EX-10.27









Exhibit 10.27




ADDENDUM TO THE AGREEMENT FOR THE ENGINEERING, PROCUREMENT AND CONSTRUCTION OF A WAVE ENERGY POWER PLANT SIGNED ON JULY 27, 2006
BETWEEN IBERDROLA ENERGIAS MARINAS DE CANTABRIA, S.A. AND OCEAN POWER TECHNOLOGIES LIMITED.



Made and entered into in Madrid on February 18, 2008.



B E T W E E N




Of the one part,


IBERDROLA
ENERGIAS MARINAS DE CANTABRIA, S.A., with registered offices in
Santander, Cantabria, Calle Amos de Escalante,
number 6, 2B, represented by Mr. Javier Garcia Perez, with
Spanish Identification Document number 30.604.192-R and
Mr. Rafael de Icaza de La
Sota, with Spanish Identification Document number 16.035.858-M, in his capacity as attorneys, as accredited by means of the deed of incorporation
of the company signed on  September 25, 2006 before the Notary of Madrid Mr. Miguel Raiz-Gallardon Garcia de la Rasilla under number 7.567 of his protocol (the “CLIENT”).



And, of the other part,



OCEAN POWER TECHOLOGIES LIMITED, a company incorporated in England and Wales Company No.   5225532) with its registered office at Warwick Innovation Centre,
Gallows Hill, Warwick CV334 6UW, United Kingdom, represented by
Mr. Mark Draper, with UK Passaport number 80061626, in his capacity as Director of Company (the “CONTRACTOR”).



The CLIENT
and the CONTRACTOR shall hereinafter be referred to collectively as the “Parties”, and individually as “Party”.




W H E R E A S





	I.	 	Whereas, in July 27, 2006, the Parties have signed an Agreement for the Engineering,
Procurement and Construction of a Wave Energy Power Plant (hereinafter, the “EPC Agreement”).
	 
	II.	 	Whereas, the Parties have agreed to modify the milestones and
the regulation of the PAC and the DAC and other terms of the EPC
Agreement, so it suits better with the development of the Works,
namely to accommodate a separate completion of the
installation, commissioning, PAC and DAC for the PowerBuoy PB40ES and
associated  mooring system, on the one hand, and the Subsca cable
and Underwater Substation
‘Pod’ on the other.




 








 











	III.	 	In virtue of the aforesaid, the Parties, hereby execute this Addendum to the EPC
Agreement (the “Addendum”), which will be governed by the following clauses:





CLAUSE 1

CHANGES TO CLAUSE 1 OF THE EPC AGREEMENT; REFERENCES TO DEFINED 

TERMS AND CLAUSES.



	1.	 	The Parties agree to change Clause 1 of the EPC Agreement that will read as follows:




“1. DEFINITIONS



1.1 For
the purposes of this Agreement, the following
terms shall have the meaning set forth beside each of them (such meanings to
be equally applicable to both the singular and plural forms of the terms defined).




	 	 	 
	Agreement

	 	Means this agreement together
with all of its Annexes.
	 
	 	 
	Agreed Price

	 	Means the compensation due by the CLIENT to the CONTRACTOR
for the entire and satisfactory execution of
the Works determined pursuant to Clause is of this Agreement that shall be paid to the CONTRACTOR according to the Schedule of Milestones.
	 
	 	 
	Business Day

	 	Means any day that is not a Saturday, Sunday or
holiday (whether a national, regional or local holiday) in Madrid
and Cantabria.
	 
	 	 
	Calendar

	 	Means the timeline for execution
of the Works contained in Annex II.
	 
	 	 
	Certificate
of Completion of Commissioning
of the PB40ES PowerBuoy and mooring system
	 	Means the certificate issued by the Contractor’s
Representative which accredits that the Commissioning
Period of the PB40ES PowerBuoy and mooring system is finalized and
the PB40ES PowerBuoy and mooring system is ready for
Provisional Acceptance pursuant to Clause 9 of this Agreement.
	 
	 	 
	Certificate of Completion of Commissioning of the Subsea cable and
Underwater Substation ‘pod’
	 	Means the certificate issued by
the Contractor’s Representative which accredits
that the Commissioning Period of the Subsea cable and Underwater
Substation ‘pod’ is finalized and the Subsea cable and Underwater
Substation ‘Pod’ is ready for Provisional Acceptance pursuant ot Clause 9 of this Agreement.
	 
	 	 
	Certificate of Completion of Installation of the PB40ES
	 	Means the certificate issued by the Contractor’s
Representative which accredits that the PB40ES PowerBuoy







 











 





	 	 	 
	PowerBuoy and mooring system
	 	and mooring system is ready for commissioning.
	 
	 	 
	Certificate
of Completion of Installation of Subsea
cable and Underwater

	 	Means the certificate issued by the Contractor’s Representative
which accredits that the Subsea
cable and Underwater Substation ‘Pod’ is ready for commissioning. 
	 
	 	 
	Substation ‘Pod’
Client’s Representative

	 	Means the representative of the Client as designated in Clause 26 of this Agreement.
	 
	 	 
	Commissioning Period of the PB40ES PowerBuoy
and mooring system

	 	Period commencing upon issue of
the Certificate of Completion of
Installation of the PB40ES
PowerBuoy and mooring system and
finishes
at the signature of the
Provisional Acceptance Certificate of the PB40ES PowerBuoy and mooring system.
	 
	 	 
	Commissioning Period of the
Subsea cable and Underwater Substation ‘Pod’
	 	Period commencing upon issue of
the Certificate of Completion of
Installation of the Subsea cable
and Underwater Substation ‘Pod’
and finishes at the signature of
the Provisional Acceptance
Certificate of the Subsea cable
and Underwater Substation ‘Pod’.
	 
	 	 
	Commissioning Protocol of the PB40ES
PowerBuoy and mooring system
	 	The preliminary Commissioning
Protocol for the PB40ES PowerBuoy and mooring system is attached to the Agreement as
Annex X. The final Commissioning Protocol for the PB40ES PowerBuoy and mooring system
shall be delivered by the
CONTRACTOR to the CLIENT at
least one month prior to the
Scheduled date for commencement
of the commissioning of the
PB40ES PowerBuoy and mooring system.
	 
	 	 
	Commissioning Protocol of the Subsea
cable and Underwater Substation ‘Pod’
	 	The Preliminary Commissioning Protocol for the Subsea cable
and Underwater Substation ‘Pod’
connected to the PB40ES
PowerBuoy is attached to the
Agreement as Annex X. The final commissioning Protocol for the Subsea cable and Underwater Substation ‘Pod’ shall be
delivered by the CONTRACTOR to the CLIENT at least one month prior to the scheduled date for commencement of the commissioning of the Subsea
cable and Underwater Substation ‘Pod’.
	 
	 	 
	Contractor’s Representative

	 	Means the person appointed by the CONTRACTOR in this Agreement under Clause 27.1, who acts on behalf of the CONTRACTOR.
	 
	 	 
	Day

	 	Means a calendar day.
	 
	 	 
	Definitive Acceptance Certificate of
the PB40ES PowerBuoy and mooring
system

	 	Document to the signed by the Client and the Contractor after conclusion of Testing Period of the PB40ES
PowerBuoy and mooring system in accordance with Clause 10. A draft of this document is included in Annex VII.






 









 






	 	 	 
	Definitive Acceptance Certificate of the Subsea cable and
Underwater Substation ‘Pod’
	 	Document to be signed by the Client and the contractor
after conclusion of Testing Period of the Subsea cable and
Underwater Substation ‘Pod’ in accordance with Clause 10. A
draft of this document is included in Annex VII.
	 
	 	 
	Equipment

	 	Means the equipment and/or materials supplied by the
CONTRACTOR and falling within the scope of this Agreement,
as defined in Clause 3 and the related Annexes.
	 
	 	 
	EURIBOR

	 	Means the interest rate applicable among the banks published
in Brussels for the three months deposits in Euros as it is defined daily in the Telerate screen, page
248, 11:00 morning time (central Europe time), the second banking day previous to the beginning of every period in
which the Automatic Paying System is operative in Trans European Real Time TARGET. This
rate shall be increased, as the case may be, with any cost, surcharges, taxes, etc, as
duly supported by documents, which are referred to in the EURIBOR definition.
	 
	 	 
	Final Commissioning Protocol of the PB40ES PowerBuoy and mooring system
	 	Means the Commissioning Protocol delivered by the
CONTRACTOR to the CLIENT at least one month prior to the scheduled date
for commencement of the commissioning of the PB40ES PowerBuoy
and Mooring system.
	 
	 	 
	Final Commissioning
Protocol of the
Subsea cable and
Underwater
Substation ‘Pod’

	 	Means the Commissioning Protocol delivered by the
CONTRACTOR to the CLIENT at least one month prior to the
scheduled date for commencement of the commissioning of the
Subsea cable and Underwater Substation ‘Pod’.
	 
	 	 
	Force Majenre

	 	Means any event or fact as described in Clause 24 of this Agreement.
	 
	 	 
	IBERENOVA

	 	Means Iberdrola Energias Renovables II S.A., Sociedad
Unipersonal, a company incorporated and validly existent
under the laws of Spain: registered with the Madrid Commercial Registry, of Section 8, page 285710, Tax
Identification Number (C.I.F.) A-83028035, with registered office at Madrid, Calle Tomas Redando, number 1.
	 
	 	 
	IDAE
	 	Means Instituto para la Diversificacion Y Ahorro de la Energia, S.A., public entity ascribed to the Ministry of
Industry, Tourism and Commerce through the General
Secretary of Energy, with domicile in Madrid, at Calle
Madera number 8 and CIF number Q 2820009 E.
	 
	 	 
	Independent Expert

	 	Means the qualified specialist appointed by the School of
Industrial Engineers of Madrid or the Institute of
Mechanical Engineers or Electrical Engineers in London,







 











 





	 	 	 
	 	 	U.K. upon request by either Party.
	 	 	 
	Insurance Schedule	 	Means the required policies that the CONTRACTOR must
take out and maintain under this Agreement.
	 	 	 
	Intellectual and Industrial Property	 	Means all (i) trademarks, trade names, Internet domain
names, logos, symbols, all applications and
registrations for the foregoing and all goodwill
associated therewith and symbolized thereby; (ii)
patents, utility models, registrations, invention
disclosures and applications therefore, including
divisions, continuations, continuations-in-part and
including renewals, extensions and reissues and all
inventions and discoveries whether patentable or
not; (iii) published and unpublished works of
authorship, whether copyrightable or not (including
databases and other compilations of information),
Copyrights therein and thereto, and registrations and
applications therefore, and all renewals, extensions,
restorations and reversion thereof; and (iv) other
industrial and intellectual property or proprietary
rights; concerning the Plant and the PowerBuoyTM system.
	 	 	 
	Know How	 	Means all the information, trade secrets, documents,
technical data, technical knowledge, including
processes, schematics, business methods, formulae,
drawings, prototypes, models, designs, quality control
systems, quality standards and specifications
developed or acquired by the CONTRACTOR, presently or
in the future, concerning the Plant and the
PowerBuoyTM system, or its design,
constructions, commissioning, use, exploitation and
assembling.
	 	 	 
	Major Defects	 	Means such defects that could affect the production
and/or transmission of energy by the PB40ES PowerBuoy
and mooring system or Subsea cable and Underwater
Substation ‘Pod’ and/or the safety of the PB40ES PowerBuoy
and mooring system and/or the Subsea cable and Underwater Substation
‘Pod’ and/or of the people working therein.
	 	 	 
	Milestone	 	Means the relevant stages of progress of the Works as
described under the Schedule of Milestones and
Calendar.
	 	 	 
	Minor Defects	 	Means such material defects that are not Major Defects.
	 	 	 
	Notice of Approval	 	Means the document issued by the Client under Clause
19.2 (i) of this Agreement.
	 	 	 
	Notice of Completion	 	Means the communication sent by the Contractor to the



 








 





	 	 	 
	 	 	Client under clause 19.2 (i) which accredits the
completion of a Milestone.
	 	 	 
	Notice of Pending Works	 	Means the document issued by the Client under Clause
19.2 (ii) of this Agreement.
	 	 	 
	OPT	 	Means Ocean Power Technologies,
Inc., a company
incorporated and validly existent under the laws of
New Jersey, USA; with registered office at 1590 Reed
Road, Pennington, NJ, USA.
	 	 	 
	Order for Change	 	Means the document signed by both the Client and the
Contractor for a given modification of the Works under
clauses 11.1 or 11.2 of this Agreement.
	 	 	 
	Parties	 	Means the Client and the Contractor jointly.
	 	 	 
	Party	 	Means the Client or the
Contractor, as the context may require.
	 	 	 
	PB40ES PowerBuoy and mooring system	 	Means the
PowerBuoy®1 x
40kW PB40ES, its
mooring system, and all other ancillary equipment and
services required to provide a complete installation
of the PowerBuoy 1 x 40kW PB40ES. As described in Annex
1.
	 	 	 
	Phase 1	 	Means Phase 1 of the Santona Wave Energy Project as
defined in Recital 1 of this Agreement in which the
parties to the Project have studied and decided about
the viability of the Project at the Site.
	 	 	 
	Phase 2A	 	Means Phase 2A of the Santona Wave Energy Project as
defined in Recital IV of this Agreement, consisting of
the design, manufacture, factory tests, dispatch and
unloading, ex works delivery, assembly and
commissioning of the PowerBuoyTM 1 x 40kW
PB40ES, its mooring system, the underwater substation
and submarine cable both with capacity for energy
evacuation of this PowerBuoyTM and
other nine (9) 150kW PB150 PowerBuoysTM and
all other ancillary equipment and services required to
provide a complete installation of the
PowerBuoyTM  1 x 40kW PB40ES. All as
described in Annex 1.
	 	 	 
	Phase 2B	 	Means Phase 2B of the Santona Wave Energy Project
consisting of the design, manufacture, factory tests,
dispatch and unloading, ex-works delivery, assembly and
commissioning of the nine PoweBuoysTM 9 x
150kW PB150, their mooring systems, submarine cables and all
other ancillary equipment and services required to
provide a complete installation of the
PowerBuoysTM.



 










 





	 	 	 
	
PowerBuoyTM
	 	Means the Technology owned by the Contractor.
	 
	 	 
	Preliminary Commissioning Protocol
	 	Means the Commission Protocol attached to the Agreement as Annex X.
	 
	 	 
	Provisional Acceptance
Certificate or PAC of the PB40ES PowerBuoy and mooring system
	 	Document to be signed
by the Client and the Contractor to put on record the satisfactory completion of the Commissioning Protocol of the PB40ES
PowerBuoy and mooring system, including all Minor Defects that the Contractor must remedy prior to the signature of DAC of the PB40ES
PowerBuoy and mooring system. A draft of this Document is included in Annex VI.
	 
	 	 
	Provisional Acceptance
Certificate or PAC of the Subsea cable and Underwater Substation ‘Pod’
	 	Document to be signed by the Client and the
Contractor to put on record the satisfactory completion of the Commissioning Protocol of the Subsea
cable and Underwater Substation ‘Pod’, including all Minor Defects that the Contractor must remedy prior to
signature of DAC of the Subsea cable and Underwater Substation ‘Pod’. A draft of this Document is included in Annex VI.
	 
	 	 
	Santoňa Wave Energy Agreement
	 	Means the agreement signed on July 2, 2004 by OPT, IBERENOVA, SODERCAN,
and IDAE, and modified on June 17, 2005 to included TOTAL as a party.
	 
	 	 
	Santoňa Wave Energy Project or SWEP
	 	Means the pilot project consisting of a power plant harnessing wave energy with an initial installed capacity of 1.39 MW
on the north coast of Spain based on the Technology.
	 
	 	 
	Schedule of Milestones
	 	Means the schedule describing the progress
of the Works and the timeline for payment of the Agreed Price contained in Annex V.
	 
	 	 
	Site
	 	Means the place where the PB40ES PowerBuoy and
mooring system and the Subsea cable and Underwater Substation ‘Pod’ will be installed located at the coast opposite the
“Punta del Pescador” Lighthouse
in Santoňa; in the Cantabrian region in Spain as specified in Annex XIII.
	 
	 	 
	SODERCAN
	 	Means Sociedad para el Desarrallo Regional de Cantabria, S.A., a company incorporated
and validly existent under the laws of Spain by virtue of its incorporation deed granted on December 15,
1984 before the Notary of Santander, Mr. Jose Antonia Olascoega, with number 1271 of his public protocol;
registered with the Cantabria Commercial Registry, at Volume 296,
Book 101, Sheet 60 and Page S-1751; Tax Identification Number (C.I.F.) A-3904457, with






 









 







	 	 	 
	 
	 	registered office at Santander,
Avenida de Los Infantes 32, “Quinta Labal”.
	 
	 	 
	SPV
	 	Means the public limited company created by IBERENOVA, IDAE, OPT, SODERCAN
and TOTAL for the construction and operation of the Santona Wave Project as agreed under the Santona Wave Energy Agreement.
	 
	 	 
	Subcontractors
	 	All firms or individuals contracted by the
CONTRACTOR to do part of the Works contemplated in this Agreement.
	 
	 	 
	Subsea cable and Underwater Substation ‘Pod’
	 	Means the underwater substation
and submarine cable, as described in Annex I,
with capacity for energy evacuation of the PB40ES PowerBuoy and other nine (9) 150kW PB150 PowerBuoys.
	 
	 	 
	Taxes
	 	Means any taxes, rates, special
levies (“contribuciones especiales”),
charges (“exacciones parafiscales”) or any other encumbrance of tax nature, required by any
administrative authority, including surcharges, interests and penalties.
	 
	 	 
	Technical Documentation
	 	Means the documents, workshop plans, calculations and
sketches listed in Annex IX of this Agreement.
	 
	 	 
	Technology
	 	Means the technology for electricity generation
harnessing the energy produced by the waves called
PowerBuoyTM system owned by the CONTRACTOR. In particular,
it means all the Know How and Intellectual and Industrial Property related to the PowerBuoyTM system, including the
moorings and the
underwater substation.
	 
	 	 
	Testing Period of the PB40ES PowerBuoy and
mooring system
	 	Means six months including three months between October and March (inclusive);
plus any extensions made hereunder. Period commencing upon signature of the Provisional Acceptance of the PB40ES PowerBuoy and mooring system and
finishing at the signature of the Definitive Acceptance Certificate of the PB40ES PowerBuoy and mooring system.
	 
	 	 
	Testing Period of the Subsea cable and Underwater Substation ‘Pod’
	 	Means six months commencing upon
signature of the Provisional Acceptance Certificate of the Subsea cable and Underwater Substation ‘Pod’ and finishing at the signature of the Definitive Acceptance Certificate of the Subsea cable and Underwater Substation ‘Pod’.







 












 





	 	 	 
	Time for Completion

	 	Means the period of time for the Contractors
completing the assembly, installation and
commissioning of the PB40ES PowerBuoy and mooring
system and Subsea cable and Underwater Substation
‘Pod’ according to this Agreement.
	 
	TOTAL

	 	Means Total Eolica S.A., a company incorporated and
validly existent under the laws of Spain registered with
the La Coruna Commercial Registry, at Section S,
Page 25547; Tax Identification Number (C.I.F)
A-15745706, with registered office at Avenida Fernando
de Casas Novoa, number 37, planta  B,3°A,.
	 
	Works

	 	Means all actions work and services for the supply,
construction and commissioning of the PB40ES PowerBuoy
and mooring system and the Subsea cable and Underwater
Substation ‘Pod’ described in Clause 3 of this
Agreement.







	1.2	 	Other terms may be defined in other clauses of this Agreement.”





CLAUSE 2

CHANGES TO DEFINITION OF PLANT.



The Parties agree that, unless otherwise agreed under this Addendum, each and every reference to
“Plant” throughout the EPC Agreement is replaced by  — “PB40ES PowerBuoy and mooring system and/or
the Subsea cable and Underwater Substation ‘Pod’” – both as defined in Clause 1 of the EPC
Agreement as amended by this Addendum.




CLAUSE 3

CHANGES TO CLAUSE 3.1 OF THE EPC AGREEMENT.



The Parties agree to change Clause 3.1 of the EPC Agreement that will read as follows:





	“3.7	 	 The CONTRACTOR shall perform the Works and shall deliver the Equipment according to the
Technical Documentation according to Annex IX.”





CLAUSE 4

CHANGES TO CLAUSE 4 OF THE EPC AGREEMENT



The Parties agree that Clause 4.2 of the EPC Agreement shall be amended as follows:





	“4.2	 	 Upon signing the Provisional Acceptance Certificate of the PB40ES PowerBuoy and mooring




 









 






	 	 	system, the CONTRACTOR shall hand over the “as built” documents of the Equipment included in the
PB40ES PowerBuoy and mooring system in accordance with Annex IX, and any other documentation as may
be agreed between the Parties, all the documents generated during commissioning of the PB40ES
PowerBuoy and mooring system, including any modifications based on reasonable written comments made
by the CLIENT and agreed by the CONTRACTOR on the Provisional Acceptance of the PB40ES
PowerBuoy and mooring system.
	 
	 	 	Upon signing the Provisional Acceptance Certificate of the Subsea cable and Underwater
Substation ‘Pod’, the CONTRACTOR shall hand over the “as built” documents of the Subsea
cable and Underwater Substation ‘Pod’ in accordance with Annex IX, and any other
documentation as may be agreed between the Parties, all the documents generated during
commissioning of the Subsea cable and Underwater Substation ‘Pod’, including any
modifications based on reasonable written comments made by the CLIENT and agreed by the
CONTRACTOR on the Provisional of the Subsea cable and Underwater Substation ‘Pod’.”





CLAUSE 5

CHANGES TO CLAUSE 6.6 OF THE EPC AGREEMENT



The Parties agree to change Clause 6.6 of the EPC Agreement that will read as follows:





	“6.6 	 	If any fault or defect is discovered during testing and/or inspection as contemplated in
Clause 6.4, the CONTRACTOR shall be responsible for correcting the fault or defect prior to
the relevant PAC.”





CLAUSE 6

CHANGES TO CLAUSE 7 OF THE EPC AGREEMENT



The Parties agree to change Clauses 7.2, 7.4 and 7.5 of the EPC Agreement that will read as
follows:





	“(...)	 	 






	7.2	 	The PB40ES PowerBuoy and mooring system and the Subsea cable and Underwater Substation
‘Pod’ shall be installed at the Site once the CLIENT has given its written confirmation that
the required permits and consents for installation have been obtained.






	(...)	 	 
	 
	7.4	 	Inspections by the CLIENT shall not release the CONTRACTOR from any of its obligations and
liabilities hereunder nor shall they imply acceptance of the PB40ES PowerBuoy and mooring system,
or the Subsea cable and Underwater Substation ‘Pod’.






 











 





(...)





	7.5	 	As soon as the CONTRACTOR considers the assembly and installation of the PB40ES PowerBuoy and
mooring system is complete, according to the terms of this Agreement, it shall issue a Certificate
of Completion of Installation of the PB40ES PowerBuoy and mooring system indicating that the PB40ES
PowerBuoy and mooring system is ready for Commissioning.
	 
	 	 	As soon as the CONTRACTOR considers the assembly and installation of the Subsea cable and
Underwater Substation ‘Pod’ connected to the PB40ES PowerBuoy is complete, according to
the terms of
this Agreement, it shall issue a Certificate of Completion of Installation of the Subsea cable and
Underwater Substation ‘Pod’ indicating that the Subsea cable and Underwater Substation ‘Pod’ is ready for
Commissioning.”





CLAUSE 7




CHANGES TO CLAUSE 8 OF THE EPC AGREEMENT




The Parties agree to change Clause 8 of the EPC Agreement that will read as follows:




“8. COMMISSIONING




8.1 Protocol



During the commissioning of each of the PB40ES PowerBuoy and mooring system and the Subsea cable
and Underwater Substation ‘Pod’ connected to the PB40ES PowerBuoy, the CLIENT shall appoint an
overseer, who shall check the correct application of the corresponding Commissioning Protocols. The
CONTRACTOR shall deliver the Final Commissioning Protocol of the PB40ES PowerBuoy and mooring
system and the Final Commissioning Protocol of the Subsea cable and Underwater Substation ‘Pod’, to
the CLIENT, which must contain at least the issues contained in the Annex X as applicable to each of
the relevant Final Commissioning Protocols, at least one (1) month prior to the Scheduled date of
commencement of commissioning of the PB40ES PowerBuoy and mooring system or

commencement of commissioning of Subsea cable and Underwater
Substation ‘Pod’, as applicable.



The CLIENT may request the
CONTRACTOR to make such further tests during this period, as may be
required by the competent authorities for the grid connections and the initial operation of the
PB40ES PowerBuoy and mooring system or the Subsea cable and Underwater Substation ‘Pod’ connected to the
PB40ES PowerBuoy. Any additional tests that the CLIENT asks the CONTRACTOR to make shall be at the
CLIENT’s cost.



In Annex X is included a Preliminary Commissioning Protocol.



Each of the actions included in the Commissioning
Protocols carried out  during commissioning shall be
recorded in the protocol or corresponding procedure, dated and signed by the person effecting the action
and the person responsible for commissioning.




 









 







If any
fault, failure or Major Defects, as defined in this Agreement are
detected in any of the
Equipment, the CONTRACTOR shall be obliged to remedy the problem during the
corresponding Commissioning Period.




8.2 Commissioning Period



The proper functioning of the PB40ES PowerBuoy and
mooring system on one hand, and the Subsea
cable and Underwater Substation ‘Pod’ connected to the
PB40ES PowerBuoy on the other, shall be
checked during the applicable Commissioning Period according to the corresponding Final
Commissioning Protocol.



For
finalizing the Commissioning Period of the PB40ES PowerBuoy and
mooring system it is required
that the PB40ES PowerBuoy and mooring system will be in operation for
one (1) month producing
energy measured at the electrical output from the PowerBuoy.



Once the Commissioning Period of the PB40ES PowerBuoy
and mooring system is finalized the
CONTRACTOR shall issue a Certificate of Completion of Commissioning of the PB40ES PowerBuoy
and mooring system and shall notify the CLIENT indicating that the PB40ES PowerBuoy and mooring system
is ready for Provisional Acceptance.



For finalizing the Commissioning Period of the Subsea cable and
Underwater Substation ‘Pod’ it is
required that the Subsea cable and Underwater Substation
‘Pod’ connected to the PB40ES PowerBuoy is in
operation for one (1) month transmitting energy to shore measured at
the onshore grid connection
point supplied by the CLIENT.



Once the Commissioning Period of the Subsea cable and
Underwater Substation ‘Pod’ is finalized the
CONTRACTOR shall issue a Certificate of Completion of Commissioning of the Subsea cable and
Underwater Substation ‘Pod’ and shall notify the CLIENT indicating that the Subsea cable and
Underwater Substation ‘Pod’ is ready for Provisional Acceptance.”




CLAUSE 8




CHANGES TO CLAUSE 9 OF THE EPC AGREEMENT




The Parties agree to change Clause 9 that will read as follows:





	“9.	 	PROVISIONAL ACCEPTANCE
	 
	9.1	 	Provisional Acceptance of the PB40ES PowerBuoy and mooring system
	 
	9.1.1	 	Upon termination of the Commissioning Period of the PB40ES PowerBuoy and mooring system,
the CONTRACTOR shall notify the CLIENT in writing indicating:






	 	a)	 	A date proposed by the CONTRACTOR for a joint visit with the CLIENT. The proposed
date shall be at least seven (7) Business Days after the date of notification. If the
proposed date is not convenient for the CLIENT, it may be postponed to a later






 












 







	 	 	 	date no more than seven (7) Business Days after the latest date indicated in the initial proposal.
	 
	 	b)	 	The confirmation that the corresponding Commissioning Period has finalized
satisfactorily.
	 
	 	c)	 	The confirmation of delivery of the required Technical Documentation under Clause 4.






	9.1.2	 	The Equipment, temporary installations and materials left over from the Works shall be
removed by the CONTRACTOR after completing assembly of the PB40ES PowerBuoy and mooring system
leaving the Site totally free and clear , as a prerequisite for signing of the corresponding
PAC.
	 
	9.1.3	 	During the joint visit, the parties shall inspect the state of the Equipment and complete a
check list, indicating any defects and/or irregularities detected and any pending Works. The
CONTRACTOR shall remedy within the following two (2) weeks at least those Major Defects that
preclude acceptance, after which the CLIENT and the CONTRACTOR shall
proceed to do a new
visit and complete a new check list with the Minor Defects so the
CLIENT could sign the
corresponding PAC and attach to in the list of pending matters.
	 
	9.1.4	 	If the Parties do not reach an agreement as to the existence and/or remedy of Major Defects
and consequent obligation of issue of the PAC, any of them may entrust their divergence to an
Independent Expert, who will decide and thirty (30) days from its engagement and whose
decision shall be final and binding for both Parties.
	 
	9.1.5	 	The Minor Defects of the Equipment shall be listed as
pending and remedied within the
times agreed upon signing the corresponding PAC. If the pending
defects are not remedied within the agreed times the CLIENT may remedy the deficiency itself or commission a third party to do so , for
the expense of the CONTRACTOR and without releasing the latter from its responsibilities.
	 
	9.2	 	Provisional Acceptance of the Subsea cable and Underwater Substation ‘Pod’
	 
	9.2.1	 	Upon termination of the Commissioning Period of the Subsea cable and Underwater
Substation ‘Pod’, the CONTRACTOR shall notify the CLIENT in writing, indicating:






	 	a)	 	A date proposed by the CONTRACTOR for a joint visit with the CLIENT. The
proposed date shall be at least seven (7) Business Days after
the date of notification. If the proposed date is not convenient for the CLIENT, it may be postponed to a later
date no more than seven (7) Business Days after the latest date indicated in the
initial proposal.
	 
	 	b)	 	The confirmation that the corresponding Commissioning
Period has finalized
satisfactorily.
	 
	 	c)	 	The confirmation of delivery of the required Technical Documentation under
Clause 4.





 









 






	9.2.2	 	The Equipment, temporary installations and materials left over from the Works shall be
removed by the CONTRACTOR after completing assembly of the Subsea cable and Underwater
Substation ‘Pod’, leaving the Site totally free and clear, as a prerequisite for signing of
the corresponding PAC.
	 
	9.2.3	 	During the joint visit, the Parties shall inspect the state of the Equipment and complete a
check list, indicating any defects and/or irregularities detected and any pending Works. The
CONTRACTOR shall remedy within the following two (2) weeks at least those Major Defects that
preclude acceptance, after which the CLIENT and the CONTRACTOR shall proceed to do it new visit
and complete a new check list with the Minor Defects so the CLIENT could sign the
corresponding PAC and attach to it the list of pending matters.
	 
	9.2.4	 	If the Parties do not reach an agreement as to the
existence and/or remedy of Major Defects
and consequent obligation of issue of the PAC, any of them may entrust their divergence to an
Independent Expert, who will decide on thirty (30) days from its engagement and whose decision
shall be final and binding for both Parties.
	 
	9.2.5	 	The Independent Expert will not be required and the corresponding PAC should be issued, if
the competent authority from the industry regional department of Cantabria issues the
definite start-up certificate to operate the PB40ES PowerBuoy and mooring system and the
Subsea cable and Underwater Substation ‘Pod’ (Acta de
Puesta en Marcha Definition).
	 
	9.2.6	 	The Minor Defects of the Equipment shall be listed as pending and remedied within the times
agreed upon signing the corresponding PAC, If the pending defects are not remedied within the
agreed times, the CLIENT may remedy the deficiency itself or commission a third party to do
so, for the expense of the CONTRACTOR and without releasing the latter from its
responsibilities.
	 
	9.3	 	If, for reason beyond the control of the CONTRACTOR, it is not possible to effect the
commissioning of the PB40ES PowerBuoy and mooring system and/or that
of the Subsea cable
and Underwater Substation ‘Pod,’ the Parties shall agree on how to proceed to obtain the
corresponding PAC without jeopardizing the interest of the CLIENT. In any case, provided it is
signed, the relevant PAC would contain the corresponding reservations and the CONTRACTOR would
undertake to do whatever has been established for that Commissioning Period as soon as the
impeding obstacles have disappeared. This document shall indicate the effective date of
beginning of the relevant Testing Period for the purpose of the Definitive Acceptance of the
PB40ES PowerBuoy and mooring system.
	 
	9.4	 	Upon signing the Provisional Acceptance Certificate of each of the PB40ES PowerBuoy and
mooring system and that of the Subsea cable and
Underwater Substation ‘Pod’ ownership of the
PB40ES PowerBuoy and mooring system and that of the Subsea cable and Underwater Substation
‘Pod’ as well as the relevant Equipment shall be transferred to the CLIENT. The CONTRACTOR
shall bear the risks of loss of or damage to the PB40ES PowerBuoy and mooring system and that
of the Subsea cable and Underwater Substation ‘Pod’ and the relevant Equipment up to its
effective transfer of ownership, without prejudice to the other






 












 






	 	 	guarantees and liabilities of the CONTRACTOR hereunder. The CONTRACTOR will be responsible for the care and
preservation of the PB40ES PowerBuoy and mooring system and that  of
the Subsea cable and
Underwater Substation ‘Pad’ until their Provisional Acceptance.”





CLAUSE 9

CHANGES TO CLAUSE 10 OF THE EPC AGREEMENT



The Parties agree to change Clause 10 that will read as follows:





	“10.	 	DEFINITIVE ACCEPTANCE
	 
	10.1.	 	Definitive Acceptance of the PB40ES PowerBuoy and mooring system shall be issued after the
end of the corresponding Testing Period, provided that the pending Minor Defects indicated in
the PAC of the PB40ES PowerBuoy and mooring system and any others detected during the relevant
Testing Period have been remedied and provided that the CONTRACTOR delivers the information
required under Clause 21.4 and 21.5 to confirm fulfilment of the
guaranteed values included therein.
	 
	10.2.	 	Definitive Acceptance of the’ Subsea cable and
Underwater Substation ‘Pod’ shall be issued
after the end of the corresponding Testing Period, provided that the pending Minor Defects
indicated in the PAC of the Subsea cable and Underwater Substation ‘Pad’ and any others detected
during the relevant Testing Period have been remedied.
	 
	10.3.	 	If the Parties do not reach an agreement as to the
fulfilment of the above criteria and consequent
obligation of issue of the corresponding DAC, any of them may entrust
their divergence  to an Independent
Expert, who will decide on thirty (30) days from its engagement and whose decision shall be
final and binding for both Parties.
	 
	10.4.	 	The CONTRACTOR shall deliver to the CLIENT an updated version of Annex XIV based on real data
collected during the Testing Period of the PB40ES PowerBuoy and mooring system. The CONTRACTOR
shall deliver such information within the ninety (90) days following the Definitive Acceptance
of the PB40ES PowerBuoy and mooring system





CLAUSE 10

CHANGES TO CLAUSE 14 OF THE EPC AGREEMENT



The Parties agree to change Clauses 14.5 and 14.7 of the EPC Agreement that will read as follows:




“14.(...)





	14.5	 	Environmental Protection




 









 










The
CONTRACTOR shall be responsible for continuous cleaning of the Site
and the surrounding area of the
Site, the [**] or the “path” to reach the Site during the Works and the periodical removal of any
debris left over from installation of the Equipment.



The
CONTRACTOR shall comply with the Environmental Impact Declaration or
equivalent assessment
issued by Spanish authorities, if applicable, as well as with the
Environmental Supervision  plan (“Plan de
Vigilancia Ambiental”) throughout the duration of the
Works. The CONTRACTOR shall be responsible for paying
any fines that may be levied by the competent  authorities when
breaching obligations in this regard. The
CONTRACTOR shall be liable towards the CLIENT for all damages caused to the environment by the
CONTRACTOR and/or its Subcontractors during the performance of the Works. It shall also be liable
for removing from the Site all toxic and hazard substances and  waste generated by the CONTRACTOR and
its Subcontractors during the Works.



(...)





	14.7	 	Replacement parts and consumables




The
Contractor shall provide all parts, consumables equipment and tools
which are necessary for the commissioning of the
PB40ES PowerBuoy and mooring system during the Commissioning Period of the PB40ES PowerBuoy and mooring system.



The
Contractor shall provide all parts, consumables, equipment and tools which are necessary for the commissioning of the
Subsea cable and Underwater Substation ‘Pod’ during the
Commissioning Period of the Subsea cable and Underwater Substation
‘Pod’.




CLAUSE 11

CHANGES TO CLAUSE 18 OF THE EPC AGREEMENT



The
Parties agree to change Clause 18.7 of the EPC Agreement that will
read as follows:




“18,
(...)





	18.7	 	In order to enable the CLIENT to control the cost and expenses incurred by the CONTRACTOR
regarding the different concepts of the table above the CONTRACTOR
shall report the actual cost
incurred in the Works, to the CLIENT, on a monthly basis by delivery
of the relevant documents
supporting those costs as well as equipment and services invoices. This monthly report will
include also the accumulated costs from the beginning of the Agreement and the costs forecast for
finalising the PB40ES PowerBuoy and mooring system and/or Subsea cable and Underwater Substation
‘Pod’ up to the relevant PAC”





CLAUSE 12

CHANGES TO CLAUSE 20 OF THE EPC AGREEMENT



The Parties agree to change Clause 20.1 of the EPC Agreement that will read as follows:





 











 





“20. PERFORMANCE BOND/LETTER OF CREDIT





	 	20.1	 	The CONTRACTOR shall deliver to the CLIENT a letter of credit of first requirement issued by
a top ranking bank in Spain for 10% of the Agreed Price against the payment of that same amount by the
CLIENT to secure the performance of the Works (the “Performance Bond”), as attached in Annex VIII.
	 
	 	 	 	This Performance Bond shall be valid and effective without any obligation by the CLIENT to return it until
the earlier of (i) the termination of this Agreement under Clauses 18.5.(ii)(c), 31.1 (ii) or 31.2,
or (ii) the date when the Parties agree in writing to proceed with Milestones 12 and 15.
Then the CLIENT will return the Performance Bond to the CONTRACTOR against delivery of a new letter
of credit of first requirement issued by a top ranking bank in Spain for 3% of the Agreed Price to secure
the performance of the outstanding Milestones. This new letter of credit will be valid and effective
until the earlier of (i) the date of signature of the PAC of the Subsea cable and Underwater Substation
‘Pod’ or (ii) the termination of this Agreement under Clauses 31.1 (ii) or 31.2.
	 
	 	20.2	 	The CONTRACTOR shall grant a letter of credit of first requirement issued by a top ranking bank in Spain
for 5% of the Agreed Price against payment of the same amount upon performance of Milestone number 3.
This letter of credit shall secure the supply of the equipment covered by that Milestone and shall be valid
and effective until the earlier of (i) delivery of the respective equipment or (ii) termination of the Agreement
under Clauses 18.5.(ii)(c), 31.1 (ii) or 31.2.
	 
	 	20.3	 	The CONTRACTOR shall grant a letter of credit of first requirement issued by a top ranking bank in Spain
for 5% of the Agreed Price against payment of the same amount upon performance of Milestone number 4. This
letter of credit shall secure the supply of the equipment covered by that Milestone and shall be valid
and effective until the earlier of (i) delivery of the respective equipment or (ii) termination of the
Agreement under Clauses 18.5.(ii)(c), 31.1 (ii) or 31.2.”





CLAUSE 13




CHANGES TO CLAUSE 21 OF THE EPC AGREEMENT



The Parties agree to change Clause 21 of the EPC Agreement that will read as follows:




“21. WARRANTIES




21.1 PB40ES PowerBuoy and mooring system



The CONTRACTOR offers the following guarantees effective as from the PAC of the PB40ES
PowerBuoy and mooring system:





 









 




The remedies set forth in this Clause 21.1 and 21.3 are the sole and exclusive remedy of the
CLIENT with respect to the breach of the stipulated guarantees.




21.1.1 Ownership Guarantee



The CONTRACTOR represents and warrants that at the date of signature of the PAC of the PB40ES
PowerBuoy and mooring system:



(i) the Equipment comprising the PB40ES PowerBuoy and mooring system is fully and exclusively
owned by the CONTRACTOR:



(ii) the
Equipment comprising the PB40ES PowerBuoy and mooring system is transferred to the
CLIENT according to this Agreement free from charges, encumbrances, constraints on transfer or
third-party rights; and



(iii) the CONTRACTOR is authorised to transfer their full and exclusive ownership to the CLIENT.



This ownership guarantees shall be valid and enforceable against third party claims throughout the
limitation period established in the applicable law.



In the event of default, invalidity or uncertainty of these guarantees, the CONTRACTOR shall
defend the validity of the sale of the Equipment and hold the CLIENT harmless from damages of
whatsoever nature including costs and expenses.



If there is any lien or encumbrance on any of the Equipment and it is not imputable in the CLIENT,
the CONTRACTOR must, as soon as possible, replace or cancel that attachment, lien or encumbrance at its cost.



The CONTRACTOR represents and warrants to the CLIENT that all creations, plans, drawings,
specifications, documents, procedures, methods, products or inventions supplied, prepared or made by
the CONTRACTOR hereunder and the use of any of them does not infringe any third-party rights.
In the event of any claim or action by a third party alleging infringement of any intellectual or
industrial property right, the CLIENT must notify the CONTRACTOR promptly and the CONTRACTOR will
carry out all the negotiations to settle the claim. At the request of the CONTRACTOR, the CLIENT will provide
all reasonable assistance to the CONTRACTOR against the claim of the third party. In such case, the
CONTRACTOR shall hold the CLIENT harmless from all damages (including costs and expenses) that may be
produced and shall obtain for the CLIENT the right to use, or continue using, the Equipment. Delayed performance
of the Works due to this cause shall not release the CONTRACTOR from any liabilities for delays or entitle
it to raise the Agreed Price.




21.1.2 Quality Guarantee



The CONTRACTOR guarantees that the components of the Equipment comprising the PB40ES
PowerBuoy and mooring system shall comply with the standards required for normal operation of the
PB40ES PowerBuoy and mooring system during the term of the O&M Agreement.






 












 




If during the O&M Agreement any of the components of the Equipment fail to comply with the
referred standards the CONTRACTOR shall have to repair or replace, at its option, any such component on its
account, included the cost of retrieval from the Site and redeployment of the defective items, if
required.




21.1.3 Repair and Replacement Guarantee



The CONTRACTOR shall, during a period of one year beginning with the signature of the PAC of the
PB40ES PowerBuoy and mooring system repair or replace, at its option, all failures or defects in the
Equipment comprising the PB40ES PowerBuoy and mooring system elements found to have a faulty design,
quality or operations as soon as possible without any cost to the CLIENT. The cost of materials,
labour and, in general, all expenses incurred in total repair shall be for the account of the
CONTRACTOR, included the cost of retrieval from the Site and redeployment of the defective items if
required.



If the CONTRACTOR does not repair or replace in a reasonable period of time, the CLIENT shall
notify the CONTRACTOR, indicating a reasonable deadline for making the repair or replacement. If
the CONTRACTOR continues not fulfilling its obligation after that time, the CLIENT shall be entitled to
carry out the repair for the account of the CONTRACTOR, which will be responsible for the direct
damages caused by this delay.



Correct and adequate repair by the CLIENT in the above circumstances shall not release the
CONTRACTOR from all its liabilities.




21.1.4 Power Output Guarantee



In respect of the PB40ES PowerBuoy and mooring system, the  CONTRACTOR guarantees fulfilment of a Power
Output of at least 50% of that predicted (according to the Theoretical Power Table contained in
table 1 of Annex XIV) during the Testing Period of the PB40ES PowerBuoy and mooring system given
the measured energy levels. Wave energy levels will be collected and recorded for at least 50% of
the Testing Period of the PB40ES PowerBuoy and mooring system by the dedicated Acoustic Doppler
Current Profiling (ADCP) unit at or near the Site or, if the ADCP fails to collect the required data
for the project, by extrapolating data from publicly available
sources (e.g. RPE 2914, 2915 or Bilbao
Buoy), the latter being subject to approval by the CLIENT. PowerBuoy output levels will be recorded
for at
least 50% of the Testing Period of the PB40ES PowerBuoy and mooring
system by the SCADA system,
PowerBuoy output power, as measured with the meter equipment. The proposed meter equipment with its
auxiliary transformers would have an accuracy compliant with the IEC 687 Class 0.5 specification
and have bi-directional measurement capability with Ethernet communications. A Siemens 9300 series
device or equivalent meter shall be installed at the low tension wire at the output from the
PowerBuoy, will be compared against the predicted level which is calculated using the collected wave
energy levels and the theoretical power table in Annex XIV.



In the event of breach of this guarantee that results in the delay of the DAC of the PB40ES
PowerBuoy and mooring system beyond the date included in Clause 31, the remedies set forth in
Clause 31 shall apply.




 









 








21.1.5 Energy Production Guarantee



In repect of the PB40ES PowerBuoy and mooring system, the CONTRACTOR guarantees fulfilment of an
Energy Production of at least 50% of that predicted according to the Theoretical Power Table
contained in table 1 of Annex XIV using the real  wave data captured during the Testing Period of the
PB40ES PowerBuoy and mooring system in the method described in Clause 21.4.



In the event of breach of this guarantee that results in the delay of the DAC of the PB40ES
PowerBuoy and mooring system beyond the date included in Clause 31, the remedies set forth in Clause
31 shall apply.




21.1.6 Spare Parts Guarantee



The CONTRACTOR guarantees the existence of spare parts or equivalent replacements (which may
require redesign) for any component of the Equipment and undertakes to offer the CLIENT their
availability for supply during the term of the Testing Period of the PB40ES PowerBuoy and mooring system, until
DAC of the PB40ES PowerBuoy and mooring system is achieved of this Agreement terminated.




21.2 Subsea cable and Underwater Substation ‘Pod’



The CONTRACTOR offers the following guarantees effective as from the PAC of the Subsea cable and
Underwater Substation ‘Pod’:



The remedies set forth in the Clause 21.2 and 21.3 are the sole and exclusive remedy of the CLIENT
with respect to the breach of the stipulated gurantees;




21.2.1 Ownership Guarntee



The CONTRACTOR represents and warrants that at the date of signature of the PAC of the Subsea cable
and Underwater Substation ‘Pod’:



(i) the Equipment comprising the Subsea cable and Underwater Substation ‘Pod’ is fully and
exclusively owned by the CONTRACTOR;



(ii) the Equipment comprising the Subsea cable and Underwater Substation ‘Pod’ is transferred to
the CLIENT according to this Agreement free from charges, encumbrances, constraints on transfer or
third-party rights; and



(iii) the CONTRACTOR is authorised to transfer their full and exclusive ownership to the CLIENT.



This ownership guarantees shall be valid and enforceable against third party claims throughout the
limitation  period established in the applicable law.



In the event of default, invalidity or uncertainty of these guarantees, the CONTRACTOR shall defend
the validity of the sale of the Equipment and hold the CLIENT harmless from the damages of





 












 





If there is any lien or encumbrance on any of the Equipment and it is not imputable to the CLIENT,
the CONTRACTOR must, as soon as possible, replace or cancel that attachment, lien or encumbrance at
its cost.



The CONTRACTOR represents and warrants to the CLIENT that all creations, plans, drawings,
specifications, documents, procedures, methods, products or inventions supplied, prepared or made by
the CONTRACTOR hereunder and the use of any of them does not infringe any third-party rights.
In the event of any claim or action by a third party alleging infringement of any intellectual or
industrial property right, the CLIENT must notify the CONTRACTOR promptly and the CONTRACTOR will
carry out all the negotiations to settle the claim. At the request of the CONTRACTOR, the CLIENT
will provide all reasonable assistance to the CONTRACTOR against the claim of the third party. In
such case, the CONTRACTOR shall hold the CLIENT harmless from all damages (including costs and
expenses) that may be produced and shall obtain for the CLIENT the right to use, or continue
using, the Equipment. Delayed performance of the Works due to this cause shall not release the
CONTRACTOR from any liabilities for delays or entitle it to raise the Agreed Price.



21.2.2 Quality Guarantee




The CONTRACTOR guaranties that the components of the Equipment comprising the Subsea cable and
Underwater Substation ‘Pod’ shall comply with the standards required for normal operation of the
Subsea cable and Underwater Substation ‘Pod’, during the term of the O&M Agreement.



If during the O&M Agreement any of the components of the Equipment fail to  comply with the
referred standards the CONTRACTOR shall have to repair or replace, at its option, any such component
on its account, included the cost of retrieval from the Site and redeployment of the defective items,
if required.



21.2.3 Repair and Replacement Guarantee




The CONTRACTOR shall, during  a period of one year beginning with the signature of the PAC of the
Subsea cable and Underwater Substation ‘Pod’, except for the cable for which the Parties will
endeavors to obtain a two-year guarantee in which case the CONTRACTOR shall grant an equivalent
guarantee to the CLIENT, repair or replace, at its option, all failures or defects in the Equipment
comprising the Subsea cable and Underwater Substation ‘Pod’ elements found to have a faulty
design, quality or operation as soon as possible without any cost to the CLIENT. The cost of
materials, labour and, in general, all expenses incurred in total repair shall be for the account of
the CONTRACTOR included the cost of retrieval from the Site and redeployment of the defective items,
if required.



If the
CONTRACTOR does not repair or replace in a reasonable period of time, the CLIENT
shall notify the CONTRACTOR, indicating a reasonable deadline for making
the repair or replacement. If the CONTRACTOR continues not fulfilling its obligation after that
time, the CLIENT shall be entitled to carry out the repair for the account of the CONTRACTOR, which
will be responsible for the direct damages caused by this delay.



 









 





Correct and adequate repair by the CLIENT in the above circumstances shall not release the
CONTRACTOR from all its liabilities.



21.2.4
Spare Parts Guarantee




The
CONTRACTOR guarantees the existence of spare parts or equivalent replacements (which may require
redesign) for any component of the Equipment and undertakes to offer the CLIENT their availability for supply
during the term of the Testing Period of the Subsea cable and Underwater Substation ‘Pod’, until
DAC of the Subsea cable and Underwater Substation ‘Pod’ is achieved or this Agreement is
terminated.



21.3 Limitations on Guarantees




The
CONTRACTOR does not guarantee the consequences arising from the CLIENT’S failure to observe the
instructions contained in the operating and maintenance manuals,
unless it is the CONTRACTOR that is responsible for the operation and
maintenance of the PB40ES PowerBuoy and mooring system
and of the Subsea cable and Underwater Substation ‘Pod’,
nor does it guarantee the consequences of
normal wear and tear or corrosion, from external phenomena, form abnormal or negligent use, nor
those arising, from any repairs or modifications made without prior
approval of the CONTRACTOR, except
when they have been made by virtue or default by the CONTRACTOR or its obligation to repair within
the times established in Clause 21.1.3 or 21.2.3.”



CLAUSE 14 

CHANGES TO ANNEX V OF THE EPC AGREEMENT




The Parties agree that the Schedule of Milestones contained in the Annex V is replaced by this one:



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	OPT Allo-	 	 
	 	 	 	 	Forecast	 	% of con-	 	Amount	 	cation	 	 
	No.	 	Milestone	 	Date	 	tract price	 	(kC)	 	(kC)	 	Evidence of Completion
	1

	 	EPC Contract Signature
	 	Paid
	 	 	10	%	 	 	266	 	 	 	 	Signing of the EPC contract.
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	2

	 	Placement of
PowerBuoy component
orders
	 	Paid
	 	 	4	%	 	 	107	 	 	 	 	OPT to provide
copies of contracts/Purchase orders
placed with
subcontractors
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5

	 	Delivery of
Bathymetry study
	 	Paid
	 	 	4	%	 	 	107	 	 	 	 	Bathymetry report
supplied







 











 






	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Forecast	 	% of contract	 	Amount	 	OPT Allocation	 	Evidence of
	No.	 	Milestone	 	Date	 	price	 	(KC)	 	(KC)	 	Completion
	6

	 	Order of Subsea
Cable
	 	Paid
	 	 	5	%	 	 	133	 	 	 	 	 	 	OPT to provide
copies of
contracts/Purchase
orders placed with
subcontractors.
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	Subtotal
	 	 	23	%	 	 	613	.00	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	3

	 	Purchase order of
Substation POD
equipment
	 	Jan. ’08	 	 	5	%	 	 	134	 	 	 	 	 	 	OPT to provide
copies of
contracts/Purchase
orders placed with
subcontractors.
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	4

	 	Purchase order of
Mooring System
	 	Nov. ’07	 	 	5	%	 	 	134	 	 	 	300	 	 	OPT to provide
copies of
contracts/Purchase
orders placed with
subcontractors.
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	7

	 	PB40ES steel

fabrication complete	 	Oct. ’07	 	 	7	%	 	 	186	 	 	 	 	 	 	Certificate of
completion from
steel subcontractor
approved by OPT.
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Visual evidence
(e.g. digital
photograph of steel
parts).
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	8

	 	Delivery of POD
main components
(Transformer,
switchgear) at
Santander
	 	Mar. ’08	 	 	7	%	 	 	186	 	 	 	 	 	 	Copy of goods
received
certificated from
delivery agent.
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	9

	 	Assembly of
Underwater
Substation ‘Pod’ on
land complete
(Santander)
	 	May. ’08	 	 	7	%	 	 	186	 	 	 	 	 	 	Final ‘POD Functional Test’ certificate from OPT.


Visual evidence of
final testing (e.g.
digital photo of
assembled USP).
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	10

	 	Assembly of PB40ES
PowerBuoy on land
complete
(Santander)
	 	Mar. ’08	 	 	7	%	 	 	186	 	 	 	143	 	 	Final ‘Buoy Functional Test’ certificate from OPT. 



Visual evidence of
final testing (e.g.
digital photo of
assembled buoy).
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	11

	 	Delivery of subsea
cable ‘ex-works’ at
Santander
	 	Feb. ’08	 	 	13	%	 	 	346	 	 	 	 	 	 	Certificate of
completion from
Cable manufacturer
and Visual
evidence.
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	13

	 	Installation of
PB40ES mooring
system at site and
test complete
	 	Mar. ’08	 	 	4	%	 	 	106	 	 	 	57	 	 	Certificate of completion of mooring from OPT.






 









 






	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Forecast	 	% of contract	 	Amount	 	OPT Allocation	 	Evidence of
	No.	 	Milestone	 	Date	 	price	 	(KC)	 	(KC)	 	Completion
	14

	 	Deployment of
PB40ES PowerBuoy at
site complete
	 	April. ’08	 	 	8	%	 	 	213	 	 	 	 	 	 	Certificate of
Completion of
PowerBuoy
installation from
OPT
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	16

	 	PAC of all PB40ES PowerBuoy and mooring system	 	April. ’08
	 	 	4	%	 	 	106	 	 	 	 	 	 	Provisional
Acceptance
Certificate for the
PB40ES PowerBouy
and mooring system
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	17

	 	DAC of the PB40ES PowerBuoy and mooring system	 	Dec. ’08
	 	 	2	%	 	 	54	 	 	 	 	 	 	Definitive
Acceptance
Certificate for the
PB40ES PowerBouy
and mooring system
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	Subtotal	 	 	69	%	 	 	1837	 	 	 	500	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	12

	 	Subsea cable installation and
test complete
	 	 	 	To Be Determined	 	 	 	 	 	 	 	 	 	Copy of
subcontractor
installation
certificate for the
cable.
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	15

	 	Installation of
Underwater
Substation ‘Pod’
complete
	 	 	 	To Be Determined
	 	 	 	 	 	 	 	 	 	Certificate of
completion of POD installation from OPT
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	18

	 	PAC of the Subsea
cable and
Underwater
Substation ‘Pod’
	 	 	 	To Be Determined
	 	 	 	 	 	 	 	 	 	Provisional
Acceptance
Certificate for the
Subsea cable and
Underwater
Substation ‘Pod’
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	19

	 	DAC of the Subsea cable and Underwater Substation ‘Pod’	 	 	 	To Be Determined
	 	 	 	 	 	 	 	 	 	Definitive Acceptance Certificate for the Subsea cable and Underwater Substation ‘Pod’
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	Subtotal
	 	 	8	%	 	 	213	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	Total
	 	 	100	%	 	 	2663	 	 	 	500	 	 	 






CLAUSE 15




COSTS



The Parties acknowledge and agree that:



(i) The revised Schedule of Milestones in Clause 14 confirms that the maximum cost overrun
allocated by the CONTRACTOR of €500,000 under clause 18.5 (i) of the EPC contract will
have been fully utilized.



(ii) Actual costs of Milestones 12,15,18 and 19 are to be determined.





 











 





CLAUSE 16




Models of PAC and DAC




The Parties agree that the Model of Provisional Acceptance in Annex VI and the Model of Definitive
Acceptance in Annex VII will be adjusted to reflect the principle of having both a PAC of the
PB40ES PowerBuoy and mooring system on the one hand a PAC of the Subsea Cable and Underwater
substation ‘POD’ on the other under Annex VI and a DAC of the PB40ES PowerBuoy and mooring system
on the one hand and a DAC of the Subsea Cable and Underwater substation ‘POD’ on the other under
Annex VII with the word Plant in the Annexes referring to PB40ES PowerBuoy and mooring system or
the Subsea Cable and Underwater substation, ‘POD’ as applicable.



CLAUSE 17

REMAINING AGREEMENT




The Parties agree that except as amended in accordance with this
Addendum the EPC Agreement
remains in full force and effect according to its terms.



IN WITNESS WHEREOF, this Agreement is signed in two originals, both to the same effect, at the
place and date first above mentioned.



	 	 	 	 	 
	

	 		 	
	THE CLIENT
	 	THE CONTRACTOR