, authorizations, approvals, and permits
obtained from any Governmental Agency.
 
     1.66  Person means an individual, partnership, corporation, company,
limited liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, governmental authority, or other
entity.
 
     1.67  Plant means Owner’s Iatan Unit 1 and Unit 2.
 
     1.68  Prime Interest Rate means the effective “prime rate” of interest for
large U.S. money center commercial banks published under “Money Rates” by The
Wall Street Journal.
 
     1.69  Progress Reports means the engineering, procurement, progress, and
construction progress reports required by the Contract Documents.
 
     1.70  Project means, collectively, (a) the Work, responsibilities,
obligations and warranties of Contractor as provided in the Contract Documents,
including the securing of all Contractor Permits; (b) the responsibilities and
obligations of Owner as provided in this Contract, including the securing of all
Owner Permits; and (c) any and all other elements of designing, engineering,
procuring, constructing, erecting, start-up and testing, successful continuous
operating and maintaining the AQC Systems, SCR Systems, the Boiler, and their
respective appurtenances as set forth in the Contract Documents.
 
     1.71  Project Critical Path means the longest calculated path of activities
in the Project Schedule as defined under Article 8.
 
     1.72  Project Schedule means the Baseline Schedule, as defined in Section
8.4, for Contractor’s timely completion of the Work as prepared by Contractor
pursuant to Article 8 which shall include all of the Milestone Dates identified
in Exhibit B.
 
     1.73  Provisional Acceptance Test means a test as measured by Owner’s
monitoring equipment, including Owner’s Continuous Emission Monitoring System,
to determine the applicable Unit’s ability to meet the Provisional Acceptance
requirements stated in Exhibit E.
 
     1.74  Prudent Industry Practice means for boiler and pollution control
projects and systems utilized in connection with coal-fired power generation
facilities similar to the Plant, with respect to each of engineering,
procurement, design, construction, operation, testing, and maintenance of the
Work, the practices, methods, and acts engaged in or approved by a significant
portion of the electric generation industry of the United States (including
utilities and independent power producers) that at a particular time, in the
exercise of reasonable judgment in light of the facts known or that reasonably
should have been known at the time a decision was made, would have been expected
to accomplish the desired result in a manner consistent with the Laws, the
Contract Documents, reliability, safety, environmental protection, economy, and
expedition. Prudent Industry Practice is not intended to be limited to the
optimum practice, method, or act, to the exclusion of all others, but rather is
a spectrum of possible practices, methods or acts employed by contractors,
including those involving the use of new concepts or technology, and having due
regard for current editions of applicable design, safety and maintenance codes
and standards, manufacturers’ warranties and applicable Laws.
 
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     1.75  Punchlist means administrative items or other items of the Work
identified by Owner (with the consultation of the Engineer) in writing on or
prior to the date of Substantial Completion of Unit 1 and Unit 2, respectively,
which have not been completed but which do not affect the safe start-up and
testing or successful continuous operation of any component of the Work and
which are to be corrected, fixed or repaired by Contractor at its own expense as
a condition to achieving Final Completion.
 
     1.76  Purchase Order means a document issued by Owner to Contractor, which
defines among other things the scope, price, and duration of the Work and the
Contract Documents for the Project. Any pre-printed terms and conditions
contained on the Purchase Order are superseded by this Contract and are null and
void.
 
     1.77  Samples means physical examples of Materials, or workmanship that are
representative of some portion of the Work and which establish the standards by
which such portion of the Work will be judged.
 
     1.78  SCR Material Handling Systems means but is not limited to the ammonia
storage tank and appurtenances to be added to the Plant and comprising a portion
of the Work, as specified in the Technical Specifications.
 
     1.79  SCR System means the selective catalytic reduction system specified
in the Technical Specifications, including the Catalyst, SCR Material Handling
Systems, ammonia injection grid, ductwork, and appurtenant Materials for Units 1
and 2.
 
     1.80  Shop Drawings means all drawings, diagrams, illustrations, schedules,
and other data or information which are specifically prepared or assembled by or
for Contractor and submitted by Contractor to illustrate some portion of the
Work.
 
     1.81  Site means the real property on which the Work will be performed.
 
     1.82  Standard Warranty Work shall have the meaning set forth in Subarticle
15.4.
 
     1.83  Subcontractor means any individual or entity, including agents,
suppliers, vendors, materialmen, mechanics, carriers, warehousemen, artisans,
and subconsultants, that has a contract with Contractor for the performance of
any part of the Work, including those individuals or entities of whatever tier
having a subcontract for performance of any part of the Work with the
Subcontractors specified herein.
 
     1.84  Submittal means Shop Drawings, product data, Samples, or other
documents that are prepared by Contractor or a Subcontractor and submitted by
Contractor as a basis to evaluate the use of its Materials and construction
requirements for incorporation in or installation of the Work or needed to
describe proper installation, operation and maintenance, or technical
properties.
 
     1.85  Technical Specifications means the conformed specifications prepared
by Owner or Owner’s Engineer and Contractor and incorporated herein as Exhibit A
including the attachments attached thereto that are reviewed and verified by
Contractor and are part of the Contract Documents and establish the
corresponding initial requirements of the Contract.
 
     1.86  Underground Facilities means all pipelines, conduits, ducts, cables,
wires, manholes, vaults, tanks, tunnels, or other such facilities or
attachments, and any encasements containing such facilities which have been
installed underground to furnish any of the following services or materials:
electricity; gases; steam; liquid petroleum products; telephone or other
communications; cable television; sewage and drainage removal; traffic or other
control systems; or water.
 
     1.87  Unit means either one of Unit 1 or Unit 2 at Iatan Electric
Generating Station.
 
     1.88  Unit 1 Auxiliary Power Guarantee means the amount of power guaranteed
in Exhibit S.
 
     1.89  Unit 1 Final Completion means that each of the conditions to Unit 1
Final Completion set forth in Exhibit E have been achieved in full.
 
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     1.90  Unit 1 Guaranteed Performance Tests means the tests set forth in the
Technical Specifications to be conducted by Owner to determine Unit 1’s
compliance with the Performance Guarantees stated in Exhibit S and the Technical
Specifications.
 
     1.91  Unit 1 Mechanical Completion means that each of the conditions to
Unit 1 Mechanical Completion set forth in Exhibit E have been achieved in full.
 
     1.92  Unit 1 Mechanical Completion Certificate means a certificate issued
by Owner to Contractor confirming that Unit 1 Mechanical Completion has
occurred.
 
     1.93  Unit 1 Performance Guarantees means Contractor’s guaranteed
performance for the Work for Unit 1 as described in detail in Exhibit S.
 
     1.94  Unit 1 Provisional Acceptance means that each of the conditions to
Unit 1 Provisional Acceptance set forth in Exhibit E have been achieved in full.
 
     1.95  Unit 1 Substantial Completion means that each of the conditions to
Unit 1 Substantial Completion set forth in Exhibit E have been achieved in full.
 
     1.96  Unit 2 Auxiliary Power Guarantee means the amount of power guaranteed
in Exhibit S.
 
     1.97  Unit 2 Guaranteed Performance Tests means the tests set forth in the
Technical Specifications to be conducted by Owner to determine Unit 2’s
compliance with the Performance Guarantees stated in Exhibit S.
 
     1.98  Unit 2 Mechanical Completion means that each of the conditions to
Unit 2 Mechanical Completion set forth in Exhibit E have been achieved in full.
 
     1.99  Unit 2 Final Completion means that each of the conditions to Unit 2
Final Completion set forth in Exhibit E have been achieved in full.
 
     1.100  Unit 2 Mechanical Completion Certificate means a certificate issued
by Owner to Contractor confirming that Unit 2 Mechanical Completion has
occurred.
    
     1.101  Unit 2 Performance Guarantees means Contractor’s guaranteed
performance for the Work for Unit 2 as described in Exhibit S.
 
     1.102  Unit 2 Provisional Acceptance means that each of the conditions to
Unit 2 Provisional Acceptance set forth in Exhibit E have been achieved in full.
 
     1.103  Unit 2 Substantial Completion means that each of the conditions to
Unit 2 Substantial Completion set forth in Exhibit E have been achieved in full.
 
    1.104  Work means all of the services, labor, and Materials needed for the
design, engineering, procurement, manufacturing, fabrication, distribution,
construction, supervision, training, pre-commissioning, commissioning, start-up,
and testing, training and other related services required to be provided by
Contractor to fully complete the Project pursuant to the terms of the Contract
Documents.
 
     1.105  Work Breakdown Structure shall have the meaning set forth in
Subarticle 8.5.1.

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ARTICLE 2  
 
DESCRIPTION OF CONTRACT
 
     2.1    Engagement of Contractor. Owner hereby engages Contractor to perform
all of the Work in accordance with the requirements of the Contract Documents
for the Contract Price, and Contractor hereby accepts such engagement.
Contractor acknowledges that Owner is relying upon the expertise of Contractor
to furnish the completed Project in accordance with the requirements of the
Contract Documents.
 
     Specifically as to the Unit 1 SCR, Owner and Contractor acknowledge and
agree that the Contract, the Contract Documents, the Contract Price, the
Contract Time and the Project Schedule are based upon the Owner’s original Unit
1 SCR Specification dated March 2, 2006, including Addenda 1 and 2, as modified
by Contractor's exceptions thereto, all of which are attached hereto as Exhibit
A4-1 (the “Base SCR Specification”). Owner and Contractor further acknowledge
and agree that Owner's revised Unit 1 SCR specification (the “Revised SCR
Specification”) will be developed and when completed shall be attached hereto as
Exhibit A4-2 and will replace and supersede Exhibit A4-1, the Base SCR
Specification and will form a part of the contract as to the Unit 1 SCR. Owner
and Contractor will negotiate in good faith to conform the Revised SCR
Specification, and any affected Contract Documents, on or before September 12,
2006. If no agreement can be reached, then the Base Specification, the Contract
Price and the Project Schedule shall remain in effect subject to the provisions
of Article 13.
 
     Additionally, as to the Unit 2 Elevators, Owner and Contractor acknowledge
and agree that the Contract, the Contract Documents, the Contract Price, the
Contract Time and the Project Schedule are based upon two Vendors’ quotations
for the passenger and freight elevators  dated June 22, 2006, from Otis Elevator
Company, and July 21, 2006, from Alimak Hek, Inc., both of which are attached
hereto as Exhibit A2S-1 (the “Base Elevator Quotations”), but are not part of
the Contract Documents for the Project. Owner and Contractor further acknowledge
and agree that Owner’s specification for the elevators  (the “Elevator
Specification”) will be developed based upon these quotations and the scope
exceptions set forth therein, as well as Contractor’s comments on scope as set
forth in an email dated July 25, 2006 from Mike Sivas to Steve Jones, Brent
Davis and Jeffrey Fleenor, and when completed shall be attached hereto as
Exhibit A2S-2.  Owner and Contractor will negotiate in good faith to develop the
Elevator Specification on or before September 12, 2006. Once agreed upon, the
terms of Exhibit A2S-2 and the agreed pricing, scope of Work and schedule,
subject to the conditions stated herein and the result of the negotiations, will
be reflected in a Change Order amending the Contract Documents, including any
necessary Contract Price and scope of Work adjustments, on or before September
12, 2006.  If the Parties are unable to agree on the price, and scope of Work
for the elevators and the exceptions, then the value of the elevators reflected
in Exhibit D to the Contract and the scope of Work to provide the elevators
shall be deducted by Change Order from the Contract Price.
 
     2.2   Conflicting Provisions. In the event of any conflict between or among
the Contract Documents and the Contract Implementation Documents, the following
order of interpretation shall prevail: (a) the terms of a duly authorized and
executed Change Order; (b) the Contract; (c) the terms of Exhibits B through W;
(d) the terms of Exhibit A; (e) Contractor Specifications, if any; (f) the
Contract Implementation Documents; and (g) the Purchase Order. Notwithstanding
the foregoing, the several documents forming the Contract Documents shall be
taken as mutually explanatory of one another; however, subject to dispute
resolution provisions of Article 16, Owner shall decide priority where there
exists ambiguities, discrepancies, conflicts, or inconsistencies between or
among respective Contract Documents of equal precedence to each other.
Notwithstanding the above, Contractor acknowledges that it has provided data to
Owner which have been attached to Exhibit A as “Contractor exhibits” (exhibits
A2A, A2C, A2D, and A2P). The Parties agree that to the extent such Contractor
exhibits do not accurately reflect the Work necessary to fulfill Contractor's
obligation to design, manufacture, procure, and construct the complete systems
reflected in such Contract Documents, Contractor cannot request a Change Order.
 
     2.3    Section and Exhibit References. Any reference in this Contract to a
“Section,” “Subsection,” “Article,” “Subarticle,” or “Exhibit,” is a reference
to an article, subarticle, section, subsection, or exhibit to this Contract
unless otherwise specified.
 
     2.4    Interpretation. As used in this Contract, any agreement, document or
drawing defined or referred to herein shall include each amendment, modification
and supplement thereto and waiver thereof as may become effective from time to
time, except where otherwise indicated. Any term defined by reference to any
other agreement or document shall have such meaning whether or not such
agreement or document remains in effect. The terms “hereof,” “herein,”
“hereunder” and comparable terms refer to the entire agreement with respect to
which such terms are used and not to any particular article, section or other
subdivision thereof. A reference to any specific Laws includes any amendment or
modification to such Laws (provided that such amendment or modification enacted
after the Effective Date may constitute a basis for a Change pursuant to Article
13). Owner and Contractor may be referred to individually as “Party” or
collectively as “Parties.” A reference to any Person or Party includes its
permitted successors and assigns. A reference to a company, corporation,
partnership or other entity shall include its successors and permitted assigns.
If any provision of this Contract contemplates that the Parties shall negotiate
or agree to any matter after the date that this Contract is signed, such
provision shall be construed to include an obligation of the Parties to
negotiate or reach an agreement in good faith within the spirit and intent of
mutual cooperation and the content of this Contract and any failure of the
Parties to negotiate or agree shall be a dispute within the meaning of Article
16.
 
 
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ARTICLE 3  
 
SCOPE OF WORK
 
In addition to the specific requirements relating to the Work contained in the
Contract Documents, Contractor shall have the following obligations with respect
to the Work:
 
     3.1   General. All parts of the Work indicated or reasonably inferred from
the terms of this Contract and not expressly mentioned herein, and all of the
usual and/or necessary Work to complete projects that are the same or similar to
the Project, shall be furnished and executed as if it were expressly required by
this Contract. Without limiting the generality of the foregoing, scope content
details omitted from this Contract shall, as a minimum, be defined by the
details and meet the performance requirements of the Technical Specifications.
While Owner is conducting the Performance Tests, Contractor must comply with the
requirements of the Contract Documents, including Exhibit S.
 
     3.2   Procurement. Contractor shall, and shall cause its Subcontractors to,
procure and pay for, in Contractor’s name as an independent contractor and not
as an agent for Owner, the following items: all Contractor and Subcontractor
labor, Materials, tools, equipment, all Contractor Permits, insurance, security,
supplies, manufacturing and related services (whether on-site or off-site) for
construction of the AQC and SCR Systems for Units 1 and 2 and the Boiler for
Unit 2 and incorporation into the Plant which are required for completion of the
Work in accordance with this Contract and are not explicitly specified to be
furnished by Owner. All such items must comply with the Technical
Specifications. Contractor shall also provide management and supervision
necessary to satisfactorily engineer, design, fabricate, deliver, receive,
off-load, store, construct, inspect, start-up, and test the AQC and SCR Systems
for Units 1 and 2, and the Boiler for Unit 2 all in accordance with the
provisions of the Contract Documents.
 
     3.3   Commencement of Work. Contractor shall commence the Work as soon as
practicable after receipt of the Notice to Proceed. Contractor shall not be
authorized to commence any Work, nor shall any Work be deemed to have been
commenced under this Contract, prior to the date specified in the Notice to
Proceed; provided that, pursuant to such terms and conditions as Owner and
Contractor may agree upon, Contractor shall proceed with so much of the Work as
may be specified in the Limited Notice to Proceed, the Interim Notice to
Proceed, and any amendments thereto, from the date specified therein. Contractor
warrants that it has reviewed the Technical Specifications and agrees that they
are sufficient to perform all of the Work. Contractor further agrees that, after
the Effective Date, it will not make any claims for additional costs or
extensions of the Milestone Dates based on the content of the Technical
Specifications being insufficient to complete the Work.
 
     3.4   Management and Conduct of the Work. Contractor shall manage and
conduct the Work in accordance with the terms of the Contract Documents. Without
limiting the generality of the foregoing, Contractor agrees that:
 
   3.4.1  Selection and Approval of Contractor’s Representative and Site
Construction Manager. Contractor shall, promptly following the Effective Date,
select and give Owner written Notice of the identity of the proposed
Contractor’s Representative and Contractor employee who will manage all of the
Work at the Site (the “Site Construction Manager”), which persons shall be
subject to the prior consent of Owner, which consent shall not be unreasonably
withheld. Contractor’s Representative shall be authorized to act on behalf of
Contractor and shall be the individual with whom Owner or Owner’s Representative
may consult at all reasonable times, and whose instructions, requests, and
decisions will be binding upon Contractor as to all matters pertaining to this
Contract and the performance of the Parties hereunder (provided neither any
amendment or modification of this Contract nor any other change shall be
effected except by a Change Order). Contractor’s Representative shall also have
the responsibility to ensure that the Work being performed is in accordance with
all provisions of the Contract Documents. At all times, the Work to be performed
by Contractor at the Plant Site shall be conducted and managed under the
auspices of a competent Site Construction Manager experienced in engineering,
procurement and construction of air quality control and selective catalytic
reduction systems, pulverized coal-fired boilers, and incorporating each with
their component parts into power plants. The Site Construction Manager shall be
designated by Contractor no later than thirty (30) Days prior to the date of
Contractor’s scheduled mobilization on the Plant Site and shall be listed as one
of Contractor’s Key Personnel on the attached Exhibit F. The Site Construction
Manager’s duties shall include, among other things, coordination of Work between
all entities performing Work on the Plant Site on behalf of Contractor,
including Contractor’s Subcontractors. Contractor shall not change the Site
Construction Manager or Contractor’s Representative, or other key members of
Contractor’s staff assigned to perform the Work without the prior consent of
Owner, which consent shall not be unreasonably withheld.
 

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   3.4.2  Key Personnel. Concurrently with the appointment of Contractor’s
Representative, Contractor shall provide Owner with a list of all Key Personnel
and their respective resumes which Contractor intends to use in the performance
of the Work. A preliminary list of Key Personnel of Contractor is set forth in
Exhibit F. Contractor shall not replace any such personnel at any time without
the prior written consent of Owner, which consent shall not be unreasonably
withheld or delayed. Contractor shall exert its best efforts to promptly replace
any Key Personnel to which Owner reasonably objects in writing. Contractor shall
at all times enforce good order among its employees and those of Subcontractors
and shall not employ or permit any Subcontractor to employ in connection with
its performance under this Contract any unfit person or anyone not skilled in
the work assigned to such person. Contractor shall use reasonable efforts in the
employment of labor (whether directly or indirectly employed) so as to cause no
conflict or interference with or between the various trades, or delay in
performance of Contractor’s obligations. Whenever required by Laws, Contractor
agrees to employ only licensed personnel to perform engineering, design,
architectural or other services in the performance of the Work. Contractor shall
have and exercise full responsibility for compliance hereunder by Contractor’s
employees and Subcontractors generally, and in particular, with respect to
Contractor’s portion of the Work; shall itself comply with all Laws, and require
and be directly responsible for compliance therewith on the part of Contractor’s
employees and Subcontractors; and shall directly receive, respond to, defend and
be responsible for all citations, assessments, fines or penalties which may be
incurred by reason of Contractor’s failure or failure on the part of
Contractor’s employees or Subcontractors to so comply.
 
     3.5   Skill and Judgment. Contractor shall perform the Work in accordance
with the Contract Documents and Prudent Industry Practice.
 
     3.6   Manufacturer’s Directions. Unless the Contract Documents otherwise
require, Contractor shall comply with the manufacturer’s instructions and
printed directions for any Materials or related systems supplied by such
manufacturer.
 
     3.7   Written Progress Reports. Contractor shall submit to Owner Progress
Reports and participate in regularly scheduled meetings in accordance with the
provisions of Article 8 and shall participate in such other meetings as Owner
reasonably may request.
 
   3.7.1  Monthly Progress Reports. Contractor shall deliver to Owner no less
frequently than monthly, by the tenth (10th) Day of each month, a written
report, in a format similar to Exhibit G, of the progress of the Work during the
preceding month (each a “Monthly Progress Report”) and on all matters deemed
significant by Owner.
 
   3.7.2  Reports on Events of Force Majeure and Emergencies. In addition to all
other reports required under this Contract, should any Force Majeure event,
significant problem, emergency, strike, injury, work stoppage or legal problem
be anticipated, or any Force Majeure or other unanticipated event occur which
might adversely affect Contractor’s ability to perform its obligations
hereunder, Contractor shall immediately prepare a written report detailing all
available information and steps being taken to correct such Force Majeure or
significant problem, emergency, or other event or problem and deliver such
significant event report to Owner as soon as practicable. Owner may at any time
request a significant event report on any event which Owner reasonably regards
as being significant.
 
   3.7.3  Damage Reports. If, prior to each of their respective dates of
Substantial Completion, the AQC Systems, SCR Systems, Boiler or any component or
portion thereof is materially damaged, Contractor shall provide Owner, as soon
as practicable after the occurrence of such damage, a damage report detailing
such occurrence, any required repairs and the estimated duration of such
repairs.
 
   3.7.4  Additional Reports. Contractor shall also provide written Notice to
Owner in accordance with Subarticle 29.6 of any significant changes or
developments in the Work. Contractor shall make available, and upon Owner’s
request shall furnish, to Owner such documents necessary for Owner to review the
Work. Contractor shall, upon Owner’s request, provide to Owner or Engineer
technical information regarding the design of the AQC Systems, the SCR Systems,
or the Unit 2 Boiler; provided that, Contractor shall not be obligated to
provide proprietary technical data regarding equipment manufactured by or for
Contractor and not provided by Contractor to other Persons so long as the
non-proprietary data provided by Contractor shall be of such type and detail as
is customarily provided by vendors and provides Owner a reasonable basis for
technical review of the design of the AQC Systems, the SCR Systems, and the Unit
2 Boiler and the ability to adequately perform maintenance and secure bids for
such maintenance. Except for Owner’s responsibilities set forth in Article 7 of
this Contract, Contractor shall be solely responsible for all construction
means, methods, techniques, sequences and procedures and for coordinating all
portions of the Work under this Contract.
 

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     3.8   Progress Meetings. During performance of the Work, periodic progress
meetings shall be held at the Plant Site, in Contractor’s office, Owner’s
office, or at such other place mutually agreeable to the Parties. Such meetings
shall be at least weekly or as otherwise agreed. All matters bearing on the
progress and performance of the Work and the Project Schedule since the
preceding progress meeting shall be discussed and resolved, including any
previously unresolved matters, deficiencies in the Work or the methods being
employed for the Work, and problems, difficulties, or delays which may be
encountered. Contractor shall be represented by Contractor’s Representative and
Owner shall be represented by the Owner’s Representative. Owner will provide
minutes of all progress meetings to Contractor. Contractor, with the reasonable
agreement of Owner, shall retain the right to amend the minutes. In addition,
Contractor’s Representative and employees appropriate for the stage of the Work
must attend daily Site coordination meetings held at the Plant Site.
 
     3.9   Monitoring of Schedule. Contractor shall provide regular monitoring
of the Project Schedule as the Work progresses, review the Project Schedule for
the Work not started or incomplete, and take necessary action to meet the
Project Schedule.
 
     3.10   Quality Control. Contractor shall establish, implement and maintain
in accordance with the requirements of the Technical Specifications, a quality
control program to meet applicable Laws for the Work and to meet the
requirements of the Contract Documents and require Subcontractors to establish,
implement and maintain appropriate quality control programs with respect to
their portion of the Work. Notwithstanding any such quality control programs
established by Subcontractors, Contractor shall be responsible for assuring that
the Work and the performance thereof is in compliance with the requirements of
the Contract Documents and applicable Laws, Permits, and Prudent Industry
Practice.
 
     3.11   Safety, Loss Control and Emergencies.
 
   3.11.1  Safety and Loss Control Program. Contractor shall implement a safety
and loss control program that meets the minimum requirements of Owner and comply
with the program during the Work. The inspection, utilization or acceptance of
all or any portion of the Work by Owner shall not absolve Contractor of its duty
of furnishing a safe workplace for all personnel engaged in the Work. Contractor
shall not expose Owner’s employees or Owner’s other contractors or their
employees to (a) any chemical substance or Hazardous Substances used or brought
to the surface by Contractor or (b) any unsafe or hazardous condition in
connection with performance of the Work, unless Contractor has taken appropriate
safety and protective measures to prevent injury to persons or property. Nothing
herein shall relieve Contractor of its obligations and liability for the safe
handling and utilization of such chemical substance or Hazardous Substances.
 
   3.11.2  Action to Prevent Injury, Loss, or Damage in Emergencies. Contractor
shall take actions, in the event of any emergency endangering life or property,
as may be reasonable and necessary to prevent, avoid, or mitigate injury,
damage, or loss and, as soon as possible, report any such incidents and
Contractor’s response thereto to Owner. If Contractor has not complied with the
Laws or has not taken reasonable precautions for the safety of the public or
protection of the Work and the structures, or property on or adjacent to the
Site, and thereby creates or causes an emergency requiring immediate action,
then Owner, with or without notice to Contractor, if the delay which would
result from giving Contractor such notice would further endanger persons or
property, may, but shall be under no obligation to, take any action that Owner
shall deem necessary, including causing requisite work to be performed and
materials and equipment to be furnished, to mitigate or remedy the emergency;
provided, however, that Owner’s action or inaction shall not limit Contractor’s
liability or relieve Contractor of its obligations under the Contract Documents;
and further provided, that Owner shall take action reasonably required under the
circumstances until Contractor can be notified and respond. The actions,
performance of emergency work, or provision of materials and equipment by Owner
or its agents or employees shall be for the account of Contractor. Contractor
shall reimburse Owner for any reasonable expenses incurred by taking such
actions, performing any Work or emergency work, or furnishing any materials and
equipment. Except to the extent of Owner’s or its contractor’s (other than
Contractor or its Subcontractors) negligence, Owner shall not be liable to
Contractor for any damages or costs incurred by reason of Owner’s exercise of
its rights pursuant this Subarticle.
 
 
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      3.12   Protection of the Work and Adjacent Property.
 
   3.12.1  Adequate Protection of the Work. Contractor shall provide and
maintain adequate protection of all portions of the Work and the property of
Contractor from physical loss and damage, including vandalism, theft, malicious
mischief and damage by weather. Contractor shall provide and maintain adequate
protection of the property of Owner and others connected with the Work (when
affected or utilized during performance of the Work) from physical loss and
damage, but not including vandalism, theft or malicious mischief by other than
Contractor and those under its control.
 
   3.12.2  Protection by Subcontractors. Contractor shall conduct its operations
and shall require all Subcontractors to conduct their operations so as to
protect from damage to existing structures or the Work or work installed by
Owner or Owner’s other contractors or subcontractors.
 
   3.12.3  Adequate Protection of Property. Contractor shall perform the Work in
such a manner so as to avoid damage and to protect any and all property
including parallel, converging, and intersecting electric lines and poles,
telephone lines and poles, highways, waterways, railroads, sewer lines, natural
gas pipelines, oil pipelines, steam pipelines, water pipelines, drainage
ditches, culverts, and any and all property of third parties.
 
     3.13   Storage and Related Matters. Contractor shall warehouse or otherwise
provide appropriate storage (in accordance with manufacturers’ recommendations)
for all Materials and other supplies required for performance of the Work and
provide for the procurement or disposal of all soil, gravel and similar
materials required for performance of the Work. All Materials and other supplies
which are stored at a location other than the Site shall be (a) stored in a
warehouse or other appropriate location approved in advance in writing by Owner,
(b) properly tagged and identified for the Work and segregated from other goods,
and (c) properly insured.
 
     3.14   Royalties and License Fees. Contractor shall pay all required
royalties and license fees and shall procure, as required, the appropriate
proprietary rights, licenses, contracts and permissions for materials, methods,
processes and systems incorporated into the Work. In performing the Work
hereunder, Contractor shall not incorporate into the Work any materials,
equipment, methods, processes or systems which may result in Losses against
Owner or Contractor arising out of infringement of any patent rights,
copyrights, or proprietary rights. Contractor shall satisfy all demands that may
be made at any time for such royalties or fees, and Contractor shall be solely
liable for any Losses related thereto.
 
     3.15   Project Procedures Manual. Within thirty (30) Days after the
Effective Date, Contractor shall submit to Owner’s Representative for review and
approval, such approval not to be unreasonably withheld, Contractor’s proposed
Project Procedures Manual which shall, at a minimum, cover the topics described
in Section 01100 of the Technical Specifications.
 
     3.16   Contractor Permits. Contractor shall obtain and pay for all Permits
necessary for the performance of the Work which are required by Laws to be in
Contractor’s name. Contractor shall provide Owner with engineering and design
data, information and support with respect to the design and performance
characteristics of the Project to the extent reasonably requested or required by
Owner to assist Owner in obtaining all Owner Permits. Contractor shall comply
with all Laws applicable to the prosecution of the Work. If Contractor becomes
aware that any Contract Documents or Contract Implementation Documents are at
variance with applicable Permits or Laws, Contractor shall promptly notify
Owner. If such variance is due to a change in the applicable Permits or Laws
enacted or adopted after the Effective Date, the provisions of Subarticle 13.7
shall apply.
 
     3.17   Operations Personnel Training. Contractor shall (a) train, in up to
three groups, up to twenty-five (25) qualified individuals provided by Owner
pursuant to Subarticle 7.4 of this Contract with the training in the operations
of the AQC Systems, the SCR Systems, and the Unit 2 Boiler specified in the
Technical Specifications, in accordance with a training program to be approved
by Owner, (b) assist Owner with the start-up and testing activities, and
(c) assist Owner with all Performance Tests. Contractor shall bear the cost of
its employees assisting Owner with start-up and testing activities of operations
personnel until Substantial Completion. The training program described in clause
(a) of this Subarticle shall consist of two phases: (i) a classroom phase, to
consist of at least two (2) consecutive weeks of instruction in the design,
capabilities, component operation and procedures, and emergency and safety rules
of each of the AQC Systems, the SCR Systems, and the Unit 2 Boiler; and (ii) a
hands-on phase to train operators for the operation of each of the AQC Systems,
the SCR Systems, and the Unit 2 Boiler. Contractor shall submit such training
program in accordance with the outlines provided under the Technical
Specifications to Owner for approval at least 180 Days prior to the Mechanical
Completion Date.
 
 
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ARTICLE 4  

CONTRACTOR PERSONNEL
 
     4.1   Adequate and Competent Labor Force. At all times during the
performance of the Work, Contractor shall keep, and cause to be kept, at the
Site, a sufficient number of skilled workers, laborers and other personnel
necessary to perform and complete each part and portion of the Work in
accordance with the Project Schedule. Following consultation with Contractor,
Owner has the right to disapprove and demand the removal of any craft or
managerial personnel provided by Contractor or its Subcontractors, and
Contractor shall then promptly cause such personnel to be removed.
 
     4.2   Wages and Benefits. Contractor shall be responsible for payment of
all wages, at the applicable “Prevailing Wage” as that term is defined by the
Missouri Division of Labor, fringe benefits, pension or retirement obligations,
housing obligations, social security, unemployment, workers compensation and all
other social taxes or charges for its employees, and Contractor shall ensure
that its Subcontractors at the Site are so responsible for their employees.
 
     4.3   Labor Relations. In the performance of its Work, Contractor shall
comply with, and shall require its Subcontractors of all tiers at the Site to
comply with, the terms of the National Maintenance Agreements and/or their equal
under similar National Maintenance Agreements.
 
   4.3.1  Jurisdictional Disputes. All jurisdictional disputes arising out of
the performance of the Work shall be settled by application of the provisions of
the National Maintenance Agreements.
 
   4.3.2  Copies of National Maintenance Agreements Furnished to Owner.
Contractor and its Subcontractors at the Site shall furnish to Owner copies of
the applicable National Maintenance Agreements along with written permissions
for their use by the affected International Union(s). Contractor and its
Subcontractors at the Site shall also furnish a copy of the site extension
approval(s) granted by the International Union(s) prior to commencing the Work.
 
   4.3.3  Pre-Job Conferences. Contractor and its Subcontractors at the Site
shall conduct pre-job conferences, and assign Work to the appropriate crafts
according to the recognized and traditional jurisdiction.
 
     4.4   Drug and Alcohol Testing. All Contractor personnel, including
administrative and supervisory employees, shall be subject to alcohol and
substance abuse screening while at any Owner location. Random screenings
scheduled and/or requested by Owner will be conducted on-site. Contractor will
not be reimbursed for employee lost time on the Project for drug testing.
Consideration will be given to keep Project disruption to a minimum. Initial
random testing expenses incurred as a result of the enforcement of this policy
scheduled and/or requested by an Owner policy administrator will be at no cost
to Contractor. Alcohol and substance abuse screening is performed randomly at
Owner’s Site(s). Owner’s screening policy and procedure is listed in Exhibit K.
Revisions to this policy may be made without notice. Contractor and Contractor’s
Subcontractors shall enforce and administer a drug testing program for their
personnel that shall be no less stringent than Owner’s drug testing program.
 
      4.5   Federal Contracting Requirements. Contractor shall comply with all
Federal Contracting Requirements as set forth in Exhibit M. The terms of Exhibit
M shall apply to Contractor and all Subcontractors.
 
ARTICLE 5  
 
LICENSING AND CODES
 
     5.1   Licensed Engineers. Contractor shall ensure that all engineering
calculations, drawings, specifications, etc., including structural arrangement
drawings, required by Laws to be prepared under the direct engineering of a
design professional licensed by the State of Missouri shall be prepared under
such supervisions and shall be sealed and/or stamped as required by Laws.
 

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     5.2   Contractor License. Contractor shall maintain, and shall require all
Subcontractors to maintain, applicable contractor’s licenses as required by
applicable Laws.
 
     5.3   Law, Codes, and Standards. The Laws referenced in the Contract
Documents establish minimum requirements for the Work. In instances where the
Contract Documents do not specifically reference codes or standards, the
normally applicable codes and standards for the relevant Work shall be followed
by Contractor. Contractor shall not deviate from the applicable codes and
standards referenced in the Contract Documents without the written consent of
Owner’s Representative. Reference to known standards of any technical society,
organization, or association, or to Laws or codes of local, state or federal
authorities means the latest edition of such standard, law or code published and
in effect on the Effective Date as well as those enacted or adopted but not yet
in effect as of the Effective Date, if such standards will be applicable to the
Work. In the event that applicable codes, laws or standards are modified after
the Effective Date, Contractor shall advise Owner of such modification and the
provisions of Article 13 shall apply to determine whether a Change Order is
necessary due to the impact of such modification.
 
ARTICLE 6  
 
OWNER REVIEW
 
     6.1   Owner’s Right to Review and Inspect; Correction of Defects.
Contractor shall provide Owner, Owner’s Representative, Other Owner Authorized
Parties, and/or their designees with: (a) reasonable opportunity to review and
comment on all Shop Drawings, construction drawings, specifications and other
Contract Implementation Documents prepared for, or that may impact, the Work and
its operations as they are developed; (b) the opportunity to inspect, review and
comment on the progress of the Work; and (c) the opportunity to observe, review
and comment on all on-Site tests, including the Performance Tests, and off-Site
tests of the Work, subject to Owner’s observance of safety measures reasonably
deemed by Contractor to be necessary or appropriate. Contractor shall arrange
for such inspection and observance of such tests at the Site or at the mills or
shops of Contractor or, if appropriate, of any Subcontractor where any part of
the Work is being fabricated or manufactured. In order to allow such inspection,
Contractor shall give Owner or its designees reasonable Notice of any inspection
on Site, test of any part of the Work. In order to allow such inspection off
Site, Contractor shall give Owner or its designees reasonable Notice of any
inspection, check-out, or test of any part of the Work which Contractor intends
to attend, and Owner may in its sole discretion attend such inspection,
check-out, or test. Where practical, Contractor shall obtain from its
Subcontractors their test and inspection schedule for engineered products, and
Contractor shall provide said schedule to Owner. Contractor shall correct
Defects identified by Owner, Owner’s Representative, other Owner Authorized
Parties, and/or their designees under this Article 6. Contractor agrees to
consider in good faith any and all comments of Owner, Owner’s Representative,
and Other Owner-Authorized Parties.
 
     6.2   Failure to Provide Notice of Inspection. If Contractor fails to
provide Owner and its designees with reasonable notice of, or access to, any of
the inspections described in this Article 6, and Owner reasonably believes that
it is necessary to dismantle Work in order to conduct such an inspection, then
Contractor shall bear the expense of dismantling and reassembling of such Work.
If Owner requests that Contractor dismantle Work which Owner failed to inspect
despite receipt of a properly delivered Notice from Contractor of the
availability of such Work for an inspection under this Article 6, then, (i) if
such Work is not in conformity with the Contract Documents, Contractor shall pay
the expense of dismantling and reassembling such Work, and (ii) if such Work is
in conformity with the Contract Documents, Owner shall pay the expense of
dismantling and reassembling such Work.
 
     6.3   Review Not Approval. No inspection or review by any person designated
in this Article 6 shall constitute an approval, endorsement or confirmation of
any drawing, plan, manual, specification, Submittal, test, bidder, Work,
program, method of procedure or other work done or an acknowledgment by any such
person that a drawing, plan, specification, Submittal, test, bidder, Work,
program, method of procedure, or that any of the foregoing or other work done
satisfies the requirements of the Contract Documents, nor shall any such
inspection or review relieve Contractor of any of its obligations to perform the
Work so that the Work, when complete, satisfies all the requirements of the
Contract Documents, or relieve Contractor from any liability or responsibility
for injuries to persons or damage to property.
 

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ARTICLE 7  
 
RESPONSIBILITIES OF OWNER
 
Owner shall at Owner’s own expense and at such times as may be required by
Contractor for the successful completion of the Work in accordance with the
Project Schedule:
 
     7.1   Fuel and Utilities. Provide, at Owner’s expense, all coal and other
consumables (except as provided in Article 9) and utilities to be used in the
operation of the Plant, and remove, at its own expense, all process byproducts.
Owner shall provide fuel, oil, gas, for Plant operation and start-up, and
construction power and water in order to support the Project Schedule.
 
     7.2   Review of Submittals. Review of Submittals by Contractor within ten
(10) Business Days from their initial submission and seven (7) Business Days on
any resubmittal. If Contractor believes that a failure by Owner to timely reject
any such Submittals caused an adverse effect on the Critical Path of the
Project, then Contractor shall promptly notify Owner, and the provisions of
Article 13 shall apply. In the event that Owner’s Engineer receives an
extraordinary number of Submittals from Contractor in a particular week, and the
volume of such Submittals will prevent the Owner’s Engineer from performing a
review of all the Submittals within the contractually-required time period set
forth above, then the Owner’s Engineer shall notify the Contractor and the
Parties will agree upon a priority list for review of the Submittals in
question, including an agreed schedule for those Submittals which may be
returned after the ten Business Day time period and a list of those Submittals
which must be returned with the ten Business Day period in order for the
Contractor to maintain the Project Critical Path. So long as the Owner’s
Engineer adheres to the agreed schedule, Contractor will not make a claim for
Owner’s delay.
 
     7.3   Designation of Owner’s Representative. Designate an Owner’s
Representative to act as a single point of contact for Contractor with respect
to the performance of the Work and to provide interface and integration of all
work which is being contracted by Owner to other contractors (if any) for
ancillary facilities on the Plant Site or for the Project.
 
     7.4   Operating Personnel. Provide suitable and competent personnel to be
trained by Contractor in accordance with the Technical Specifications by the
date specified. Contractor shall deliver advance notice of the times Contractor
wants to conduct such training no later than 120 Days prior to the date
Contractor is to commence training. Training shall commence in time to train
operators for the sequence of systems startup required for the AQC Systems, the
SCR Systems, and the Unit 2 Boiler, which date shall be no less than 120 Days
prior to the anticipated date of Mechanical Completion for Unit 1 and Unit 2,
respectively. Such personnel provided by Owner are to be available to assist or
work with Contractor to operate the AQC Systems, the SCR Systems, and the Unit 2
Boiler. Employees provided by Owner are to provide assistance in the operation
of the Plant only and are not to perform any Work otherwise to be performed by
Contractor.
 
     7.5   Contractor Permits. Assist Contractor upon Contractor’s reasonable
request in obtaining Contractor Permits.
 
     7.6   Compliance with Contract and Laws. Perform all of its other
obligations specifically set forth in other provisions of the Contract Documents
and comply with all applicable Laws and Permits.
 
     7.7   Asbestos, Lead-Based Paint, and any other Hazardous Substances.
Perform or cause to be performed any testing for Asbestos and lead-based paint;
provided, however, that Contractor shall be responsible for notifying Owner of
any possible Asbestos, lead-based paint, and any other Hazardous Substances
identified during the course of the performance of the Work. Owner shall be
solely responsible and liable for the removal and disposal of any Asbestos,
lead-based paint or other hazardous or toxic materials not brought onto the
Plant Site by Contractor. The Work shall be suspended, if required, under the
provisions of Article 24 to allow for Owner’s removal and disposal of such
materials.
 
     7.8   Surveys and Reports. Make available to Contractor, without warranty
or guarantee, all surveys, geological and subsurface data and reports in Owner’s
possession with respect to the Plant Site.
 
     7.9   Owner Permits. Obtain and pay for all easements, rights-of-way, and
Permits required to be in Owner’s name, including, but not limited to, all
zoning, building, environmental and operating Permits. Owner shall provide
Contractor with copies of Owner Permits and/or applications for Owner Permits.
 

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     7.10   Performance Test Criteria. Supply Owner’s detailed procedures for
the Performance Tests to Contractor at least ninety (90) Days before Owner
commences the Performance Tests. Contractor shall provide written comments
thereto to Owner within thirty (30) days, whereupon Contractor and Owner shall
work to agree to the final test procedures.
 
ARTICLE 8  
 
PROJECT SCHEDULE AND PROJECT CONTROLS
 
     8.1   Time For Performance of the Work. Contractor shall carry out and
complete the Work on or before the Milestone Dates inserted in the Project
Schedule and listed in Exhibit B. Should the Work fall behind to such extent
that the respective Milestone Dates may, as determined by Owner or Owner’s
Representative in consultation with Contractor, be at risk, Contractor shall
propose to Owner and Owner’s Representative, within five (5) Days of determining
that any Milestone Date may be at risk, another course of action that will
return the Project to a state of Schedule compliance to meet the remaining
Milestone Dates contained in the Contract Documents. Such recovery Schedule may
include re-planning task sequences, increasing personnel or other resources of
Contractor or of any Subcontractor employed on the Work, increasing the number
of shifts, overtime operations, the addition of Subcontractors or other steps to
cause the recovery of the progress of the Work. Contractor shall not be entitled
to any additional payment for taking any such steps. Should Owner or Owner’s
Representative reasonably believe that Contractor’s proposed course of action is
not sufficient to restore the Work to meet the Milestone Dates, Owner shall
advise Contractor that Contractor has five (5) Days to correct the schedule
problem and recover the time on the Project Critical Path or to make
arrangements, acceptable to Owner and Owner’s Representative, to correct the
schedule problem and recover the time on the Project Critical Path. If
Contractor has not corrected the schedule problem or does not have a reasonably
acceptable plan to correct the schedule problem within such time, Owner shall
have the right, following consultation with Contractor as to the most
appropriate method, to require Contractor to increase the number of its
employees, or to increase or change the amount or kind of tools or equipment or
to increase the time worked by the employees until the Work is back on schedule
or a plan for regaining the schedule reasonably acceptable to Owner is proposed
by Contractor or any combination thereof. Costs for such Work shall be paid by
Contractor if such delay has been caused by the Contractor.
 
     8.2   Level 1 Milestone Schedule. A milestone schedule in a bar chart
format is required to be submitted within fourteen (14) Days after the Effective
Date (“Milestone Schedule”). The Milestone Schedule shall incorporate the Key
Milestone Dates shown in Exhibit B and Level 1 engineering and procurement
activities. The Milestone Schedule shall also address each building area,
category of Work, phase sequence and/or Material installation scope of Work for
the Project.
 
     8.3   Level 3 Detailed CPM Schedule. Contractor will prepare and submit a
critical path method (“CPM”) schedule for the Work by June 30, 2006 for the
Level 3 engineering and procurement Schedule and by September 12, 2006 for the
Level 3 construction Schedule that is integrated with the Level 3 engineering
and procurement Schedule (“Level 3 Detailed CPM Schedule”). The Level 3 Detailed
CPM Schedule will include the Milestone Dates and shall be produced utilizing
Primavera Project Planner P3e 5.0. software. Once submitted by Contractor, the
Level 3 Detailed CPM Schedule will be subject to review by Owner. The schedule
is to be mutually agreed upon by the Owner and Contractor and thereafter the
Level 3 Detailed CPM Schedule will be frozen and will comprise the “Baseline
Schedule” for monitoring the Project.
 
     8.4   Baseline Schedule. The Baseline Schedule shall include the following:
(a) identified logical sequences; (b) mathematical analysis (calculation of
early and late dates and float variances based on the logic sequences); (c)
resource analysis for the Level 3 Construction Schedule (manpower loaded and
balanced to the final estimate); and (d) originally planned and remaining
durations. More specifically, the Baseline Schedule shall contain the following:
 

    8.4.1  Designated Work Activities. Work as represented by the Baseline
Schedule shall be broken into easily identifiable Work activities including: all
Contractor installation tasks; suppliers of Materials and their delivery
schedule; engineering design status; procurement of Materials and its delivery
status and method of delivery; installation and erection tasks; start-up and
testing sequences and final commissioning activities. These activities shall be
described in sufficient detail as to clearly communicate the scope of Work to be
performed. Work activities must not exceed (3) weeks in length without agreement
between Owner and Contractor on the method to be used for tracking progress of
installation. Acceptable methods of tracking and accounting for progress may
include, but are not limited to, tons of structural steel installed/remaining,
tons of duct work installed/remaining, linear feet of pipe, conduit, cable
installed/remaining, linear feet of weld complete vs. linear feet of weld
remaining to be completed, number of pressure welds complete vs. number of
pressure welds remaining to be completed, or any other commodity that signifies
physical completion of the Work complete or left to be completed. The
anticipated number of activities for the completion of the Project shall be
defined and mutually agreed by Owner and Contractor. All Milestone Dates shall
be included in the Level 3 Detailed CPM Schedule as an activity and shall be
titled “Key Milestones.”
 

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    8.4.2  Baseline Schedule Updates. The engineering and procurement activities
in the Baseline Schedule will be updated monthly starting with the July 2006
reporting through September 2006. In mid-October 2006, the Owner and Contractor
will meet to determine whether to increase the frequency of the engineering and
procurement Baseline Schedule updates to bi-monthly in consideration of the
Owner’s reasonable assessment of the Contractor’s reporting to date. The
Construction activities in the Baseline Schedule will be updated weekly. All
progress will be reported on the basis of physical percent complete of the
activity to date. The amount of remaining duration on partially completed
activities shall be based on the amount of time required to complete the
remaining Work. Actual start and finish dates will be recorded on each of the
Baseline Schedule activities as they are started and completed. The updated
Schedule of construction activity will be electronically transmitted to Owner
weekly for inclusion in the Owner-controlled Baseline Schedule for the entire
Site and to coordinate the interface between Contractor and others working on
the Site.
 
    8.4.3  Manpower Loading. The Baseline Schedule for construction and all
schedule updates thereto will be manpower loaded. Each Schedule activity or task
will be assigned a total number of craft-hours (based on direct man-hours
including foreman and general foreman) as required to perform the Work involved.
Contractor shall demonstrate to the reasonable satisfaction of the Owner that
the total number of man-hours loaded in the Schedule are the same as and balance
to the total direct man-hours estimated by Contractor.
 
    8.4.4  CPM Diagrams. The CPM Schedule will be submitted by the Contractor to
the Owner in electronic form (XER File) and shall be structured so that the
Owner can produce graphical charts at its offices that show the logical
relationships of all Work activities including time-scaled logic diagrams of the
Baseline Schedule with all information contained on each sheet without reducing
its readability. The Project Critical Path shall be clearly shown and identified
in the Baseline Schedule calculations and also on the time-scaled logic
diagrams. Contractor shall designate for each Work activity its unique
identification number, full description, planned duration, remaining duration,
percent complete, calendar identification (“Activity ID”), and the Owner’s WBS,
if provided.
 
    8.4.5  Monitoring Activity IDs. Contractor must closely monitor the
relationships between each Activity ID to assure the Baseline Schedule and all
updated schedules properly reflect the planned Work sequences, the physical
relationships and the known constraints. Negative lag relationships will be
minimized; however, they can be used and with an explanation provided to the
Owner when requested. Zeroing out of free float is allowed. Milestones and
Schedule Plug Dates shall be included, and may be tied to the logic; however,
the Contractor will provide the scheduling methodology to the Owner when
requested in such cases.
 
    8.4.6  Features Included in Baseline Schedule. The Baseline Schedule must
include the following features and shall, at a minimum, consist of the
following:
 
   8.4.6.1  Activity ID Numbers. Each Activity ID number shall be unique to one
activity only. For purposes of overall project management, Owner reserves the
right to assign two (2) alphanumeric characters in the farthest left position,
which may assist in identifying building locations. Activity ID numbers will
correspond to the Contractor’s internal system.
 
  8.4.6.2  Activity Description. Each activity shall be described in sufficient
detail as to fully describe the Work to be performed. Generic terms or
description will not be accepted. Hammocks and milestones shall be clearly
indicated by the activity description.
 
  8.4.6.3  Activity Relationships (logic sequences). All preceding and
succeeding event Activity ID numbers, associated relationship types and lag
values will be expressed in each activity. Revisions to any logic which affects
the Project Critical Path will be submitted at the time such revision(s) are
included in the mathematical analysis. A brief reason for each revision will be
provided by Contractor upon request of the Owner.
 

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   8.4.6.4  Calendar ID/Planning Units. Multiple calendars are acceptable only
if each calendar is clearly identified and included with each mathematical
analysis. Planning units shall not be greater or less than one (1) calendar Day.
 
   8.4.6.5  Early Dates. Actual start and actual finish dates will replace
calculated early dates, as progress is reported, and shall be clearly marked as
an actual start or actual finish dates. Plugged or fill dates may be used in
lieu of calculated dates and/or logic, and such dates may include
start-no-earlier-than, start-no-later-than, or like constraint dates. If such
conventions are used in calculating early dates, they shall be clearly
indicated. Provisions shall be made to allow the “Current Early Dates” to be
adjusted based on the progress accomplished to date and the current status of
the Project as calculated by the updating of the schedule and the mathematical
analysis of the logic sequences.
 
   8.4.6.6  Late Dates. Actual start and actual finish dates will replace
calculated late dates, as progress is reported, and shall be clearly marked as
an “actual finish date.” Plugged or fill dates may be used in lieu of calculated
dates and/or logic sequences, and such dates may include finish-no-earlier-than,
finish-no-later-than, or like constraints dates. If such conventions are used in
calculating late dates, they shall be clearly indicated. Provisions shall be
made to hold or freeze the “Current Late Start and Finish Dates”, as shown in
the reviewed and approved mathematical analysis, as the agreed no-later-than
Baseline Schedule.
 
   8.4.6.7  Float or Slack. Both the calculated total float and free float shall
be clearly identified in terms of their appropriate calendar and planning units.
 
   8.4.6.8  Planned Duration. To be shown in terms of appropriate calendar and
planning units. Provisions shall be made to store and show all planned durations
included in mathematical analysis for the approved Baseline Schedule.
 
   8.4.6.9  Remaining Duration. The number of days to complete the remaining
Work for a construction activity in progress based on units or commodities left
to complete and estimated manpower loading.
 
   8.4.6.10  Percentage Complete. Activity percentage of completion shall be
determined by the physical status of the Work involved and shall be consistent
with the amount of remaining Work.
 
   8.4.6.11  Construction Resource Analysis. The resource analysis shall, at a
minimum, include Construction Schedule craft manpower loading and provide the
estimated manpower based on the planned man-hours per activity. The comparison
of planned vs. actual man-hours for each activity will be analyzed as part of
the earned-value analysis. For all of the above resources, Contractor shall
graphically show all required elements through “S” curves, histograms, and bar
graphs in a format approved by Owner. Planned and Actual elements will always be
shown together in the same graphic.
 
   8.4.6.12  Electronic Transfer of Data. Contractor will issue fully
transferable electronic information data files (XER Files ) to Owner.        
 
      8.5   Construction Work Breakdown Structure (WBS) and Construction
Earned-Value Reporting.  Subarticles 8.5.1 to 8.5.6 and 8.6, 8.7, 8.8 and 8.9
shall be applied to the construction portion of the Contractor Schedule and
Work.
    8.5.1  Work Breakdown Structure. Contractor is required to submit a Work
Breakdown Structure (“WBS”) based on Contractor’s final definitive estimate of
the Work as represented by the final estimate by line-item with detailed
descriptions and codes for each building area, category of Work, phase sequence
and/or Material installation as required to perform the Work identified in the
Contract and is subject to Owner’s approval. At a minimum, each Schedule
activity shall be coded to the Contract number, unit number, Work or system,
phase designation, outage/non-outage task, and purchaser summary code per the
WBS. Code values and details will be developed per the WBS and provided to
Contractor after the Contract award. The Baseline Schedule and the WBS Reporting
coding system shall be compatible and mutually reference the Activity IDs. The
codes used in the WBS must be approved by Owner before they may be used.
 

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    8.5.2  Progress Reporting. Contractor shall update the Detailed CPM Schedule
not less than once weekly (“Weekly Update”). The Weekly Update shall include all
required reports specified herein that are necessary for maintaining the
Detailed CPM Schedule and the Earned Value Reporting. Each Weekly Update will
show the actual and projected start dates for all Work activities, actual and
projected finish dates, all logic revisions and a statement as required
regarding the reason(s) logic within the Detailed CPM Schedule was revised,
actual man-hours expended to date, actual equipment used and actual material
installed. Each Weekly Update must be accompanied by a detailed status report
indicating the overall status of the Work, problem areas, recovery plans,
unresolved issues, change orders and their effect on the Work progress, and
manpower productivity and availability. Each Weekly Update must be accompanied
by a Material Received Report and a Materials Report.
 
    8.5.3  Earned-Value Reporting. Contractor shall provide updates of its
progress (“Earned-Value Reports”) in completing the Work in comparison to the
man-hours loading by updating its progress in accordance with the categories
established in the WBS. Formatting of the Earned-Value Reports shall be subject
to Owner’s approval. Contractor’s Earned-Value Reports shall include the
following detail:
 
   8.5.3.1  Comparison of the final man-hours loading to similar planned metrics
material quantities and equipment to be installed as identified in the WBS line
item codes.
 
   8.5.3.2  Actual man-hours expended by Contractor each Day (and by shifts per
Day if shifts are implemented) as identified in the WBS line-item codes or
schedule activity.
 
   8.5.3.3  Actual percent complete status for each WBS line-item code or
scheduled activity of Work based on the to-date progress of the Work, including
but not limited to material, commodities, units installed, and equipment
installed.
 
    8.5.4  Schedule Performance Index. Contractor shall report on a weekly basis
its schedule progress in an index dividing earned hours by budgeted or scheduled
hours (“SPI”).
 
    8.5.5  Cost Performance Index. Contractor shall report on a weekly basis its
cost progress in an index dividing earned hours by actual hours expended
(“CPI”).
 
    8.5.6  Daily Force Reports. Every Day, Contractor will submit a force report
identifying Contractor’s total manpower head count performing the Work with a
breakdown by craft, plus a description of the Work currently being performed.
 
     8.6   Project Execution Plan. As a condition precedent to Owner’s
obligation to pay Contractor’s first Application for Payment following the
Effective Date, Contractor must submit its detailed “Project Execution Plan” for
performing its Work at the Site.
 
     8.7   Material Laydown Plan. Contractor shall submit a Material Laydown
Plan within ninety (90) Days after Effective Date of the Contract. The Material
Laydown Plan shall identify all material laydown areas and the shakedown
sequence. It shall fully describe any effect on the Crane Plan and any known
coordination issues concerning materials storage related to the Project.
 
     8.8   Crane Plan. As a condition precedent to Owner’s obligation to pay
Contractor’s first Application for Payment following the Effective Date,
Contractor must submit its detailed “Crane Plan” for performing its Work. The
crane plan will include preliminary crane locations and time lines, but may be
subject to change based on the final design of components, degree of ground
fabrication and fabrication table locations.
 
     8.9   Start-Up Schedule. When the Project reaches sixty percent 60%
completion as determined by the Earned Value Analysis of Owner or six months
prior to initial operation of the first mechanical subsystems, whichever is
earlier, Contractor shall submit a detailed Start-Up Schedule.
 

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     8.10   Commissioning Schedule. Owner will prepare a Commissioning Schedule
for the Project and deliver it to Contractor and deliver it no later than
September 12, 2006 for Contractor’s review and comment. Owner and Contractor
shall then mutually agree upon the Commissioning Schedule.
 
ARTICLE 9  
 
SITE
 
     9.1   Site Availability. Owner shall make available to Contractor portions
of the Site necessary for the Contractor’s performance of the Work, all
reasonable and necessary access thereto, and areas suitable for large mobile
crane operations and for installation of Contractor’s office and warehouse,
equipment receiving and laydown, craft change rooms, welding facilities,
materials storage, and employee parking as indicated on Contract drawings. Owner
shall properly maintain storage and laydown areas and access roads.
 
     9.2   Conditions Affecting Work and Differing Site Conditions. Contractor
acknowledges that it has made a reasonable investigation and reasonably
satisfied itself as to the conditions affecting the Work, provided that such
conditions were reasonably ascertainable from a Site visit, including but not
limited to those bearing upon: the transportation, disposal, handling and
storage of materials; availability of labor, water, electric power and roads;
the reasonably anticipated uncertainties of weather, river stages, tides,
surface or similar physical conditions at the Site; the conformation and
condition of the ground; and the character of equipment needed preliminary to
and during the prosecution of the Work.
 
    9.2.1  Notification by Contractor Change Request. Contractor shall promptly,
and before conditions are disturbed, notify Owner’s Representative by means of a
Contractor Change Request of (a) latent physical conditions at the Site
differing materially from those indicated in this Contract or (b) unknown
physical conditions at Site, of an unusual nature, differing from those
ordinarily encountered and generally recognized as inherent in work of the
character provided for in this Contract for which Contractor believes that an
adjustment in Contract Price or the Project Schedule is justified. The Owner
shall provide such Change Order allowing for reimbursement of increased costs;
however, Contractor shall not be entitled to any additional time or compensation
if Contractor negligently or knowingly exacerbated the condition.
 
    9.2.2  No Contractor Liability for Pre-Existing Conditions. Except to the
extent that such conditions were readily apparent upon reasonable investigation
or unless otherwise required by the Contract Documents, Contractor takes no
responsibility and shall have no liability for pre-existing site conditions,
including but not limited to sub-surface conditions, historical artifacts,
hazardous materials, structural integrity of existing steel or other structures,
and buried or concealed conditions.
 
    9.2.3  Hazardous or Toxic Material. Contractor shall have no liability or
responsibility for any existing Asbestos, lead-based paints, pollution,
contamination, or other hazardous or toxic material or for Owner’s generation,
emission or disposal or other Hazardous substances, except to the extent
Contractor negligently or knowingly exacerbates the condition.
 
    9.2.4  Owner Abatement. In the event any such pre-existing site conditions
are encountered in the course of the Work, Contractor shall notify Owner and
stop Work in the area until Owner rectifies or abates these conditions.
 
    9.2.5  Delays, Additional Costs and Indemnity. Delays or additional costs
encountered by Contractor as a result of such pre-existing site conditions shall
result in an equitable adjustment in the Contract Price and Schedule. Owner
shall protect and indemnify Contractor against any and all claims or liabilities
based on such conditions.
 
     9.3   Use of Owner’s Tools and Equipment at Site.
 
    9.3.1  Contractor to Supply Tools and Consumables for Work. Contractor is
required to supply all tools and consumables required to perform the Work.
Contractor shall mark all of its tools by color code or Contractor nameplate
before mobilizing to the Site. No marking shall be done on the Site. Any tools
or equipment not marked will be considered the property of Owner unless
conclusively proven otherwise. Owner retains the right for continual inventory
and inspection of all Contractor tools located on Owner property. Contractor
shall not normally be allowed to borrow tools from Owner. Should Owner allow
Contractor to borrow tools, only designated Owner employees shall be allowed to
check out items from Owner’s tool crib or storeroom. Owner retains the right to
charge Contractor for any tools, equipment, consumables, or material that are
obtained from Owner that should have been supplied by Contractor. The charge
shall be at Owner’s cost plus a twenty percent (20%) markup.

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    9.3.2  Contractor’s Release and Indemnity for Use Of Owner’s Equipment.
Should Owner permit Contractor to use any of Owner’s equipment, tools or
facilities or should Owner provide transportation, labor, electric power, other
utility service or other assistance in connection with the performance of the
Work, such use or furnishings, unless expressly provided otherwise, shall be
gratuitous and Contractor hereby waives, releases, and renounces all Losses
relating thereto, whether for personal injury, occupational sickness or disease
or death or for physical damage to property, or loss of use thereof, and whether
based on the condition thereof or any negligence, strict liability or other
fault of Owner and shall indemnify Owner for any and all Losses resulting in any
way from Contractor’s use of any of Owner’s equipment, tools or facilities or
Owner’s provision of transportation, labor, electric power or other utility
service of other assistance in connection with the performance of the Work.
Notwithstanding the foregoing, such waiver and indemnity obligations shall not
apply to circumstances of gross negligence or intentional misconduct by Owner or
others for whom Contractor is not responsible.
 
     9.4   Owner Control Over Work Scope. Owner reserves the right to delete
portions of the Work from this Contract and to perform such portions of the Work
or work outside the scope of this Contract with its own forces or other
contractors and to award contracts for such other work at the Site. Contractor
shall cooperate with Owner’s Representative, Owner’s other contractors, or other
designees, in the scheduling and prosecution of the Work to accommodate such
other work. If Contractor believes that the scheduling or prosecution of such
other work has or will have an adverse effect on the Project Schedule, then
Contractor shall promptly notify Owner and the provisions of Article 13 shall
apply.
 
     9.5   Owner Control Over Access. Owner reserves the right to deny access
to, or expel from, the Site any employee of Contractor or its Subcontractors,
following consultation with Contractor, if in Owner’s reasonable judgment such
exclusion shall be in the interest of safety or security at the Site. Former
employees of Owner (or Owner’s affiliates) may be brought onto the Site only if
prior approval from Owner’s Representative is obtained and Contractor has
advance knowledge that the individual was an employee of Owner within the last
five years. Should Contractor learn that one of its personnel is a former
employee of Owner after such employee has been admitted to the Site, Contractor
shall immediately notify Owner. Owner shall have the right and power to then
exclude such employee from the Site.
 
     9.6   Signs. Contractor shall not place or maintain, or permit to be placed
or maintained, any sign, bill or poster on or about the Site without the prior
consent of Owner’s Representative.
 
     9.7   Disposal of Excavated Material; Archeological or Historical Finds. In
the event that any relics or items with archeological or historical value or
other valuable materials (“Relics”) are discovered on the Site by Contractor or
any Subcontractor, Contractor shall immediately notify Owner’s Representative
and appropriate authorities in accordance with applicable Laws, and await the
decision of Owner’s Representative before proceeding with any further Work that
might harm or destroy such Relics. If Contractor believes that the proper
disposal of any Relics constitute grounds for issuance of a Change Order, then
Contractor shall proceed in accordance with the requirements of Article 13.
Neither Contractor or any Subcontractor shall have any property rights to such
Relics.
 
     9.8   Security.
 
    9.8.1  Responsibility. Contractor shall be solely responsible for the
security of all Work in its custody or placed in construction by it. The
presence of Owner’s plant security shall not mean that Owner shall be
responsible for protection and security of Contractor’s Work.
 
    9.8.2  Methods. Security methods shall be employed by Contractor as required
to reasonably ensure the protection of all materials, equipment, and
construction Work from theft, vandalism, fire, and all other damage and loss.
 
    9.8.3  Employees. Contractor’s and its Subcontractors’ employees (referred
to as “Personnel”), will be required to check in and out of a designated
security gate. All Personnel will on their first Day of employment, inform the
security guard of their name and employer when they enter and leave the Site.
All Personnel will be required to fill out a gate access register, and turn it
into the Contract administration clerk. Contractor must notify Owner of all new
and laid off employees each Day. All Personnel will be assigned an access card
to be used to identify him or her for entrance and exit at the designated
security gate. Use of the access card will commence on the first Day of
employment. Personnel shall show proper respect to the Plant security services
at all times. All Personnel shall leave the Site immediately after completing
their shift. Congregating in the parking lot or other locations on the Site
shall not be permitted.
 

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    9.8.4  Vehicles. Contractor shall not permit vehicles to drive in and out of
Owner premises except those explicitly designated by Owner. No Contractor
employees will be allowed to ride in the vehicle through the security gate
except the driver.
 
    9.8.5  Inspections and Searches. All Personnel will check in and out with
their lunch boxes in an open position for inspection by the security guards.
Personnel will not be allowed to bring lunch sacks onto the Site. Vehicles,
toolboxes, lunch boxes, and other containers shall be subject to an unannounced
search at the gate or other location as determined by Owner.
 
     9.9   Site Coordination Between Owner and Contractor. The Parties recognize
that a close working relationship is essential in order for the Parties to
realize all of the benefits of this Contract.
 
    9.9.1  Contractor Site Office. During the performance of this Contract,
Contractor shall maintain a suitable office on the Site and near the location of
the Work as designated by Owner.
 
   9.9.1.1  Staffing. The Contractor shall staff its office to facilitate proper
office administration to Owner’s satisfaction. The office shall be continually
staffed by a representative of Contractor authorized to receive drawings,
instructions, or other communications or articles. Any communication given to
said representative, or delivered to said office, shall be deemed to have been
delivered to Contractor.
 
   9.9.1.2  Field Records. Contractor shall maintain at its Site office
up-to-date copies of all drawings, Contractor’s Specifications, the Technical
Specifications, and other Contract Documents and supplementary data, complete
with the latest revisions thereto. In addition, Contractor shall maintain a
continuous record of all field changes, which shall be available for inspection
by Owner at all times. At the conclusion of the Work, Contractor shall deliver a
copy of the continuous record to Owner, and shall incorporate all such changes
on the drawings and other engineering data, and submit the required number of
copies thereof to Owner.
 
    9.9.2  Contractor Site Supervision and Technical Expertise. Contractor shall
furnish adequate management, supervisory, and technical personnel on the Site to
ensure expeditious and competent handling of the Work.
 
   9.9.2.1  Scheduling of Site Work.
 
     9.9.2.1.1  Non-Emergency Work. The performance of any Work that would
affect the operation of Owner’s system facilities shall be scheduled to be
performed only at times acceptable to Owner. No Work shall be done between 6:00
p.m. and 7:00 a.m., local time, or on Sundays or legal holidays without the
written permission of Owner. Night Work may be established by Contractor as a
regular procedure with the written permission of Owner. Such permission,
however, may be revoked at any time if Contractor fails to maintain adequate
equipment and supervision for the proper prosecution and control of the Work at
night.
 
     9.9.2.1.2  Emergency Work. Owner shall have the right to perform emergency
work without the prior consent of Contractor.
 
  9.9.2.2  Interruptions of Owner Plant or System. All Work which will disrupt
Owner’s Plant or system shall be scheduled subject to approval by Owner and
taking into consideration the facilities and Owner’s requirements at all times
during construction. In the event that it is necessary to either interrupt the
power supply or to impose abnormal operating conditions on Owner’s utility
system, such procedure must be acceptable to Owner and a complete understanding
and agreement must be reached by all parties concerned well in advance of the
time scheduled for such operation, and such understanding shall be definite as
to date, time of day, and length of time required. This understanding and
agreement must be evidenced in writing. It shall be the Contractor’s
responsibility to ascertain that such understanding and agreement is properly
evidenced in writing with the signature of Owner’s Representative affixed
thereto.
 
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   9.9.2.3  Owner Hold Procedure. Contractor shall not be allowed to operate any
electrical switches, circuit breakers, valves or other controls on Owner’s
operating facilities. Owner shall do all switching and attach “HOLD” tags to
secure equipment for Contractor, but it shall be the responsibility of
Contractor to check all holds applied for its protection except in the case of
an emergency. Contractor shall request the application or release of all
equipment safety holds through Owner Representative.
 
    9.9.3  Relations With Other Contractors.
 
  9.9.3.1  Cooperation. Contractor shall cooperate with all other contractors
who may be performing work on behalf of Owner, and workers who may be employed
by Owner, in the vicinity of the Work under this Contract, and Contractor shall
conduct its operations to minimize interference with the work of such
contractors or workers. Any difference or conflict that may arise between
Contractor and other contractors, or between Contractor and workers of Owner, in
regard to their work shall be resolved as determined by Owner. Owner shall make
the final decision resolving the conflict.
 
  9.9.3.2  Site Coordination. Owner shall coordinate the work between or among
all of the contractors on the Project Site; however, Contractor shall coordinate
its daily Work with that of other contractors and shall cooperate fully with
Owner in maintaining orderly progress towards completion of the Work as
scheduled. Owner’s decision regarding priority between Contractor’s Work and the
work of other contractors at the Site shall be final.
 
  9.9.3.3  Site Meetings. Periodic meetings of the contractors at the Site may
be held at the times and places designated by Owner. The purpose of the meetings
will be for the scheduling and coordination of each contractor’s work, including
Contractor’s Work, within the requirements of the overall Project.
Representatives of Owner and each contractor, including Contractor, shall attend
each scheduled meeting.
 
  9.9.3.4  Delay by Owner’s Contractors. If Owner’s other contractors on Site
delay the Critical Path of Contractor’s performance of the Work as set forth on
the Milestone Schedule or if Owner’s other contractors on the Site cause
Contractor to incur additional cost(s), Contractor shall be entitled to an
equitable adjustment in the Contract Price and Project Schedule, as appropriate
and in accordance with Article 13 of this Contract.
 
   9.9.3.5  Owner’s Construction Durations. Owner, shall be entitled to the
construction durations allotted in the Level 3 Detailed CPM Schedule for Owner
and Owner’s contractors to complete portions of the Project. If Owner’s
contractors do not take longer than the allotted durations for such work, then
Contractor shall not be entitled to an extension of time.
 
     9.10   Construction Plant and Temporary Facilities.
 
    9.10.1  Contractor to Supply. Contractor shall furnish all Construction Aids
required for prosecution of the Work but which will not be incorporated in the
completed Work, unless otherwise specified herein. Temporary structures for
offices, change houses, warehouses, and other uses for Contractor or its
Subcontractors shall be provided by Contractor using materials, design, and
construction approved by Owner. Suitable construction trailers may be used in
lieu of temporary structures. Such structures or trailers shall be placed only
in the locations assigned by Owner.
 

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    9.10.2  Condition. All Construction Aids shall be in first-class condition
and shall be of the proper type and size to perform the Work. The Construction
Aids shall be regularly and systematically maintained throughout the Work to
ensure proper, efficient operation. Construction Aids that are inadequate or
improperly maintained shall be promptly modified, repaired, or removed from the
Site and replaced.
 
    9.10.3  Ownership and Removal. All temporary structures and facilities
furnished by Contractor shall remain the property of Contractor and shall be
maintained throughout the construction Work. When the construction Work is
completed, all of the Construction Aids shall be removed promptly from the Site
and the area shall be restored to its original condition.
 
     9.11   Construction Utilities.
 
    9.11.1  Contractor to Supply.
 
   9.11.1.1  Power Extension Facilities. Contractor shall provide its own power
extension facilities including all necessary connectors, disconnect switches,
breakers, transformers, wiring, and other devices required to distribute power
for its use and for the use of its agents, the installation of which shall not
impede walkways, exits, platforms and other access used by Owner operating and
maintenance personnel.
 
   9.11.1.2  Lighting. Contractor shall furnish and install all temporary
lighting required in the prosecution of its Work in accordance with current
standards.
 
   9.11.1.3  Water. Contractor shall provide piping, valves, pumps, and hoses as
required to distribute water for its and its Subcontractors’ use. Contractor
shall provide sanitary drinking water facilities for its employees including
coolers, ice, disposable cups, and a trash barrel at each water cooler.
 
   9.11.1.4  Heating. Contractor shall provide all heating facilities required
for the efficient prosecution of its Work and as required to prevent freeze
damage to equipment under its custody. Contractor shall operate all heating
facilities in a safe manner at all times and shall provide all such facilities
with adequate safeguards. The method of heating shall be subject to approval by
Owner. Salamanders, open fires, or other methods of heating which constitute a
hazard to personnel or property shall not be used by Contractor.
 
   9.11.1.5  Sanitary Facilities. Contractor shall furnish and maintain sanitary
facilities, including chemical toilets for the use of persons engaged in the
Work under this Agreement. Contractor’s personnel will not be permitted to use
the permanent Plant toilet and washroom facilities.
 
   9.11.1.6  Elevators. Contractor may provide its own hoists and elevators or
may make arrangements with other contractors for construction and use of hoists
and elevators.
 
   9.11.1.7  Telephone. Contractor shall provide its own telephone service.
 
   9.11.1.8  Compressed Air. Contractor shall provide all air compressors,
fuels, lubricants, hoses, piping and other apparatus as required for supplying
compressed air required for prosecution of its Work.
 
    9.11.2  Owner to Supply.
 
   9.11.2.1  Water. Water for construction use and drinking will be furnished by
Owner at no charge at designated supply points.
 
   9.11.2.2  Railroad Spurs. Railroad spurs may be used by Contractor with the
permission of Owner.
 
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   9.11.2.3  Barge Unloading Facility. Owner’s barge unloading facility may be
used by Contractor with the permission of Owner.
 
   9.11.2.4  Construction Power. Owner will furnish all energy for construction
electric power and temporary lighting at no charge. Owner will supply 480 volt,
3-phase ac power at Owner designated points. Owner assumes no responsibility for
interruption of construction power. Notwithstanding the above, extended
interruption of construction power not caused by Contractor that delays the
Project Critical Path or for items not on the Project Critical Path an
interruption of a continuous period of construction constituting more than
twenty-four hours of Contractor’s Work shall constitute a change entitling
Contractor to an equitable adjustment in accordance with Article 13 of this
Contract.
 

9.11.3  Condition.
 
   9.11.3.1  Power. Power facilities shall comply with applicable safety and
National Electric Code requirements, shall be constructed by Contractor to
provide proper clearances and minimum interference with construction and shall
be subject to Owner approval. All 480 volt circuits shall be multi-conductor
with neoprene or metal sheaths or be run in metallic conduit.
 
   9.11.3.2  Lighting. Lighting conductors shall be not less than 12 AWG copper
and insulated for 600 volts. A fuse of proper size and amperage shall be
provided for the protection of each circuit.
 
   9.11.3.3  Potable Water. Personnel shall be assigned to assure maintenance
and cleanliness of the potable water supply. Potable water containers and
dispensers shall not be used to hold or cool other foods or materials while
being used to contain and dispense drinking water.
 
   9.11.3.4  Sanitary Facilities. Contractor shall comply with all regulations
of agencies having jurisdiction with respect to sanitation. Any facilities or
methods failing to meet these requirements shall be corrected immediately.
Raising and lowering of the chemical toilets shall be performed by Contractor.
 
9.12  Construction Area.
 
9.12.1 Area Boundaries. Owner will designate the agreed boundary limits of
access roads, parking areas, storage areas, and construction areas, and
Contractor shall not trespass in or on areas not so designated.
 
 9.12.2  Owner Facilities. Owner’s lunchroom, control room, locker rooms, toilet
and wash facilities, parking lots and maintenance shops are considered off
limits to Contractor personnel.
 
9.12.3  Access Roads, Parking And Storage Areas. Construction access roads,
parking lots, and storage areas will be assigned for Contractor’s use by Owner.
Contractor’s employees shall park their automobiles, trucks, and other vehicles
in the assigned construction personnel parking area. Contractor shall use only
the route to and from their work area as designated by Owner.
 
9.12.4  Food Services. No food services will be permitted on the construction
Site.
 
9.13     Cleanliness. Contractor shall give special attention to keeping the
inside of the structures and surrounding grounds clean and free from trash and
debris. Contractor shall be responsible for ensuring that its Subcontractors
comply with the same standards as Contractor is required to meet hereunder.
 
 9.13.1  Personnel. Contractor shall employ sufficient and special personnel to
thoroughly clean its work areas continuously each working Day and shall
cooperate with the other contractors to keep the entire construction Site clean.
This shall include sweeping the floors, collecting and disposing of trash, and
all other functions required to keep the Site clean.
 
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   9.13.2  Storage of Materials and Supplies. Contractor shall store all
materials and supplies in locations that will not block access ways and arrange
all materials and supplies to permit easy cleaning of the Work area.
 
   9.13.3  Trash. Contractor shall collect, sort and deposit all trash, debris,
and waste materials daily in waste collection areas near the Work as designated
by Owner. Promptly upon the completion of the Work, Contractor shall remove all
trash, waste materials, and debris resulting from Work under this Contract from
the Site in a safe manner. Nothing shall be thrown or allowed to fall from any
of the structures. Contractor shall promptly remove any Hazardous Substances
from Owner’s premises in compliance with Subarticle 29.13 (and each of its
Subparts) and applicable Laws.
 
   9.13.4  Finishes. Contractor shall thoroughly clean the areas of the Work,
removing all accumulations of dust, scraps, waste, oil, grease, weld spatter,
insulation, paint, and other foreign substances. Surfaces damaged by deposits of
insulation, concrete, paint, weld metal, or other adhering materials shall be
restored by Contractor at Contractor’s sole cost.
 
   9.13.5  Parking Area. It shall be Contractor’s responsibility to keep the
construction parking area clean at all times.
 
   9.13.6  Conflict Between Contractors. In the event of conflict between
contractors, including Contractor, concerning cleaning responsibilities, Owner
will determine the responsibility and assign the work. Owner’s decision will be
binding and the contractor, including Contractor, shall promptly perform the
disputed work at that contractor’s sole expense.
 
   9.13.7  Failure. In the event that Contractor fails to comply with the
cleanliness requirements specified herein or to perform the cleanup work
assigned to it by Owner, Owner following consultation with Contractor and an
opportunity for Contractor to cure its failure, reserves the right to hire
another contractor (not necessarily one of the construction contractors) to
perform the necessary cleanup work and charge Contractor for all such costs.
 
     9.14   Fire Protection.
 
   9.14.1  Responsibility for Fire Protection. Contractor shall be responsible
for ensuring that there is adequate fire protection for its Work.
 
   9.14.2  Fire Fighting. Contractor’s supervisory personnel and a sufficient
number of workers shall be instructed in proper methods for extinguishing fires
and shall be assigned specific fire protection duties. When trained personnel
leave the job, new personnel shall be trained in their duties. All workers shall
be instructed in the selection and the operation of each type of fire
extinguisher supplied by Contractor for each type of fire that might be
encountered.
 
   9.14.3  Work Procedures. Contractor must employ work procedures that minimize
fire hazards to the extent practicable. Contractor shall follow OSHA 29 CRF 1926
Subpart F - Fire Protection and Prevention.
 
   9.14.4  Volatile and Flammable Materials.
 
   9.14.4.1  Fuels and Solvents. Contractor shall store all fuels, solvents and
other volatile or flammable materials away from the Work and in storage areas in
well-marked, safe containers as required by Laws. Only solvents with a flash
point of one hundred forty degrees Fahrenheit (140°F) and above are permitted on
site.
 
   9.14.4.2  Form Work, Scaffolding, Etc. Contractor shall treat for fire
resistance or otherwise protect against combustion resulting from welding
sparks, cutting flames, and similar fire sources all form work, scaffolding,
planking, and similar materials that are combustible but which are essential to
execution of the Work.
 
 
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   9.14.5  Burning. Contractor shall not permit open fires or burning on the
Site.
 
 9.14.6  Fire Protection Equipment. Owner shall provide adequate fire protection
for any temporary structures it provides for Contractor’s Use. Contractor shall
ensure that there is adequate fire protection equipment in each warehouse and
office, in other temporary structures and in each work area it is occupying.
Access to sources of water for extinguishing fires shall be identified and kept
clear at all times. Contractor shall provide suitable fire extinguishers in
enclosed areas, in areas that are not accessible to water for extinguishing
fires, or in areas that may be exposed to fire that cannot be safely
extinguished with water. Each fire extinguisher shall be of a type suitable for
extinguishing fires that might occur in the area in which it is located. In
areas where more than one type of fire might occur, the type of fire
extinguisher required in each case shall be provided. Each extinguisher shall be
placed in a convenient, clearly identified location that will be readily
accessible in the event of fire.

ARTICLE 10  
 
THE PARTIES’ REPRESENTATIVES
 
     10.1   Owner’s Representative. Owner shall appoint an Owner’s
Representative who shall be authorized to act on behalf of Owner and with whom
Contractor may consult at all reasonable times, and whose instructions, requests
and decisions will be binding upon Owner as to all matters pertaining to the
Contract Documents and the performance of Owner hereunder except that Owner’s
Representative shall not have the authority to modify this Contract.
Notwithstanding the foregoing, Owner’s Representative shall be allowed to issue
Change Orders in accordance with Article 13. The initial Owner’s Representative
is the individual identified in Subarticle 29.6. In addition, Owner may from
time to time appoint such other individuals, each an “Other Owner-Authorized
Party,” whose duties, authority and responsibilities shall be specified in the
Notice provided to Contractor of such Other Owner-Authorized Party’s
appointment. Owner may change the identity of its Owner’s Representative or
Other Owner-Authorized Party by providing Notice to Contractor pursuant to the
provisions of Subarticle 29.6. Owner’s Representative and Contractor’s
Representative shall confer before the Work starts to ensure that the nature and
scheduling of the Work’s activities are mutually understood and shall meet
multiple times weekly during the Work’s duration to discuss the progress made,
impediments encountered or expected and their resolution, and all other relevant
matters.
 
     10.2   Contractor’s Representative. Unless otherwise agreed in writing by
Owner, Contractor shall appoint its Project Manager as Contractor’s
Representative who shall be a resident of the Site throughout the Work and
available for consultation with Owner’s Representative and Other
Owner-Authorized Party, if any, at all reasonable times. Contractor’s
Representative shall be authorized to act on behalf of Contractor, and his or
her instructions, requests, and decisions shall be binding upon Contractor as to
all matters pertaining to the Contract Documents and the performance of the
Work. The initial Contractor’s Representative is the individual identified in
Subarticle 29.6. Contractor shall not change Contractor’s Representative without
the prior written consent of Owner’s Representative, which consent will not be
unreasonably withheld or delayed. If Owner is reasonably dissatisfied with the
performance of Contractor’s Representative, Owner, following consultation with
Contractor, may request that Contractor remove such person from his position,
and Contractor shall immediately remove such person from the Project.
 
     10.3   Representative’s Access. Owner, Owner’s Representatives, and any
Other Owner-Authorized Party, and their agents, employees and invitees, shall at
all reasonable times have access to the Work wherever and whenever it is in
preparation and progress provided said access shall not unduly interfere with
the Work. Without limiting the generality of the foregoing, Owner, Owner’s
Representatives, and any Other Owner-Authorized Party shall have the right to
videotape, photograph, copy or otherwise record the activities and the Work. The
presence of Owner, Owner’s Representatives, and any Other Owner-Authorized Party
shall not relieve Contractor of the responsibility for construction means,
methods, techniques, sequences or procedures, or for safety precautions and
programs in connection with the Work, and Owner, Owner’s Representative or Other
Owner-Authorized Party will not be responsible for the acts and omission of
Contractor or Subcontractors.
 
     10.4   Compliance with Owner’s Representative’s Directives. The conduct of
the Work is the responsibility of Contractor. Contractor shall issue all
appropriate orders to Contractor’s employees and Subcontractors. Contractor will
closely cooperate with Owner’s Representative, and Other Owner Authorized
Parties to the extent of their stated authority and to the extent consistent
with the requirements for performance of the Work. Owner, or Owner’s
Representative may direct Contractor to take such action they deem to be in
Owner’s interest. If Contractor is of the opinion that any such directive
constitutes grounds for issuance of a Change Order, then Contractor shall
proceed in accordance with the requirements of Article 13.
 

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ARTICLE 11  
 
SUBCONTRACTORS
 
     11.1   Award of Subcontracts for Portions of the Work. Contractor shall
comply with the requirements of the subcontracting plans contained in Exhibit M.
 
     11.2   List of Subcontractors. Contractor shall attempt to use Owner’s
preferred Subcontractors, and Contractor’s pre-approved Subcontractors,
identified in Exhibit N. If Contractor has difficulty using Owner’s preferred
Subcontractors and Contractor wishes to use a Subcontractor other than those
listed or agreed to by Owner, Contractor shall submit the name of the proposed
Subcontractor to Owner’s Representative for his or her approval (such approval
not to be unreasonably withheld). The Submittal shall contain the name, address,
and contact person of the proposed Subcontractor, as well as a description of
the Work to be performed. Owner’s Representative shall notify Contractor within
five (5) Business Days if it objects to any proposed Subcontractor. Contractor
shall identify a suitable substitute party in writing within ten (10) Business
Days after it receives Owner’s disapproval of a proposed Subcontractor. If after
choosing a Subcontractor to perform a portion of the Work, Contractor decides to
terminate such Subcontractor or such Subcontractor no longer performs a portion
of the Work, Contractor must notify and consult with Owner regarding any
replacement Subcontractor.
 
     11.3   Contracts with Subcontractors.
 
   11.3.1  Commercially Reasonable Efforts. Contractor shall use commercially
reasonable efforts to incorporate the following provisions into the subcontract
with each proposed Subcontractor covered by the provisions of Subarticle 11.2:
 
   11.3.1.1  Require each Subcontractor, to the extent of the Work to be
performed by such entity, to be bound to Contractor by the applicable terms of
this Contract as related to Subcontractor’s scope of work and, where appropriate
to assume to Contractor all of the obligations and responsibilities that
Contractor has to Owner under this Contract; and
 
   11.3.1.2  Make Owner an intended third-party beneficiary and preserve the
rights and remedies of Owner under this Contract with respect to the portion of
the Work to be performed by a Subcontractor, so that the subcontracting thereof
will not prejudice such rights and remedies.
 
11.3.2  Duty to Incorporate. Contractor must incorporate the following
provisions into the subcontracts with each proposed Subcontractor:
 
   11.3.2.1  Require each Subcontractor to obtain and maintain the appropriate
insurance as related to Subcontractor’s scope of work;
 
   11.3.2.2  Require each Subcontractor whose scope of work may require
disclosure of Contractor’s confidential information to execute an appropriate
confidentiality agreement;
 
   11.3.2.3  Require that each subcontract provide for a contingent assignment
of the subcontract upon termination of Contractor by Owner. Such contingent
assignment shall provide that if Owner fulfills Contractor’s obligations to the
Subcontractor, then the Subcontractor will perform the subcontract on behalf of
Owner, its successors and assigns; and
 
   11.3.2.4  Incorporate the provisions of Exhibit M.
 
11.3.3  No Contractual Rights by Subcontractor Against Owner. The provisions of
this Section shall not empower any Subcontractor with any contractual rights
against Owner.
 
     11.4   Payments to Subcontractors. Upon receipt of payment from or on
behalf of Owner, Contractor shall promptly pay to each Subcontractor the amount
paid by Owner to Contractor for such Subcontractor’s Work. Contractor must
require each Subcontractor to make similar payments to such Subcontractor’s
Subcontractors. Owner shall have no obligation to pay, or cause the payment of,
any money to any Subcontractor or any other party acting through, under or on
behalf of Contractor except as may be otherwise required by Laws, and then
subject to Contractor’s indemnity obligations under this Contract.
Notwithstanding the above, Contractor shall be entitled to withhold payment(s)
and/or offset amounts otherwise due any Subcontractor based on such
Subcontractor’s failure to perform other obligations under its subcontract with
Contractor; however, in the event such Subcontractor files a Lien or otherwise
requests or demands payment from Owner, Contractor must defend and indemnify
Owner against any Losses related thereto.
 

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     11.5   Owner/Subcontractor Communication. Owner may, at its discretion,
furnish to any Subcontractor information regarding the percentages of completion
or the amounts applied for by Contractor and the action taken thereon by Owner
on account of Work done by such Subcontractor. Owner shall have no obligation to
pay or to see to the payment of any monies to any Subcontractor, except as
otherwise may be required by Laws. Notwithstanding the foregoing, any payments
made by Owner to any Subcontractor shall be reimbursed by Contractor or may be
offset by Owner against and deducted from any future payments due to Contractor
from Owner provided that no such payment by Owner shall be made without first
consulting Contractor.
 
     11.6   Approved Equipment Suppliers.
 
   11.6.1  Approved Equipment Suppliers List. The approved equipment supplier’s
list is attached as Exhibit N. Contractor may request that additional vendors be
added to the list subject to the Owner’s approval, with such approval to be not
unreasonably withheld.
 
   11.6.2  Owner Preferred Equipment. In Exhibit N, Owner has identified
categories of items, as indicated by highlight, where Subcontractor preferences
may exist. Prior to Contractor placing a purchase order for equipment for which
the Owner has identified a preference, the Contractor will offer optional
pricing for said identified Owner-preferred equipment. Such additional pricing
shall include any necessary schedule and technical information required by Owner
to evaluate the option. Owner shall select its preferred equipment supplier and
advise Contractor within three (3) Business Days of receiving the Contractor’s
offer of said optional pricing. Any adjustment resulting from Owner’s option
selection shall be set forth in a Change Order to be issued to Contractor.

ARTICLE 12  
 
COMPENSATION, LETTERS OF CREDIT, AND INVOICING
 
     12.1   Contract Price. Contractor’s total compensation for performance of
the Work under this Contract shall be $713,067,494 as set forth in Exhibit D and
as adjusted by any Change Orders. The Contract Price shall not be increased by:
1) any event of Force Majeure, unless the Force Majeure event lasts more than
five (5) consecutive Days; or 2) any emergency caused by the negligence or
misconduct of Contractor, any Subcontractor or other person under Contractor’s
or its Subcontractors’ control.
 
     12.2   Bonus. The Parties agree that they will make a good faith effort to
reach an agreement by April 2, 2007 on a bonus which may be paid to Contractor
for early achievement of Provisional Acceptance of Unit 2, if Mechanical
Completion has been accomplished by or shortly after the Guaranteed Unit 2
Mechanical Completion Date. If no agreement can be reached by the Parties by
April 2, 2007, no bonus will be due or payable to Contractor regardless of the
date(s) Contractor achieves Provisional Acceptance of Unit 2. 
 
     12.3   Monthly Applications for Payments. On or about the tenth (10th) Day
of each calendar month, Contractor shall submit to Owner’s Representative an
Application for Payment in accordance with the Payment Schedule set forth in
Exhibit W. Owner shall not be obligated to make any payments earlier than the
months indicated or in percentages other than those set forth in Exhibit W.
Owner may withhold monies for any Payment Milestone that is not sufficiently
complete at the time the invoice is issued. Owner’s right to withhold monies
includes, but is not limited to, the Contractor’s failure to achieve a Payment
Milestone by a Milestone Date identified in Exhibit W. The amounts withheld
shall be calculated on a pro rata basis, based on the number of Payment
Milestones not achieved. For example, if four (4) milestones are identified for
a particular month, the value of each Payment Milestone is twenty five (25%) per
cent. Upon the issuance of the Project Schedule pursuant to Section 8.3, the
Parties will mutually agree to the additional Payment Milestones that serve as
conditions precedent for the payment of any Application for Payment and amend
the Payment Schedule in Exhibit W. Each Application for Payment shall include
Partial Lien Waivers, substantially in the form of Exhibit O, and certification
by Contractor that all of its laborers and Subcontractors have been paid all
monies due for Work performed and Material received through the previous month
payment by Owner. As part of such certification, Contractor shall identify any
claims, setoffs or back charges it may have or have taken against any
Subcontractor so that Owner shall know if any Subcontractor may have a colorable
right to lien Owner’s property. No payment made to Contractor shall constitute
an acceptance by Owner of any of the Work to be performed hereunder. Owner shall
hold a five percent (5%) retention from each Application for Payment, which
Owner shall release in accordance with Section 12.8.
 

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     12.4   Certification by Contractor. In each Application for Payment,
Contractor shall certify that such Application for Payment represents the amount
to which Contractor is entitled pursuant to the terms of this Contract and shall
also certify as follows:
 
There are no known Liens outstanding at the date of this Application for
Payment, all amounts which are due and payable to any third party (including
Subcontractors) with respect to the Work as of the date of this Application for
Payment have been paid or are included in the amount requested in the current
application, and, except for such bills not paid but so included, and except for
amounts disputed between Owner and Contractor in accordance with Article 12 of
the Contract between Owner and Contractor, there is no known basis for the
filing of any Liens on the Site or the Plant, except in respect of payments to
Subcontractors withheld for proper reasons, and that lien releases or waivers
from all Subcontractors required pursuant to Subarticle 12.5 of the Contract
have been obtained in such form as to constitute an effective release of lien
under the laws of the State of Missouri.
 
     12.5   Lien Waivers. Contractor shall furnish at its sole cost and expense,
an unconditional partial lien waiver and release of all Liens upon progress
payment for the benefit of Owner with each Application for Payment, or such
other documents necessary to ensure an effective release of all Liens with
respect to the Project in compliance with the laws of the State of Missouri.
Contractor shall obtain from each Subcontractor whose subcontracts or equipment
or material supply contracts are in excess of $250,000 in the aggregate (“Major
Subcontractor”) an unconditional partial Lien waiver and release of all Liens
upon progress payment to such Major Subcontractor (for the benefit of Owner),
provided that Contractor shall only be obligated to provide to Owner such
partial and final Lien waivers and releases or such other documents necessary to
assure an effective release of Liens with respect to the Plant Site in
compliance with the laws of the State of Missouri from each Major Subcontractor
upon completion of the work of said Major Subcontractor or complete supply or
provision of goods covered under its subcontract by such Major Subcontractor and
shall not be obligated to obtain Lien waivers or releases from any other
Subcontractor who is not a Major Subcontractor. Except as contemplated in the
preceding sentence, Owner’s receipt of Lien waivers and releases for each
portion of the Work covered by the Progress Payment shall be a condition
precedent to Owner’s obligation to pay for such portion of the Work covered in
any Application for Payment. Contractor has an obligation and duty to provide
prompt payment to all of its Subcontractors, whether such Subcontractor is a
Major Subcontractor or not. Contractor acknowledges and agrees that it shall
have the obligation at its sole expense to cause any Liens filed against the
Plant Site to be promptly released or discharged or shall post a bond in
accordance with applicable laws or shall post other security reasonably
satisfactory to Owner in the full amount of the Lien except to the extent that
such Liens have been filed against the Project as a result of nonpayment by
Owner of any valid and proper Application for Payment or portion thereof for
which Contractor is entitled to receive payment under this Contract or is
otherwise being disputed by the Parties pursuant to the applicable provisions of
this Article.
 
     12.6   Payment of Undisputed Amounts. Owner shall pay Contractor the amount
determined by Owner’s Representative to be payable from each Application for
Payment (i.e., undisputed amounts) within thirty (30) Days after Owner’s receipt
of such invoice and accompanying data and other items in accordance with
Subarticle 12.4. In addition to disputed amounts of any Application for Payment,
at Owner’s option, Owner may deduct from the amount due under any Application
for Payment, any liquidated damages payable by Contractor pursuant to the
Contract Documents. Owner may set off amounts owed to Contractor under this
Contract against amounts owed by Contractor to Owner under the Contract
 
    12.6.1  Suspension by Contractor. Contractor shall have the right to suspend
performance of the Work upon ten days Notice to Owner, if the Owner fails to
make payment of any undisputed amount for sixty days after its due date.
Contractor shall resume performance of the Work upon payment of all amounts then
due together with an equitable adjustment in the Project Schedule and payment of
Contractor’s costs resulting from the suspension and resumption of the Work.

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     12.7   Payment of Disputed Amounts. Within fifteen (15) Days of receipt of
an Application for Payment, Owner shall provide Contractor with Notice setting
forth the amount of any portion of such Application for Payment that is disputed
by Owner and the reasons therefore. Any deduction of a disputed amount of an
Application for Payment that is not specifically agreed to by Contractor in
writing and that finally is determined by arbitration, or by mutual agreement,
to have been improperly withheld by Owner shall be paid promptly by Owner,
together with simple interest, from the date of withholding to the date of
payment, calculated using the Prime Interest Rate plus two (2) percent on the
date of withholding.
 
     12.8   Retainage. For each Application for Payment, Owner shall be entitled
to retain and withhold payment of five percent (5%) of each payment as security
for Contractor’s full and faithful performance of its obligations pursuant to
this Contract. All amounts withheld or secured pursuant to this Subarticle shall
be referred to herein as “Retainage.” The Retainage shall be payable, subject to
the provisions of this Subarticle, to Contractor with interest at the Prime
Interest Rate plus two per cent at the following events in accordance with the
Payment Schedule, at Exhibit W: Delivery of Unit 2 Tier 6 steel, Unit 1
Mechanical Completion, Unit 2 Mechanical Completion, Unit 2 Synchronization,
Unit 2 Substantial Completion B. In the event that a scheduled Milestone
retention release date is not achieved, the retention shall be paid at the next
monthly payment date after the Milestone has been achieved.
 
     12.9   Not Used.
 
     12.10   Payments Withheld. In addition to any amounts otherwise permitted
to be withheld under this Article 12, Owner, without limitation of any other
rights or remedies contained in this Contract, may withhold payment on one or
more Applications for Payment, or any portion thereof, an amount, and to such
extent as may be reasonably necessary, to protect Owner from loss because of:
 
   12.10.1  Contractor’s or any Subcontractor’s failure to carry out any
substantive portions of the Work in accordance with the Contract Documents;
 
   12.10.2  Third-party claims made or filed, against Owner on account of
Contractor or any Subcontractor;
 
   12.10.3  Damage to Owner property for which Contractor is liable under this
Contract arising from the performance of the Work or failure to perform the Work
properly;
 
   12.10.4  Failure of Contractor to maintain the Five Percent LOC, or the
Performance LOC as required by the Contract Documents. 
 
Promptly with the next monthly payment following the remedy or cure of any of
the foregoing, Owner shall make the payment withheld in connection therewith.
Owner’s right to withhold monies due Contractor pursuant to this Subsection is
conditioned upon Owner providing Notice to Contractor if its intent to withhold
such funds stating the specific reason(s) therefore within 20 days of receipt of
Contractor’s Application for Payment.
 
     12.11  Final Payment.
 
   12.11.1  Unit 2 Provisional Acceptance. Final payment of 1.0% of the Contract
Price shall be made to Contractor upon achievement of Unit 2 Provisional
Acceptance. Contractor shall submit, in addition to the material required under
Subarticles 12.4 and 12.5, a statement summarizing and reconciling all previous
invoices, payments, Change Orders, Contractor Change Requests and Final Lien
Waivers from Contractor and all Major Subcontractors.
 
   12.11.2  Owner Review of Statement. Owner shall review and accept or reject
such statement within ten (10) Days of receipt thereof. To the extent accepted,
Owner shall pay Contractor all remaining amounts due, within thirty (30) Days of
the receipt of such statement. Owner shall notify Contractor of the rejection of
any portion or all of such statement. Any amount not accepted shall be treated
as being in dispute. When Contractor’s final statement submitted pursuant to
this Subarticle has been fully paid, Contractor’s acceptance of final payment
shall be deemed to be a waiver of all claims by Contractor for payment of the
Contract Price or other obligations of Owner except for claims that have been
previously made but have not been resolved. Nothing in this Article shall be
construed to imply a waiver of any right to any amount that is the subject of a
written protest at the time acceptance of final payment is made.
 

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   12.11.3  Contractor Prevention of Liens. The final payment shall not become
due unless the Five Percent LOC, if applicable, complies with Subarticle 12.12
and until Contractor submits to Owner an affidavit, together with a final
release of Lien in form and content specified in Exhibit O from Contractor and
from each of the Major Subcontractors as required by Subarticles 12.4 and 12.5,
representing and affirming that all indebtedness connected with the Work and any
Lien or rights to file any such Liens related thereto, for which Owner or its
property might in any way be responsible or to which it may be subject, have
been paid, waived or otherwise satisfied. Contractor shall not permit a Lien to
be placed on any Owner property by Contractor’s Subcontractors or their
employees. Should Owner receive Notice of an intent to file a Lien from any of
Contractor’s Subcontractors, or employees, Owner will notify Contractor. Upon
receipt of Notice from Owner of the intent of one of Contractor’s Subcontractor
employees, to file a Lien, Contractor shall immediately take steps to prevent
the filing of such Lien. If Contractor fails to prevent the filing of such Lien,
Contractor shall be responsible and liable for and shall indemnify Owner for all
of Owner’s costs, expenses (including attorneys’ fees), liabilities, damages,
fees, penalties, judgments and settlement costs arising from the placement of
such Lien. The obligations and liabilities of Contractor under this Subsection
shall not apply where the basis for such Lien relates to amounts invoiced by
Contractor that are either not paid or disputed by Owner.
 
   12.11.4  No Entitlement to Final Payment Until Unit 2 Provisional Acceptance.
Notwithstanding any provisions to the contrary in this Contract, Owner and
Contractor acknowledge and agree that Contractor shall not be entitled to the
final payment (less any retention) unless and until Contractor has achieved Unit
2 Provisional Acceptance.
 
     12.12  Contractor’s Five Percent LOC.
 
   12.12.1  Amount of Letter of Credit. Within 30 days following the Effective
Date, Contractor shall provide to Owner a letter of credit substantially in the
form of Exhibit P and in an amount equal to five percent (5%) of the Contract
Price (the “Five Percent LOC”). The Five Percent LOC shall remain in full force
and effect until the expiration of the Warranty Callback Period for Unit 1 or
Unit 2, whichever is later.
 
   12.12.2  Reduction of Five Percent LOC. At the end of the two-year Warranty
Callback Period for Unit 2, Contractor may reduce the amount of the Five Percent
LOC to thirty-three percent (33%) of the original value of the Five Percent LOC.
The remaining thirty-three percent (33%) of the initial value of the Five
Percent LOC shall remain in effect until the end of the Guaranteed Catalyst
Period or the Guaranteed Baglife Period, whichever is later.
 
   12.12.3  Liquidated Damages Draws Upon the Five Percent LOC and Performance
LOC. In the event that Contractor fails to pay liquidated damages pursuant to
Article 22 of this Contract within 30 days of the date due under the Contract,
then Owner shall be entitled to draw upon the Five Percent LOC and Performance
LOC for the amount due by Contractor. In the event that Owner draws upon any LOC
and it is subsequently determined that Owner was not entitled to all or any
portion of the draw, Owner shall repay to Contractor the amount of any such
incorrect draw, plus simple interest, from the date of Owner’s draw, at the
Prime Interest Rate on the date of Owner’s draw plus two percent (2%) and
reasonable costs incurred including attorney’s fees.
 
   12.12.4  Warranty Repairs Draws Upon the Five Percent LOC. Prior to
expiration of the Unit 1 or Unit 2 Warranty Callback Period, as the case may be,
and all extensions of the Unit 1 or Unit 2 Warranty Callback Period, Owner shall
be permitted to draw upon the Five Percent LOC, for any warranty payments due
and not otherwise paid by Contractor and release the remaining amounts under the
Five Percent LOC, if they have not been fully drawn down. Owner shall return the
Five Percent LOC and the Performance LOC to Contractor upon their respective
expiration dates subject to any extensions permitted hereunder.
 
ARTICLE 13  

 
CHANGE ORDERS
 
     13.1   Owner Initiated Change Orders. Owner, without invalidating this
Contract, may order changes in the Work, with resulting changes in the Contract
Price and/or the Project Schedule or other applicable provisions of the Contract
Documents (including the required Final Completion Date) through the issuance of
a Change Order. A Change Order signed by Owner and Contractor indicates an
agreement to the changes in the Work, and/or amount of compensation increase or
decrease, and/or adjustment in the Project Schedule reflected in such Change
Order. Owner and Contractor shall use their good faith efforts to agree on the
price for such ordered changes prior to the issuance of such Change Order. If,
however, the Parties cannot agree on the adjustment to be made in the Contract
Price, the Work or the Project Schedule as a result of such Change Order, then
Contractor shall nevertheless proceed to execute the Work described in the
Change Order promptly upon authorization from Owner and shall be paid for such
changed Work in accordance with Subarticle 13.6. If the value of a proposed
Change Order exceeds 15% of the Contract Price, Contractor must execute such
Change Order before it is obligated to perform such Work.
 
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     13.2   Contractor Change Requests. If Contractor would like to seek a
Change Order, Contractor must give Owner written Notice within fifteen (15)
Business Days after Contractor’s knowledge of the occurrence of the event giving
rise to such request. Within a reasonable time thereafter, not to exceed forty
five (45) Days of any such Notice, unless the circumstances of the event giving
rise to the request reasonably require additional time, Contractor shall provide
Owner with an appropriate statement setting forth the reasons why Contractor
believes additional compensation or additional time should be granted, and
include the nature of any costs to be incurred, including reasonable adjustment
to other applicable Contract provisions, and if applicable, the probable length
of performance that could result in a delay to the Project Critical Path (a
“Contractor Change Request”). If Owner accepts any such Contractor Change
Request, a Change Order shall be executed by the Parties and the Contract Price
or Project Schedule, or both, as the case may be, shall be adjusted in
accordance with the terms of such Change Order. Owner shall have no obligation
to accept a Contractor Change Request. Failure to comply with the requirements
of this Subarticle shall constitute a waiver by Contractor of any and all
Contractor Change Requests not pursued in accordance with the terms herein.
 
     13.    Change Order For Delays. If a delay or suspension of Work or
activities occurs and causes a delay to the Project’s Critical Path and
Contractor has prepared an appropriate analysis identifying the extent of the
delay, an appropriate Change Order will be issued to adjust the Project Schedule
and the Contract Price as specified below: 
 
   13.3.1  Delay to Critical Path. To the extent the delay or suspension of
activities causes a delay to the Critical Path of the Project Schedule and is
caused by Owner or others not under the control of Contractor, or unknown
subsurface conditions, the Project Schedule shall be extended and the Contract
Price shall be adjusted in an amount necessary to compensate Contractor for all
reasonable direct and indirect costs and expenses on the basis set forth in
Subarticle 13.6 resulting from such delay or suspension (“Contractor’s Delay
Costs”).
 
   13.3.2  Delay Caused by Force Majeure. To the extent the delay or suspension
is caused by Force Majeure, as that term is defined in Article 24 (excepting for
purposes of Subarticle 13.3.2), Contractor shall give Owner written Notice
specifying the date of commencement of such delay or suspension within ten (10)
Business Days after the date on which Contractor first becomes aware of the
event or act constituting the Force Majeure. The Project Schedule shall be
extended on a Day-for-Day basis from the Force Majeure Delay Date. To the extent
that a Force Majeure event lasts more than five (5) consecutive Days, Contractor
shall be entitled to an adjustment in the Contract Price as set forth in
Subarticle 24.6.

   13.3.3  Best Efforts to Mitigate Delay. Contractor shall use its best efforts
to re-sequence the Work and/or mitigate, to the greatest extent practicable, the
effect of any delay described in this Article.
 
In order to receive an equitable price or schedule adjustment for a delay or
deficiency for which Owner is responsible, Contractor must demonstrate that
there was an actual delay in the performance of the Contractor’s Work that
impacts the Project Critical Path of the Contractor Schedule and/or an actual
increase in the Contractor’s costs.
 
     13.4   Change Order for Contractor Delay or Error. To the extent the delay
or suspension of the Work causes a delay to the Critical Path of the Project
Schedule and is caused by Contractor or any Subcontractor, no adjustment will be
made to the Contract Price or Project Schedule, and Contractor shall propose a
plan to perform the changed Work while minimizing Project Schedule impacts,
which may include increasing manpower and extended work hours or extra shifts if
required, for Contractor to meet the required Guaranteed Completion Dates.
Excess costs for such work will be Contractor’s responsibility. Further, no
Change Order shall be issued and no adjustment of the Contract Price or the
Project Schedule shall be made in connection with any correction of errors,
omissions, deficiencies, or improper or Defective Work on the part of Contractor
or any Subcontractors in the performance of the Work.
 
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     13.5   Minor Changes in the Work. Without a Change Order, Owner and
Contractor may mutually agree in writing to make, changes in the Work which do
not require an adjustment in the Contract Price or an extension of the Project
Schedule.
 
     13.6   Duty to Continue the Work. In the event Owner and Contractor are
unable, within twenty (20) Days of an Application for Payment to agree upon an
acceptable adjustment in the Project Schedule and acceptable changes in the
Contract Price, pursuant to Subarticles 13.1 or 13.2, then Contractor shall
proceed with the Work following Owner’s written direction to do so; provided
however, Owner reserves its rights to dispute any claims of Contractor pursuant
to Article 16. Owner’s written direction shall include an equitable adjustment
in the Project Schedule, if applicable. The cost of such extra Work shall then
be determined on the basis of one hundred twenty percent (120%) of all
verifiable direct costs reasonably and prudently incurred in the performance of
the changed Work. Direct costs shall be in accordance with the Rate Schedule
attached hereto as Exhibit V, submitted by Contractor on or before the Effective
Date. Direct costs incurred in the performance of such extra work shall include:
additional costs of materials, costs of labor, including premiums and shift
differentials; social security; old age and unemployment insurance; fringe
benefits required by agreement or custom; workmen’s compensation insurance;
rental value of equipment and machinery; all actual and reasonably allocated
costs of construction supervision and field office; and all actual and
reasonable costs, if any, of shutdown, delay and start-up; provided, however,
that Contractor shall notify Owner if Contractor anticipates such shutdowns,
delay and start-up costs in advance. In the event Owner so directs Contractor to
perform changed Work, then Contractor shall submit monthly invoices to Owner
itemizing all costs incurred in the performance of such Work during the period
covered by the invoice in accordance with this paragraph. Pending final
determination of Contractor’s total costs, Owner shall pay such invoices on
account in accordance with Article 12 of this Contract. Contractor shall
maintain complete and accurate records and supporting documentation regarding
Change Orders in accordance with Contractor’s established policies and
procedures and generally accepted accounting practices, consistently applied.
Upon three (3) Business Days prior Notice, Owner shall have access to such
records during normal business hours for a period of three (3) years after Final
Completion or termination of the Work, to the extent required to verify the
payroll and other costs (excluding agreed-upon mark-ups and rates) set forth
above.
 
     13.7   Effect of Changes in the Law. The Contract Price is based on
applicable Laws in effect as of the Effective Date. After the Effective Date, if
a change occurs to any Laws that affects performance of the Work by Contractor,
or any Subcontractor, Contractor shall comply with such changed Laws and
Contractor may be entitled to an equitable adjustment to any applicable
provisions of the Contract. Notwithstanding the foregoing, in the event the
change in Laws constitutes an event of Force Majeure for which termination of
this Contract would be appropriate, the provisions of Subarticle 24.5 shall
apply.
 
ARTICLE 14  
 
CONTRACTOR’S GENERAL REPRESENTATIONS,
WARRANTIES AND COVENANTS
 
     14.1   Representations and Warranties of Contractor. Contractor, as a
material inducement to Owner’s entering into this Contract, represents and
warrants to Owner that, as of the date of this Contract:
 
   14.1.1  There are no suits, proceedings, judgments, rulings or orders by or
before any court or any governmental authority pending or to the best of
Contractor’s knowledge threatened action or proceeding affecting Contractor
before any court, Governmental Agency, or arbitrator that could reasonably be
expected to materially and adversely affect the financial condition or
operations of Contractor or the ability of Contractor to perform its obligations
hereunder, or which purports to affect the legality, validity or enforceability
of this Contract (as in effect on the date hereof);
 
   14.1.2  It is a duly organized and validly existing entity of the type
described in the recital clauses of this Contract and is in good standing under
the laws of the jurisdiction of its formation; it has the legal right, power,
and authority and is qualified to conduct its business, and to execute and
deliver this Contract and perform its obligations under this Contract; and all
regulatory authorizations have been or will be obtained and will be maintained
as necessary for it to perform legally its obligations under this Contract as
such obligations become due;
 
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   14.1.3  Its making and performing this Contract are within its powers, have
been duly authorized by all necessary action on its part, and do not and will
not violate any provision of Laws or order, writ, judgment, decree, or other
determination presently in effect and applicable to it or its governing
documents; and
 
   14.1.4  This Contract constitutes its legal, valid, and binding act and
obligation, enforceable against it in accordance with this Contract’s terms,
subject to applicable bankruptcy, insolvency, reorganization and other laws
affecting creditors’ rights generally, and general equitable principles, to the
discretion of the tribunal before which proceedings to obtain same may be
pending.
 
     14.2   Covenants of Contractor. Contractor warrants and represents to Owner
that during the term of this Contract it will:
 
   14.2.1  Comply at all times with applicable Laws necessary for its
performance under this Contract, or, in the event of any alleged continuing
noncompliance, diligently contest any allegations of non-compliance with such
Laws in good faith by appropriate proceeding to the extent permitted without
material adverse effect on Contractor’s performance under this Contract; and
 
   14.2.2  Give all required notices, procure, maintain and comply with all
applicable Permits necessary for the performance of its obligations under this
Contract, and pay all charges and fees in connection therewith.
 
     14.3   Opinion of Counsel from Contractor. No later than the Effective
Date, Contractor shall, upon request of Owner, and at Contractor’s expense,
cause its counsel to issue an opinion to Owner affirming in customary form the
representations in Subarticle 14.1 as of the Effective Date and setting forth
such further matters as Owner may reasonably request.
 
     14.4   Additional Warranties and Representations of Contractor.
 
   14.4.1  Qualifications. Contractor warrants and represents that it is a fully
experienced and properly licensed in the State of Missouri, equipped, organized,
financed and qualified to perform the Work and that all detailed design and
construction drawings will be supervised, approved and signed by an engineer
licensed by the State of Missouri where required by Laws.
 
   14.4.2  Performance Guarantees. Contractor warrants and guarantees that the
AQC Systems, the SCR Systems, and the Unit 2 Boiler supplied pursuant to this
Contract will operate at or above the levels required by the Performance
Guarantees.
 
     14.5   Additional Documentation. Contractor, upon request of Owner and at
Contractor’s expense, shall deliver or cause to be delivered from time to time,
such additional certifications of its officers, accountants, engineers or agents
or opinions of counsel, as may be reasonably requested and as related to
Contractor’s obligations under this Contract.
 
     14.6   Changes in Circumstances. Contractor agrees that it shall promptly
advise Owner of any fact, event, or occurrence taking place subsequent to the
Effective Date that would cause it to be unable to continue to make such
representations and warranties provided above at any time subsequent to such
dates; provided that no such inability shall be considered a default under this
Contract, except to the extent it shall constitute a default under another
provision of this Contract.
 
ARTICLE 15  
 
WARRANTY OF THE WORK AND REMEDIES
 
     15.1   General Warranty of Work. Contractor hereby warrants to Owner that:
 
   15.1.1  The Work furnished and performed under this Contract by Contractor
and any Subcontractor shall be furnished and performed to (a) Prudent Industry
Practice, (b) professional standards with the accuracy, care and skill
customarily employed by and expected from comparable firms in the electric
generation construction industry, and (c) comply with all Laws;
 
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   15.1.2  The Work will conform to the requirements of the Contract Documents,
and will be free from Defects in materials, engineering, design, and
workmanship; and
 
   15.1.3  All Materials provided by Contractor will be new and free from
Defects in materials, engineering, design, and workmanship.
 
     15.2   Engineering and Design. Contractor hereby warrants that all
engineering and design performed as part of the Work shall be performed in
accordance with sound engineering practice, Prudent Industry Practice, Laws, and
applicable Permits, and in conformity with the requirements of the Contract
Documents.
 
     15.3   Nonconforming Work. If Work is discovered that does not conform to
the requirements of the Contract Documents prior to the end of the applicable
Warranty Callback Period, Owner, Owner’s Representative, and Other Owner
Authorized Parties to the extent of their authority, shall have the authority to
require Contractor at Contractor’s option to reperform, repair or replace any
such item of the Work (including without limitation engineering, design or
supply of Materials); provided, however, that neither their authority to act
under this Subarticle 15.3, nor any decision made by them in good faith either
to exercise or not to exercise such authority, shall give rise to any duty or
responsibility of Owner, Owner’s Representative and Other Owner Authorized
Parties to Contractor, or any Subcontractor, it being understood that Owner’s
(or its representatives’) failure to so require Contractor does not relieve
Contractor from its responsibility under the Contract Documents and liability
for any error, fault or inconsistency in the Work or the Project. Failure to so
require Contractor shall not be considered as acceptance of the Work.
 
     15.4   Standard Warranty Work. Except in the case of an Operating
Emergency, if any of the Work is Defective or does not comply with the
warranties contained in this Article and Owner gives Contractor Notice of such
Defect, Contractor shall, at its sole expense and option, promptly correct such
Defect by repair or replacement of any Defective Work. The decision to repair or
replace shall be made following consultation with Owner and the repair or
replacement shall be scheduled consistent with Owner’s operating requirements so
as to minimize loss of production or use of any portion of the Plant to which
the Work relates. Warranty Work shall be performed on a straight time basis;
however, Contractor shall conduct such Warranty Work on an overtime schedule
basis if Owner reasonably determines such a schedule is necessary to avoid or
minimize the effects of an outage or load reduction, and Owner shall bear such
additional costs. Except as stated herein, Contractor shall bear all costs and
expenses associated with correcting any Defective Work and for the deductible
portion of direct property damage of Owner to the extent caused by Contractor’s
breach of warranty during the Warranty Remedy Period. Such costs and direct
damages shall include, without limitation, the costs of necessary disassembly,
transportation, reassembly, retesting, reworking, repair, or replacement of such
Defective Work. Direct damages shall also include reasonable attorneys’ fees,
engineering fees, the costs of testing reasonably required to verify that the
repaired or replaced Work conforms to the applicable Warranties and requirements
of this Contract in enforcing the provisions of Article 15. Contractor shall
collect and assemble all warranties and maintenance manuals and deliver them to
Owner as set forth in Exhibit L. Any repair and replacement performed by
Contractor pursuant to Article 15 shall comply with the Laws, Prudent Industry
Practice, and this Contract.
 
     15.5   Operating Emergency Warranty Work. In the event of an Operating
Emergency which results from Work which is Defective or does not comply with the
warranties contained in Article 15, Owner shall consult with Contractor to
determine who would best be able to correct the Defective Work. If the Parties
agree that Contractor would best accomplish such correction, Subarticle 15.4
shall apply to such correction. If the Parties agree that Owner would best
accomplish such correction, Owner shall promptly correct such Defective Work by
repair or replacement of any Defective Work. The decision to repair or replace
shall be made with the concurrence of Contractor. Normally, Warranty Work shall
be performed on a straight time basis; however, such Warranty Work shall be
performed on an overtime schedule basis if Owner reasonably determines such a
schedule is necessary to avoid or minimize the effects of an outage or load
reduction, and Owner shall bear such additional costs. As with Standard Warranty
Work, Contractor shall bear all costs and expenses associated with correcting
any Defective Work to the extent caused by Contractor’s acts or omissions. Such
costs and direct damages shall include, without limitation, the costs of
necessary disassembly, transportation, reassembly, retesting, reworking, repair,
or replacement of such Defective Work.
 
     15.6   Unit 1 Warranty Callback Period. The Unit 1 Warranty Callback Period
for the Work shall run for a period of two (2) years from the Unit 1 Provisional
Acceptance Date. If any Work shall be repaired, replaced, or otherwise corrected
pursuant to this Article 15, the Unit 1 Warranty Callback Period for such Work
shall be two years from the date that such repair, replacement, or correction is
completed to Owner’s reasonable satisfaction. Notwithstanding the foregoing, in
no event shall the Unit 1 Warranty Callback Period exceed three (3) years from
the Unit 1 Provisional Acceptance Date.
 
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     15.7   Unit 2 Warranty Callback Period. The Unit 2 Warranty Callback Period
for the Work shall run for a period of two (2) years from the Unit 2 Provisional
Acceptance Date. If any Work shall be repaired, replaced, or otherwise corrected
pursuant to Article 15, the Unit 2 Warranty Callback Period for such Work shall
be two years from the date that such repair, replacement, or correction is
accepted by Owner. Notwithstanding the foregoing, in no event shall the Unit 2
Warranty Callback Period exceed three (3) years from the Unit 2 Provisional
Acceptance Date.
 
     15.8   Catalyst Warranty.
 
   15.8.1  Guaranteed Catalyst Period. In addition to the above Warranties,
Contractor warrants that the Catalyst used in the SCR Systems for Unit 1 and
Unit 2, respectively, will not suffer a Catalyst Life Failure for a minimum of
24,000 hours (the “Guaranteed Catalyst Period”) from the date flue gas first
passes through the Catalyst on each respective Unit.
 
   15.8.2  Catalyst Life. For Catalyst Life Failure, unless such failure is
caused by Owner, that occurs between 0 to 24,000 hours of operation from first
gas of Unit 1 or Unit 2, as the case may be, Contractor will conduct a root
cause failure evaluation. After the corrective action plan as defined by Section
15.8.3 with the Owner and Catalyst manufacturer and selecting mutually agreeable
repairs or modifications, Contractor shall make indicated repairs or
modifications to achieve Performance Guarantees and replace and/or add Catalyst
as required if Catalyst replacement and/or addition is indicated by the root
cause failure evaluation. The repairs, modifications and retesting shall follow
the procedure identified in Section 15.8.3.
 
   15.8.3  Catalyst Life Corrective Actions. Within fourteen (14) Days of a
Catalyst Life Failure, Contractor shall initiate preparation of a corrective
action plan complete with all drawings, data, specifications, and other
information required for approval of the Work by Owner, and shall complete all
such corrective action as soon as reasonably possible. For failure to meet the
Guaranteed Catalyst Period, Contractor shall make all repairs and modifications
necessary to correct and modify the Work to cause performance to so conform
without cost to Owner. Contractor’s obligation to make repairs and modify the
Work to meet the Guaranteed Catalyst Period shall not be limited by the Unit 1
or Unit 2 Warranty Callback Period but should extend only for three years from
date flue gas first passes through the Catalyst on each respective Unit.
 
     15.9   Baglife Warranty.
 
   15.9.1  Guaranteed Baglife Period. In addition to the above Warranties,
Contractor warrants that the fabric filter bags used in the Baghouse for Unit 1
or Unit 2, as the case may be, will not suffer Baglife Failure for a minimum of
25,000 hours (the “Guaranteed Baglife Period”) from the date flue gas first
passes through the fabric filter bags on each respective Unit. Contractor shall
provide replacement bags for all bags that suffer Baglife Failure during the
Guaranteed Baglife Period and replacements will be made as Baglife Failure
occurs. Owner will store bags provided by Contractor in a temperature and
humidity controlled environment in accordance with the manufacturer’s written
recommendations.
 
   15.9.2  Baglife Corrective Action. Within fourteen (14) Days of any Baglife
Failure, Contractor shall conduct a root cause evaluation and prepare a
corrective action plan complete with all drawings, data, specifications, and
other information required for approval of the Work by Owner. Contractor shall
complete all such corrective action as soon as reasonably possible. For failure
to meet the Guaranteed Baglife Period Contractor shall provide replacement bags
suitable to cause performance to so conform without cost to Owner. Contractor’s
obligation to make repairs and modifications to the Work to meet the Guaranteed
Baglife Period shall not be established by the Warranty Callback Period but will
extend for three years from the date flue gas first passes through each
respective Baghouse.
 
   15.9.3  Bag Pre-Coat. Contractor’s Baglife Warranty is contingent on Owner
pre-coating the bags prior to first flue gas passage in accordance with
Contractor’s recommendations in the O&M manual.
 
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      15.10  Subcontractor Warranties. Contractor shall, for the protection of
Contractor and Owner, obtain from all Subcontractors, and thereafter enforce,
all warranties with respect to Work as are reasonably obtainable. Contractor
shall use commercially reasonable efforts to secure warranties from all
Subcontractors that extend for the Unit 1 Warranty Callback Period or the Unit 2
Warranty Callback Period, as the case may be, set out in Subarticles 15.6 and
15.7, respectively. Contractor agrees during the Warranty Callback Period, as
soon as reasonably possible after receipt of Notice from Owner specifying any
Defects, to cause the Subcontractor of such Work (or upon failure or refusal by
such Subcontractor to do so itself), to inspect and to repair such Defects. All
such repairs and replacements shall comply with Laws and Prudent Industry
Practices. Contractor shall cause the Subcontractor of such Work (or upon
failure or refusal by such Subcontractor to do so itself), to bear all costs and
expenses associated with correcting any such Defective Work, including necessary
disassembly, transportation, reassembly, and retesting, as well as reworking,
repair, or replacement of such Work, and disassembly and reassembly of adjacent
Work when necessary to give access to Defective Work. Notwithstanding the
issuance of or inability to obtain any Subcontractor warranties, Contractor is
responsible for the Work and compliance thereof with the requirements of the
terms of the Contract Documents.
   
          15.11  Root Cause Repairs. If chronic failure of any of the Project’s
components or Materials occurs during either the Unit 1 Warranty Callback Period
or the Unit 2 Warranty Callback Period (either original or as may be extended as
a result of failures during the original Warranty Callback Periods), as the case
may be, Contractor shall investigate the root cause of such chronic failure and
make such repairs, replacements or adjustments necessary to correct the root
cause of the chronic failure in accord with Subarticles 15.6 and 15.7,
respectively.
 
     15.12   Cure Rights of Owner for Breach of Warranty.  Except in cases of
emergency, within ten (10) Days of receipt by Contractor of Notice and adequate
supporting documentation from Owner specifying a Defect, (or such additional
period as is necessary in circumstances where ten (10) Days is not reasonable
given the circumstances), Contractor shall give Notice to Owner of when and how
Contractor shall remedy said Defect; provided, however, that in cases of
emergency, Contractor shall remedy such Defect as quickly as reasonably possible
under the circumstances.  If Owner objects to the remedy period specified by
Contractor and Contractor does not offer a substitute remedy period satisfactory
to Owner, or if Contractor does not begin and diligently proceed to complete
said remedy within the time period specified by Contractor and accepted by
Owner, or if Contractor unreasonably fails to specify a remedy period acceptable
to Owner within such ten-Day period (or immediately, in the case of emergency
conditions), Owner, after Notice to Contractor, shall have the right to perform
or to have performed by third parties the necessary remedy, and the reasonable
and actual costs thereof shall be paid by Contractor, together with all
reasonable and actual attorneys’ fees and engineering fees.    
       15.13   Warranty and Passage of Title.  Contractor warrants that it
passes good title to all Work provided pursuant to this Contract to Owner, free
and clear of all Liens upon delivery to the Site.  Passage of title shall not
affect risk of loss, which shall be governed by Article 23.
          15.14   Extent of Warranty.  The Warranties provided in this Article
shall not cover the effects of normal wear, tear, deterioration, or abuse of the
Work.  The Contractor shall have no obligation for breach of Warranty (a) if the
Owner fails to store, operate or maintain the Work in accordance with Prudent
Industry Practice and the provisions of any storage, operating or maintenance
instructions furnished in writing by Contractor or its Subcontractors, or (b) if
the Work is altered, repaired or installed by a party other than Contractor or
its Subcontractors, other than emergency repairs to Contractor’s Work performed
in accordance with Contractor’s operating and maintenance manuals or Prudent
Industry Practice.  Contractor’s Representative shall have access to test and
operating records, the Work and other information he or she deems necessary to
investigate the validity of a claim under this Warranty. 
   15.15    Warranty Disclaimer.  THE EXPRESS WARRANTIES SET FORTH IN THE
CONTRACT DOCUMENTS, EXCLUDING EXHIBIT A, ARE EXCLUSIVE AND IN LIEU OF ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY AND ALL
IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. 
   15.16    Failure of Owner to Operate and Maintain Work.  The duties,
liabilities and obligations of Contractor under this Article 15 do not extend to
any repairs, adjustments, alterations, or replacements of materials as a result
of the failure of Owner to operate and maintain the Work in accordance with
Contractor-supplied operating manuals, or which are required as a result of
normal wear and tear in the operation of the Work nor to damage or wear
occasioned by abrasion, corrosion, erosion or chemical attack resulting from
conditions that are not within the performance conditions set forth in the
Technical Specifications.
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ARTICLE 16 
 
DISPUTE RESOLUTION
 
 
      16.1       Step Negotiations.  The Parties shall attempt in good faith to
resolve all disputes promptly by negotiation, as follows.  Either Party may give
the other Party written Notice of any dispute not resolved in the normal course
of business.  Executives of both Parties at levels one level above the Parties’
personnel who have previously been involved in the dispute shall meet at a
mutually acceptable time and place within ten (10) Days after delivery of such
Notice, and thereafter as often as they reasonably deem necessary, to exchange
relevant information and to attempt to resolve the dispute.  If the matter has
not been resolved within thirty (30) Days from the referral of the dispute to
senior executives, or if no meeting of senior executives has taken place within
fifteen (15) Days after such referral, either Party may initiate mediation as
provided hereinafter.  If a Party intends to be accompanied at a meeting by an
attorney, the other Party shall be given at least three (3) Business Days’
Notice of such intention and may also be accompanied by an attorney.  All
negotiations pursuant to this clause are confidential and shall be treated as
compromise and settlement negotiations for purposes of the Federal Rules of
Evidence and state rules of evidence.  Each Party will bear its own costs for
this dispute resolution phase.
       16.2       Mediation.  In the event that any dispute arising out of or
relating to the Contract Documents is not resolved in accordance with the
procedures set forth in Subarticle 16.1, such dispute must be submitted to
mediation to  Jonathan Marks of MarksADR, LLC or any mutually agreed to
mediator.  The mediation shall take place at a neutral location near the Project
Site unless otherwise agreed to by the Parties.  If the mediation process has
not resolved the dispute within thirty (30) Days of the mediation session or
within such longer period as the Parties may agree, the dispute shall be decided
by arbitration as set forth below.  All negotiations pursuant to this clause are
confidential and shall be treated as compromise and settlement negotiations for
purpose of the Federal Rules of Evidence and state rules of evidence.  Each
Party will bear its own costs for this dispute resolution phase.
       16.3       Arbitration.  All claims, disputes and other matters in
question not resolved by mediation between the Parties to this Contract arising
out of or relating to the Contract Documents or the breach thereof shall be
decided by arbitration by the American Arbitration Association (at a neutral
location near the Project Site) or by a mutually agreed upon arbitrator.  The
arbitration shall take place at a neutral location and be conducted in
accordance with the American Arbitration Association Construction Industry
Arbitration Rules then obtaining or a mutually agreed upon set of arbitration
rules.  This Contract to arbitrate and any other agreement or consent to
arbitrate entered into in accordance herewith will be specifically enforceable
under the prevailing arbitration law of any court having jurisdiction.  Notice
of demand for arbitration must be filed in writing with the other Party to this
Contract and with the AAA or other mutually agreed to arbitrator.  The demand
must be made within a reasonable time after the dispute has arisen.  In no event
may the demand for arbitration be made if the institution of legal or equitable
proceedings based on such dispute is barred by the applicable statute of
limitations.  If the total dispute, exclusive of interest and arbitration costs,
does not equal or exceed one million dollars, the arbitration shall be heard by
one neutral arbitrator.  If the total dispute equals or exceeds one million
dollars, then the arbitration shall be heard by three neutral arbitrators.  Any
arbitration may be consolidated with any other arbitration proceedings.  Either
Party may join any other interested parties.  The award of the arbitrator(s)
shall be specifically enforceable in a court of competent jurisdiction.  Each
Party will bear its own costs for this dispute resolution phase.
      16.4        Continued Prosecution of the Work.  In case of any dispute
which is or may be the subject of mediation, Contractor shall continue to
diligently prosecute the Work and maintain its progress, and Owner shall
continue to make payments to Contractor for those portions of the Work completed
that are not the subject of dispute in accordance with this Contract.
ARTICLE 17
 
TAXES
 

   17.1  Payment by Contractor. The Contract Price includes federal, state and
local taxes levied on wages and/or salaries paid to Contractor’s employees, and
all taxes based upon net income of Contractor’s business. However, the Contract
Price is exclusive of any present or future federal, state, municipal or other
sales or use tax with respect to the Work covered hereby, or of any other
present or future excise tax upon or measured by the gross receipts from this
transaction or any allocated portion thereof or by the gross value of the Work
covered hereby; and of any present or future property tax or other similar
charge with respect to the Work covered hereby. If Contractor is required by
applicable Laws to pay or collect any such tax or taxes or import duties on
account of this transaction or the Work covered hereby, then such amount of tax
or import duties and any penalties and interest thereon shall be reimbursed to
Contractor or paid by Owner.
 
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       17.2      Tax Exemption.  Missouri Law provides a sales and use tax
exemption for (1) machinery, equipment and parts used directly for manufacturing
a product which is intended to be sold ultimately for final use and consumption,
(2) the materials, supplies and parts solely required for the installation or
construction of such machinery and equipment, and (3) repair and replacement
parts for such machinery and equipment.  When purchasing such machinery,
equipment and parts for delivery and installation in Missouri, Owner shall
provide Contractor with a valid Missouri Form 149, Exemption Certificate a copy
of which is attached hereto as Exhibit Q, which Contractor shall maintain on
file during the period of this Contract.  Contractor shall not invoice Owner for
any Missouri sales and/or use tax for any machinery, equipment and parts covered
by such exemption certificate.
       17.3      Indemnification.  Contractor agrees to indemnify and to hold
Owner harmless, at its own cost and expense from any expense, cost or liability
resulting from the nonpayment of any taxes or withholding for which Contractor
is contractually liable.
      17.4       Assurances.  Contractor agrees to present, if so requested by
Owner, satisfactory evidence of payment of all such taxes and payroll deductions
to the proper authorities.
 
ARTICLE 18
 
INDEMNIFICATION 
 
      

   18.1  Contractor Indemnity. To the fullest extent permitted by Laws,
Contractor waives any right of contribution and agrees to indemnify, defend and
hold harmless Owner and its parent, affiliates, sister entities, officers,
directors, employees, agents, representatives, subsidiaries, successors, and
assigns and the Owner’s Engineer, (collectively, “Owner Indemnitees”) from and
against all Losses in respect of any loss or damage to third-party physical
property, other than the Work, death or personal injury, to the extent caused by
the negligence, including any in the performance of professional services Work
under the Contract Documents or breach of statutory duty of Contractor,
Subcontractors, or their respective employees and agents arising prior to three
years from the date Owner and Contractor execute a Certificate of Final
Completion. Such obligation shall not negate, abridge, or otherwise reduce any
other common law or statutory right or obligation of indemnity or contribution
which exists in favor of the Owner Indemnitees. The obligations of Contractor
under this Contract shall not extend to the liability of Owner Indemnitees
arising out of their negligence. Contractor shall use commercially reasonable
efforts to impose identical duties upon all Subcontractors of Contractor;
however, the inability of Contractor to impose such identical duties on a
Subcontractor shall not relieve Contractor from any liability assumed under this
Section, including Losses caused by Subcontractor.
 
       18.2      Workers Compensation Waiver.  To the fullest extent permitted
by law, Contractor expressly (1) waives the benefit, for itself and all
Subcontractors insofar as the indemnification of Owner is concerned, of the
provisions of any applicable workers compensation law limiting the tort or other
liability of any employer on account of injuries to the employer’s employees,
and (2) assumes liability in accordance with this Article.
       18.3       Not Used.     
              18.4        Patent Indemnity.  Contractor agrees to indemnify,
defend, and hold Owner and any other Owner Indemnitee harmless from and against
any and all Losses that any Owner Indemnitee may hereafter suffer or pay out by
reason of any infringement of a patent based upon the Work designed or used by
Contractor or any of its Subcontractors.

   18.4.1  Notification by Owner. Contractor shall, at its sole expense,
promptly defend against any patent indemnity claim, demand, action or
proceeding, unless directed otherwise by Owner, provided that Owner shall have
notified Contractor upon becoming aware of such claim, demand, action or
proceeding and provided further that Contractor’s aforementioned obligations
shall not apply to materials, equipment or processes furnished or specified by
Owner.
 
   18.4.2  Substitution of Non-Infringing Equipment or Processes or
Modification. Contractor shall have the right, in order to avoid such claim,
demand, action or proceeding, to substitute, at its expense, non-infringing
equipment or processes, or to modify such infringing equipment or processes of
the Work so they become non-infringing, or to obtain the necessary licenses to
use the infringing equipment or processes provided that such substituted and
modified equipment or processes meet all the requirements and are subject to all
the provisions of this Contract.
 
 
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   18.4.3  Rights of Owner Upon Injunction. If Owner or Contractor is enjoined
from completion of the Work or any part thereof, or from the use, operation, or
enjoyment of the Work or any part thereof as a result of any claim, legal
action, or litigation of the type described in this Subarticle, Contractor shall
use commercially reasonable efforts to have such injunction removed promptly at
no cost to Owner, and Owner may without thereby limiting any other right it may
have hereunder or at law or in equity, require Contractor at Contractor’s option
to supply, temporarily or permanently, facilities not subject to such injunction
and not infringing any patent or to replace all such facilities or to take such
steps as may be necessary to ensure compliance by Owner with such injunction,
all to the satisfaction of Owner while maintaining the functionality of the AQC
Systems, the SCR Systems, and the Unit 2 Boiler and all without cost or expense
to Owner, including any additional operating cost.
 
ARTICLE 19
 
INSURANCE
 
       Contractor shall provide the insurance as set forth in the attached
Exhibit R.  Owner reserves the right to implement an Owner Controlled Insurance
Program (OCIP) and Contractor agrees to cooperate with Owner and provide Owner a
credit for the full value of those insurance premiums that Contractor no longer
incurs as a result of the implementation of an OCIP.

ARTICLE 20
EVENTS OF DEFAULT AND TERMINATION
 
   20.1      Termination Without Cause.  This Contract may be terminated by
Owner at any time without liability for damages and without need to show cause
by giving ten (10) Days Notice to Contractor, provided however, upon termination
of this Contract pursuant to this Subarticle.  Owner shall pay Contractor for
the sums expended in the performance of the Work performed up to the date of
termination as follows: (a)  All direct labor and material costs and expenses
incurred prior to cancellation or suspension; (b)  Ten percent (10%) of the
direct labor costs and expenses incurred prior to cancellation or suspension for
overhead expenses; (c)  Ten percent (10%) of the direct labor cost and expenses
incurred prior to cancellation or suspension for profit; and (d)  Reasonable
expenses, if any, specifically incurred by Contractor solely as a result of the
cancellation or suspension, less salvage value (if any) of the Work.  This
includes, but is not limited to, all amounts due and not previously paid to
Contractor for products completed in accordance with this Contract prior to such
Notice, a reasonable amount for any products then in production, reasonable
costs of settling and paying claims arising out of the cancelled orders, and all
costs for providing Owner with requested assistance pursuant to Article 20 or
otherwise, after the date of termination.  These items shall not be considered
incidental, consequential or indirect damages.  
   20.1.1       Limitation of Liability.  Owner’s liability for termination
shall be limited to the foregoing, and Owner shall not be liable for incidental,
consequential or indirect damages.
   20.1.2       Credits.  Owner shall be credited in full for any and all
payments made prior to termination.
   20.1.3       Profits.  Contractor shall make every reasonable effort to
mitigate any termination costs.  Whether Owner terminates Contractor with or
without cause or suspends Contractor’s Work, in no event shall Owner be
responsible for termination expenses (other than provided above), for overhead
costs associated with Work not performed by Contractor, for any profits
Contractor would have earned if it had completed the Work, or for any
consequential, incidental, or indirect damages.
   20.1.4       Contractor Duty.  Contractor shall make every reasonable effort
to minimize such termination charges, including alternate utilization of its
work force, materials and equipment to fill other existing and additional orders
and contracts.  Within thirty (30) Days of receipt of written Notice of
termination, Contractor shall present in writing its claim for termination
charges, providing documentation and justification for each item in reasonable
detail.  In no event shall Owner be responsible for termination expenses (other
than provided herein), for overhead costs associated with Work not performed by
Contractor, for any profits Contractor would have earned if it had completed the
Work, or for any consequential, incidental, or indirect damages.
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       20.2      Contractor Events of Default.  Any of the following shall
constitute an “Event of Default” with respect to Contractor if not cured in all
material respects within the applicable cure period provided herein.  Cure of
such failure or action, except as otherwise expressly provided in this
Subarticle, must be remedied within thirty (30) Days after receipt of Notice
from Owner describing Contractor Event of Default; provided, however, if such
default cannot be remedied within such thirty-Day period and Contractor
commences to remedy such default within such thirty-Day period and thereafter
diligently pursues mutually agreeable appropriate action to remedy such default,
then such cure period shall be extended for such mutually agreeable period as
shall be necessary to cure such default.  Owner and Contractor shall use their
reasonable best efforts to agree upon an appropriate period of time for the
cure; provided that the failure to so agree shall not affect the rights and
obligations of the Parties hereunder.  Events of Default include but are not
limited to the following: 
 
   20.2.1       Failure of Contractor to discharge or perform any material duty
or obligation under the Contract Documents for which no other exclusive remedy,
such as a liquidated damage, applies unless such exclusive remedy has not been
fulfilled by Contractor;
   20.2.2       Failure of Contractor to make to Owner, when due, any payment
required under this Contract if that failure is not remedied on or before the
thirtieth (30th) Day after Owner provides Notice to Contractor of such failure;
provided, however, the provisions of this Subarticle shall not apply to payments
that are the subject of a good faith dispute pursuant to Article 16;
   20.2.3       Failure of Contractor to maintain the  Five Percent LOC or
Performance LOC as required by this Contract;
   20.2.4       Assignment of Contractor’s rights or obligations under this
Contract, except as provided in this Contract.
   20.2.5       Any of the following shall be considered “Events of Default” to
which no period of cure shall apply and Owner shall immediately have the right
to exercise the remedies listed in Subarticle 20.4:
      20.2.5.1       The dissolution or termination of Contractor’s existence;
        20.2.5.2     The appointment of a receiver, trustee or liquidator of
Contractor or of substantially all of Contractor’s property;
          20.2.5.3       An admission in writing by Contractor of its inability
to pay its debts generally as they become due;
          20.2.5.4       A general assignment by Contractor for the benefit of
its creditors;
      20.2.5.5       The filing by or against Contractor of a petition in a
proceeding under the bankruptcy or insolvency laws applicable to it as such
bankruptcy or insolvency laws are now or hereafter in effect;
      20.2.5.6       Contractor seeking relief from its creditors in any other
proceeding under federal bankruptcy laws or state insolvency statutes, or shall
otherwise become insolvent or bankrupt.
       20.3        Remedies for Contractor Default.  If an Event of Default has
occurred and cure efforts have not been initiated by the appropriate date, or
such Event of Default shall not have been cured in all material respects at the
conclusion of the applicable cure period, Owner, at its discretion, may be
entitled to take one or more of the following actions:
   20.3.1       Proceed against Contractor pursuant to Article 16;
   20.3.2       Seek specific performance of Contractor’s obligations under this
Contract to the extent permitted by Laws; or
   20.3.3       Terminate this Contract.
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       20.4       Owner Termination for Cause.  In the event that Owner
terminates this Contract for Contractor’s default, Owner shall have a license to
use any and all patented and/or proprietary information, and all drawings and
plans Owner deems necessary to complete the Work including use of such
information for the operation and maintenance of the AQC Systems, the SCR
Systems, and the Unit 2 Boiler.  Further, Owner shall have the right, but not
the obligation to pay for Materials already ordered by Contractor for use on the
Project, to take possession of any or all of Construction Aids located at the
Site for the purpose of completing the Work, with such Construction Aids to be
returned to Contractor upon the completion of the Work.  Although Owner shall
use reasonable efforts to mitigate the cost for completion of the Work, Owner
may employ any person, firm, or corporation to finish the Work by whatever
method Owner may deem expedient and may undertake such expenditures as in
Owner’s sole judgment will best accomplish the timely completion of the Work
(including, where necessary, the entry into contracts without prior solicitation
of proposals).  In such event, Contractor shall not be entitled to receive any
further payments under this Contract except for payments for Work performed
prior to such termination based on the percentage of Work completed, subject to
Subarticle 20.5.
   20.4.1       Contractor Liable for Excess Costs to Complete Work.  If the
cost to Owner of completing the Work, including costs of accelerated or
expedited construction methods customarily and actually performed in an attempt
to mitigate any delay by Contractor and reasonable charges for administering any
subcontract and for legal fees associated with the termination exceeds the
Contract Price, then Contractor shall be liable for the amount of such excess. 
Owner shall be entitled to offset any such excess costs against any amount due
Contractor for Work performed prior to termination. 
   20.4.2       Contractor’s Additional Services Relative to the Work.  If Owner
elects to terminate this Contract pursuant to Subarticle 20.4, Contractor shall,
at Owner’s request and Contractor’s expense, perform the following services
relative to the Work so affected: (a)  Assist Owner in preparing an inventory of
all Materials in use or in storage at the Site; (b)  Assign to Owner all
subcontracts and other contractual agreements as may be designated by Owner; and
(c)  Remove from the Site all such Construction Aids and rubbish as Owner may
request.
       20.5       Additional Consequences of Termination.  Upon any termination
pursuant to this Article 20, Contractor shall have no further liability for
payment of unaccrued liquidated damages for failure to meet Schedule pursuant to
Article 22, nor liquidated damages for failure to meet the Performance
Guarantees pursuant to Article 22. Owner may at its option elect to (a) take
possession of the Work performed to date, materials or equipment remaining at
the Site, and (b) succeed to the interests of Contractor in any or all
subcontracts entered into by Contractor with respect to the Project, and shall
be required to compensate such Subcontractors only for compensation becoming due
and payable to such parties under the terms of their Subcontracts with
Contractor from and after the date Owner elects to succeed to the interests of
Contractor in such Subcontracts.
       20.6       Limitation of Liability.  Except only as provided in the
penultimate sentence of this Subarticle 20.6, the liability of one Party to the
other and its successors and assigns relating to the Work of this Contract shall
not exceed in the cumulative aggregate the Contract Price (the “Total Liability
Limitation”), regardless of whether any such liability may be based on contract,
guarantee, indemnity (except only as provided in the last sentence of this
Subarticle 20.6), warranty, tort, including negligence or gross negligence,
strict liability, or otherwise, and each Party hereby releases the other Party
from any liability in excess thereof.  The provisions of this Subarticle 20.6 do
not apply to limit: (a) Contractor’s obligation to achieve Unit 1 Final
Completion; (b) Contractor’s obligation to achieve Unit 2 Final Completion; (c)
Subarticle 20.4.1; (d) Contractor’s indemnity obligations under Article 18.1,
18.3 and 18.4; or (e) Owner’s Indemnity for Hazardous Substances.  This
Limitation of Liability shall prevail over any inconsistent provisions contained
in any of the documents comprising the Contract, irrespective of any order of
precedence.
      20.7        Consequential Damages.  Except to the extent of the liquidated
damages provided for in Article 22 and Exhibit S, the requirement to prevent the
placement of Liens in Article 12, the adjustments provided for in Article 13,
any amounts paid to third parties as a result of Contractor’s indemnity
obligations under Article 18.1, 18.3 and 18.4, or Contractor’s costs incurred in
performing Warranty Work set forth in Article 15 may be construed to be
consequential damages, whether as a result of breach of contract, guarantee,
tort, including negligence, strict liability or otherwise, neither Party hereto
shall be liable for loss of profits or revenue, loss of use, cost of capital,
down time costs, loss of opportunity, loss of goodwill, cost of purchased or
replacement power, and/or claims of customers of the other Party for such
damages or for indirect, incidental, consequential or exemplary damages of any
nature or kind; and Owner and Contractor hereby release each other from
liability to the other for such damage.  Contractor shall obtain from all
Subcontractors for the benefit of Owner releases from all such liability in
accordance with the foregoing provisions of this Subarticle 20.7.
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      20.8        Applicability.  The waivers and disclaimers of liability,
releases from liability, limitations on liability, indemnities, and exclusive
remedy provisions set forth in this Contract shall apply even in the event of
the fault, negligence (in whole or in part), strict liability, or other basis of
liability of the Party to the benefit of which such provisions operate.  In the
event either Party asserts a claim or claims against any of the other Party’s 
partners, shareholders, directors, officers, employees, agents, companies
affiliated with such Party or their directors, officers or employees (such
Persons, “Related Persons”), the aggregate recovery of the asserting Party
pursuant to such claim or claims shall, except to the extent prohibited by law,
be limited by the waivers and disclaimers of liability, releases from liability,
limitations on liability, indemnities, and exclusive remedy provisions set forth
in this Contract, even in the event of the fault, negligence (in whole or in
part), strict liability, or other basis of liability of any of the Related
Persons.
      20.9        Books, Records and Right To Audit.  In the event of suspension
or cancellation of the Work at any time by Owner and a claim by Contractor for
suspension or cancellation charges or time and material work, Owner shall have
the right at any reasonable time, upon written Notice to Contractor, to perform
or cause to be performed at Owner’s expense, audits and/or reviews by its
personnel or outside experts of all of Contractor’s books and records supporting
any such claim under this Contract for three (3) years after the event of
suspension or cancellation.  Contractor shall maintain all books and records for
the Project as required by Law but in no event less than three (3) years.
      20.10       Insolvency of Owner.  The Owner’s insolvency shall constitute
an Owner event of default.  Upon the occurrence of an Owner event of default,
Contractor shall provide Notice of such default and demand cure of the same
within thirty (30) days of the date of Notice.  If the event of default is not
cured within the 30-day period, Contractor may with fifteen (15) days prior
written Notice, suspend performance of the Work.  Should an Owner event of
default not be cured within ninety (90) days of the original notice of default,
Contractor may be entitled to terminate this Contract.
ARTICLE 21
 
TESTING AND FINAL COMPLETION

    21.1    Scheduling of Performance Testing. At least sixty (60) Days prior to
the time Contractor believes that the Work is ready for Performance Testing as
set forth in Exhibit E, Contractor shall provide Notice to Owner of the
estimated date to begin the Performance Tests identified in the Contract
Documents. The Performance Testing shall not be postponed more than nine (9)
months from the date of Provisional Acceptance. If Performance Testing is not
conducted within nine (9) months from the Guaranteed Unit 1 Provisional
Acceptance Date or the Guaranteed Unit 2 Provisional Acceptance Date, as
applicable, due to no fault of Contractor, the Performance Testing shall be
deemed to have been achieved If Performance Testing has not been completed by
Owner prior to the Guaranteed Unit 1 Substantial Completion Date or the
Guaranteed Unit 2 Substantial Completion Date B, as the case may be, due to no
fault of Contractor, then Owner will pay Contractor the payment due for
achieving Unit 1 Substantial Completion or Unit 2 Substantial Completion B as if
Substantial Completion for the Unit had been achieved. However, by making such
payment, Owner does not waive its right to dispute Contractor’s entitlement to
such payment if, once the Performance Tests have been performed, such
Performance Tests demonstrate that the Work does not meet the Performance
Guarantees in Exhibit S.
 
      21.2         Achievement of Performance Guarantees.  If the Performance
Tests demonstrate that the Work meets the Performance Guarantees as set forth in
Exhibit S, the Work shall be accepted by Owner for Unit 1 Substantial Completion
or Unit 2 Substantial Completion B, as the case may be.  Upon Provisional
Acceptance of each Unit, Owner shall assume operational control of the Unit. 
Contractor may continue to work to complete the Work at the scheduling of Owner
and without interfering with Owner’s needs to supply power.
      21.3         Failure of Performance Tests.  Within six (6) weeks of
completion of failed Performance Testing, to the extent such failure is
attributable to Contractor, Contractor must submit a corrective action plan to
address Contractor’s portion of the failed Performance Testing complete with all
drawings, data, specifications, and other information required for approval of
the Work by Owner and shall complete all such corrective action as soon as
reasonably possible to meet the Performance Guarantees.  Following completion of
the corrective action, Performance Testing of the Units shall be repeated, at
Owner’s expense, to determine if the Work as so corrected complies with the
Performance Guarantees.
      21.4         Retainage for Punchlist Items.  For any outstanding Punchlist
items that remain on the Punchlist following Unit 2 Substantial Completion B,
Owner shall retain one and one-half times the monetized value of the Punchlist
from the final payment.
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ARTICLE 22
 
LIQUIDATED DAMAGES
 
 
      22.1         Performance Guarantees.  The principal Unit 2 Boiler and
Units 1 and 2 AQC Systems performance features with specific performance
guarantees by Contractor are listed in Exhibit S.  Contractor guarantees that if
the Boiler, AQC and SCR Systems are operated and tested as provided in Exhibit
S, they will each perform in accordance with the guaranteed performance data
stipulated in the Technical Specifications utilizing performance fuel.  The
specific Performance Guarantees set forth in Exhibit S are the only guarantees
of performance made by Contractor with respect to the Work with the exception of
the Catalyst Life Guarantee and the Baglife Guarantees set forth in Article 15.
      22.2         Liquidated Damages For Failure to Meet Performance
Guarantees.  The amount of liquidated damages payable to Owner in the event that
Contractor is unable to satisfy the Performance Guarantees as set forth in
Exhibit S.  Performance Guarantees and associated liquidated damages, if
applicable, for Unit 1 and Unit 2 shall be the same unless otherwise indicated. 
The Parties agree that certain Performance Guarantees for Unit 1 or Unit 2 for
which the payment of liquidated damages shall be an acceptable remedy for
failure to satisfy the applicable Performance Guarantees.
       22.3       Liquidated Damages For Delay and Failure to Meet Schedule. The
applicable liquidated damages are more fully described in Exhibit S.
      22.4        Liquidated Damages Exclusive Remedy.  Payment of liquidated
damages by Contractor to Owner shall be Owner’s sole and exclusive remedy and
Contractor’s sole liability for delay.  Additionally, after Contractor achieves
Provisional Acceptance for each respective Unit, Contractor’s payment of the
applicable amount of liquidated damages with respect of the limited range of
deviation from the Performance Guarantees shall constitute the sole and
exclusive remedy by Owner and the sole liability of Contractor to Owner for
Contractor’s failure to achieve a percentage of the Performance Guarantee. 
Notwithstanding the foregoing, Contractor’s obligation to pay liquidated damages
to Owner shall not affect, waive, or otherwise modify Contractor’s warranty
obligations to Owner.
 
       22.5       No Liquidated Damages for Owner Delay.  If no bonus is agreed
upon by the Parties pursuant to Section 12.2, Contractor shall have no liability
for liquidated damages for any delay in achieving Unit 2 Provisional Acceptance,
if, after the Guaranteed Unit 2 Provisional Acceptance Date, the period of time
the Unit is not operating for reasons other than Contractor’s delay, including
but not limited to delay by Owner or Owner’s other contractors including the
turbine installation contractor and balance of Plant contractor.  However, if
the Parties are able to agree on a bonus, then Contractor will be liable for
Liquidated Damages for delay in accordance with the Contract Documents. 
       22.6        Liquidated Damages Reasonable.  It is understood and agreed
between Contractor and Owner that: (a) Contractor’s failure to meet the
Guaranteed Unit 1 Provisional Acceptance Date and the Guaranteed Unit 2
Provisional Acceptance as set forth in Exhibit E, will cause Owner to suffer
substantial damages; (b) Owner’s loss from failure to achieve Unit 1 Provisional
Acceptance on or before the Guaranteed Unit 1 Provisional Acceptance Completion
Date, Unit 2 Provisional Acceptance by the Guaranteed Unit 2 Provisional
Acceptance Date, or failure of the Work to comply with any of the Performance
Guarantees would be uncertain and impossible to determine or quantify with
precision; (c) the provisions set forth in this Section both limit the liability
of Contractor and establish agreed compensation and damages; (d) such provisions
represent a reasonable endeavor on the part of Contractor and Owner to estimate
fair and reasonable compensation for the foreseeable damages from each of the
potential events for which liquidated damages are provided in Exhibit S; and (e)
subject to the limitations on liquidated damages contained in this Article and
Exhibit S, such liquidated damages are cumulative.
ARTICLE 23
 
RISK OF LOSS
 
       Care, custody, and control of the Work and full risk of loss shall pass
to Owner upon the earlier to occur of Provisional Acceptance of each Unit, or
Termination or as agreed by the Parties the (“Care, Custody and Control Date”). 
Owner shall assume the risk of physical loss or damage to the applicable portion
of the Work or the Plant from and after the Care, Custody  and Control Date;
provided, however, Contractor shall remain liable for deductibles under Owner’s
insurance policies for loss or damages to the extent caused by fault, including
negligence, of Contractor to the extent of Contractor’s or its Subcontractors’
acts or omissions.  Owner shall waive its rights of subrogation against
Contractor and Subcontractors for loss or damage incurred from and after the
Care, Custody  and Control Date that may be covered under Owner’s insurance and
hereby releases Contractor and Subcontractors for such liability to the extent
of recoveries from Owner’s insurance.  Contractor shall be obligated to replace,
repair, or reconstruct any and all Work or supplies furnished by Contractor that
are lost, damaged, or destroyed prior to transfer of care, custody, and control
of the Work to Owner. 
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ARTICLE 24
 
FORCE MAJEURE
 
       24.1       Definition.  As used in this Contract, the term “Force
Majeure” shall mean any acts, events, or occurrences that are not caused by the
fault, negligence or willful misconduct of the affected Party and are beyond the
reasonable control of a Party, including but not limited to acts of God,
earthquakes, floods, tornado, tidal wave, lightning, fire, quarantine, blockade,
governmental acts (other than the time periods associated with obtaining
approvals necessary from governmental agencies), court orders or injunctions,
war (declared or not), rebellion, terrorism (foreign and domestic), riots,
insurrection or civil strife, sabotage, explosions, strikes, work stoppages or
other labor dispute (if, (a) a national or regional strike, and (b) if the
strike is not against Contractor or its Subcontractors), other than those caused
by: (1) breaches of any collective bargaining agreement by Contractor or any of
its Subcontractors, (2) actions of Contractor toward Owner’s personnel or
Owner’s contractors’ personnel, or (3) unfair labor practices of Contractor;
provided, however, that “Force Majeure” does not include Contractor’s inability
to obtain labor or to pay monies due and owing, nor shall Force Majeure include
weather conditions other than those specifically listed above or those weather
conditions upon which Owner and Contractor mutually agree prevent the Work from
proceeding for safety or efficiency reasons. 
      24.2        Excused Performance.  A Party shall be excused from
performance and shall not be considered to be in default with respect to any
obligation hereunder, except the obligation to make payments previously due in a
timely manner, if and to the extent that its failure of, or delay in,
performance is due to a Force Majeure; provided the Party claiming excuse by
reason of such Force Majeure: (a) gives the other Party written Notice
describing the particulars of the Force Majeure event as soon as reasonably
practicable, but in no event later than ten (10) Days after the affected Party’s
knowledge of the occurrence of such event; (b) suspends performance only to the
extent and for the duration that is reasonably required by the Force Majeure
event; (c) is not excused as a result of such occurrence from any obligations of
such Party which arose before the occurrence causing the suspension of
performance; (d) uses commercially reasonable efforts to overcome or mitigate
the effects of such occurrence; and (e) promptly resumes performance hereunder
when such Party is able to resume performance of its obligations under this
Contract, and shall give the other Party written Notice to that effect. 
       24.3       Settlement of Strikes.  Notwithstanding the foregoing, nothing
in Article 24 shall be construed to require the settlement of any strike,
walkout, lockout or other labor dispute on terms which, in the sole judgment of
the Party involved in the dispute, are contrary to such Party’s interest.  It is
understood and agreed that the settlement of strikes, walkouts, lockouts or
other labor disputes shall be entirely within the discretion of the Party
experiencing such action.  Owner may direct Contractor, at Contractor’s costs,
to take reasonable steps to resolve any strike, walkout, lockout or other labor
dispute and procure Materials or labor from other sources so as to minimize
adverse impact on the Project.
      24.4        Burden of Proof.  If the Parties are unable in good faith to
agree that a Force Majeure event has occurred, the Party claiming a Force
Majeure event shall have the burden of proof as to whether such Force Majeure
event (a) has occurred, (b) was not a result of such Party’s, its agents’ or
subcontractor’s acts or omissions, and (c) could not have been avoided by due
diligence or the use of reasonable efforts of such Party or its agents.
      24.5        Termination for Force Majeure Delay.  Owner may terminate this
Contract for Force Majeure delay upon fifteen (15) Days’ written Notice to
Contractor after a delay or suspension resulting from an event of Force Majeure
and lasting at least sixty (60) Days after a Force Majeure Delay Date.  If Owner
elects to terminate pursuant to Subarticle 24.5, Owner shall compensate
Contractor for all Work performed as of the termination date as provided in
Subarticle 20.1 as if the termination were one without cause.  Such compensation
shall be made by Owner within thirty (30) Days of receipt of a final invoice
from Contractor computed as set forth herein. 
       24.6        Force Majeure as a Change.  If the Parties experience a Force
Majeure event, Contractor may make a claim for a Change Order to modify the
Project Schedule pursuant to Article 13.  No Force Majeure event shall give rise
to a change in the Contract Price unless the delay caused by the Force Majeure
event lasts more than five (5) consecutive Days.  In the event that the Force
Majeure event does last more than five Days, a change in the Contract Price
shall be limited to the direct costs incurred by the Contractor after the first
five Days of such delay, as determined pursuant to the provisions of Article 13.
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ARTICLE 25
 
FEDERAL CONTRACTING REQUIREMENTS
 
 
      Owner is a U.S. government contractor.  In order to comply with the
requirements applied to Owner by the government under Owner’s agreement, Owner’s
suppliers and contractors, including Contractor, are required to comply with the
rules outlined in Exhibit M.
 
ARTICLE 26 
 
MILLENNIUM COMPLIANCE
 
       26.1       Millennium Compliant Software.  Contractor warrants that the
Materials, any embedded processor or firmware and software or related equipment
(collectively “Software”) is “Millennium Compliant” (defined below).  For the
purposes of this Contract “Millennium Compliant” means:
   26.1.1      The Software accepts, calculates, compares, sorts, extracts,
sequences, and otherwise processes date and time inputs and date and time
values, and returns and displays date and time values, in a consistent manner
regardless of the dates used, whether before, on, or after January 1, 2000;
   26.1.2     The Software will function without interruptions caused by the
date in time on which the processes are actually performed or by the date input
to the Software, whether before, on, or after January 1, 2000;
   26.1.3      The Software stores and displays date information in ways that
are unambiguous as to the determination of the century.
       26.2      Testing.  Contractor warrants that the Software has been tested
by Contractor to determine whether the Software is Millennium Compliant. 
Contractor shall deliver the test plans and results of such tests upon written
request from Owner.  Upon Owner’s written request, Contractor agrees to
participate in additional tests of the Software at no charge to determine
Millennium Compliance.  Contractor shall notify Owner immediately of the results
of any tests or any claim or other information, which indicates that the
Software is not Millennium Compliant.
      26.3       Subcontractor Warranties.  Contractor agrees to pass through to
Owner any and all warranties concerning this Millennium Compliance issue,
resting in Contractor from any and all Subcontractors.
      26.4        Non-Compliant Software.  To the extent that it is determined
by Owner in its reasonable discretion that the Software is not Millennium
Compliant, Contractor agrees to immediately formulate and implement a written
plan of action to modify the Software such that it is Millennium Compliant.  A
copy of such plan of action shall be delivered to Owner within ten (10) Business
Days after completion of the same.
       26.5      Owner Liability.  Any required correction to the Software
caused by misinformation supplied by Owner, Owner’s error of omission or
commission, material failure to follow Contractor’s operating instructions or
any reason not attributable to Contractor are not included in these warranties
and will be billed at Contractor’s rates which shall be those rates which would
be chargeable under Contractor’s most favorable contract terms then in effect.
       26.6      Contractor Obligations.  In the event that Contractor is unable
to cure any substantial nonconformance in the Software during the period ending
ninety (90) Days after the expiration of the Software Warranty Period, Owner
may, at its option, require Contractor to refund in full the purchase price of
the Software and any other items procured from Contractor within a reasonable
time period around the time of procurement of the Software which are rendered
substantially unusable by the lack of functionality of the Software.  In this
event, any associated agreement for maintenance of the Software or other
terminated items, to the extent that it covers the Software or the other
terminated items, shall be terminated and any pre-paid maintenance will be
refunded to Owner on a pro rata basis.
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ARTICLE 27
 
UNDERGROUND INSTALLATIONS
 
      27.1        Contractor Responsibility.  Contractor shall be solely
responsible for protecting all known existing underground installations and
underground utilities within the construction limits of the Work and elsewhere
where any of Contractor’s below ground installations are anticipated or required
or where construction operations may subject underground installations or
underground utilities to damage.
      27.2        Maintaining Records of Underground Facilities.  All
information relative to the underground installations and underground utilities
shall be recorded by Contractor and incorporated into the records required by
this Contract.

 
 
ARTICLE 28
 
SAFETY AND FIRST AID
 
      28.1        Responsibility and Liability.  Contractor shall be solely and
completely responsible and liable for any damages caused by Contractor’s or its
Subcontractors’ negligent acts or omissions.  Contractor shall be fully
responsible for the protection of all persons including members of the public,
employees of Owner, and employees of other contractors or subcontractors, and
all public and private property including structures, sewers and utilities,
above and below ground.  Contractor shall take all reasonable precautions to
protect the workers and others about the premises and the public on the streets,
highways, or rights-of-way.
       28.2        Safety Standards.  Contractor shall be responsible for
assuring that all Work performed under this Contract complies with all
applicable safety standards.  Contractor shall also observe all applicable Owner
safety rules.  Contractor alone shall be responsible for the safety, adequacy,
and efficiency of its Construction Aids, and methods.  This requirement will
apply continuously and not be limited to normal working hours.  Owner’s review
of Contractor’s performance is not intended to include review of the adequacy of
Contractor’s safety measures in, on, or near the Site.
 
ARTICLE 29 
 
MISCELLANEOUS PROVISIONS
 

      29.1   Entire Contract; Amendment. This Contract sets forth the full and
complete understanding of the Parties with respect to the subject matter hereof,
as of the Effective Date, and supersedes any and all agreements and
representations (oral or written) made or dated prior thereto. Subsequent to the
date hereof, this Contract may be supplemented and amended only by written
agreement signed by authorized representatives of the Parties.
 
      29.2         Independent Contractor.  Contractor shall be an independent
contractor with respect to the Work to be performed hereunder.  Contractor, its
Subcontractors or the employees of any of them, shall not be deemed to be
servants, employees, or agents of Owner.
      29.3         Title to Plans and Specifications.  Owner and Contractor
agree that Owner shall have physical ownership of all design documents which are
required to be delivered by Contractor hereunder, although Owner shall have an
irrevocable, royalty-free license to use such design documents as necessary or
desired in connection with future maintenance of the Project or to use the
documents and materials in connection with modifications to and expansion of the
Project.  Contractor shall be obligated to keep Owner advised and updated on the
specific location of all Project documents together with all engineering data,
information and design documents and Subcontractor information related to the
Work.
           29.3.1     Delivery of Documents.  Provided Contractor has been paid
in accordance with the requirements of the Contract and Owner is not in default
of its obligations under the Contract, in the event of any termination of this
Contract, Contractor agrees to deliver to Owner forthwith all original documents
(including, but not limited to, reports and calculations) and also computer
disks containing the Contract Documents, drawings and specifications prepared or
in the process of being prepared by or on behalf of Contractor in readable form
through the date of termination and hereby grants to Owner a license to use the
copyright information to allow:
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      29.3.1.1    Use of any drawings, specifications and other documents to
complete the Work, including providing any drawings and specifications and other
documents to others.
      29.3.1.2    Owner to amend or have amended any drawings, specifications or
other Project documents as may be required by Owner.
      29.3.1.3    Use of any drawings, specifications and other documents in
connection with the use or maintenance of or modification of the Project or the
bidding of any work related thereto.
     29.4       Binding Effect; Successors and Assignees. 
   29.4.1    Binding Effect.  This Contract shall be binding upon and shall
inure to the benefit of the Parties hereto and their respective successors and
permitted assignees.
   29.4.2    Successors and Assigns.  Neither Party hereto shall assign or
otherwise convey any of its rights, titles, or interests under this Contract
without the prior written consent of the other Party hereto (which consent shall
not be unreasonably withheld or delayed); provided, however, that without any
such consent, either Party may assign its interest in this agreement by way of
merger, consolidation or acquisition of substantially all of the assets of the
assigning Party to a parent company or successor.  .  Upon each permitted
assignment described in this Section by either Party hereto, the assignee of
such Party shall expressly assume in writing all of the obligations of such
Party hereunder. 
   29.4.3    Acknowledgement of Assignment.  Upon the request of either Party,
the other Party shall acknowledge in writing any permitted assignment described
in Section 29.4.2 and the right of any permitted assignee to enforce this
Contract against such other Party. 
   29.4.4    Continuance of Contractual Obligations.  Unless otherwise agreed by
the Parties hereto in a separate writing, no permitted assignment described in
Section 29.4.2 shall relieve the assigning Party from any of its obligations
under this Contract.  However, the assignee may be required by the assigning
Party to agree to indemnify and hold harmless the assigning Party from some or
all of its obligations under this Contract.
     29.5      Auditing Rights for Non-Fixed-Price Work.
   29.5.1    Review Evidence and Interview Employees.  For any and all non-fixed
price Work, Contractor and its Subcontractors shall permit Owner’s auditors or
their agents to: (a) Review all evidence deemed necessary by auditors or their
agents to substantiate charges for direct and indirect costs, including overhead
allocations as may apply to associated costs.  Auditors or their agents shall
have the right to examine records to the extent necessary to determine proper
charges for non-fixed price work are not also charged to the firm fixed price. 
This information shall be provided by Contractor to auditors or their agents
upon request in both hard copy via U.S. mail, and transmission in electronic
formats.  Contractor shall ensure that these same audit rights are provided in
all contracts between Contractor and its Subcontractors; and (b) Interview any
current or former employees of Contractor or appropriate Subcontractor during
the audit relative to amounts charged by Contractor.
   29.5.2    Workspace.  Contractor and all Subcontractors will provide Owner
auditors or their agents adequate and appropriate workspace, with access to
photocopy machines.
   29.5.3    Reimbursement of Overcharges.  If the audit detects overcharges
that equal or exceed 1% of total billings for non-fixed price work, Contractor
shall reimburse Owner for the cost of the audit.
   29.5.4    Deadline for Repayment.  Contractor will repay any overcharges
discovered during the audit within thirty (30) Days after the completion of the
audit.
   29.5.5    Maintenance of Records.  Contractor and all Subcontractors will be
subject to audit during the course of the Work in question and for a period of
three (3) years after Unit 2 Substantial Completion.  Contractor and all
Subcontractors agree to maintain all records related to the Project for a period
of three (3) years after Unit 2 Substantial Completion.
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   29.6      Notices.  Any Notices, demands or requests required to be given
under this Contract after it has been awarded as a contract shall be in writing
and delivered personally or sent by facsimile, by nationally recognized
express-type courier service requiring delivery receipts, or postage prepaid by
U. S. Mail, return receipt requested, as follows:
To Owner:       Kansas City Power & Light Company
             1201 Walnut, 11th Floor
             Kansas City, MO 64141-9679
             Attn.:   Brent Davis
             FAX:   (816)-654-1623
                                        and
                                        To Contractor:          ALSTOM Power
Inc.
                                                                            2000
Day Hill Road
                                                                           
Windsor, CT 06095
                                                                           
Attn.:  Gary Lexa
 
                                                                            cc:
ALSTOM Power Inc.
                                                                            2000
Day Hill Road
                                                                           
Windsor, CT 06095
                                                                           
Attn.:  General Counsel
Changes of address or addresses for Notice shall be in compliance with this
Subarticle 29.6.  Notices properly addressed and stamped shall be deemed
received by the addressee on the Day of actual receipt.  Express-type courier
service and facsimile Notices shall be deemed to have been received at the end
of the first Business Day following the actual date of delivery by such courier
or of transmission.
     29.7   Not for Benefit of Third Parties.  Except as provided herein, this
Contract and each and every provision hereof and thereof is for the exclusive
benefit of the Parties hereto and not for the benefit of any third party.
     29.8   Governing Law and Venue.  This Contract, and all amendments and
modifications hereof, and all documents and instruments executed and delivered
pursuant hereto or in connection herewith, shall be governed by and construed
and enforced in accordance with the internal laws of the State of Missouri,
without regard to principles of conflict of laws.  Subject to Article 16, any
judicial actions or proceedings brought against any Party with respect to this
Contract may be brought in any state or federal court of competent jurisdiction
in the State of Missouri and, by its execution and delivery of this Contract,
each Party accepts, generally and unconditionally, the non-exclusive
jurisdiction of the aforesaid courts.  Each Party irrevocably waives any
objection that it now or hereafter may have to the bringing or prosecution of
any such action or proceeding with respect to this Contract or the documents and
instruments contemplated hereby in the State of Missouri. 
     29.9       Headings; Usage of Certain Words.  The headings set forth in
this Contract are for convenience only and shall not be considered as part of
this Contract in any respect nor shall they in any way affect the substance of
any provisions contained in this Contract.  The words “herein”, “hereof”,
“hereunder” and words of similar import shall be construed to refer to the
particular Article, Subarticle, Section, or paragraph of which it is a part
unless the context requires otherwise.
     29.10  Rules of Construction.  Each Party has reviewed and discussed this
Contract with counsel and agrees that this Contract shall not be construed by
applying any rule of construction providing for interpretation against the
drafting party.
     29.11     No Waiver.  No consent or waiver, expressed or implied, by a
Party to the performance by the other Party or of any breach or default by the
other Party of its obligations hereunder shall be deemed or construed to be a
consent or waiver to or of any other breach or default in the performance by
such other Party of the same or any other obligations of such other Party
hereunder.  The giving of consent by a Party in any one instance shall not limit
or waive the necessity to obtain such Party’s consent in any future instance. 
No waiver of any rights under this Contract shall be binding unless it is in
writing and signed by the Party waiving such rights. 
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     29.12      Severability.  In the event that any provision of this Contract
or the documents and instruments contemplated hereby is held by a tribunal of
competent jurisdiction to be invalid, prohibited or unenforceable for any
reason, unless narrowed by construction, this Contract and the documents and
instruments contemplated hereby shall be construed as if such invalid,
prohibited or unenforceable provision had been more narrowly drawn so as not to
be invalid, prohibited or unenforceable, or if such language cannot be drawn
narrowly enough to satisfy such tribunal, the tribunal making any such
determination shall have the power to modify in scope, duration or otherwise any
such provision, but only to the extent necessary to make such provision or
provisions enforceable by such tribunal, and such provision then shall be
applicable in such modified form.  No narrowed construction,
tribunal-modification, or invalidation of any provision of this Contract and the
documents and instruments contemplated hereby shall affect the construction,
validity, or enforceability of such provision or of this Contract and the
documents and instruments contemplated hereby in any jurisdiction other than
that upon which the decision of the tribunal of competent jurisdiction shall
govern.
     29.13      Hazardous Substances.
   29.13.1  Removal, Transport and Disposal.  Owner shall remove, transport, and
dispose of any Hazardous Substances discovered or released at the Site, other
than hazardous materials (a) transported and released onto the Site or on
off-site rights of way and easements by Contractor or any Subcontractor or (b)
used as part of Contractor’s or any Subcontractor’s activities at the Site.
   29.13.2  Notice.  Contractor shall provide written Notice of the presence of
Hazardous Substances to local fire, medical, and law enforcement agencies as
required with a copy of such Notice to Owner.
   29.13.3  Material Safety Data Sheets Required.  As required under Federal
Hazardous Communications Standards and certain state and local Laws, Contractor
shall maintain Material Safety Data Sheets covering all Hazardous Substances
furnished under, brought on Site under, or otherwise associated with the Work
under this Contract and provide them prior to or at the time Hazardous
Substances are delivered to or otherwise brought on the Site.  If Contractor
does not bring any hazardous materials on Site, Contractor shall provide Owner
with copies of a document certifying that no Material Safety Data Sheets are
required under any Laws in effect at the Site.
   29.13.4  Labeling and Training.  Contractor shall provide labeling of
Hazardous Substances and training of their employees in the safe usage of such
materials as required under any applicable Laws.
     29.14     Environmental Compliance and Indemnification.
   29.14.1  Warranty.  Contractor warrants that it shall fully comply with all
Laws applicable to its services provided to Owner under this Contract, including
but not limited to the Comprehensive Environmental Response, Compensation and
Liability Act, the Toxic Substances Control Act, and the Resource Conservation
and Recovery Act, as the same may be amended from time to time.
   29.14.2   Environmental Indemnification.  Contractor shall indemnify and
defend Owner from and against all Losses (including but not limited to damages
for injury or loss of natural resources) arising out of and to the extent of:
(a)  Contractor’s provision of services to Owner relating to Hazardous
Substances, and (b)  The transporting, handling, storage, treatment, release,
threatened release or disposal by Contractor, or any third party, of any
equipment, substances or other materials brought onto the Site or used by
Contractor during the course of providing such services.
   29.14.3  Owner shall fully indemnify, save harmless, and defend Contractor
and each of Contractor’s directors, officers, subcontractors, agents, employees
and successors and permitted assigns from and against all  Losses resulting
from: (a) the presence of any Hazardous Substances on the Site prior to the
commencement by Contractor of performance of the Work, of (b) the introduction
of any Hazardous Substances (other than pursuant to the Contract) at, on or into
the Site after the commencement of the Work other than due to actions or
inactions of Contractor of any Subcontractor or of a person acting on behalf of,
or under the direction or supervision of Contractor, and (c) Hazardous
Substances which are byproducts of the normal operation of the Plant.
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     29.15      Asbestos & Lead Paint.
   29.15.1  Discovery.  Owner’s existing facilities may contain
Asbestos-containing materials and lead paint.  If Contractor or any of its
Subcontractors is required to perform Work within or immediately adjacent to any
of the existing structures or facilities, the possibility exists that
Asbestos-containing material and lead paint may be encountered during the
execution of the Work.  Should Contractor or any of its Subcontractors encounter
or have reason to believe that Asbestos-containing material or lead paint is
present while performing Work, Contractor must immediately notify Owner. 
Contractor shall take the necessary precautions to prevent disturbing insulation
or lead paint adjacent to the Work.  If the Work cannot be continued without
disturbing or exposing such material, Contractor shall stop Work in the
immediate vicinity of the affected area.
   29.15.2   Investigation and Determination.  If Contractor notifies Owner that
it has reason to believe that it has encountered Asbestos or Asbestos containing
material or lead paint, Owner will investigate the material and determine
whether Asbestos or lead is present.  Owner shall thereupon notify Contractor of
its determination.  If Asbestos or lead paint is not present, Contractor shall
immediately resume any of its operations that have been stopped.
   29.15.3   Removal or Protection.  Removal or protection of the Asbestos
material or lead paint will be done by, and at the expense of, Owner.

 
ARTICLE 30
 
PERFORMANCE LETTER OF CREDIT
 
     30.1        Performance Letter of Credit.  Within 30 days following the
Effective Date, Contractor shall provide to Owner a Performance Letter of Credit
(“Performance LOC”) substantially in the form of Exhibit U and in an amount
equal to twenty percent (20%) of the Contract Price.  The  Performance LOC shall
remain in full force and effect until Contractor has achieved Unit 2 Provisional
Acceptance.
              IN WITNESS WHEREOF, the Parties have executed these Terms and
Conditions as of the day and year first above written.
 
                THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY
BE ENFORCED BY THE PARTIES.
    

ALSTOM POWER INC.

By:          
                                                                                      

Its:          
                                                                                      

KANSAS CITY POWER & LIGHT COMPANY

By:       
                                                                                          

Its:        
                                                                                           

 
 
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