Exhibit
      10.2




CONFIDENTIAL
      TREATMENT REQUESTED.


CONFIDENTIAL
      PORTIONS OF THIS DOCUMENT


HAVE
      BEEN REDACTED AND HAVE BEEN FILED


WITH
      THE COMMISSION.


**AMENDED
        AND RESTATED**
  **ENGINEERING,
        PROCUREMENT AND CONSTRUCTION AGREEMENT**
  **by
        and between**
  **OAK
        GROVE MANAGEMENT COMPANY LLC**
  **and**
  **FLUOR
        ENTERPRISES, INC.**
  **dated
        June 8, 2007**
   
  
  **TABLE
        OF CONTENTS**
 
 
  **1.**
              **DEFINITIONS
                  AND RULES OF INTERPRETATION**
              **Page**
                **2**1.1
              Definitions
              21.2
              Exhibits
              161.3
              Interpretation
              161.4
              Headings
              171.5
              Conflicts
                  in Documentation
              171.6
              Documentation
                  Format
              17**2.**
              **RESPONSIBILITIES
                  OF OWNER**
              **17**2.1
              Project
                  Representative
              172.2
              Operating
                  Personnel
              182.3
              Ministerial
                  Assistance
              182.4
              Owner
                  Acquired Permits
              182.5
              Access
                  to Site and Owner Furnished Equipment
              182.6
              Owner
                  Provided Facilities and Services
              182.7
              Owner
                  Furnished Equipment
              192.7.1
              Access
              192.7.2
              Upgrade
                  Contracts
              192.8
              Commodity
                  and Transmission Scheduling
              19**3.**
              **RESPONSIBILITIES
                  OF CONTRACTOR**
              **19**3.1
              Turnkey
                  Basis
              193.2
              Performance
                  of Work
              203.3
              Design
                  and Construction of Project
              203.4
              Project
                  Director
              203.5
              Owner
                  Furnished Equipment
              203.5.1
              Assumption
                  or Execution of Upgrade Contracts
              203.5.2
              Assignment
                  of Upgrade Contracts
              203.5.3
              Management
                  of Upgrade Contracts
              213.5.4
              Inspection,
                  Delivery and Installation of Owner Furnished Equipment
              213.5.5
              Costs
              213.5.6
              Upgrade
                  Suppliers
              213.5.7
              Existing
                  Boiler Components
              223.5.8
              Owner
                  Furnished Equipment Not Utilized
              223.6
              Utilities
                  and Services
              233.6.1
              Provision
                  of Services
              233.6.2
              Payment
              233.6.3
              Supply
                  of Construction Facilities
              233.6.4
              Operating
                  Consumables
              233.7
              Inspection
                  by Contractor
              233.8
              Organization
              243.9
              Contractor
                  Acquired Permits
              24
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  **TABLE
        OF CONTENTS**
 (continued)
 
 3.10
              Hazardous
                  Materials Disposal System
              243.11
              Maintenance
                  of Site
              243.12
              Site
                  Security
              253.13
              Safety
              253.14
              Expediting
              263.15
              Applicable
                  Laws and Permits
              263.16
              Quality
                  Assurance Programs
              273.17
              Access
              273.18
              Delivery
                  of Documents; Owner Review
              273.18.1
              Submittals
              273.18.2
              Operational
                  Documents
              273.19
              Training
                  of Operating Personnel
              273.19.1
              Commencement
                  of Training
              273.19.2
              Design
                  and Review of Training Program
              283.20
              Spare
                  Parts.
              283.20.1
              Spare
                  Parts Schedules
              283.20.2
              Start-up
                  Spare Parts
              283.20.3
              Spare
                  Parts Procurement
              283.21
              Start
                  Up Personnel
              283.22
              Commodity
                  Scheduling
              293.23
              Contractor
                  as Agent
              29**4.**
              **COVENANTS,
                  WARRANTIES AND REPRESENTATIONS**
              **29**4.1
              Contractor
              294.1.1
              Organization,
                  Standing and Qualification
              294.1.2
              Professional
                  Skills
              294.1.3
              Due
                  Authorization; Enforceability
              304.1.4
              No
                  Conflict
              304.1.5
              Government
                  Approvals
              304.1.6
              No
                  Suits, Proceedings
              304.1.7
              Intellectual
                  Property
              304.1.8
              Business
                  Practices
              304.1.9
              Owner
                  Provided Information
              314.1.10
              Legal
                  Requirements
              314.1.11
              Financial
                  Condition
              314.1.12
              Licenses
              314.1.13
              Exclusivity
              314.2
              Owner
              324.2.1
              Organization,
                  Standing and Qualification
              324.2.2
              Due
                  Authorization; Enforceability
              324.2.3
              No
                  Conflict
              324.2.4
              Governmental
                  Approvals
              324.2.5
              No
                  Suits, Proceedings
              324.2.6
              Owner
                  Parent Guarantee
              324.2.7
              Agency
                  Subcontracts
              33
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  **TABLE
        OF CONTENTS**
 (continued)
 
 5.
              COST
                  OF WORK
              335.1
              Separated
                  Target Price
              335.2
              Separated
                  Contract Price
              345.3
              Open
                  Book Review
              345.3.1
              Leased
                  Equipment
              345.3.2
              Development
                  of Schedule of Payment Values and Estimated Cancellation
                  Costs
              345.4
              All
                  Items of Work Included
              345.5
              Bonuses
              355.5.1
              Schedule
                  Bonus
              355.5.2
              Performance
                  Bonus
              355.6
              Payment
                  of Bonuses
              365.7
              Texas
                  Sales and Use Taxes
              365.7.1
              Separated
                  Contract
              365.7.2
              Texas
                  Direct Payment Permit and Other Matters
              365.7.3
              Certain
                  Reimbursements
              365.7.4
              Statements
                  and Other Information
              365.8
              Other
                  Taxes
              375.9
              Cooperation
                  Regarding Taxes
              375.10
              Credit
                  for Payments made by Owner under the STG Upgrade Contract
              385.11
              Labor
                  Committees
              38**6.**
              **TERMS
                  OF PAYMENT**
              **39**6.1
              Invoice
                  Payments
              396.2
              Progress
                  Assessment
              396.3
              Contractor’s
                  Invoices
              396.3.1
              During
                  Open Book Review
              396.3.2
              After
                  Completion of Open Book Review
              396.4
              Subcontractor
                  Statements
              406.5
              Subcontractor
                  Invoices
              416.6
              Owner
                  Review
              416.7
              Payments
              416.8
              Retainage
              426.8.1
              Retainage
              426.8.2
              Letter
                  of Credit
              426.8.3
              Release
                  of Retainage
              426.9
              Final
                  Payment
              436.10
              Method
                  of Payment
              446.11
              Disputes
                  Regarding Payments
              446.12
              Holdbacks
              456.12.1
              Owner
                  Holdbacks
              456.12.2
              Notice
                  of Withholding; Notice of Correction
              466.12.3
              Payment
                  Following Notice of Correction
              466.12.4
              Limitation
                  on Contractor’s Rights
              46


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(continued)





6.13
            Application
                of Monies
            466.14
            Release
                of Liability
            466.15
            Certifications
            476.15.1
            Payment
                Certifications
            476.15.2
            Certifications
                on Final Payment
            47**7.**
            **COMMENCEMENT
                AND SCHEDULING OF THE WORK**
            **47**7.1
            Notices
                to Proceed
            477.1.1
            Pre-Contract
                Letter of Authorization
            477.1.2
            Phase
                One EPC Activities
            487.1.3
            Full
                Notice to Proceed
            487.2
            Contractor’s
                Acknowledgment
            487.3
            Prosecution
                of Work
            487.4
            Project
                Schedule
            487.4.1
            Project
                Schedule
            487.4.2
            Milestone
                Items
            497.5
            Progress
                Reporting
            497.6
            Meetings
            49**8.**
            **FORCE
                MAJEURE and AN EXCUSABLE EVENT**
            **49**8.1
            Force
                Majeure
            498.2
            Notice
            508.3
            Scope
                of Suspension; Duty to Mitigate
            508.4
            Removal
                of Force Majeure
            508.5
            Responsibility
                of Contractor
            518.6
            Contractor’s
                Remedies
            518.6.1
            Force
                Majeure
            518.6.2
            Excusable
                Event
            518.6.3
            Changes
                In Work
            528.7
            Owner’s
                Right to Terminate
            52**9.**
            **SUBCONTRACTORS
                AND VENDORS**
            **52**9.1
            Use
                of Subcontractors
            529.2
            Agency
                Subcontracts Prior to Assignment
            529.3
            Use
                of Contractor’s Affiliates
            539.4
            Assignment
            539.5
            Information
                and Access
            539.6
            Terms
                in Subcontracts
            539.7
            Minority
                and Women-Owned Businesses
            55**10.**
            **LABOR
                RELATIONS**
            **55**10.1
            General
                Management of Employees
            5510.2
            Worker
                Recruitment and Training Program
            5510.3
            Labor
                Disputes
            5610.4
            Personnel
                Documents
            56


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10.5
            Key
                Personnel
            5610.6
            Replacement
                of Employees and Other Persons at Owner’s Request
            56**11.**
            **INSPECTION;
                EFFECT OF REVIEW AND COMMENT**
            **57**11.1
            Right
                to Reject Work
            5711.2
            Inspection
            5711.3
            Contractor
                Submittals Table
            5711.4
            Owner
                Review of Documents
            5711.5
            Remedy
                of Flaws
            58**12.**
            **SITE
                CONDITIONS**
            **58**12.1
            Site
                Conditions
            5812.2
            Differing
                Site Conditions
            5812.3
            Unforeseen
                Site Conditions
            58**13.**
            **PERFORMANCE
                GUARANTEES AND TESTS**
            **58**13.1
            Performance
                Guarantees and Other Requirements
            5813.2
            Start
                up and Commissioning Procedures
            5913.3
            Acceptance
                Test Procedures
            5913.4
            Acceptance
                Test Schedules
            5913.5
            Testing
            5913.6
            Non-Conforming
                Work
            5913.7
            Certificate
                of Completion of Testing
            6013.8
            Revenues
            6013.9
            Post
                Test Modifications
            60**14.**
            **SUBSTANTIAL
                COMPLETION AND FINAL COMPLETION**
            **60**14.1
            Punchlists
            6014.1.1
            Creation
                of Punchlists
            6014.1.2
            Completion
                of Punchlists
            6114.1.3
            Owner’s
                Punchlist Option
            6114.2
            Substantial
                Completion
            6214.3
            Notice
                of Substantial Completion
            6214.4
            Final
                Completion
            6314.5
            Notice
                of Final Completion
            6414.6
            Contractor’s
                Access After Substantial Completion and Final Completion
            64**15.**
            **LIQUIDATED
                DAMAGES**
            **65**15.1
            Liquidated
                Damages for Delay in the Substantial Completion Dates
            6515.2
            Intentionally
                Omitted
            6515.3
            Liquidated
                Damages for Failure to Satisfy Net Unit Capacity and Net Unit Heat
                Rate
                Guarantees
            6515.4
            Actions
                During the Cure Period
            6615.4.1
            If
                Minimum Performance Criteria are Satisfied
            6615.4.2
            Remedial
                Plans
            66


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15.4.3
            Prosecution
                of Remedial Plan
            6715.4.4
            Additional
                Remedial Plans
            6715.4.5
            Election
                of Option
            6715.4.6
            Buy-Down
                Not Available
            6715.4.7
            Access
                During Cure Period
            6715.4.8
            Operations
                During Cure Period
            6815.4.9
            Shut
                Downs During Cure Period
            6815.5
            Extension
                of Cure Period
            6915.6
            Sole
                Remedy; Liquidated Damages Not a Penalty
            6915.7
            Enforceability
            6915.8
            True-Up
            70**16.**
            **CHANGES
                IN THE WORK**
            **70**16.1
            Change
                In Work
            7016.2
            By
                Owner
            7116.3
            Adjustment
                to Substantial Completion Guaranteed Dates and Separated Contract
                Price
                Due to Certain Events.
            7116.3.1
            Adjustments
                to Substantial Completion Guaranteed Dates
            7116.3.2
            Adjustments
                to Separated Target Price and Separated Contract Price
            7216.3.3
            Adjustments
                to Separated Contract Price
            7216.4
            Preparation
                of Change In Work Form
            7216.5
            Execution
                of Change In Work Form
            7316.6
            No
                Obligation or Payment Without Executed Change In Work Form
            7316.7
            Owner
                Directives
            7316.8
            Disputed
                Changes In Work
            7416.9
            Changes
                in Work All Inclusive
            7416.10
            No
                Suspension
            7416.11
            Change
                for Contractor’s Convenience
            74**17.**
            **WARRANTIES
                CONCERNING THE WORK**
            **74**17.1
            Work
                Warranty
            7417.2
            Materials
                Warranty
            7517.3
            Warranty
                Period
            7517.4
            Enforcement
                by Owner
            7517.5
            Exclusions
            7617.6
            Subcontractor
                Warranties
            7617.7
            Correction
                of Errors or Omissions and Defects
            7717.7.1
            Notice
                of Warranty Claim
            7717.7.2
            Owner
                Performance
            7817.7.3
            Replaced
                Components Demonstrations
            7817.7.4
            Continual
                Failure of Component
            7817.7.5
            Owner’s
                Warranty Option
            7917.8
            Limitations
                On Warranties
            79


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**18.**
            **EQUIPMENT
                IMPORTATION; TITLE**
            **79**18.1
            Importation
                of Equipment and Materials
            7918.2
            Title
            8018.2.1
            Condition
            8018.2.2
            Transfer
            8018.2.3
            Custody
                During Performance
            8018.3
            Protection
            8018.4
            Owner
                Possession
            80**19.**
            **DEFAULT**
            **80**19.1
            Contractor
                Events of Default
            8019.2
            Owner’s
                Rights and Remedies
            8219.3
            Damages
                for Contractor Default
            8319.4
            Owner
                Event of Default
            8319.5
            Contractor’s
                Remedies
            84**20.**
            **TERMINATION
                FOR CONVENIENCE AND SUSPENSION**
            **85**20.1
            Termination
                for Convenience
            8520.1.1
            Owner’s
                Right to Terminate; Payment
            8520.1.2
            Limitation
                on Payment
            8520.1.3
            Owner’s
                Right to Elect to Assume Obligations with Subcontractors
            8520.2
            Contractor
                Conduct
            8620.3
            Nature
                of Termination Payments
            8620.4
            Suspension
                by Owner
            8620.4.1
            Contractor’s
                Termination Right
            8620.4.2
            Extension
                of Time and Compensation Rights
            8720.5
            Claims
                for Payment
            8720.6
            Suspension
                for Cause
            87**21.**
            **INSURANCE**
            **88**21.1
            Owner
                Controlled Insurance Program
            8821.1.1
            OCIP
                Coverages
            8821.1.2
            OCIP
                Costs
            8821.1.3
            OCIP
                Deductibles
            8821.1.4
            Participation
            8921.1.5
            Enrollment
            8921.1.6
            OCIP
                Administration
            8921.1.7
            Coverage
            9021.1.8
            OCIP
                Insurance Policies
            9021.1.9
            Commencement
                of Work
            9021.1.10
            Non-Violation
            9021.1.11
            Payroll
                Reports
            9021.1.12
            Audit
                Rights and Closeout Reports
            9121.1.13
            Dividends
                and Refunds
            91


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21.1.14
            Safety
                and Accident Reporting
            9121.1.15
            Modification
                and Termination
            9121.1.16
            Duplication;
                Cancellation
            9121.1.17
            Work
                After Termination of OCIP Coverage
            9221.2
            Contractor’s
                Additional Insurance
            9221.2.1
            Insurance
                Policies
            9221.2.2
            Effectiveness
            9221.2.3
            General
                Requirements
            9221.3
            Subcontractors’
                Insurance
            9321.4
            Subrogation
                Waivers
            9321.5
            Insurance
                Coverages
            9321.6
            Failure
                to Maintain Insurance
            9421.7
            Claims
                Compensation
            94**22.**
            **RISK
                OF LOSS OR DAMAGE**
            **94**22.1
            Contractor
                Assumption of Risk
            9422.1.1
            Risk
                of Loss
            9422.1.2
            Repair
                or Replacement
            9422.1.3
            Payment
                Amounts
            9522.2
            Risk
                of Loss After Substantial Completion
            95**23.**
            **INDEMNIFICATION**
            **95**23.1
            By
                Contractor
            9523.2
            By
                Owner
            9723.3
            Patent
                Infringement and Other Indemnification Rights
            9823.4
            Use
                of Electronic Data Files
            9923.5
            Claim
                Notice
            9923.6
            Survival
                of Indemnity Obligations
            100**24.**
            **TREATMENT
                OF CONFIDENTIAL INFORMATION**
            **100**24.1
            Confidential
                Information
            10024.2
            Applicable
                Law Disclosures
            10124.3
            Ownership
                of Confidential Information
            10124.4
            Remedies
            10224.5
            Exclusions
            102**25.**
            **INVENTIONS
                AND LICENSES**
            **102**25.1
            Invention,
                License
            10225.2
            Contractor
                Deliverables
            10325.3
            Software
                Licenses
            10325.4
            Warranty
            10325.5
            Subcontractors
            103**26.**
            **ASSIGNMENT
                BY OWNER**
            **104**26.1
            Assignment
            104


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26.1.1
            Assignment
                to Financing Entities
            10426.1.2
            Assignment
                to an Affiliate of Owner
            10426.1.3
            Assignment
                to Other Persons
            10526.1.4
            Assignment
                in Violation
            10726.1.5
            Owner
                Indemnitee to Include Successors and Assigns
            10726.2
            Transfer
                of Work; Third-Party Beneficiaries
            107**27.**
            **ASSIGNMENT
                BY CONTRACTOR**
            **107****28.**
            **Hazardous
                Materials**
            **107**28.1
            Use
                by Contractor
            10728.2
            Remediation
                by Contractor
            10728.3
            Notice
                of Hazardous Materials
            10828.4
            Suspension
                and Mitigation
            10828.5
            Pre-Existing
                Contamination
            10828.6
            Handling
                Pre-Existing Contamination as part of the Work
            108**29.**
            **Non-Payment
                Claims**
            **109****30.**
            **NOTICES
                AND COMMUNICATIONS**
            **110**30.1
            Requirements
            11030.2
            Effective
                Time
            11030.3
            Representatives
            110**31.**
            **LIMITATIONS
                OF LIABILITY AND REMEDIES**
            **111**31.1
            Limitations
                on Damages
            11131.2
            Limitations
                on Contractor’s Liability
            11131.2.1
            Maximum
                Liability Amount
            11131.2.2
            Maximum
                Liquidated Damages
            11231.2.3
            Calculation
                of Liability
            11231.3
            Specific
                Performance
            11231.4
            Limitation
                on Owner’s Liability
            11231.5
            Releases,
                Indemnities and Limitations
            11331.6
            Representations
                and Remedies
            11331.7
            Limitation
                on Remedies
            113**32.**
            **DISPUTES**
            **113**32.1
            Negotiations
            11332.2
            Disputed
                Invoice Payments and Changes In Work
            11432.3
            Work
                to Continue
            114**33.**
            **MISCELLANEOUS**
            **114**33.1
            Severability
            11433.2
            Governing
                Law; Consent to Jurisdiction and Venue
            11433.3
            Survival
                of Termination
            11533.4
            No
                Oral Modification
            11533.5
            No
                Waiver
            115


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33.6
            Review
                and Approval
            11533.7
            Time
            11633.8
            Third
                Party Beneficiaries
            11633.9
            Financing
                Matters
            11633.9.1
            Contractor
                Cooperation
            11633.9.2
            Documents
                Requested by Financing Entities
            11733.10
            Other
                Assistance
            11733.11
            Further
                Assurances
            11733.12
            Record
                Retention
            11733.13
            Binding
                on Successors, Etc
            11733.14
            Merger
                of Prior Contracts
            11733.15
            Counterparts
            11833.16
            Opinions
                of Contractor’s Counsel
            11833.17
            Set-Off
            11833.18
            Attorneys’
                Fees
            11833.19
            Announcements;
                Publications
            11833.20
            Independent
                Contractor
            11833.21
            Non-Solicitation
            11933.22
            Audit
            119


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EXHIBITS





A-1
            Statement
                of Work and Specifications
                –       General Requirements (Div. 1
                & 1A)A-2
            Statement
                of Work and Specifications
                –        Air Quality Control
                Equipment (Div. 3A)
              (Purchase
                Order #
                A2YF-4-0501-00 /
              A2YF10009)A-3
            Statement
                of Work and Specifications –       
                Balance of Plant Equipment
              (Div.
                1, Appendix A, B &
                C)A-4
            Statement
                of Work and Specifications
                –        Steam Generator
                Completion Contracts for \
              Unit 1
                (Purchase Order #
                A2YF-4-0502-00 /
              A2YF10011)
                and Unit 2
                (Purchase Order #
              A2YF-4-0503-00
                /
                A2YF10010)B
            Owner
                Furnished Equipment and MaterialsB-1
            STG
                Upgrade ContractC
            Owner
                and Contractor Acquired PermitsD
            Schedule
                of Payment Values and Estimated Cancellation CostsE
            Change
                In Work FormF
            Form
                of Contractor’s InvoiceF-1
            Conditional
                Waiver and Release Upon Milestone or Progress PaymentF-2
            Intentionally
                OmittedF-3
            Conditional
                Waiver and Release Upon Final PaymentF-4
            Unconditional
                Waiver and Release Upon Final PaymentG
            Milestone
                Items and Project ScheduleH
            Open
                Book Review ProcessI-1
            Performance
                Guarantees, Acceptance Tests and Testing ProceduresI-2
            Performance
                CalculationsJ
            Key
                PersonnelK
            Form
                of Monthly Progress ReportL
            Legal
                Description of Oak Grove PropertyM
            Project
                Plant and Site DrawingN-1
            Contractor
                Provided InsuranceN-2
            OCIP
                Insurance CoverageN-3
            Form
                of OCIP Enrollment SummaryO
            Approved
                Subcontractors and SuppliersP
            Form
                of Letter of CreditQ
            Intentionally
                OmittedR
            Interface
                RequirementsS
            Check-out,
                Start up and Initial OperationsT
            Separated
                Target PriceU
            Intentionally
                OmittedV
            Construction
                RequirementsW
            Owner
                Provided InformationX
            Form
                of Assignment and Assumption AgreementY
            Contractor’s
                Rate ScheduleZ-1
            Contractor
                Parent GuarantyZ-2
            Owner
                Parent GuarantyAA
            Owner’s
                Draft Air Permit for the Project





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EXHIBITS


(continued)


BB
            Separated
                Contract PriceCC
            Phase
                One EPC ActivitiesDD
            Open
                ItemsEE
            Craft
                Labor Compensation


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This
      AMENDED AND RESTATED ENGINEERING, PROCUREMENT, AND CONSTRUCTION AGREEMENT (this
      “**Agreement**”) is made and entered into as of this 8th day of
      June, 2007 between OAK GROVE MANAGEMENT COMPANY, LLC (
“**Owner**”), and FLUOR ENTERPRISES, INC. (
“**Contractor**”), to amend and restate the Engineering,
      Procurement and Construction Agreement entered into by Owner and Contractor
      as
      of June 2, 2006 (the “**Original Agreement**”), as amended by the
      Amendment to the Engineering, Procurement and Construction Agreement entered
      into by Owner and Contractor as of February 5, 2007 (the
“**Amendment**”).  Each of Owner and Contractor is
      sometimes individually referred to herein as a “Party” and both are sometimes
      collectively referred to herein as the “Parties.”




**RECITALS**




A.           Owner
      desires to develop, finance, construct, own and operate an approximately 1,600
      megawatt (net load) coal-fired generation****facility to be
      located approximately 40 miles southeast of Waco in Robertson County,
      Texas.




B.           Pursuant
      to the Original Agreement, Owner engaged Contractor to design, engineer,
      procure, install, construct, test, commission and start up the Project and
      to
      train the persons who will operate and maintain the Project, for the Separated
      Contract Price stated herein and on a turnkey basis, and Contractor agreed
      to
      provide such services, all in accordance with the terms and conditions set
      forth
      in this Agreement, including Sections3.1 and 3.2.




C.           Owner
      owns the Owner Furnished Equipment that will be used in the
      Project.  Contractor shall be responsible for incorporating the Owner
      Furnished Equipment into the design and installing the Owner Furnished Equipment
      as part of the Project as applicable and in accordance with the terms of this
      Agreement.




D.           Contractor
      has: (1) been provided and reviewed the conceptual drawings for the Project
      and all other documents relating to the Project, including the Upgrade Contracts
      and information regarding the OCIP, (2) inspected the real property on
      which the Project shall be constructed and the Owner Furnished Equipment, and
      (3) performed or reviewed such other investigations, studies, and analyses
      that Contractor has determined to be necessary or prudent in connection with
      entering into this Agreement.




E.           Contractor
      is willing to guarantee the timely completion and operating performance of
      the
      Project, in accordance with the terms and conditions hereof.




F.           WHEREAS,
      the Parties desire to amend and restate the Original Agreement to incorporate
      the terms of the Amendment.




NOW,
      THEREFORE, in consideration of the sums to be paid to Contractor by Owner and
      of
      the covenants and agreements set forth herein, the Parties agree as
      follows:




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**AGREEMENT**




1.           **DEFINITIONS
      AND RULES OF INTERPRETATION******




1.1           Definitions.  For
      the purposes of this Agreement, except as otherwise expressly provided or unless
      the context otherwise requires, the following terms shall have the following
      meanings.




“**Abandons**”
      means for the purposes of Section19.1(h), that Contractor has substantially
      reduced personnel at the Site or removed required equipment from the Site such
      that Contractor would not reasonably be capable of maintaining progress
      sufficient to achieve Substantial Completion of a Unit by such Unit’s the
      Substantial Completion Guaranteed Date.




“**Abnormally
      Severe Weather Conditions**” means abnormally severe or extreme storms,
      including hurricanes, tornadoes, rain, snow or hail storms or abnormally severe
      lightning, taking into consideration the period of time when such storms occur
      and the location of the Site.




“**Acceptance
      Tests**”****means the Performance Tests and the
      Emission Tests.




“**Acceptance
      Tests Procedures**”****means the written test
      procedures, standards, protective settings, and testing programs for the
      Acceptance Tests as set forth in Section13.3 and Exhibit I.




“**Affiliate**”****means
      with respect to any Person, another Person that is controlled by, that controls,
      or is under common control with, such Person.  For purposes of this
      definition, “control” with respect to any Person shall mean the ability to
      effectively control, directly or indirectly, the operations and business
      decisions of such Person whether by voting of securities or partnership
      interests or any other method.  Without limiting the foregoing, an
      Affiliate of a Person shall include any other Person in which such Person holds
      twenty percent (20%) or more of the outstanding equity or ownership
      interests.




“**Agency
      Subcontracts**” shall have the meaning set forth in
Section3.23.




“**Agreement**”****means
      this Amended and Restated Engineering, Procurement, and Construction Agreement,
      including all Exhibits hereto, as the same may be modified, amended, or
      supplemented from time to time in accordance with the terms hereof, and the
      Submittals as approved or accepted, as applicable, by Owner.




“**Ancillary
      Sites**” means the Forest Grove site located near Athens, Texas and the
      warehouse located approximately five (5) miles from the Site at which Owner
      has
      stored portions of the Owner Furnished Equipment, both of which are owned and
      controlled by Owner or an Affiliate of Owner.




“**Applicable
      Laws**”****means and includes any applicable statute,
      license, law, rule, regulation, code, ordinance, judgment, decree, writ, legal
      requirement, order or the like, of any national, federal, provincial, state
      or
      local court or other Governmental Authority, and the written interpretations
      thereof, including any statute, law, rule, regulation, code, ordinance,
      judgment, decree, writ, order or the like, regulating, relating to or imposing
      liability or standards of conduct concerning: (i) Contractor, the Site or
      the performance of any portion of the Work or the Work




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 taken
        as a whole, or the operation of the Project; or (ii) safety and the
        prevention of injury to persons and the damage to property on, about or adjacent
        to the Site or any other location where any other portion of the Work shall
        be
        performed; or (iii) protection of human health or the environment or
        emissions, discharges, releases or threatened releases of pollutants,
        contaminants, chemicals or industrial, toxic or hazardous substances or wastes
        into the environment including ambient air, surface water, ground water,
        or
        land, or otherwise relating to the manufacture, processing, distribution,
        use,
        treatment, storage, disposal, transport, or handling of pollutants,
        contaminants, chemicals, Hazardous Materials or other industrial, toxic
        materials or wastes, as now or may at any time hereafter be in
        effect.





“**Applicable
      Permits**”****means each and every national, state,
      local or other license, consent, appraisal, authorization, ruling, exemption,
      variance, order, judgment, decree, declaration, regulation, certification,
      filing, recording, permit or other approval with, from or of any Governmental
      Authority, including each and every environmental, construction, operating
      or
      occupancy permit and any agreement, consent or approval from or with any other
      Person, that is required by any Applicable Law or that is otherwise necessary
      for the performance of the Work or operation of the Project, including the
      Owner
      Acquired Permits and the Contractor Acquired Permits.




“**Boilers**”****means
      the boilers and the auxiliary components associated therewith described on
      Exhibit B hereto, which shall be installed and incorporated into the
      Project by Contractor.




“**Boiler
      Upgrade Contracts**”****means that certain Purchase
      Order to be executed between Contractor and Alstom Power Inc. for the upgrade
      of
      the Unit 1 Boiler and that certain Purchase Order to be executed between
      Contractor and The Babcock & Wilcox Company for the upgrade of the
      Unit 2 Boiler.




“**Boiler
      Upgrade Suppliers**”****means Alstom Power Inc. and
      The Babcock & Wilcox Company.




“**Business
      Day**”****means a day, other than a Saturday or Sunday
      or a public holiday, on which banks are generally open for business in Dallas,
      Texas and New York, New York.




“**Change
      In Law**”****means the enactment, adoption,
      promulgation, modification, or repeal after the date of the Amendment of any
      Applicable Law, or the modification after the date of this Agreement of any
      Applicable Permit issued or promulgated by any Governmental Authority that
      establishes requirements that affect Contractor’s costs or schedule for
      performing the Work or the issuance, after the date of this Contract, of any
      Applicable Permit that includes requirements, that affect Contractor’s costs or
      schedule for performing the Work; provided, however, a change in
      any national, federal, state, provincial or any other income or franchise tax
      law shall not be a Change In Law pursuant to this Agreement.




“**Change
      In Work**”****means a change in the Work as defined in
Section16.1.




“**Change
      In Work Form**”****means the form attached hereto as
Exhibit E.




“**Claim
      Notice**” shall have the meaning set forth in Section23.5.




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“**Component**”
      shall have the meaning set forth in Section17.7.3.




“**Conditional
      Waiver and Release Upon Final Payment**”****means a
      written statement in the form attached hereto as Exhibit F-3,
      containing a waiver and release of liens prepared and executed by Contractor
      or
      a Major Subcontractor, as applicable, pursuant to which a Person conditionally
      waives and releases all mechanic’s liens, stop notices and bond rights with
      respect to all Work, conditioned only upon final payment.




“**Conditional
      Waiver and Release Upon Milestone or Progress
      Payment**”****means a written statement in the form
      attached hereto as Exhibit F-1, containing a waiver and release of
      liens prepared and executed by Contractor or a Major Subcontractor, as
      applicable, pursuant to which a Person conditionally waives and releases all
      mechanic’s liens, stop notices and bond rights with respect to all Work for
      which Contractor requested payment in the current Contractor’s Invoice,
      conditioned only upon payment of the amount set forth therein.




“**Confidential
      Information**”****means information, ideas or
      materials, including such information, ideas or materials containing elements
      of
      Owner’s or its Affiliates’ proprietary operating system, now or hereafter owned
      by or otherwise in the possession or control of, or otherwise relating to,
      one
      Party or any of its Affiliates, including proprietary or non-public information
      concerning such Party’s or its Affiliates’ business, operations, financial
      condition, projections, or assets, historical information, inventions, business
      or trade secrets, know-how, techniques, data, reports, drawings, specifications,
      blueprints, flow sheets, designs, or engineering, construction, environmental,
      operations, marketing or other information, disclosed by one Party (the
“**transferor**”) to the other Party or any of its Affiliates or
      any of their respective directors, employees or agents (the
“**transferee**”); provided, however,
“**Confidential Information**” of Owner shall also mean
      information, ideas or materials related to the Work or the Project that are:
      (a) obtained, developed or created by or for Contractor directly through
      the use of Owner’s Confidential Information in connection with the Work;
      (b) disclosed by Owner or any of its Affiliates; or (c) deduced by
      Contractor or any of its Affiliates or any of their respective directors,
      employees or agents from Confidential Information supplied by Owner or of its
      Affiliates or agents, or as a result of visits by Contractor or any of its
      Affiliates or any of their respective directors, employees or agents to the
      premises of Owner or any of its respective Affiliates, which relate to the
      Project.




“**Contractor**”
      shall have the meaning set forth in the preamble.




“**Contractor
      Acquired Permits**”****shall have the meaning set
      forth in Section3.9 and shall
      be those set forth in Exhibit C.




“**Contractor
      Deliverables**”****means all of the design criteria,
      system descriptions, Required Manuals, Submittals, design calculations, quality
      assurance reports and all other material documents relating to the Project
      to be
      delivered to Owner for review and comment in accordance with the requirements
      of
Exhibit A and Section11.3.




“**Contractor
      Event of Default**” shall have the meaning set forth in
Section19.1.




“**Contractor
      Lien**” shall have the meaning set forth in Article29.




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“**Contractor’s
      Indemnitee**” shall have the meaning set forth in Section23.2.




“**Contractor’s
      Invoice**”****means an invoice from Contractor to
      Owner in accordance with Section6.2 and in the form of Exhibit F
      hereto.




“**Contractor
      Submittals Table**”****means the table of Contractor
      Deliverables to be prepared by Contractor in accordance with
Section11.3 of this
      Agreement.




“**Craft
      Labor Compensation Escalation Amount**” means the amount calculated as
      set forth in and in accordance with Exhibit EE.




“**Critical
      Path Item(s)**”****means the items identified as
      critical path items on the Project Schedule.




“**Cure
      Period**” means for each Unit the period beginning on the Substantial
      Completion Date for such Unit and ending one hundred eighty (180) days later,
      as
      adjusted pursuant to Section15.5.




“**Defect**”****means
      any Equipment and Materials, or installation or other workmanship (including
      the
      installation of the Owner Furnished Equipment) that: (a) does not conform
      to the Statement of Work or the Submittals; (b) is of improper or inferior
      workmanship or material in that it fails to comply with Industry Standards,
      as
      applicable; or (c) is otherwise inconsistent with Industry Standards, and
      satisfies any of the following conditions: (i) could materially and
      adversely affect the mechanical, electrical or structural integrity of the
      Project; or (ii) could materially and adversely affect the normal,
      efficient, effective or safe operation of the Project during the Project’s
      design life.




“**Delay
      Liquidated Damages**”****shall have the meaning set
      forth in****Section15.1.




“**Delay
      Notice**”****shall have the meaning set forth
      in****Section8.2.




“**Discharge
      Permit**” means the TPDES Permit to Discharge Wastes
      No. WQ0001986000 renewal issued January 31, 2005.




“**Dollars**”**or**“**$**”****means United States
      dollars.




“**Emissions
      Tests**” means the tests as set forth in Exhibit I-1 to
      determine whether a Unit or the Project satisfies the Environmental Compliance
      Guarantees.




“**Environmental
      Compliance Guarantees**” shall have the meaning set forth in
Exhibit I-1.




“**Equipment
      and Materials**”****means all materials, supplies,
      apparatus, devices, machinery, equipment, parts, tools, special tools,
      components, instruments, appliances, spare parts and appurtenances thereto,
      including the Owner Furnished Equipment, that are required for the design,
      construction or operation of the Project in accordance with Industry Standards,
      and described in, required by or reasonably inferable from the Statement of
      Work
      or the Submittals.




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“**ERCOT**”
      means the Electric Reliability Council of Texas.




“**Errors
      or Omissions**” means any design or engineering Work, including any
      Submittals that: (a) does not conform to the Statement of Work;
      (b) fails to comply with Industry Engineering Standards, as applicable; or
      (c) could materially and adversely affect the mechanical, electrical or
      structural integrity of the Project, or the normal, efficient, effective or
      safe
      operation of the Project during the Project’s design life.




“**Executive
      Labor Committee**” means a committee to be formed by Owner and Contractor
      consisting of four (4) senior executive representatives of Owner and Contractor
      (i.e., two representatives from each Party), that shall meet as needed, in
      person or by conference call or as otherwise mutually agreed, in response to
      a
      recommendation(s) from the Program Labor Committee.




“**Excusable
      Event**” means an event that adversely impacts Contractor’s performance
      of the Work, to the extent such event is actually and demonstrably attributable
      to: (a) Owner’s failure or delay to perform any covenant or contractual
      obligation of Owner, as applicable hereunder; (b) to the extent set forth
      in Section7.1.3, Owner’s
      failure to issue a Full Notice to Proceed by March 1, 2007; (c) a
      Change In Law; (d) an Unforeseen Site Condition; (e) a difference in
      the actual conditions encountered or the final permits issued from the Owner
      Provided Information, or (f) Owner’s failure to obtain an amendment or
      modification of the Discharge Permit that will permit Owner to discharge a
      total
      volume of up to 1,556 million gallons of once-through cooling water and
      auxiliary cooling water during any twenty four (24) hour period by the date
      Contractor commences conducting the Performance Tests for Unit 1 or
      Unit 2, as the case may be.




“**Exhibits**”****means
      each Exhibit attached hereto.




“**Final
      Completion**”****means satisfaction by Contractor or
      waiver by Owner of all of the conditions for Final Completion set forth in
      Section14.4.




“**Final
      Completion Date**”****means the date on which the last
      of the conditions to Final Completion of a Unit as set forth in
Section14.4
      occurs.




“**Final
      Contractor’s Invoice**”****means the final
      Contractor’s Invoice submitted for Final Payment with respect to a Unit in
      accordance with Section6.9.




“**Final
      Payment**”****means the final payment made by Owner or
      the Financing Entities to Contractor with respect to a Unit in accordance with
      Section6.9.




“**Financial
      Closing**” means commitments of the Financing Entities to fully finance
      the engineering, procurement and construction of the Project in accordance
      with
      this Agreement and all conditions precedent to such commitments have been met
      to
      close financing and fund the Project.




“**Financing
      Entities**”****means the holders of, or the agent(s)
      or trustee(s) representing the holders of, any debt, lease, or equity financing
      for, of or secured by the Project, including any Person(s) that owns the Project
      or any portion thereof and leases the Project or such portion to




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 Owner
        or an Affiliate of Owner, as applicable, under a lease, sale leaseback or
        synthetic lease structure, or the Person(s) providing a letter or letters
        of
        credit or other guarantees or insurance in support of any such debt, lease
        or
        equity financing or providing any other letter of credit in connection with
        the
        construction or development of the Project, but excluding Owner and any
        Affiliate shareholders or Affiliate constituent members of Owner as of the
        date
        hereof.




“**Force
      Majeure**”****means events demonstrably beyond the
      reasonable control of the Person claiming the event of Force Majeure, including
      each of the following events, matters, or things:  war, blockade,
      revolution, insurrection, riot, act of terrorism (or threats of terrorism
      involving the Work), or public disorder or acts of emergency; expropriation,
      requisition, confiscation, or nationalization; export or import restrictions
      (but not to the extent due to an increase in export or import duties or taxes)
      by any Governmental Authority; embargoes or sanctions; closing, damage or
      accidents to harbors, docks, canals, or other assistances to or adjuncts of
      the
      shipping or transportation industry; rationing or allocation, at the request
      or
      insistence of any Governmental Authority; action or inaction of Governmental
      Authority; explosions; fire; flood; earthquake; volcano; tide, tidal wave,
      or
      perils of the sea; Abnormally Severe Weather Conditions; an epidemic or
      quarantine; acts of God; or labor strikes, disputes or disruptions; the
      unavailability or shortages of labor or Equipment and Materials if caused by
      an
      event of Force Majeure.  The Person claiming the event of Force
      Majeure shall reasonably demonstrate that the effect of such event would not
      have been avoided had such Person used reasonable care or acted in compliance
      with Industry Standards.  The following events, matters or things
      shall not constitute an event of Force Majeure: (i) the absence of
      sufficient financial means to perform obligations or the failure to make
      payments in accordance with this Agreement; (ii) any labor disturbance,
      strike or dispute of Contractor’s workers or personnel or any Subcontractor’s
      workers or personnel or any independent contractor engaged by Contractor or
      any
      of its Subcontractors occurring at the Site (unless such event is part of a
      national or regional disturbance, strike or dispute) or any labor disturbance,
      strike or dispute limited to employees of Contractor; (iii) mechanical
      failures unless caused by an event of Force Majeure; (iv) storms and other
      climatic or weather conditions other than Abnormally Severe Weather Conditions;
      and (v) the unavailability or shortages of labor or Equipment and Materials
      unless itself caused by an event of Force Majeure.




“**Full
      Notice to Proceed**”****means a written Notice signed
      by a duly authorized representative of Owner to Contractor authorizing
      Contractor to commence and complete all Work under this Agreement, including
      on-Site construction of the Units.




“**Full
      Notice to Proceed Date**”****means the Business Day
      after Owner provides Contractor with the Full Notice to Proceed.




“**Governmental
      Authorities**”****means applicable national, federal,
      state, provincial, and local governments and all agencies, authorities,
      departments, instrumentalities, courts, corporations, other authorities lawfully
      exercising or entitled to exercise any administrative, executive, judicial,
      legislative, police, regulatory or taxing authority or power, or other
      subdivisions of any of the foregoing having or claiming a regulatory interest
      in
      or jurisdiction over the Site, the Project, the Work or the
      Parties.




“**Guaranteed
      Amount**” shall have the meaning set forth in Section4.2.6.




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“**Hazardous
      Materials**”****means any substance or material
      regulated or governed by any Applicable Permit, or any substance, emission
      or
      material now or hereafter deemed by any Governmental Authority to be a
“regulated substance,” “hazardous material,” “hazardous waste,” “hazardous
      constituent,” “hazardous substance,” “toxic substance,” “radioactive substance,”
“pesticide” or any similar classification, including by reason of deleterious
      properties, ignitability, corrosivity, reactivity, carcinogenicity or
      reproductive toxicity.




“**Indemnitee**”****means
      an Owner Indemnitee or a Contractor Indemnitee, as the context may
      require.




“**Independent
      Expert**” means a technical or scheduling expert experienced in and
      knowledgeable of the engineering, procurement and construction industry and
      the
      particular subject matter of a dispute between the Parties.




“**Industry****Engineering Standards**” means those standards of care
      and diligence normally practiced by recognized engineering and design firms
      in
      performing engineering and design services of a similar nature for power
      projects in the United States similar to this Project and in accordance with
      Applicable Laws and Applicable Permits, as practiced at the time the engineering
      Work is performed.




“**Industry
      Standards”**or**“Industry
      Grade**”****means those standards of construction,
      workmanship, Equipment and Materials, and components specified in
Exhibit A; provided, however, if the relevant standard
      is not so specified or is ambiguous therein, “**Industry
      Standards**” or “**Industry Grade**” shall mean those
      standards of care and diligence normally practiced by engineering and
      construction firms in performing services of a similar nature for power projects
      in the United States similar to this Project and in accordance with Applicable
      Laws and Applicable Permits, as practiced at the time the Work is
      performed.




“**Intellectual
      Property Claim**”****means a claim or legal action for
      unauthorized disclosure or use of any trade secret, patent, copyright, trademark
      or service mark arising from Contractor’s performance (or that of its Affiliates
      or Subcontractors) under this Agreement that:  (a) concerns any
      Equipment and Materials or other items or services provided by Contractor,
      any
      of its Affiliates, or any Subcontractor under this Agreement; (b) is based
      upon or arises out of the performance of the Work by Contractor, any of its
      Affiliates, or any Subcontractor, including the use of any tools or other
      implements of construction by Contractor, any of its Affiliates, or any
      Subcontractor; or (c) is based upon or arises out of the design or
      construction of any item by Contractor under this Agreement or the operation
      of
      any item according to directions embodied in Contractor’s final process design,
      or any revision thereof, prepared or approved by Contractor; provided
      that such claim or legal action does not result from Contractor’s following the
      written instructions of Owner to use, incorporate, or install the offending
      or
      infringing process or item.




“**Intellectual
      Property Rights**”****means all licenses, trade
      secrets, copyrights, patents, trademarks, proprietary information and other
      ownership rights related to the Work or otherwise necessary for the ownership
      and maintenance of the Project, including all Project-related documents, models,
      computer drawings and other electronic expressions, photographs and other
      expressions.




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“**Invention**”
      shall have the meaning set forth in Section25.1.




“**Key
      Personnel**”****means the natural persons named and
      assigned to the identified positions set forth on
Exhibit J.




“**Leased
      Equipment**” shall have the meaning set forth in Section5.3.1.




“**Loss(es)**”****means
      subject to Section31.1, any and
      all liabilities (including liabilities arising out of the application of the
      doctrine of strict liability), obligations, losses, damages, penalties, claims,
      actions, suits, judgments, costs, expenses and disbursements and, in the case
      of
      third-party claims, whether the foregoing be founded or unfounded (including
      legal fees and expenses and costs of investigation), and whether arising in
      equity, at common law, or by statute, or under the law of contracts, torts
      or
      property, of whatsoever kind and nature, including claims for property damage,
      personal injury (including emotional distress) and third-party economic
      loss.




“**Major
      Subcontractor**”****means a Subcontractor whose
      contract or contracts (in the aggregate) with Contractor, or any of its
      Subcontractors require payments by Contractor (or Subcontractor) of at least
      One
      Million Dollars ($1,000,000).




“**Materials
      Warranty**”****means the warranty of Contractor under
Section17.2.




“**Mechanical
      Completion**”****means satisfaction of the following
      requirements:




(a)           the
      Unit is mechanically, electrically, and structurally constructed in accordance
      with the requirements of this Agreement, the Statement of Work and Industry
      Standards, except for Non-Critical Deficiencies; and




(b)           the
      Unit and each sub-system thereof, including all emissions or environmental
      compliance systems and all other critical systems, is mechanically, electrically
      and functionally complete and ready for initial operations, adjustment and
      testing, except for Non-Critical Deficiencies.




“**Milestone
      Item(s)**”****means a discrete portion of the Work as
      set forth in Exhibit G, and scheduled to be completed by the
      applicable dates set forth in the Project Schedule.




“**Minimum
      Performance Criteria**” means at least *** percent (***%) of the Net Unit
      Capacity Guarantee during a Net Unit Capacity Test and not more than *** percent
      (***%) of the Net Unit Heat Rate Guarantee during a Net Heat Rate Performance
      Test while meeting all requirements of the TPDES General Permit to Dispose
      of
      Wastes Under the Clean Water Act Section 402 Permit WQ0001986000, approved
      Texas Commission Environmental Quality Air Permit No. 76474 and Prevention
      of Significant Deterioration Permit (PSD-TX-1056), including all variances
      and
      waivers that may be applicable thereto.




“**Minimum
      Tangible Net Worth**” shall have the meaning set forth in
Section26.1.2(a).




***
      CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE
      COMMISSION.




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“**Monthly
      Progress Report**”****means a written monthly progress
      report prepared by Contractor in form and content generally in accordance with
      Exhibit K.




“**Net
      Unit Capacity**” means the capacity of the Unit in kilowatts equal to the
      sum of the steam generator output minus generator transformer losses and
      auxiliary power losses.




“**Net
      Unit Capacity Guarantee**” means the Net Unit Capacity shall be between
      *** and *** kilowatts for Unit 1 and shall be between *** and *** kilowatts
      for Unit 2, at the conditions specified in
Exhibit I-1.




“**Net
      Unit Heat Rate**” means gross heat input to the steam generator divided
      by the sum of generator output minus generator transformer losses and auxiliary
      power usage.




“**Net
      Unit Heat Rate Guarantee**” means the Net Unit Heat Rate shall be between
      *** and *** Btu/kWh for Unit 1 and shall be between *** and *** Btu/kWh for
      Unit 2, at the conditions specified in
Exhibit I-1.




“**Non-Critical
      Deficiencies**”****means each item of Work that:
      (a) Owner or Contractor identifies as requiring completion or containing
      Defects or Errors or Omissions; (b) does not impede the safe operation of a
      Unit or the Project in accordance with Industry Standards; and (c) does not
      affect the capacity, efficiency, reliability, operability, safety or mechanical
      or electrical integrity of a Unit or the Project.




“**Notice**”****or****“**notice**”****means
      a written communication between the Parties required or permitted by this
      Agreement and conforming to the requirements of Article30.




“**Notice
      For Payment of Performance Liquidated
      Damages**”****means a Notice from Owner to Contractor
      specifying the Performance Liquidated Damages and the actual performance levels
      of the Project during a Performance Test used in calculating the Performance
      Liquidated Damages.




“**Notice
      of Correction**”****means a Notice from Contractor to
      Owner that a condition has been corrected in accordance with
Section6.12.2.




“**Notice
      of Final Completion**”****means a Notice from
      Contractor to Owner in accordance with Section14.4 that a Unit has satisfied the
      requirements
      for Final Completion.




“**Notice
      of Substantial Completion**”****means a Notice from
      Contractor to Owner in accordance with Section14.3 that a Unit has satisfied the
      requirements
      for Substantial Completion.




“**Notice
      of Withholding**”****means a Notice from Owner to
      Contractor of amounts to be withheld from a payment in accordance with
Section6.12.2.




***
      CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE
      COMMISSION.




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“**O&M
      Manual Supporting Documents**”****means with respect
      to the Project, Subcontractor, Upgrade Suppliers, and Supplier operation and
      maintenance manuals for Equipment and Materials, including piping and
      instrumentation diagrams, narrative descriptions, heat and material balances,
      and system design and operating parameters, including procedures and operator
      responses to alarms.




“**OCIP**”
      shall have the meaning set forth in Section21.1.1.




“**OCIP
      Administrator**” shall have the meaning set forth in
Section21.1.6.




“**Open
      Book Review**” shall mean the process for determining the scope of the
      Work and the Separated Contract Price, as described in Section5.3.




“**Operating
      Consumables**”****means operating consumables,
      including lubricants, filters, lamps, light bulbs, and other consumable
      equipment and materials, necessary for the operation and maintenance of the
      Project, but excluding any and all production inputs that are the responsibility
      of Owner pursuant to Section2.8.




“**Operating
      Personnel**”****means the personnel hired by Owner, or
      by an entity providing operating or maintenance services for Owner, to operate
      and maintain the Project (including all operators, maintenance personnel,
      instrument technicians and supervisors).




“**Other
      Owner Furnished Equipment**”****means the Owner
      Furnished Equipment other than the Boilers and the STGs.




“**Outage
      Period**” shall have the meaning set forth in Section15.4.9.




“**Owner**”****shall
      have the meaning set forth in the preamble.




“**Owner
      Acquired Permits**” shall have the meaning set forth in
Section2.4.




“**Owner
      Directive**” shall have the meaning set forth in Section16.7.




“**Owner
      Event of Default**” shall have the meaning set forth in
Section19.4.




“**Owner
      Furnished Equipment**”****means all of the equipment
      and the materials provided by Owner to Contractor for installation and
      incorporation into the Work, including the Boilers and the STGs, as more
      particularly described on Exhibit B hereto, and the existing
      foundations and partial installation of structural steel with respect to
      Unit 1.




“**Owner
      Indemnitee**” shall have the meaning set forth in Section23.1.




“**Owner
      Provided Information**”****means the information
      provided by or on behalf of Owner, including such information as set forth
      on
Exhibit W.




“**Owner
      Provided Facilities and Services**”****means the
      substation and the office space at the Site and the Ancillary Sites, if any,
      made available to Contractor by Owner in Owner’s sole discretion, until the Full
      Notice to Proceed has been issued and the Contractor has mobilized its




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 construction
        trailers to the Site, the laydown area, rights-of-way and easements, and
        access
        to Owner’s potable water supply, phone lines and electrical service as more
        particularly described in
Exhibit A-1–Section 01560.




“**Owner’s
      Certificate of Final Completion**”****means a
      certificate of Owner certifying that Final Completion has occurred.




“**Owner’s
      Certificate of Substantial Completion**”****means a
      certificate from Owner certifying that Substantial Completion of a Unit has
      occurred.




“**Owner’s
      Draft Air Permit**” means the draft air permit issued by the Texas
      Commission on Environmental Quality Air Permit No. 76474 and the Prevention
      of
      Significant Deterioration Permit (PSD-TX-1056).




“**Owner’s
      Engineer**”****means any engineering firm or firms or
      other engineer or engineers (which may be employees of Owner) selected and
      designated by Owner.




“**Performance
      Bonus**” shall have the meaning set forth in Section5.5.2.




“**Performance
      Guarantees**”****means the Net Unit Capacity
      Guarantee, the Net Unit Heat Rate Guarantee and the Environmental Compliance
      Guarantees, as more particularly defined in
Exhibit I-1.




“**Performance
      Liquidated Damages**” means the amounts, if any, paid or to be paid by
      Contractor pursuant to Section15.3 in the event Contractor fails
      to satisfy
      certain of the Performance Guarantees.




“**Performance
      Tests**”****means the tests for measuring the Net Unit
      Capacity and Net Unit Heat Rate as described in
Exhibit I-1–Section 5.03.




“**Permit
      Requirement**”****means any requirement or condition
      on or with respect to the issuance, maintenance, renewal or transfer of any
      Applicable Permit or any application therefore.




“**Person**”****means
      any individual, corporation, company, voluntary association, partnership,
      incorporated organization, trust, limited liability company, or any other entity
      or organization, including any Governmental Authority.




“**Phase
      One EPC**” means the period beginning on the date on which Owner and
      Contractor execute this Agreement and ending on the Full Notice to Proceed
      Date,
      during which Contractor shall perform the Phase One EPC Activities.




“**Phase
      One EPC Activities**” shall mean the activities set forth on
Exhibit CC.




“**Pre-Authorization**”
      shall have the meaning set forth in Section7.1.1.




“**Program
      Labor Committee**” means a committee to be formed by Owner and Contractor
      consisting of six (6) project and program level representatives of Owner and
      Contractor (i.e., three representatives from each Party), that shall meet,
      in
      person or by




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 conference
        call or as otherwise mutually agreed, on a quarterly basis or such shorter
        time
        period as requested by either Party or upon one (1) Business Day’s notice from
        either Party, or as soon as practicable thereafter, to discuss and recommend
        potential changes to craft labor hiring practices and policies (including
        the
        composition of, and the salary and benefits (based upon Exhibit EE),
        to be paid to craft labor, collectively referred to as “**Craft Labor
        Compensation**”) that Contractor believes are appropriate and necessary
        to continue to attract and retain skilled craft to perform the Work in an
        efficient and timely manner at the Project and at other construction projects
        in
        which Owner and Contractor may be engaged in Texas.




“**Project**”****means
      the complete coal-fired power generation facility to be designed, engineered,
      procured, constructed, tested and commissioned under this Agreement, together
      with all ancillary equipment and subsystems, all equipment, supplies and
      materials necessary to produce the Project outputs of electricity (including
      the
      Equipment and Materials and the Owner Furnished Equipment), together with all
      supporting improvements and interconnections, as generally described in, and
      including all items described, in or inferable from, this
      Agreement.




“**Project
      Director**”****means the Project Director designated
      by Contractor and approved by Owner pursuant to Section3.4.




“**Project
      Representative**”****means the Project Representative
      designated by Owner pursuant to Section2.1.




“**Project
      Schedule**”****means a critical path schedule prepared
      by Contractor and meeting the requirements set forth in
Exhibit A-1–Section 01320 describing the time of completion by
      Contractor of the Milestone Items and all of the other Work items, as such
      schedule may be modified in accordance with Section7.4.1.




“**Proposed
      Punchlist**” shall have the meaning set forth in Section14.1.1.




“**Punchlist**”****means
      schedules of Non-Critical Deficiencies for each Unit developed pursuant to
      Section14.1.1.




“**Remedial
      Plan**”****shall mean a plan prepared by Contractor
      regarding the actions to be taken and the schedule to remedy failures to meet
      the Performance Guarantees, as submitted to and approved by Owner pursuant
      to
Sections15.4.2.




“**Required
      Manuals**”****means all operating data and manuals,
      spare parts manuals, integrated and coordinated operation and maintenance
      manuals and instructions, and training aids, whether created by Contractor
      or  any Subcontractor, which are reasonably necessary to safely and
      efficiently commission, test, start up, operate, maintain and shut down the
      Project (including those manuals identified on
Exhibit A-1–Section 01330).




“**Retainage**”
      shall have the meaning set forth in Section6.8.




“**Schedule
      Bonus**” shall have the meaning set forth in Section5.5.1.




“**Schedule
      of Payment Values**”****means the Schedule of Payment
      Values reflecting the Separated Contract Price assigned to the Work upon
      completion of the Open Book Review and




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 attached
        hereto as Exhibit D, and developed in accordance with
Section5.3.2 and
Exhibit A-1–Section 01320, establishing
        payment amounts in
        connection with achieving Milestone Items, setting forth the estimated date
        of
        completion of such Milestone Items and setting forth estimated cancellation
        costs.




“**Separated
      Contract Price**” means the total sum payable by Owner developed during
      the Open Book Review in accordance with Section5.2 as stated in Exhibit BB for all
      labor, all materials, and all equipment, which sum shall be due in accordance
      with the terms of this Agreement as consideration for the performance of the
      Statement of Work to be performed by or through Contractor on a “turnkey” basis
      in order to complete the Project, all in strict accordance with the terms of
      this Agreement, which sum shall only be subject to adjustment in accordance
      with
      this Agreement.




“**Separated
      Target Price**” shall have the meaning set forth in
Section5.1.




“**Site**”****means
      the real property described in Exhibit L located in Robertson County
      and Limestone County, Texas on which the Project shall be constructed, as more
      particularly defined in Exhibit M.




“**Site
      Conditions**”****means the physical and other
      conditions at the Site and the surrounding area as a whole, including conditions
      relating to the environment, transportation, access, waste disposal, handling
      and storage of materials, the availability and quality of electric power, the
      availability and quality of water, the availability and quality of roads,
      climatic conditions and seasons, topography, air and water (including raw water)
      quality conditions, ground surface conditions, surface soil conditions, sound
      attenuation, subsurface geology, nature and quantity of surface and subsurface
      materials to be encountered (including Hazardous Materials), the geological
      and
      subsurface conditions of the Site, and the location of underground utilities,
      and equipment and facilities needed before and during performance of
      Contractor’s obligations under this Agreement.




“**Spare
      Parts Schedule**” shall have the meaning set forth in
Section3.20.1.




“**Statement
      of Work**”****means the requirements regarding the
      Work set forth in this Agreement, including the specifications and other
      requirements included in the Exhibits attached hereto.




“**STGs**”****means
      the steam turbines and generators described on Exhibit B hereto,
      together with all major components and auxiliary components thereto, which
      Owner
      will provide for installation or incorporation into the Project by
      Contractor.




“**STG
      Upgrade Contract**”****means that certain Steam
      Turbine Generator Agreement dated as of March 31, 2006, between TXU Energy
      Company LLC, an Affiliate of Owner, and General Electric International, Inc.
      for
      the upgrade and completion of two General Electric model steam turbines and
      generators, attached hereto as Exhibit B-1, as assigned to Owner on
      August 3, 2006.




“**STG
      Upgrade Supplier**”****means General Electric
      International Inc.




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“**Subcontractor**”****means
      any Person, including any Supplier, other than Contractor or its Affiliates,
      that performs any portion of the Work (including any subcontractor of any tier)
      in furtherance of Contractor’s obligations under this Agreement.




“**Submittals**”****means
      the drawings, specifications, drawing logs, conformed technical specifications,
      manufacturers’ drawings and data, plans and designs, and any other information
      that has been prepared by Contractor, or any Subcontractor or Supplier with
      respect to the Work, and that have been submitted to and accepted or approved
      by
      the Owner in accordance with the provisions of this
      Agreement.  Submittals and the time periods available for Owner’s
      review, acceptance or approval thereof, are defined in
Exhibit A-1–Section 01330.




“**Substantial
      Completion**”****means satisfaction or waiver of all
      of the conditions set forth in Section14.2 with respect to each Unit.




“**Substantial
      Completion Date**”****means the date on which
      Substantial Completion actually occurs.




“**Substantial
      Completion Guaranteed Date**”****means, with respect
      to the first Unit, the date of ***, and, with respect to the second Unit, the
      date of ***, as such dates may be modified in accordance with the terms
      hereof.




“**Successfully
      Run**”****means with respect to an Acceptance Test
      that the applicable Acceptance Test was completed in accordance with the
      procedures, conditions and requirements for the proper performance of such
      test
      set forth in Exhibit I-1 and the other provisions of this Agreement
      applicable to such test.




“**Suppliers**”****means
      persons that supply Equipment and Materials to Contractor or any Subcontractor
      in connection with the performance of the Work.




“**Suspension
      for Cause**” shall have the meaning set forth in Section20.6.




“**Tangible
      Net Worth**” shall mean the sum of (i) assets, including permits,
      contracts and leases, less (ii) intangible assets, including goodwill,
      patents, copyrights and trademarks, less (iii) total
      liabilities.




“**Threshold
      Rating**”****shall mean a credit rating equal to or
      greater than BBB- by Standard & Poors, BBB- by Fitch or Baa3 by
      Moody’s.




“**Unconditional
      Waiver and Release Upon Final Payment**”****means a
      written statement in the form attached hereto as to Exhibit F-4,
      containing a waiver and release of liens prepared and executed by Contractor
      or
      a Major Subcontractor, as applicable, pursuant to which a Person unconditionally
      waives and releases all mechanic’s liens, stop notices and bond rights with
      respect to all Work.




“**Unforeseen
      Site Conditions**”****shall have the meaning set forth
      in Section12.3.




***
      CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE
      COMMISSION.




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“**Unit**”****means
      a boiler, steam turbine generator, emission control and related
      equipment.  The first Unit to be completed pursuant to this Agreement,
      together with facilities common to both Units such as the water treatment
      system, is sometimes referred to herein as
“**Unit 1**.”  The second Unit to be completed is
      sometimes referred to herein as “**Unit 2**.”




“**Upgrade
      Contracts**” shall mean****the STG Upgrade Contract
      and the Boiler Upgrade Contracts, collectively.




“**Upgrade
      Suppliers**”****shall mean the STG Upgrade Supplier
      and the Boiler Upgrade Suppliers, collectively.




“**Warranty
      Payment Option**” shall have the meaning set forth in
Section17.7.5.




“**Warranty
      Period**” shall have the meaning set forth in Section17.3.




“**Warranty
      Procedures**”****shall have the meaning set forth in
Section17.7.1.




“**Work**”****means
      all obligations, duties, and responsibilities assigned to or undertaken by
      Contractor under this Agreement with respect to the Project, including all
      engineering, design and construction of the Project, cleaning of the components
      of the Boilers, cleaning and refurbishment of the Other Owner Furnished
      Equipment, all procurement and provision of Equipment and Materials (other
      than
      Owner Furnished Equipment), all erection and installation of Equipment and
      Materials, and all training, start up (including calibration, inspection, and
      start up operation), and testing included in or required for the
      Project.  Where this Agreement describes a portion of the Work in
      general, but not in complete detail, the Parties acknowledge and agree that
      the
      Work includes any work required:  (a) for the design and
      construction of the Project in accordance with Industry Standards; and
      (b) for the Project to be capable of being operated in accordance with
      Industry Standards.  Notwithstanding the foregoing, Contractor’s
      obligations with respect to Owner Furnished Equipment are as specified in
Section3.5.




“**Work
      Warranty**”****means the warranties of Contractor
      under Section17.1.




1.2           Exhibits.  This
      Agreement includes the Exhibits annexed hereto and any reference in this
      Agreement to an “**Exhibit**” by letter designation or title shall
      mean one of the Exhibits identified in the table of contents and such reference
      shall indicate such Exhibit herein.  Each Exhibit attached hereto is
      incorporated herein in its entirety by this reference.




1.3           Interpretation.




(a)           Terms
      defined in a given number, tense, or form shall have the corresponding meaning
      when used in this Agreement with initial capitals in another number, tense,
      or
      form.  The meaning assigned to each term defined herein shall be
      equally applicable to both the singular and the plural forms of such term and
      vice versa, and words denoting either gender shall include both genders as
      the
      context requires. Where a word or phrase is defined herein, each of its other
      grammatical forms shall have a corresponding meaning.




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(b)           The
      terms such as “hereof,” “herein,” “hereto,” “hereinafter,” and other terms of
      like import are not limited in applicability to the specific provision within
      which such references are set forth but instead refer to this Agreement taken
      as
      a whole.




(c)           When
      a reference is made in this Agreement to an Article, Section, subsection or
      Exhibit, such reference is to an Article, Section, subsection or Exhibit to
      this
      Agreement unless otherwise specified.




(d)           The
      word “include,” “includes,” and “including” when used in this Agreement shall be
      deemed to be followed by the words “without limitation,” unless otherwise
      specified shall not be deemed limited by the specific enumeration of items,
      but
      shall be deemed without limitation.  The term “or” is not
      exclusive.




(e)           A
      reference to any Party to this Agreement or any other agreement or document
      shall include such Party’s predecessors, successors and permitted
      assigns.




(f)           Reference
      to any Applicable Law means such Applicable Law as amended, modified, codified,
      replaced or reenacted, and all rules and regulations promulgated
      thereunder.




(g)           The
      Parties have participated jointly in the negotiation and drafting of this
      Agreement. Any rule of construction or interpretation otherwise requiring this
      Agreement to be construed or interpreted against any Party by virtue of the
      authorship of this Agreement shall not apply to the construction and
      interpretation hereof.




1.4           Headings.  All
      headings or captions contained in this Agreement are for convenience of
      reference only, do not form a part of this Agreement and shall not affect in
      any
      way the meaning or interpretation of this Agreement.




1.5           Conflicts
      in Documentation.  This Agreement, including the Exhibits hereto
      shall be taken as mutually explanatory.  If there is an express
      conflict between the provisions of this Agreement or any Exhibit hereto,
      Contractor shall immediately notify Owner of such conflict.  Owner, in
      its reasonable discretion, shall choose which conflicting provision it requires
      Contractor to follow.  In the event of a conflict between any
      provision within Articles1
      through 33 of this Agreement and an Exhibit,
      the provisions of Articles1
      through 33 of this Agreement shall take
      precedence over any of the Exhibits.  In the event of a conflict
      between the Exhibits and any Submittals, the Exhibits shall take precedence
      over
      any Submittals.




1.6           Documentation
      Format.  This Agreement and all documentation to be supplied
      hereunder shall be in the English language and all units of measurement in
      the
      design process, specifications, drawings and other documents shall be specified
      in dimensions as customarily used in the United States.




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2.           **RESPONSIBILITIES
      OF OWNER**




Owner
      shall, at Owner’s cost and expense:




2.1           Project
      Representative.  As of the date of the Amendment, Owner has
      designated a Project Representative as identified in Section30.1, who shall act as the point
      of contact for
      Contractor with respect to the prosecution of the Work and any issues relating
      to this Agreement (but who shall not by virtue of such designation be authorized
      to execute a Change In Work Form or make any amendments to, or provide waivers
      under, this Agreement).  The Project Representative’s authority to
      execute a Change In Work Form shall be as set forth in Section16.5.  Owner may designate Owner’s
      Engineer as its Project Representative and may designate more than one Project
      Representative, and may designate a different Project Representative from time
      to time by written notice to Contractor.




2.2           Operating
      Personnel.  Commencing six (6) months prior to first fire for a
      Unit as set forth in the Project Schedule, as updated from time to time by
      Contractor, provide Operating Personnel with general power plant experience
      for
      training by Contractor as provided pursuant to Section3.19 and to provide ordinary operating
      and
      maintenance support to Contractor for testing, start up and commissioning of
      the
      Project as provided in Section3.19.1.  Until Substantial
      Completion, the Operating Personnel provided by Owner pursuant to this
Section2.2 shall provide normal
      operating maintenance support under the****supervision and
      direction of Contractor’s start-up manager; provided, however,
      that such Operating Personnel shall not be deemed employees or Subcontractors
      of
      Contractor.  Notwithstanding anything to the contrary in the
      foregoing, Contractor shall remain solely responsible for performing the Work
      in
      accordance with this Agreement, including Contractor’s obligation to achieve
      Substantial Completion of each Unit by the applicable Substantial Completion
      Guaranteed Dates.  Except to the extent prohibited by any applicable
      bargaining unit agreement, Contractor shall be entitled to require Owner to
      remove any Operating Personnel from the Site that Contractor reasonably
      demonstrates (i) is creating a safety hazard, (ii) has committed such
      actions or refused to take such action as would amount to insubordination,
      or
      (iii) is causing or has caused material interference with Contractor’s
      completion of the Work by the Substantial Completion Dates as indicated on
      the
      Project Schedule.




2.3           Ministerial
      Assistance.  Provide such ministerial assistance as Contractor may
      reasonably request in connection with obtaining Contractor Acquired
      Permits.




2.4           Owner
      Acquired Permits.  Obtain, with Contractor’s reasonable assistance
      (to be provided at no cost to Owner), and pay for all the Applicable Permits
      set
      forth on Exhibit C as a permit to be acquired by Owner and all other
      Applicable Permits excluding the Contractor Acquired Permits (collectively,
      the
“**Owner Acquired Permits**”), as set forth on
Exhibit C.




2.5           Access
      to Site and Owner Furnished Equipment.  Owner shall make the Site
      and the Ancillary Sites, the Owner Furnished Equipment and the Owner Provided
      Facilities and Services available to Contractor and shall allow Contractor
      unencumbered access thereto as necessary for Contractor to proceed with the
      Work
      and assure rights of ingress and egress to and from the Site for Contractor
      for
      performance of the Work; provided, however, that Contractor shall
      coordinate with and cooperate with Owner regarding entry onto the Site, the
      Ancillary Sites




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 or
        any part thereof, and with Owner’s security procedures.  Owner hereby
        grants Contractor the right to, and to allow the Upgrade Suppliers to, remove
        the Owner Furnished Equipment to be refurbished pursuant to the Upgrade
        Contracts, from the Site and the Ancillary Site, in accordance with the terms
        thereof.




2.6           Owner
      Provided Facilities and Services.  Provide the Owner Provided
      Facilities and Services.  Notwithstanding anything in this Agreement
      to the contrary, Contractor’s sole remedy for the failure of Owner to provide or
      cause to be provided any of the Owner Provided Facilities and Services in
      accordance with the terms of this Agreement is the relief granted in
Section8.6.2.  Any
      such failure shall not be considered a breach of any covenant, condition,
      representation or warranty of Owner, and shall not be construed as an Owner
      Event of Default.




2.7           Owner
      Furnished Equipment.




2.7.1                      Access.  Provide
      or cause to be provided to Contractor and the relevant Upgrade Suppliers,
      access, physical possession and control of the Owner Furnished Equipment (as
      identified from time to time during the term of this
      Agreement).  Notwithstanding anything in this Agreement to the
      contrary, Contractor’s sole remedy for the failure of Owner to provide or cause
      to be provided any of the Owner Furnished Equipment in accordance with the
      terms
      of this Agreement shall be the relief granted to Contractor under
Section8.6.2.  Any
      such failure shall not be considered a breach of any covenant, condition,
      representation or warranty of Owner, and shall not be construed as an Owner
      Event of Default.




2.7.2                      Upgrade
      Contracts.  Cause its Affiliate, TXU Energy Company LLC, to
      appoint Contractor as Owner’s agent with respect to the STG Upgrade Contract,
      and assign such STG Upgrade Contract to Contractor on such date as Owner and
      Contractor mutually agree, but in any event on or before Financial
      Closing.  Upon execution of the Boiler Upgrade Contracts and with
      respect to the STG Upgrade Contract, Owner shall advise the Upgrade Suppliers
      that Contractor shall act as agent for and on behalf of Owner with respect
      to
      all matters concerning the Upgrade Contracts and that such Upgrade Suppliers
      shall take directions and instructions from Contractor in the performance of
      their obligations under their respective Upgrade
      Contract.




2.8           Commodity
      and Transmission Scheduling.  Owner shall schedule
      (i) delivery of sufficient coal meeting the specifications as set forth in
Exhibit A; and (ii) off take of test power (during the
      Acceptance Tests), including arranging for and scheduling transmission of such
      test power, in each case in the amounts and at such times as may be required
      to
      support Contractor’s obligations with respect to start up, commissioning and
      testing of each Unit as indicated by Contractor pursuant to
Section3.22.  In
      addition, Owner shall, upon reasonable advance notice from Contractor, provide
      Contractor (i) access to and availability of cooling water (with respect to
      adequate quantities and quality), (ii) backfeed power,
      (iii) limestone, (iv) ammonia, (v) natural gas, and
      (vi) such other consumables that are to be provided by Owner pursuant to
Exhibit S, in the amounts and at such times as may be requested by
      Contractor from time to time to support Contractor’s obligations with respect to
      start up, commissioning and testing of each Unit, as indicated by Contractor
      pursuant to Section3.22.




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3.           **RESPONSIBILITIES
      OF CONTRACTOR**




Contractor
      shall:




3.1           Turnkey
      Basis.  On a turnkey basis, Contractor shall perform, furnish, be
      responsible for, and, except for such equipment purchase agreements or purchase
      orders for which Contractor is acting as Owner’s agent, pay the cost of, all of
      the Work, including all services, labor, Equipment and Materials and supervision
      necessary to provide an operable Project to the extent and in accordance with
      the provisions of this Agreement.  References to the obligations of
      Contractor under this Agreement as being “**turnkey**” and
      performing the Work on a “**turnkey basis**” means that Contractor
      is obligated to complete the Work such that the Project satisfies the applicable
      terms, conditions, Performance Guarantees, Substantial Completion Guaranteed
      Dates, the other guarantees as set forth in Exhibit I-1 and the
      requirements set forth in this Agreement, all for the Separated Contract
      Price.




3.2           Performance
      of Work.  Perform and complete all of the Work, and cause each
      Subcontractor to perform and complete each such Subcontractor’s respective work,
      without any Defects or Errors or Omissions, in accordance with the terms of
      this
      Agreement and with Industry Engineering Standards, Industry Standards, and
      in
      compliance with Applicable Laws, Permit Requirements and Applicable
      Permits.  Without limiting the foregoing, Contractor shall, subject to
      the terms and conditions of this Agreement, including Section15.1, perform the Work so as to achieve
      Substantial Completion of each Unit by such Unit’s Substantial Completion
      Guaranteed Date.




3.3           Design
      and Construction of Project.  Design, engineer and construct the
      Project so that it meets the requirements of the Submittals, and is capable
      of
      operation, at the design levels specified in the Statement of Work and in
      compliance with Industry Engineering Standards, Industry Standards, Applicable
      Laws, Permit Requirements and Applicable Permits in effect at the time of
      Substantial Completion; provided that Owner acknowledges that Contractor
      has designed the Project to discharge a total volume of up to 1,556 million
      gallons during any twenty four (24) hour period of once-through cooling water
      and auxiliary cooling water, rather than the volume limitation of 1,470 million
      gallons during any twenty four (24) hour period currently provided in the
      Discharge Permit.  Contractor shall provide all necessary engineering
      and design services necessary to set forth in detail the specifications,
      drawings and requirements for the procurement of Equipment and Materials (other
      than the Owner Furnished Equipment) and for the construction of the entire
      Project in a manner which satisfies the requirements of this
      Agreement.  Contractor shall preserve all permanent survey
      construction monuments and benchmarks during its performance of the
      Work.




3.4           Project
      Director.  Contractor shall designate a Project Director, subject
      to Owner’s prior written approval, who shall have full responsibility for the
      prosecution of the Work and shall act as a single point of contact in all
      matters on behalf of Contractor.  The Project Director shall be one of
      the Key Personnel for purposes of this Agreement.  Contractor’s
      initial Project Director is designated on
Exhibit J.******




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3.5           Owner
      Furnished Equipment.




3.5.1                      Assumption
      or Execution of Upgrade Contracts.  Contractor represents that it
      has conducted a detailed review of the commercial and technical terms,
      conditions and requirements contained in the STG Upgrade Contract.  As
      of the date of the Original Agreement with respect to the Boiler Upgrade
      Contracts and as of August 16, 2006 with respect to the STG Upgrade
      Contract, until the date of assignment to and assumption of the Upgrade
      Contracts in full by Contractor, Contractor shall act as agent for and on behalf
      of Owner with respect to all matters concerning the Upgrade
      Contracts.  Contractor has been authorized to and has executed the
      Boiler Upgrade Contracts directly with the Upgrade Suppliers as agent for and
      on
      behalf of Owner, subject to Owner’s review and approval of the Boiler Upgrade
      Contracts.




3.5.2                      Assignment
      of Upgrade Contracts.  Upon Contractor’s appointment as agent of
      the STG Upgrade Contract and the execution of the Boiler Upgrade Contracts,
      Contractor shall be responsible to administer all aspects of the Upgrade
      Contracts and shall oversee the Upgrade Suppliers’ performance thereunder,
      including technical review and coordination.  Subject to
Section4.2.7(b), Owner shall,
      in writing and in the form attached hereto as Exhibit X, assign its
      rights and obligations under the Boiler Upgrade Contracts and the STG Upgrade
      Contract to Contractor, and upon such assignment, Contractor shall assume all
      of
      Owner’s rights and obligations under the Boiler Upgrade Contracts and the STG
      Upgrade Contract, including the payment obligations
      thereunder.




3.5.3                      Management
      of Upgrade Contracts.  While acting as agent for Owner and
      following assignment of the Upgrade Contracts to Contractor, Contractor shall
      conduct receiving inspection, off-loading, Site storage and maintenance of
      the
      Boilers and the STGs until Substantial Completion, and shall incorporate the
      Boilers and the STGs into the Project.  Contractor shall schedule and
      otherwise manage the technical consulting time provided by each Upgrade Supplier
      pursuant to the Upgrade Contracts, it being the responsibility of Contractor
      to
      efficiently manage such Upgrade Supplier’s consulting time and otherwise
      coordinate with each Upgrade Supplier to require that its technical consultants
      are available at the Site as and when required by the Project Schedule and
      the
      overall progress of the Work.




3.5.4                      Inspection,
      Delivery and Installation of Owner Furnished
      Equipment.  Contractor acknowledges that the Other Owner Furnished
      Equipment is currently stored in various locations at the Site and at the
      Ancillary Sites, and that the Boilers and the STGs are undergoing inspection
      and
      condition assessment by the Upgrade Suppliers and may be required to undergo
      repair and upgrade at each respective Upgrade Supplier’s place of
      business.  Notwithstanding the foregoing, as between Owner and
      Contractor, the Owner Furnished Equipment shall fall under the care, custody
      and
      control of Contractor.  Contractor shall be responsible for
      inspecting, refurbishing, cleaning and causing the Other Owner Furnished
      Equipment to be delivered to the Site, as necessary, for cleaning the components
      of the Boilers and for causing, or coordinating with the Upgrade Suppliers
      to
      cause, the Boilers and the STGs to be delivered to the Site.  Owner
      shall obtain insurance in the amount of the replacement value of the Owner
      Furnished Equipment identified to be refurbished, insuring against any damage
      or
      loss to the Owner Furnished Equipment while in transit to and from the
      Site.   Contractor shall be responsible for the installation,
      commissioning and testing of the Owner Furnished
      Equipment.




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3.5.5                      Costs.  All
      necessary costs for inspection, cleaning, refurbishing, handling, shipping,
      storage, erection, commissioning and start up of any Owner Furnished Equipment,
      and all costs and expenses relating to the technical administration of the
      Upgrade Contracts, review of Upgrade Supplier drawings, and expediting and
      inspection of the Owner Furnished Equipment shall be borne by Contractor to
      the
      extent not paid by Owner prior to the date hereof and are included in the
      Separated Contract Price.




3.5.6                      Upgrade
      Suppliers.  Notwithstanding any other provision of this
Section3.5, Contractor
      shall:




(a)           deliver
      a copy of any correspondence or other communication relating to warranties
      or
      asserting claims against Contractor or Owner that Contractor may receive from
      each Upgrade Supplier to Owner immediately after Contractor’s receipt
      thereof;




(b)           provide
      Notice to Owner promptly after Contractor becomes aware of any material failure
      by any Upgrade Supplier to perform its respective obligations under the Upgrade
      Contracts (including any work performed by Contractor or any Upgrade Supplier
      that does not conform to the requirements of the Upgrade Contracts or
      developments that affect Critical Path Items); and




(c)           record
      each Upgrade Supplier’s performance under the Upgrade Contracts, respectively,
      after delivery of the respective Owner Furnished Equipment to the
      Site.




Notwithstanding
      the foregoing, Contractor’s authority in connection with the Upgrade Contracts
      shall be limited such that Contractor shall neither do nor undertake to do
      any
      of the following without Owner’s prior written consent in each
      case:




(i)           materially
      amend or modify the Upgrade Contracts;




(ii)           waive
      or exclude performance by any Upgrade Supplier of their respective obligations
      under the Upgrade Contracts; or




(iii)           release,
      compromise or waive any claim against any of the Upgrade Suppliers.




3.5.7                      Existing
      Boiler Components.  Owner and Contractor acknowledge that the
      existing Boiler components were manufactured under the then-applicable ASME
      codes.  If any Governmental Authority, including for these purposes an
      ASME authorized inspector, or the State of Texas Board of Inspectors or its
      equivalent, determines that the existing Boiler components must be modified
      to
      comply with another version of the ASME code, Contractor shall be entitled
      to a
      Change In Work with respect to such modifications.




3.5.8                      Owner
      Furnished Equipment Not Utilized.  Owner and Contractor
      acknowledge and agree that Contractor will be evaluating existing equipment
      of
      Owner’s to be provided for the Project as identified on Exhibit B,
      and may choose or may not be able to utilize all of such existing equipment
      for
      the Project.  To the extent Contractor does not utilize any of the
      existing equipment provided by Owner, Contractor shall promptly notify Owner
      of
      its election or decision not to use or utilize such existing equipment, such
      election or decision to be




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 subject
        to Owner’s reasonable approval if the cost of replacing such equipment exceeds
        an aggregate of One Million Dollars ($1,000,000), and in any event such
        elections and decisions to be completed during the Open Book Review and before
        determination of the Separated Contract Price.  If the decision not to
        utilize existing equipment is subject to Owner’s approval, Owner shall withhold
        or provide such approval within ten (10) days after receipt of a written
        notice
        from Contractor specifying the existing equipment is not being used and the
        reasons why.  If Contractor elects not to use any of the Owner
        Furnished Equipment, and where applicable, Owner approves Contractor’s decision,
        such equipment shall not be included in the Owner Furnished Equipment for
        purposes of this Agreement.  Accordingly, risk of loss of such
        existing equipment not included in the Owner Furnished Equipment shall remain
        with Owner at all times.  Contractor acknowledges that some of the
        existing equipment not being utilized in the Project is stored in the same
        locations as the Owner Furnished Equipment.  Contractor shall use
        reasonable care to avoid any damage to any of Owner’s existing equipment and
        shall promptly notify the Project Representative if Contractor needs to move
        any
        of the existing equipment to complete the Work.  Contractor and Owner
        shall cooperate to move the existing equipment not utilized as Owner Furnished
        Equipment.  If Contractor moves any such existing equipment, the cost
        of moving such equipment shall be part of the Separated Contract Price, which
        shall not be adjusted as a result of any such relocation of existing equipment
        by Contractor.




3.6           Utilities
      and Services.




3.6.1                      Provision
      of Services.  Contractor shall install, connect, and maintain at
      its own expense during its performance under this Agreement all utilities,
      facilities, and services as set forth in
Exhibit A-1–Section 1560 (other than or in excess of the
      utilities, facilities, and services provided as part of the Owner Provided
      Facilities and Services) required for the performance of the
      Work.  All actions taken by Contractor concerning the utilities,
      facilities, and services used or provided hereunder shall follow all Applicable
      Laws and the standards of performance set forth in this Agreement.




3.6.2                      Payment.  Contractor
      shall pay when due all construction utility usage charges and shall arrange
      with
      local authorities and utility companies having jurisdiction over the Site for
      the provision of utilities other than or in excess of the utilities provided
      as
      part of the Owner Provided Facilities and Services.




3.6.3                      Supply
      of Construction Facilities.  Other than the Owner Provided
      Facilities and Services, Contractor shall obtain and provide all supplies or
      services required for the performance of the Work but which do not form a
      permanent part of the completed Work, including all temporary structures and
      other facilities as set forth in Exhibit A-1–Sections 1520 and
      1560 required for the proper and safe performance and completion of the Work
      but that does not form part of the Work such as office trailers, boarding,
      fences, covered ways, temporary footways and stairs, protection for workers
      such
      as guardrails, fences, notices, temporary lights, construction power,
      non-potable water and other consumables, construction utilities and services,
      erection structures and equipment such as shoring, falsework, forming materials,
      scaffolding, temporary stairs, staging, and all sanitary, safety, and first
      aid
      and fire prevention facilities of a temporary nature, and obtain and pay for
      an
      adequate supply of fuel, water, power, and all other necessary construction
      utility services (including fuel for construction equipment), all construction
      chemicals, lubricants, and construction consumables, and disposal of sewage,
      waste




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 material,
        rubbish, and spoils generated by Contractor and its Subcontractors, in each
        case
        as necessary for Contractor’s performance of the Work (but excluding utilities,
        facilities and services provided as part of the Owner Provided Facilities
        and
        Services).




3.6.4                      Operating
      Consumables.  Contractor shall:  (a) provide all
      Operating Consumables  necessary or appropriate for the construction,
      start up, testing, commissioning, operation or maintenance of the Project (other
      than the consumables to be provided by Owner as set forth in
Exhibit S) until Contractor achieves Substantial Completion;
      (b) at Substantial Completion, provide an inventory of Operating
      Consumables provided by Contractor at full storage capacity; and
      (c) provide to Owner, at least one hundred eighty (180) days prior to
      the Substantial Completion Date, a detailed list of suppliers of all Operating
      Consumables provided by Contractor.




3.7           Inspection
      by Contractor.  Contractor shall perform all inspection,
      expediting, quality surveillance, and other like services required for
      performance of the Work, including inspecting all Equipment and Materials that
      comprise the Project or that are to be used in the performance of the
      Work.




3.8           Organization.  Contractor
      shall maintain staff that are dedicated to the furnishing and completion of
      the
      Work, and that have the technical and managerial expertise to control and
      execute the Work in accordance with the requirements of this Agreement,
      including key staff members for the management of the Work both on and off-site
      who shall be supported by area and discipline superintendents and personnel
      as
      required.  Contractor shall maintain a qualified and competent
      organization at the Site with adequate capacity and numbers of construction
      and
      start up personnel, equipment, and facilities to execute the Work in a safe,
      efficient, environmentally sound, and professional manner at a rate of progress
      in accordance with the Project Schedule.




3.9           Contractor
      Acquired Permits.  Obtain all Contractor Acquired Permits required
      to be obtained by Contractor as set forth on Exhibit C, including
      all: (a) building permits required for the construction of the Project;
      (b) labor or health standard permits and approvals reasonably related to
      construction of the Project; (c) business permits necessary for the conduct
      of the operations of Contractor in any location where such permits may be
      required (including all contractors’ licenses and related documents);
      (d) permits, approvals, consents or agreements from or with any Person
      necessary for the performance by Contractor of the Work or its warranty
      obligations hereunder, for the transportation or importation of Equipment and
      Materials or for the transportation or importation of equipment, tools,
      machinery and other items used by Contractor in performance of the Work; and
      (e) permits, visas, approvals and certifications necessary for Contractor’s
      employees to legally perform the Work in any location where performed (including
      documentation of citizenship or legal residency in the United States) (all
      of
      the foregoing, collectively, the “**Contractor Acquired
      Permits**”).  Without limiting the foregoing, Contractor
      Acquired Permits include permits for temporary construction utilities and
      temporary sanitary facilities, dump permits, road use permits, permits related
      to Contractor’s or any Subcontractor’s use, storage and disposal of Hazardous
      Materials, and permits issued pursuant to any building, mechanical, electrical,
      plumbing or similar codes, each as required by Applicable Law in order to permit
      Contractor to perform the Work, and such permits not set forth on
Exhibit C that would customarily be obtained by Contractor in its
      name as may be




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 necessary
        to perform the Work.  Contractor shall cause its Subcontractors to
        obtain such permits as may be necessary to perform their portion of the
        Work.




3.10           Hazardous
      Materials Disposal System.  Contractor shall prepare and maintain
      accurate and complete documentation of all Hazardous Materials used in
      connection with the Project, and of the disposal of any such materials,
      including transportation documentation and the identity of all Subcontractors
      or
      Suppliers providing Hazardous Materials disposal services to Contractor or
      any
      Subcontractor.  Contractor shall provide Owner with copies of such
      documentation from time to time upon Owner’s request and shall provide Owner
      with a complete set of such documents within thirty (30) days after the
      Substantial Completion Date of Unit 2.




3.11           Maintenance
      of Site.  Maintain the Site and the Ancillary Sites clear of
      debris, waste material, and rubbish.  Contractor shall dispose of such
      debris, waste material, and rubbish in accordance with Applicable
      Law.  Prior to Final Completion, Contractor shall remove from the Site
      and the Ancillary Sites all of its waste materials, tools, equipment, machinery,
      and surplus materials not part of the Project, in Owner’s
      discretion.




3.12           Site
      Security.  During the performance of the Work at the Site and the
      Ancillary Sites, Contractor shall provide all necessary and reasonably
      appropriate safeguards at the Site or any Ancillary Site at which Contractor
      conducts the Work or any part thereof, for the protection of the Work, the
      Project, and all persons and other property related thereto, including lights
      and barriers, guard service, controlled access, and other measures reasonably
      required to prevent vandalism, theft, and danger to the Project and personnel,
      except that Owner may maintain such security measures at the Site or the
      Ancillary Sites as Owner deems appropriate or necessary, including such measures
      as described on
Exhibit A-1-Section 01530.  Contractor shall
      cooperate with and follow all such security measures of Owner.  Within
      thirty (30) days after the Full Notice to Proceed Date, Contractor shall provide
      a draft security assurance program that satisfies the requirements of
Exhibit A-1-Section 01530 to Owner for Owner’s review and
      approval.  Contractor shall follow the approved security assurance
      program during the performance of the
      Work.******




3.13           Safety.  During
      the performance of the Work at the Site and the Ancillary Sites, Contractor
      shall be responsible for the safety of the Persons at the Site and for the
      safe
      performance of the Work.  Contractor shall give notices and comply
      with applicable laws, ordinances, rules, regulations and lawful orders of public
      authorities bearing on the safety of persons or property or their protection
      from damage, injury or loss.  Within thirty (30) days after the
      Full Notice to Proceed Date, Contractor shall provide a draft safety program
      specifically designed for the Site and any Ancillary Sites to Owner for Owner’s
      review and approval, describing the safety program to be used by Contractor
      and
      the Subcontractors in the performance of the Work.  Contractor’s
      safety program shall be designed to provide a safe and healthful environment
      at
      the Site and any Ancillary Site during the performance of the Work at such
      location and shall, among other things, seek to achieve an incident free
      performance of the Work.  Such safety program shall include a drug and
      alcohol program (which shall include a drug testing policy) that at a minimum
      complies with all Applicable Laws and shall otherwise satisfy the requirements
      of Exhibit A-1-Section 01530 and any additional requirements of
      the OCIP, to the extent such requirements impose additional or more stringent
      requirements.




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 Contractor
        shall be solely responsible for implementing and following the approved safety
        program at the Site and the Ancillary Sites and shall perform the Work, and
        shall cause the Subcontractors to implement, follow and perform the Work,
        in
        accordance with such approved program.  Owner shall have the right to
        review and comment on Contractor’s draft safety program and to provide it to the
        OCIP Administrator and the OCIP insurance carriers for review and
        comment.  Contractor shall cooperate with Owner, the OCIP safety
        representative and the OCIP insurance carriers to incorporate changes into
        the
        safety program addressing such comments, and resubmit the safety program
        to
        Owner for further review, until approved.  Contractor shall designate
        a safety representative with the necessary qualifications and experience
        to
        supervise the implementation of and monitoring of all safety precautions
        and
        programs related to the Work.  The safety representative shall make
        routine inspections of the Site and shall hold safety meetings with Contractor’s
        personnel, Subcontractors and others, as Contractor reasonably deems
        appropriate.  Contractor acknowledges and agrees that safety
        representatives designated by the OCIP insurance carriers may from time to
        time,
        and without advance notice, conduct periodic safety reviews of Contractor
        and
        any Subcontractor, and Contractor shall, and shall cause the Subcontractors
        to,
        cooperate with such safety representatives, including by correcting any safety
        deficiencies identified during such reviews.  Contractor shall
        promptly provide Owner with:




(a)           written
      reports reflecting any incidents or accidents that occur on the Site or any
      Ancillary Site;




(b)           such
      reports regarding the safety program as reasonably requested by the OCIP
      Administrator;




(c)           written
      accident reports for O.S.H.A. lost time and recordable accidents that occur
      at
      the Site, prepared in accordance with the safety program approved by Owner
      pursuant to this Section3.13;
      and




(d)           copies
      of all written communications, including notices, with Governmental Authorities
      and insurance companies that have provided the Project-specific insurance
      coverage required of Contractor pursuant to Section21.2 and Exhibit N-1 (but not other
      insurance coverage that Contractor may happen to carry) with respect to
      accidents that occur at the Site, and thereafter provide such written reports
      relating thereto as Owner may reasonably request.




In
      the event that three (3) or more lost time accidents occur at the Project Site
      during performance of the Work, whether relating to Work performed by Contractor
      or any Subcontractor, Contractor shall, upon written request of Owner, prepare
      and submit to Owner for review and comment a revised safety program intended
      to
      remedy the safety issues presented by such incidents or accidents.




3.14           Expediting.  Arrange
      for complete handling of all Equipment and Materials, and construction
      equipment, including inspection, expediting, quality assurance, shipping,
      loading, unloading, customs clearance, receiving, storage, and
      claims.  All Equipment and Materials shall be stored and maintained in
      storage in strict accordance with the applicable manufacturer’s
      recommendations.  Contractor shall normally cause all Equipment and
      Materials transported to




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 the
        Site via blue water or ocean transit to be stored during such travel below
        deck
        of the applicable transport vessel, but Contractor may permit above-deck
        storage
        for certain Equipment and Materials where below-deck storage is not
        customary.  Within thirty (30) days after the Full Notice to
        Proceed Date, Contractor shall provide a Notice to Owner describing the shipping
        plan which Contractor shall follow in shipping all Equipment and Materials
        to
        the Site, for Owner’s review and approval.  If Owner fails to respond
        within thirty (30) days, Owner shall be deemed to have approved the plan
        submitted by Contractor.  Contractor shall comply with the approved
        shipping plan.




3.15           Applicable
      Laws and Permits.  Promptly provide all technical support and
      information, and other reasonably requested information at no additional cost,
      to enable Owner to apply for, obtain and maintain Owner Acquired
      Permits.  During and in connection with the Work, Contractor shall and
      shall cause its Subcontractors to comply in all respects with all Applicable
      Laws and Applicable Permits relating to the Site or the performance of the
      Work.




3.16           Quality
      Assurance Programs.  Use effective quality assurance programs,
      acceptable to Owner and consistent with the requirements of
Exhibit A-1–Section 01440 in performing the
      Work.  During the Open Book Review, Contractor shall prepare a quality
      assurance/quality control program and provide a Notice to Owner, for Owner’s
      approval, describing such quality assurance programs to be used by Contractor
      in
      the performance of the Work.  Contractor shall comply with the
      approved quality assurance program throughout the performance of the
      Work.




3.17           Access.  Use
      only the entrance(s) to the Site specified by Owner for ingress and egress
      of
      all personnel, Equipment and Materials and vehicles.




3.18           Delivery
      of Documents; Owner Review.




3.18.1                      Submittals.  Without
      limiting the obligations contained in Sections5.3 and 11.3,
      Contractor shall issue Submittals with
      respect to the design, engineering, procurement, installation and construction
      of the Project to Owner for Owner’s acceptance or approval within the times set
      forth in Exhibit A-1-Section 01330 under Item 1.03
      (Approval Required Compliance Submittals (ARCS) or Technical Submittals), as
      applicable, prior to the commencement of any fabrication, construction or
      installation with respect to the Project.  Upon acceptance or approval
      by Owner, as applicable, the Submittals may not thereafter be amended or
      modified without the consent of Owner.




3.18.2                      Operational
      Documents.  Provide all operating data and preliminary,
      construction and final record drawings necessary to safely and efficiently
      start
      up, test, operate, shut down, and maintain the Project (including the O&M
      Manual Supporting Documents).  In order to facilitate observations and
      inspections, Contractor shall maintain at the Site in a safe place one working
      copy of all Submittals, including the Project Schedule, drawings,
      specifications, addenda, executed Changes in Work, graphic or written
      instructions, and interpretations and clarifications related to Submittals,
      in
      good order and marked currently to record all material changes made during
      construction, commissioning and start up.  Such working copies shall
      be available to Owner and the Financing Entities, if any, for reference, copying
      and use.




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3.19           Training
      of Operating Personnel.




3.19.1                      Commencement
      of Training.  Commencing six (6) months prior to first fire for a
      Unit as set forth in the Project Schedule, Contractor shall, or where applicable
      shall cause the Subcontractors to, train the designated Operating Personnel
      in
      the requirements for the start up, shut-down, operation and maintenance of,
      and
      safety, general process understanding and emergency procedures for, the Project
      and all of its sub-systems all in accordance with the training program approved
      by Owner pursuant to Section3.19.2.  Without limiting the
      generality of the foregoing, Contractor shall cause the Subcontractor that
      provides the plant control system to train the Operating Personnel on the
      operation and maintenance of such equipment.  Notwithstanding anything
      to the contrary herein or in Exhibit A hereto, the training program
      shall provide that at least a minimum number of Operating Personnel shall have
      completed all necessary training to safely operate the relevant Unit on or
      before the Substantial Completion Date for such Unit.




3.19.2                      Design
      and Review of Training Program.  Contractor shall design, and
      prepare a written narrative description of, the training program (in accordance
      with the provisions of Exhibit A) and the proposed written materials
      to be used in the training program and submit such description to Owner, for
      Owner’s review, by no later than the date that is three (3) months prior to the
      date the first of the Operating Personnel are scheduled to commence Work at
      the
      Site.  Contractor shall train the Operating Personnel in accordance
      with the approved training program, and shall provide Owner with paper and
      electronic copies of the final versions of all materials used in the training
      program.




3.20           Spare
      Parts.




3.20.1                      Spare
      Parts Schedules.  Contractor shall deliver to Owner a schedule
      (the “**Spare Parts Schedule**”) describing the spare parts that
      Contractor believes necessary for the operation and maintenance of each Unit,
      as
      well as a price list setting forth the unit cost for such parts with pricing
      valid for a minimum of six (6) months.  Such schedules shall, at a
      minimum, list the manufacturer’s part number or easily identifiable ordering
      number, to the extent available.  Contractor shall deliver the Spare
      Parts Schedule for each Unit to Owner at least six (6) months prior to the
      then-scheduled Substantial Completion Date.  The Spare Parts Schedule
      shall be updated from time to time as additional spare parts are identified
      by
      Contractor or Owner.  Contractor may designate “required spare parts”
on the Spare Parts List with an aggregate procurement cost not to exceed Two
      Million Dollars ($2,000,000).  Owner shall order such required spare
      parts so that such required spare parts are available at the Site before
      Contractor commences commissioning and start up.




3.20.2                      Start-up
      Spare Parts.  Contractor shall procure the spare parts such as
      gaskets, filters and other consumables customarily obtained by a prudent
      contractor in connection with the start up and testing of power generation
      facilities comparable to the Units, and arrange for delivery of such spare
      parts
      to the Site in time to support the scheduled start up of each
      Unit.




3.20.3                      Spare
      Parts Procurement.  Until the Final Completion Date, Contractor
      shall provide procurement support with respect to Owner’s procurement of all
      operational and




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 maintenance
        spare parts.  Contractor shall be allowed to use all spare parts
        acquired by Owner pursuant to Section3.20.1.  Contractor shall, at its own
        cost, promptly replace, recondition or procure for delivery any operational
        or
        maintenance spare parts it uses prior to the Substantial Completion Date
        and
        shall, at its own cost, replace, recondition or procure for delivery to Owner
        any operational or maintenance spare parts used by Contractor during testing
        following the Substantial Completion Date or in its attempt to cure performance
        during the Cure Period, all such replaced, reconditioned or procured spare
        parts
        to be free and clear of any liens, claims, charges, security interests, and
        encumbrances whatsoever (except with respect to such liens, security interests,
        pledges, and other such encumbrances given by Owner in favor of the Financing
        Entities) when delivered to the Site.




3.21           Start
      Up Personnel.  Contractor shall provide or cause to be provided
      appropriate installation and start up representatives from Subcontractors of
      major equipment and control systems, all necessary supervising personnel, all
      equipment, tools, construction and temporary material and all other labor
      necessary for all of the Work to complete commissioning and start
      up.




3.22           Commodity
      Scheduling.  Within one hundred eighty (180) days prior to the
      scheduled first fire on coal date for each Unit, Contractor shall provide a
      Notice to Owner of the amount of coal, limestone and other commodities to be
      provided by Owner pursuant to Section2.8, including scheduling off-take
      of power,
      and required for such Unit for the period beginning on such scheduled first
      fire
      on coal date and ending on the Substantial Completion Date of such
      Unit.




3.23           Contractor
      as Agent.  In addition to acting as agent for and on behalf of
      Owner with respect to the STG Upgrade Contract, Contractor has also been
      authorized by Owner to execute, and has executed, as agent for and on behalf
      of
      Owner, the Boiler Upgrade Contracts and the air quality control system equipment
      purchase order (such agreement, together with the Upgrade Contracts, the
“**Agency Subcontracts**”), and has been authorized act as agent
      for and on behalf of Owner thereunder.  While acting as agent with
      respect to the Agency Subcontracts, Contractor agrees to promptly make payments
      to such Suppliers, subject to Owner having paid Contractor, and to administer
      all other aspects of the Agency Subcontracts and shall oversee the Suppliers’
performance under the Agency Subcontracts, including technical review and
      coordination.  Contractor’s authority in connection with the Agency
      Subcontracts shall be limited such that Contractor shall not materially amend
      or
      modify the Agency Subcontracts, waive or exclude performance by any Supplier
      of
      their respective obligations under the Agency Subcontracts, or release,
      compromise or waive any claim against any of such Suppliers, without Owner’s
      prior written consent in each case.  Pursuant to and in accordance
      with Section4.2.7(b), Owner
      shall, at such time as provided in Section4.2.7(b), in writing and in the form
      attached
      hereto as Exhibit X, assign its rights and obligations under the
      Agency Subcontracts to Contractor, and upon such assignment, Contractor shall
      assume all of Owner’s rights and obligations under such Agency Subcontracts,
      including the payment obligations thereunder.




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4.           **COVENANTS,
      WARRANTIES AND REPRESENTATIONS**




4.1           Contractor.




4.1.1                      Organization,
      Standing and Qualification.  Contractor warrants and represents
      that it is a corporation, duly organized, validly existing, and in good
      standing  under the laws of the State of California, and has full
      power and authority to execute, deliver and perform its obligations hereunder
      and to engage in the business it presently conducts and contemplates conducting,
      and is and will be duly licensed or qualified to do business and in good
      standing under the laws of the State of Texas and in each other jurisdiction
      wherein the nature of the business transacted by it makes such licensing or
      qualification necessary and where the failure to be licensed or qualified would
      have a material adverse effect on its ability to perform its obligations
      hereunder.




4.1.2                      Professional
      Skills.  Contractor represents that it has and will have all the
      required authority, ability, skills, experience and capacity necessary to
      perform and covenants that it shall diligently perform the Work in a
      professional manner, utilizing sound engineering principles, project management
      procedures, construction procedures and supervisory procedures, all in
      accordance with Industry Standards.  Contractor represents that it has
      the experience and skills necessary to determine, and Contractor represents
      that
      Contractor can perform the Work for the Separated Contract Price and in
      accordance with the Project Schedule.




4.1.3                      Due
      Authorization; Enforceability.  Contractor represents and warrants
      that this Agreement has been duly authorized, executed, and delivered by or
      on
      behalf of Contractor and is, upon execution and delivery, the legal, valid,
      and
      binding obligation of Contractor, enforceable against Contractor in accordance
      with its terms, except as such enforceability may be limited by applicable
      bankruptcy, insolvency or similar laws affecting creditors’ rights generally and
      by general equitable principles.




4.1.4                      No
      Conflict.  Contractor represents and warrants that the execution,
      delivery and performance by Contractor of this Agreement will not conflict
      with
      or cause any default under: (a) its organizational documents;
      (b) any indenture, mortgage, chattel mortgage, deed of trust, lease,
      conditional sales contract, loan or credit arrangement or other agreement or
      instrument to which Contractor is a Party or by which it or its properties
      may
      be bound or affected; or (c) any Applicable Laws; and will not subject the
      Project or any component part thereof or the Site or any portion thereof to
      any
      lien other than as contemplated or permitted by this Agreement.




4.1.5                      Government
      Approvals.  Contractor covenants that the Contractor Acquired
      Permits either have been obtained by Contractor and are in full force and effect
      on the date hereof or will be obtained by Contractor and will be in full force
      and effect on or prior to the date on which they are required, under this
      Agreement and Applicable Law, to be in full force and effect, so as to permit
      Contractor to commence and prosecute the Work to completion in accordance with
      the Project Schedule.  Other than with respect to the Contractor
      Acquired Permits, neither the execution nor delivery by Contractor of this
      Agreement requires the consent or approval of, or the giving of notice to or
      registration with, or the taking of any other action in respect of, any
      Governmental Authority.




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4.1.6                      No
      Suits, Proceedings.  Contractor represents that there are no
      actions, suits, proceedings, patent or license infringements, or investigations
      pending or, to Contractor’s knowledge, threatened against it at law or in equity
      before any court (United States or otherwise) or before any Governmental
      Authority (whether or not covered by insurance) that individually or in the
      aggregate could result in any materially adverse effect on the business,
      properties, or assets or the condition, financial or otherwise, of Contractor
      or
      in any impairment of its ability to perform its obligations under this
      Agreement.  Contractor has no knowledge of any violation or default
      with respect to any order, writ, injunction, or decree of any court or any
      Governmental Authority that may result in any such materially adverse effect
      or
      such impairment.




4.1.7                      Intellectual
      Property.  Contractor represents and covenants that it owns, has,
      or shall have (prior to commencement of the applicable Work), the right to
      use
      all patents, trademarks, service marks, trade names, copyrights, licenses,
      franchises, and permits necessary to perform the Work without conflict with
      the
      rights of others.




4.1.8                      Business
      Practices.  Contractor represents that none of it or its
      representatives have made any payment or given anything of value, and Contractor
      covenants that it will not, and Contractor will direct its employees, agents,
      and Subcontractors, and their employees or agents to not, make any payment
      or
      give anything of value, in either case to any government official (including
      any
      officer or employee of any Governmental Authority) to influence his, her, or
      its
      decision or to gain any other advantage for Owner or Contractor in connection
      with the Work to be performed hereunder.  Contractor shall follow its
      Business Ethics and Conduct policy with respect to all of the Work, including
      the selection of Subcontractors.  Contractor shall not, and none of
      its employees or agents shall, take any action with respect to this Agreement
      or
      any of the Work that in any way violates the United States Foreign Corrupt
      Practices Act or any similar Applicable Law, and Contractor shall use all
      commercially reasonable efforts to cause its Subcontractors and their employees
      and agents to not take any action with respect to this Agreement or any of
      the
      Work that in any way violates the United States Foreign Corrupt Practices Act
      or
      any similar Applicable Law.  Contractor shall immediately notify Owner
      of any violation of this covenant by Contractor, its Subcontractors or any
      of
      their respective employees or agents.




4.1.9                      Owner
      Provided Information.  Contractor acknowledges that Owner does not
      make any representation or warranty with respect to the accuracy or completeness
      of any Owner Provided Information or any other documents or information
      (including oral statements) or opinions expressed by Owner, except for the
      Owner
      Provided Information as set forth on Exhibit W on which Contractor
      shall be entitled to rely without verification.  Contractor represents
      and warrants that except for the Owner Provided Information as set forth on
      Exhibit W, it is not relying on Owner for any information, data,
      inferences, conclusions, or other information with respect to Site Conditions,
      including the surface conditions of the Site and the surrounding
      areas.




4.1.10                      Legal
      Requirements.  Contractor has knowledge of all of the Applicable
      Laws that must be followed in performing the Work and Contractor’s warranty
      obligations herein.  The Project can and shall be built in conformity
      with Applicable Laws and Applicable Permits.  The Work and
      Contractor’s warranty obligations herein will be performed in conformity with
      all Applicable Laws and Applicable Permits.




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4.1.11                      Financial
      Condition.  Contractor represents and warrants that it has a
      senior unsecured long-term debt rating of not less than BBB by Standard &
Poors and Baa2 by Moody’s, or within five (5) business days of the date of the
      Amendment will have provided a guarantee, substantially in the form attached
      hereto as Exhibit Z-1, by an entity having such a
      rating.




4.1.12                      Licenses.  Contractor
      covenants that all Persons who will perform any portion of the Work have and
      will have all business and professional certifications if and as required by
      Applicable Law to perform the services under this Agreement.




4.1.13                      Exclusivity.  Contractor
      covenants and agrees that for the period from and after the date hereof until
      the Final Completion Date of the last Unit to be completed, Contractor will
      not
      act in the role of an engineering, procurement or construction contractor with
      respect to any coal fired power generation plant located or to be located within
      the ERCOT region, except for Owner or Owner’s
      Affiliates.




4.2           Owner.




4.2.1                      Organization,
      Standing and Qualification.  Owner represents and warrants that
      Owner is a limited liability company, duly formed, validly existing, and in
      good
      standing****under the laws of the State of Delaware, and has
      full power and authority to execute, deliver and perform its obligations
      hereunder and to engage in the business Owner presently conducts and
      contemplates conducting, and is and will be duly licensed or qualified to do
      business and in good standing in each jurisdiction wherein the nature of the
      business transacted by it makes such licensing or qualification necessary and
      where the failure to be licensed or qualified would have a material adverse
      effect on its ability to perform its obligations hereunder.




4.2.2                      Due
      Authorization; Enforceability.  Owner represents and warrants that
      this Agreement has been duly authorized, executed, and delivered by or on behalf
      of Owner and is, upon execution and delivery, the legal, valid, and binding
      obligation of Owner, enforceable against Owner in accordance with its terms,
      except as such enforceability may be limited by applicable bankruptcy,
      insolvency or similar laws affecting creditors’ rights generally and by general
      equitable principles.




4.2.3                      No
      Conflict.  Owner represents and warrants that the execution,
      delivery and performance by Owner of this Agreement will not conflict with
      or
      cause any default under:  (a) its organizational documents;
      (b) any indenture, mortgage, chattel mortgage, deed of trust, lease,
      conditional sales contract, loan or credit arrangement or other agreement or
      instrument to which Owner is a Party or by which it or its properties may be
      bound or affected; or (c) any Applicable Laws.




4.2.4                      Governmental
      Approvals.  Owner covenants that no authorization, approval,
      exemption, or consent by any Governmental Authority is required in connection
      with the execution, delivery, and performance of this Agreement by
      Owner.  Owner Acquired Permits either have been obtained and are in
      full force and effect on the date hereof or will be obtained and will be in
      full
      force and effect, so as to permit Contractor to commence and prosecute the
      Work
      to completion in accordance with the Project Schedule.




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4.2.5                      No
      Suits, Proceedings.  Owner represents that there are no actions,
      suits, proceedings, or investigations pending or, to Owner’s knowledge,
      threatened against it at law or in equity before any court (United States or
      otherwise) or before any Governmental Authority (whether or not covered by
      insurance) that individually or in the aggregate could result in any materially
      adverse effect on the business, properties, or assets or the condition,
      financial or otherwise, of Owner or in any impairment of its ability to perform
      its obligations under this Agreement.  Owner has no knowledge of any
      violation or default with respect to any order, writ, injunction, or any decree
      of any court or any Governmental Authority that may result in any such
      materially adverse effect or such impairment.




4.2.6                      Owner
      Parent Guarantee.  Within five (5) business days of the date of
      the Amendment, Owner has provided a guarantee from TXU US Holdings Company
      to
      guarantee Owner’s payment and performance obligations hereunder, in the form
      attached hereto as Exhibit Z-2, and in an amount (the
“**Guaranteed Amount**”) equal to the sum of (i) Contractor’s
      estimated charges for Work to be performed for the next three (3) consecutive
      Invoice Payments (based on estimated reimbursable costs or on the Schedule
      of
      Payment Values of milestones estimated to be completed during such period,
      as
      applicable) to be made prior to Financial Closing, not to include such charges
      related to the Agency Subcontracts, (ii) breakage costs, cancellation
      costs, or termination fees that would be incurred by Contractor upon termination
      of Equipment and Materials purchase agreements or purchase orders, other than
      the Agency Subcontracts, (iii) amounts past due hereunder by Owner to
      Contractor as of such date, and (iv) the positive or negative difference in
      the Separated Contract Price based on Changes In Work during the last calendar
      quarter.  If TXU Energy Company LLC loses its status as a direct
      wholly-owned subsidiary of TXU US Holdings Company, Owner shall provide
      Contractor with a guarantee from TXU Corp. in the form as set forth in
Exhibit Z-2 and in the same amount as the guarantee provided by TXU
      US Holdings Company.  Upon Financial Closing or assignment to a
      permitted assignee pursuant to Section26.1.2, the guarantee shall be released
      in its
      entirety and terminated, except as otherwise provided in Section26.1.2(d).




4.2.7                      Agency
      Subcontracts.




(a)           Until
      assignment of the Agency Subcontracts to Contractor, Owner shall not materially
      amend or modify the Agency Subcontracts, waive or exclude performance by any
      Supplier of their respective obligations under the Agency Subcontracts, or
      release, compromise or waive any claim against any of such Suppliers, without
      Contractor’s prior written consent in each case.




(b)           During
      the period between the Full Notice to Proceed Date and before the date of
      Financial Closing, (i) Owner may assign any or all of the
      Agency Subcontracts to Contractor if Owner provides a letter of credit from
      a bank that has senior unsecured debt rated at least A- by Standard &
Poors or A3 by Moody’s (or an equivalent rating from a similar
      rating agency), in an amount equal to the total cancellation exposure under
      the Agency Subcontracts assigned to Contractor pursuant to this
      clause (i), consisting of (A) the termination or cancellation charges
      payable under such Agency Subcontracts at the time of assignment, less
      (B) payments made by Owner under such Agency Subcontracts prior to
      such assignment (the “**Total Cancellation Exposure**”), and
      (ii) Owner shall assign each Agency Subcontract to Contractor when the
      Total Cancellation Exposure under such Agency Subcontract is zero.
 All of




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 the
        Agency Subcontracts that were not previously assigned to Contractor shall
        be assigned to Contractor as promptly as practicable after there has been a
        Financial Closing.  If Financial Closing has not occurred and the
        Total Cancellation Exposure is greater than zero, Owner shall assign
        to Contractor upon Contractor’s written request any remaining
        Agency Subcontracts that have not been previously assigned to Contractor,
        provided that Owner shall not be required to provide a letter of
        credit upon such assignment.  Upon assignment of the Agency
        Subcontracts to Contractor, Owner shall also pay Contractor an amount equal
        to the amount of liquidated damages paid to Owner by the
        Subcontractors pursuant to such subcontracts prior to such
        assignment.




5.           **COST
      OF WORK**




5.1           Separated
      Target Price.  Subject to the determination of the Separated
      Contract Price as provided in Section5.2, Contractor has provided an
      estimated price
      amount on the basis and as set forth in Exhibit T (the
“**Separated Target Price**”), to be paid to Contractor by Owner as
      full compensation for the Work and all of Contractor’s obligations hereunder
      unless and until Contractor and Owner agree upon the Separated Contract Price
      in
      accordance with Sections5.2 and
5.3.  Payments
      made during the
      Open Book Review shall be made on a reimbursable cost basis for all Work
      performed by Contractor in accordance with Article6 and Exhibit Y, which shall
      provide an estimate of the next three (3) months payments and shall be updated
      monthly.  Payments made after the Open Book Review shall be made in
      accordance with the Schedule of Payment Values developed pursuant to
Section5.3.2.




5.2           Separated
      Contract Price.  As full compensation for the Work and all of
      Contractor’s obligations hereunder, Owner shall pay to Contractor a separated
      contract price amount (the “**Separated Contract Price**”) as
      determined during the Open Book Review conducted pursuant to
Section5.3, such Separated
      Contract Price to be set forth in the form provided in
Exhibit BB.  Once finally determined, the Separated
      Contract Price shall be changed only as expressly set forth in this
      Agreement.  The Separated Contract Price shall be paid in accordance
      with Article6.  The
      Separated Contract Price shall be determined during the Open Book Review and
      in
      any event no later than the date that is eight (8) months from the date
      hereof.  Contractor and Owner shall memorialize the agreed upon
      Separated Contract Price in writing executed by the duly authorized
      representatives of the Parties, including a final
Exhibit BB.  Owner may terminate this Agreement by Notice
      to Contractor at any time before the Separated Contract Price is determined
      if
      after good faith negotiations, and subject to the management negotiation
      procedures set forth in Section32.1,
      the Parties fail by absence of mutual written agreement to finalize the
      Separated Contract Price.  Upon such termination, Contractor shall be
      entitled to receive the payments as set forth in Section20.1.1.




5.3           Open
      Book Review.  As of the date of the Amendment, Contractor and
      Owner have completed an Open Book Review of the Project.




5.3.1                      Leased
      Equipment.  Contractor acknowledges and agrees that Owner may
      enter into, or request that Contractor enter into, arrangements for the
      installation of certain systems of a Unit that will be owned and operated by
      a
      Supplier and leased to Owner upon Substantial Completion.  Contractor
      agrees to cooperate with Owner and such Suppliers and to assist Owner in
      procuring such Leased Equipment, including by entering into agreements with




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 such
        Suppliers to install such Leased Equipment at the Site.  In the event
        Owner determines that it will utilize any Leased Equipment, Owner shall notify
        Contractor and Contractor shall be entitled to a Change In Work in accordance
        with Article16.




5.3.2                      Development
      of Schedule of Payment Values and Estimated Cancellation
      Costs.  During the Open Book Review described in this
Section5.3, Contractor and
      Owner shall mutually agree upon a Schedule of Payment Values for each Unit,
      which shall be consistent with the Separated Contract Price setting forth
      payments to be made upon completion of the Work or portions thereof as set
      forth
      in such schedule.  The final, mutually approved Schedule of Payment
      Values, together with an estimate of cancellation costs, has been attached
      hereto as Exhibit D.




5.4           All
      Items of Work Included.  Subject to Section5.7, the Separated Contract
      Price will include
      payment for:  (a) all costs of Equipment and Materials (excluding
      payments made by Owner pursuant to the Upgrade Contracts prior to the date
      hereof), temporary equipment, labor, transportation, engineering, design and
      other services relating to Contractor’s performance of its obligations under
      this Agreement and the Work (including any intellectual property rights licensed
      under this Agreement, expressly or by implication) provided by Contractor or
      its
      Subcontractors and (b) all costs associated with and payments due under the
      Upgrade Contracts (including payments made by Owner pursuant to the Upgrade
      Contracts prior to the date hereof).  Contractor represents and
      warrants that the Separated Target Price does not and the Separated Contract
      Price shall not include any sales or use taxes.




5.5           Bonuses.




5.5.1                      Schedule
      Bonus.  Contractor shall be entitled to a bonus if Substantial
      Completion of a Unit is achieved prior to such Unit’s Substantial Completion
      Guaranteed Date (a “**Schedule Bonus**”) in an amount equal to
      (i) *** Dollars ($***) per day for each full day before the Substantial
      Completion Guaranteed Date on which the Substantial Completion Date of such
      Unit
      actually occurs, for the first thirty (30) days before the Substantial
      Completion Guaranteed Date of such Unit, and (ii) *** Dollars ($***) for
      each full day before the Substantial Completion Guaranteed Date on which the
      Substantial Completion Date actually occurs, for the period starting on the
      thirty first (31st) day before
      the
      Substantial Completion Guaranteed Date; provided that the Schedule Bonus shall
      not exceed an aggregate amount of *** Dollars ($***) for each
      Unit..  The Parties agree that for purposes of this
Section5.5, Substantial
      Completion shall be deemed to have been achieved on the date of Contractor’s
      notice of Substantial Completion with respect to a Unit that was accepted by
      Owner pursuant to an Owner’s Certificate of Substantial Completion for such
      Unit.  Notwithstanding anything to the contrary in the foregoing, in
      the event the Substantial Completion Guaranteed Date is adjusted to a later
      date
      from that set forth herein due to the occurrence of one or more events of Force
      Majeure, for the sole purpose of calculating the amount of Schedule Bonus to
      be
      paid to Contractor pursuant to this Section5.5.1, the number of days prior to
      the
      Substantial Completion Guaranteed Date on which Substantial Completion was
      achieved shall be reduced by one-half (1⁄2) the number of days by which the
      Substantial Completion Guaranteed Date was adjusted due to such events of
      Force




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Majeure,
      and the Schedule Bonus that Contractor would otherwise receive shall be
      calculated using such adjusted number of days.




5.5.2                Performance
      Bonus.  With respect to each Unit, provided that Contractor has
      met the Minimum Performance Criteria with respect to the Net Unit Capacity
      and
      Net Unit Heat Rate for both Units, Contractor shall be entitled to a bonus
      (a
“**Performance Bonus**”) (i) if the Unit achieves Net Unit
      Capacity in excess of the Net Unit Capacity Guarantee in an amount equal to
      ***
      Dollars ($***) per kilowatt for each kilowatt by which the Unit exceeds the
      Net
      Unit Capacity Guarantee, and (ii) if the Unit achieves a Net Unit Heat Rate
      below the Net Unit Heat Rate Guarantee in an amount equal to *** Dollars ($***)
      per Btu/kilowatt hour for each Btu/kilowatt hour by which the Unit achieves
      a
      Net Unit Heat Rate lower than the Net Unit Heat Rate Guarantee.  Owner
      acknowledges and agrees that if Contractor does not receive a Performance Bonus
      pursuant to this Section5.5.2,
      Contractor may invoice Owner and Owner shall pay Contractor pursuant to and
      in
      accordance with the provisions of Article6 an amount equivalent to the
      bonuses paid to
      the STG Upgrade Supplier and the Boiler Upgrade Suppliers by Contractor if
      such
      Subcontractors are entitled to, and Contractor pays them, a performance bonus
      for achieving the performance criteria that correspond to the Performance Bonus
      as contemplated in this Section5.5.2, pursuant to the Upgrade
      Contracts.




5.6           Payment
      of Bonuses.  Owner shall pay any Schedule Bonus to Contractor
      monthly within twenty (20) Days of receipt of Contractor’s invoice delivered
      after the Substantial Completion Date for such Unit.  All Performance
      Bonuses will be paid with the Final Payment for the second
      Unit.




5.7           Texas
      Sales and Use Taxes.




5.7.1                      Separated
      Contract.  Owner and Contractor agree that for Texas sales and use
      tax purposes, this Agreement is a “separated contract” as such term is defined
      in 34 Texas Administrative Code § 3.291(a)(12).  This
      Agreement, the Separated Target Price, and the Separated Contract Price will
      be
      further divided as provided in Section5.7.3.




5.7.2                      Texas
      Direct Payment Permit and Other Matters.  Owner will provide
      Contractor with a blanket Texas Direct Payment Exemption Certification covering
      each sale, lease or rental of a “taxable item” (as hereinafter defined) by
      Contractor to Owner in connection with the Work, and will provide any Suppliers
      for whom Contractor is acting as an agent for Owner pursuant to this Agreement,
      with a similar Texas Direct Payment Exemption Certification, which will negate
      Contractor’s obligation to collect Texas sales and use taxes from Owner with
      respect to such taxable items.  Contractor shall issue, and shall
      cause the applicable Subcontractors and Upgrade Suppliers to issue, properly
      completed Texas Resale Certificates and/or other exemption certifications or
      other documentation, as appropriate, to all applicable Subcontractors and
      Upgrade Suppliers, and shall take such other actions as are necessary or
      advisable, in order to claim, obtain and/or evidence that the sale of such
      taxable items is exempt or otherwise not taxable for Texas sales and use tax
      purposes.  Owner shall have no liability to




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Contractor
      under this Agreement or otherwise for any sales and use taxes paid, directly
      or
      indirectly, by Contractor, any Subcontractor or any Upgrade Supplier to any
      Subcontractor or Upgrade Supplier with respect to such taxable items, including
      by reason of Contractor’s failure to comply, or to cause any Subcontractor or
      Upgrade Supplier to comply, with the immediately preceding sentence or otherwise
      to avail itself of the benefit of any exemption it may receive, including the
      resale exemption.  As used in this Section5.7, the term “taxable item” has the meaning
      assigned to that term in Section 151.010 of the Texas Tax
      Code.




5.7.3                      Certain
      Reimbursements.  Contractor shall pay and be responsible for, and
      Owner shall reimburse Contractor (without duplication) for, all sales and use
      taxes imposed on Contractor’s equipment, materials, tools, supplies,
      consumables, services and overhead not incorporated into the Project related
      to
      the design, construction, or operation of the
      Project.  Notwithstanding anything to the contrary in the foregoing,
      Owner shall not reimburse Contractor for sales and use taxes on such equipment,
      materials, tools, or supplies used or to be used on projects other than the
      Project.




5.7.4                      Statements
      and Other Information.




(a)           Contractor
      shall provide to Owner a statement of information for sales and use tax purposes
      which shall break down in detail by month the aggregate amount of the Separated
      Contract Price by clearly and separately listing and identifying mutually agreed
      items, categories of items (including any service relating to the repair,
      remodeling, maintenance or restoration of tangible personal property or real
      property) and the amount of the cost related thereto.  Contractor
      shall also provide Owner with any additional information regarding tax matters
      concerning such statements of information, and sales and use tax matters
      relating thereto, requested by Owner.  Contractor and Owner will
      reconcile cost allocation listing by the agreed tax categories at the beginning
      and at completion of the Project.




(b)           Owner
      and Contractor shall develop a schedule of discrete unit and plant components
      that Owner will designate as “units of property” necessary for maintenance,
      accounting and tax record keeping purposes.  Upon Final Completion,
      Contractor shall provide Owner a schedule of the “units of property” showing the
      appropriate allocable construction cost for each such unit of
      property.  Contractor agrees to identify such units of property on the
      final record drawings and shall physically identify or tag such “units of
      property” during the construction process according to Contractor’s standard
      identification and tagging procedures.




5.8           Other
      Taxes.  Except with respect to sales and use taxes covered by
Section5.7.3, the Separated
      Target Price includes, and the Separated Contract Price will include, all taxes,
      duties, levies, imposts, fees, royalties or charges of any kind imposed on
      Contractor, the Subcontractors or the Upgrade Suppliers with respect to any
      Equipment and Materials (other than any such taxes, duties, levies, imposts,
      fees, charges and royalties paid by Owner with respect to the Owner Furnished
      Equipment prior to the date hereof), labor, or services provided under this
      Agreement.  Accordingly, Contractor shall pay and be responsible for,
      and shall not be reimbursed by Owner for, and there shall be no adjustments
      to
      the Separated Contract Price for, any of such taxes, duties, levies, imposts,
      fees, royalties or charges.  The taxes covered hereby include
      occupational, excise, unemployment, FICA, ownership, value-added, gross
      receipts, state and federal gasoline and fuel taxes, property taxes on
      Contractor’s construction equipment, tools




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 and
        supplies and any and all other taxes and duties on any item or service that
        is
        part of, incurred in, or result from Contractor’s performance of the Work,
        whether such tax is normally included in the price of such item or service
        or is
        normally stated separately.  Notwithstanding the foregoing provisions
        of this Section5.8, Contractor
        shall not be liable for (i) any property taxes imposed on the Site, Owner
        Furnished Equipment, and Equipment and Materials that have been incorporated
        into the Project, or (ii) any corporate income taxes with respect to
        Owner’s profits.




5.9           Cooperation
      Regarding Taxes.  Owner and Contractor shall cooperate in good
      faith with each other, and shall use their commercially reasonably efforts,
      to
      minimize sales and use taxes and other taxes relating to this Agreement and
      the
      Work, including taking advantage of applicable exemptions and consulting and
      cooperating in good faith with each other in order to effectively handle and
      contest any audit, examination, investigation, or administrative, court or
      other
      proceeding.  In connection therewith, Contractor shall assign to Owner
      its rights to any refund of sales or use taxes which have been paid or
      reimbursed by Owner to Contractor in order to enable Owner to contest the
      determination of taxability and recover any overpayment of such
      taxes.  Contractor shall grant or cause to be granted to, and shall
      cause its Affiliates, and shall use commercially reasonable efforts to cause
      its
      Subcontractors, to grant to Owner or Owner’s representatives access at all
      reasonable times during the course of the Work and for a period six (6) years
      after the Final Completion Date to all of the information, books, and records
      relating to the Work within their possession or control (including, the right
      to
      take extracts therefrom and make copies thereof) in connection with tax matters
      (including sales and use tax matters) to which this Agreement
      relates.  Contractor shall also furnish or cause to be furnished to
      Owner or Owner’s representatives the assistance and cooperation of personnel of
      Contractor and its Affiliates, and shall use commercially reasonable efforts
      to
      cause all of its Subcontractors to furnish or cause to be furnished such
      assistance and cooperation, as Owner may reasonably request in connection which
      such tax matters.  Without limiting the foregoing, Owner and
      Contractor acknowledge and agree that certain of the Agency Subcontracts provide
      that the respective Subcontractors will cooperate with audits and provide
      information requested in the course of an audit by federal or state Governmental
      Authorities.




5.10           Credit
      for Payments made by Owner under the STG Upgrade Contract.  Owner
      and Contractor acknowledge that prior to January 31, 2007, Owner made payments
      directly to the STG Upgrade Supplier in accordance with the terms of the STG
      Upgrade Contract.  As soon as practicable after the date hereof, Owner
      shall provide a written certification to Contractor of the aggregate amount
      that
      Owner has paid to the STG Upgrade Supplier under the STG Upgrade Contract prior
      to the date hereof, and Owner and Contractor shall verify that the Schedule
      of
      Payment Values and Estimated Cancellation Costs accurately reflects such
      payments and, if necessary, shall agree upon an adjustment to the Schedule
      of
      Payment Values and Estimated Cancellation Costs to accurately reflect such
      payments.  Owner and Contractor agree that the Schedule of Payment
      Values and Estimated Cancellation Costs includes all payments due to the STG
      Upgrade Supplier after January 31, 2007 under the terms of the STG Upgrade
      Contract.




5.11           Labor
      Committees.  Contractor and Owner shall each designate in writing
      its representatives to serve on the Program Labor Committee and the Executive
      Labor Committee within thirty (30) days after the execution of this
      Amendment.  A Party may designate alternate representatives or change
      its representatives from time to time upon written notice to the other
      Party.  Should the representatives of either Party on the Program
      Labor Committee believe that a




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 need
        exists to adjust the Craft Labor Compensation on the Project or at other
        construction projects at which Owner and Contractor may be engaged in Texas,
        the
        Program Labor Committee shall communicate in writing to the Executive Labor
        Committee the recommendations of the Parties with respect to the proposed
        adjustment to such Craft Labor Compensation, within two (2) Business Days
        after
        the start of the meeting.  Each of Owner’s and Contractor’s
        representatives on the Program Labor Committee shall act in good faith and
        reasonably on, among other things, the escalation of Craft Labor Compensation
        for purposes of this Agreement.  The Executive Labor Committee shall
        review the recommendations of the Parties’ representatives on the Program Labor
        Committee, and shall agree upon proposed adjustments to Craft Labor
        Compensation.  Each of Owner’s and Contractor’s representatives on the
        Executive Labor Committee shall act in good faith in reaching agreement,
        such
        agreement not to be unreasonably withheld, on, among other things, the
        escalation of Craft Labor Compensation for purposes of this
        Agreement.  All decisions by the Executive Labor Committee shall be
        unanimous and shall be made within three (3) Business Days after receipt
        of any
        Program Labor Committee recommendation.  In no event shall
        Contractor’s representatives on the Program Labor Committee request an
        escalation in Craft Labor Compensation in order to improve the Project Schedule,
        or to recover the Project Schedule based upon conditions unrelated to craft
        labor availability, and in connection with any request for escalation,
        Contractor’s representatives shall reasonably demonstrate that the requested
        escalation in Craft Labor Compensation is necessary in order for Contractor
        to
        attract or retain sufficient qualified craft labor personnel to perform the
        on-Site Work as necessary for Contractor to maintain the Project
        Schedule.




6.           **TERMS
      OF PAYMENT**.  Payments to Contractor shall be made as
      follows:




6.1           Invoice
      Payments.  Subject to Owner’s right to withhold payments as
      provided in this Article6,
      Owner shall make payments to Contractor in accordance with
Sections6.3 and 6.7,
      and Section6.5 with respect to the Subcontractor
      Invoices.  Contractor shall be paid on a reimbursable cost basis with
      respect to Work performed during the Open Book Review, and after the Open Book
      Review is completed and the Separated Contract Price has been agreed upon by
      the
      Parties, in accordance with the Schedule of Payment Values for each of the
      Units
      in accordance with Exhibit A-1–Section 01320 as set forth in
Exhibit D less the amount of any payments made to Contractor during
      the Phase One EPC.  After completion of the Open Book Review, each
      Invoice Payment shall be due and payable only to the extent it is supported
      by
      signed notices of completion of Schedule of Payment Values or other milestones
      pursuant to Section6.2.  No Invoice Payment shall be
      made to the extent of any improperly performed Work.




6.2           Progress
      Assessment.  After completion of the Open Book Review, Contractor
      shall from time to time notify Owner’s Project Representative upon completion of
      each Schedule of Payment Values milestone for signature by Owner’s Project
      Representative or designee, such signature not to be unreasonably
      withheld.  In connection with such notifications, during on-Site
      construction, representatives of Contractor and Owner shall periodically, and
      in
      any event at least twice each month, review the Work completed and assess the
      progress of on-Site Work completed and completion of the related Schedule of
      Payment Values milestones.




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6.3           Contractor’s
      Invoices.




6.3.1                      During
      Open Book Review.  During the period before completion of the Open
      Book Review, on or about the first (1st) day of
      each month,
      Contractor shall furnish Owner two (2) copies of its Contractor’s Invoice
      covering the estimated cost of the Work to be completed during the next
      succeeding twenty (20) days, on an estimated reimbursable cost
      basis.  After the initial invoice, each subsequent invoice shall
      reflect the total amount of the Work completed to date, plus the Work to be
      completed through the first twenty (20) days of the current month, less the
      total amount paid through the last invoice period.  Each Contractor’s
      Invoice shall separate the Work to be completed as represented by such invoice
      into engineering services, construction services and costs of equipment, shall
      be reasonably detailed and shall be accompanied by reasonable supporting
      documentation with respect to the Work completed and the costs related thereto
      set forth on such invoice.  Notwithstanding anything to the contrary
      in Sections6.3.2 or 6.7,
      until completion of the Open Book Review,
      Contractor shall invoice Owner and Owner shall make payments to Contractor
      with
      respect to the Subcontractors in accordance with Section6.5.  Contractor acknowledges and
      agrees that Owner may request the Contractor’s Invoices be submitted in
      electronic form and agrees to use commercially reasonable efforts to comply
      with
      Owner’s reasonable requests for the use of electronic invoices.




6.3.2                      After
      Completion of Open Book Review.  Beginning on the first (1st) day
      of the month
      after the month in which the Open Book Review Period is completed, and on or
      about the first (1st) day of
      each month
      thereafter, Contractor shall submit two (2) copies of its Contractor’s Invoice
      for the Work completed on each Unit in the immediately preceding month in the
      form of Exhibit F to Owner by delivering one such copy to the
      Project Representative and such Person in the finance or accounting department
      as designated in writing by Owner.  Contractor acknowledges and agrees
      that Owner may request the Contractor’s Invoices be submitted in electronic form
      and agrees to use commercially reasonable efforts to comply with Owner’s
      reasonable requests for the use of electronic invoices.  Contractor
      specifically agrees that it shall not request in any Contractor’s Invoice the
      payment of any sum attributable to Work: (a) for which Contractor has
      already been paid; (b) which has been rejected by Owner or Contractor and
      has not subsequently been accepted in accordance with the terms hereof; or
      (c) for which Contractor and Owner have not signed a notice of completion
      of a Schedule of Payment Values milestone as provided in Section6.2.  Each Contractor’s Invoice:
      (x) shall identify: (i) which activities described on the Schedule of
      Payment Values have been completed; (ii) the related payments set forth on
      the Schedule of Payment Values that are then due as of the end of the
      immediately preceding calendar month; (iii) any other amounts then payable
      by Owner to Contractor under Article16 or any other provision hereof;
      (iv) shall be accompanied by reasonable supporting documentation with
      respect to the Work completed; (v) shall not limit Owner’s right to dispute
      any amounts requested for payment; (y) shall include the notices of
      completion of Schedule of Payment Values milestones signed during the preceding
      month; and (z) shall include a Conditional Waiver and Release Upon
      Milestone or Progress Payment of Contractor for payments to be made pursuant
      to
      such Contractor’s Invoice.  Contractor understands and agrees that any
      Contractor’s Invoice that is inaccurate or incomplete or that lacks reasonable
      detail, specificity, or supporting documentation required by this
Section6.3,
Section6.4,
      Section6.5 and, with respect to
      a Contractor’s Invoice requesting a Final Payment, Section6.9, shall not, to the extent of
      such
      deficiency, constitute a valid request for payment.




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6.4           Subcontractor
      Statements.  In addition to the requirements of
Section6.3 and 6.5,
      with each applicable Contractor’s Invoice,
      or each invoice received from a Subcontractor prior to the Open Book Review
      and
      delivered to Owner pursuant to Section6.5, Contractor shall submit to
      Owner from each
      of Contractor’s direct (i.e. first tier) Major Subcontractors, and shall use its
      commercially reasonable efforts to obtain and submit from each other Major
      Subcontractor:  (a) unless the applicable Major Subcontractor has
      already delivered a Conditional Waiver and Release Upon Final Payment, a
      Conditional Waiver and Release Upon Milestone or Progress Payment, and
      (b) if such Major Subcontractor has completed all Work that such Major
      Subcontractor is to perform, an Unconditional Waiver and Release Upon Final
      Payment; provided, however, if Contractor is unable to obtain the
      foregoing, Contractor may provide Owner with a bond or other security in form,
      substance and amount reasonably acceptable to and if reasonably requested by
      Owner based on the existence of outstanding claims, if any, with such Major
      Subcontractor, to indemnify Owner against and discharge any lien or other claim
      by such Major Subcontractor with respect to its right to be paid in connection
      with performance of the Work.  Contractor shall provide Owner with a
      list of Contractor’s direct (i.e., first tier) Major Subcontractors and its
      other Major Subcontractors as soon as practicable after the date hereof and
      from
      time to time thereafter to reflect changes in such list, but no less than
      monthly on the same date that Contractor’s Invoice is delivered to Owner if
      there have been any changes to such list in the prior month, by delivering
      one
      copy of such list to the Project Representative and one copy to such Person
      in
      the finance or accounting department as designated in writing by
      Owner.




6.5           Subcontractor
      Invoices.  Prior to completion of the Open Book Review, Contractor
      shall submit two (2) copies of any invoices received from its Subcontractors
      to
      Owner by delivering one such copy to the Project Representative and such Person
      in the finance or accounting department as designated in writing by Owner
      pursuant to Section6.3.  Each such invoice shall be
      reasonably detailed and shall be accompanied by reasonable supporting
      documentation with respect to the Work completed and the costs related thereto
      set forth on such invoice, and by the statements required pursuant to
Section6.4.  Contractor acknowledges and
      agrees that Owner may request such invoices be submitted in electronic form
      and
      shall use commercially reasonable efforts to obtain the Subcontractors’
compliance with such requests.  Contractor understands and agrees that
      any invoice that is inaccurate or incomplete or that lacks reasonable detail,
      specificity, or the supporting documentation required by this
Section6.5 shall not, to the
      extent of such deficiency, constitute a valid request for payment.  By
      submitting such invoice to Owner, Contractor shall be deemed to represent to
      Owner that the milestone required for payment has been achieved or the Work
      required to be completed has been completed, as
      applicable.  Notwithstanding anything to the contrary in
Section6.3, Owner shall pay
      Contractor the entire amount of the invoice, subject only to Retainage, in
      immediately available funds by electronic means using banking transfer
      instructions provided by Contractor within fifteen (15) days after Owner
      receives such invoice.




6.6           Owner
      Review.  Without limiting Owner’s rights of review under
Article11, within ten (10) days
      after Owner receives a Contractor’s Invoice and all accompanying documentation
      required by Sections6.2 and 6.4,
      Owner shall notify Contractor concerning
      any dispute over the accuracy of the submitted invoice and the basis for such
      dispute.  Disputed invoices or portions thereof that are corrected
      before the date that is five (5) days prior to the date payment is due pursuant
      to Section6.7, shall be paid on
      such due date.




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6.7           Payments.  Within
      twenty (20) days after receipt of a Contractor’s Invoice (except as otherwise
      provided in Section6.5), Owner
      shall pay, subject to Sections6.8 and 6.12,
      all undisputed amounts that are then
      payable as set forth in the then current Contractor’s Invoices (each, an
“**Invoice Payment**”).  Owner and Contractor agree that
      payment of amounts due under this Agreement may be by electronic means of
      immediately available funds using banking transfer instructions provided by
      the
      receiving Party of any such payment at least five (5) business days before
      such
      payment is due and payable.  Upon receipt of any Invoice Payment from
      Owner, Contractor shall promptly pay each Subcontractor out of such Invoice
      Payment the amount to which said Subcontractor is entitled pursuant to the
      applicable subcontract or purchase order.  Owner shall not have any
      obligation to pay any Subcontractor with respect to the Work completed by such
      Subcontractor on the Project.  Any delinquent payment shall bear
      interest at the prime rate as published in “The Money Rates” Section of The Wall
      Street Journal (U.S. Edition), plus one percent (1%) per annum, until paid,
      but
      not to exceed the maximum rate permitted by the applicable usury
      laws.  The payment of interest unaccompanied by payment of the
      delinquent payment shall not excuse or cure any default or delay in such
      payment.  In the event interest accrues on any delinquent payment,
      Contractor shall reflect such amount in each subsequent billing
      invoice.




6.8           Retainage.




6.8.1                      Retainage.  Owner
      shall withhold from each Invoice Payment for a Unit an amount (the
“**Retainage**”) equal to five percent (5%) of the portion of the
      Separated Target Price or the Separated Contract Price, as applicable, to be
      paid for the applicable month pursuant to Contractor’s Invoice.  In
      the event Contractor’s, or if applicable its guarantor’s, rating falls below
      BBB- by Standard & Poors or Baa3 by Moody’s, Owner shall be entitled to
      withhold additional Retainage of five (5%) for a total Retainage of ten percent
      (10%) from Contractor’s Invoices submitted after such decline in Contractor’s or
      its guarantor’s rating.




6.8.2                      Letter
      of Credit.  Notwithstanding the obligations set forth in this
Section6.8 regarding Retainage
      or Section6.12 regarding
      Owner’s right to holdback or withhold payment, Contractor may provide in lieu of
      Retainage, or receive a refund of the Retainage (if cash Retainage has already
      been withheld) and amounts withheld by Owner pursuant to Section6.12, upon delivery of an irrevocable
      standby
      letter of credit whereupon Owner shall no longer maintain such cash Retainage
      and shall pay such amounts withheld pursuant to Section6.12 to the extent covered by such
      Letter of
      Credit.  If Contractor desires to deliver one or more Letters of
      Credit, Contractor shall, at its own expense, cause a financial institution
      that
      has senior unsecured debt rated at least A by Standard & Poor’s or A2 by
      Moody’s (or an equivalent rating from such other equivalent rating agency as may
      be approved by Owner) to issue and maintain, by renewal or replacement, for
      the
      periods specified herein, one or more irrevocable, unconditional, transferable,
      standby, revolving letters of credit in favor of Owner consistent with the
      requirements of this Section6.8.2, in form and substance as set
      forth on
Exhibit P herein (individually and collectively, the “**Letter
      of Credit**”).  If the amount of such Letters of Credit are
      insufficient to cover the Retainage with respect to the Contractor’s Invoices,
      Owner shall be entitled to withhold cash Retainage and such amounts as Owner
      may
      be entitled to withhold pursuant to Section6.12 from payments made with respect
      to such
      Contractor’s Invoice.  The terms of release of Retainage as set forth
      in Section6.8.3 and payment
      with respect




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 to
        amounts withheld pursuant to Section6.12 following a Notice of Correction
        shall
        apply *mutatis mutandis* with respect to the Letter of
        Credit.




6.8.3                      Release
      of Retainage.  Owner shall release the Retainage to Contractor as
      follows:




6.8.3.1                      Release
      at Substantial Completion.  No later than eighty (80) days after
      achieving Substantial Completion of a Unit, or if a pre-lien notice pursuant
      to
      Section 53.056 of the Texas Property Code, has been received by Owner, one
      hundred twenty (120) days after such Substantial Completion Date, Owner shall
      release to Contractor an amount of Retainage equal to fifty percent (50%) of
      the
      amount retained to date related to such Unit; provided that Contractor is
      on schedule to achieve Substantial Completion by the Substantial Completion
      Guaranteed Date for the remaining Unit and is not otherwise in default under
      the
      terms of this Agreement.  If Retainage is not released following
      Substantial Completion of the first Unit because Contractor is not on schedule
      to achieve the Substantial Completion Guaranteed Date of the second Unit, Owner
      shall release such fifty percent (50%) Retainage related to the first Unit
      within fifteen (15) days after the earlier of the date Contractor reasonably
      demonstrates it is back on schedule to achieve Substantial Completion by the
      Substantial Completion Guaranteed Date for the remaining Unit or Contractor
      achieves Substantial Completion of the second Unit; provided that
      Contractor is not otherwise in default under the terms of this
      Agreement.  If Retainage is not released upon Substantial Completion
      of a Unit due to Contractor being in default under the terms of this Agreement,
      Owner shall release such fifty percent (50%) Retainage related to the first
      Unit
      within ten (10) days after Contractor reasonably demonstrates that such default
      has been cured; provided that Contractor is on schedule to achieve
      Substantial Completion by the Substantial Completion Guaranteed Date for the
      remaining Unit. Concurrently with Owner’s release of Retainage pursuant to this
Section6.8.3.1, Owner shall
      provide to Contractor, or take any actions to cause the financial institutions
      holding any Letters of Credit, written confirmation of the amounts released
      under this Section6.8.3.1.




6.8.3.2                      Release
      at Final Completion.  Within eighty (80) days (one hundred twenty
      (120) days if Owner receives a pre-lien notice pursuant to Section 53.056
      of the Texas Property Code before or during such eighty (80) day period) after
      the Final Payment for a Unit, and subject to compliance with and completion
      of
      all requirements regarding reports, audits and closeout reports as set forth
      in
Section21.1.11 by Contractor
      and each Subcontractor enrolled in the OCIP, Owner shall release to Contractor
      all of the amount retained to date related to such Unit then held by Owner;
      provided that if such Retainage is related to Invoice Payments for the
      first Unit to be completed, whether Unit 1 or Unit 2, Contractor is on
      schedule to achieve the Substantial Completion Guaranteed Date for the other
      Unit and is not otherwise in default under the terms of this
      Agreement.  If Retainage is not released following Final Completion of
      the first Unit because Contractor is not on schedule to achieve the Substantial
      Completion Guaranteed Date of the second Unit, Owner shall release such
      Retainage related to the first Unit within fifteen (15) days after the earlier
      of the date Contractor reasonably demonstrates it is back on schedule to achieve
      the Substantial Completion Guaranteed Date for the remaining Unit or Contractor
      achieves Substantial Completion of the second Unit; provided that
      Contractor is not otherwise in default under the terms of this
      Agreement.  If Retainage is not released upon Final Completion of a
      Unit due to Contractor being in default under the terms of this Agreement,
      Owner
      shall release the remaining Retainage related to the first Unit within ten
      (10)
      days after




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 Contractor
        reasonably demonstrates that such default has been cured; provided that
        Contractor is on schedule to achieve the Substantial Completion Guaranteed
        Date
        for the remaining Unit.




6.8.3.3                      Release
      upon Termination.  In the event this Agreement is terminated prior
      to completion of the Work for any reason other than a Contractor Event of
      Default, all Retainage on payments made to Contractor prior to such termination
      shall be released to Contractor upon the later to occur of (a) eighty (80)
      days (one hundred twenty (120) days if Owner receives a pre-lien notice pursuant
      to Section 53.056 of the Texas Property Code before or during such eighty
      (80) day period) after the date of such termination, and (b) ten (10) days
      after all disputes between Owner and Contractor have been resolved and all
      amounts due from Contractor have been paid (as applicable); provided that
      in each case Contractor and each of its direct (i.e., first tier) Major
      Subcontractor has delivered, and that Contractor has used commercially
      reasonable efforts to cause each of its other Major Subcontractors to deliver,
      Unconditional Waivers and Releases Upon Final Payment to Owner prior to such
      release of the Retainage.




6.9           Final
      Payment.  Upon the delivery of Owner’s Certificate of Final
      Completion of a Unit, Contractor shall submit a final Contractor’s Invoice for
      such Unit (a “**Final Contractor’s Invoice**”) which shall set
      forth all amounts due to Contractor that remain unpaid in connection with such
      Unit (including amounts relating to the items on the Punchlist for such Unit),
      and shall attach all reports required of Contractor and each Subcontractor
      enrolled in the OCIP pursuant to Section21.1.  Upon approval of such Final
      Contractor’s Invoice by Owner based on Contractor having performed its Work in
      accordance with this Agreement, Owner shall pay to Contractor the amount due
      under such Final Contractor’s Invoice (“**Final
      Payment**”).  Owner shall make Final Payment to Contractor
      within thirty (30) days after receipt of the Final Contractor’s Invoice if
      and only if Contractor has delivered the following items to Owner:




(a)           with
      respect to each Major Subcontractor, either:




(i)           an
      Unconditional Waiver and Release Upon Final Payment of Subcontractor;
      or




(ii)           a
      bond in form and substance reasonably acceptable to Owner to indemnify and
      fully
      protect Owner against any claim by such Subcontractor with respect to its right
      to be paid in connection with the Project or the performance of the
      Work;




(b)           with
      respect to Contractor and each Subcontractor enrolled in the OCIP, completion
      of
      all requirements regarding reports, audits and closeout reports in connection
      with the OCIP under Section21.1; and




(c)           with
      respect to Contractor, a Conditional Waiver and Release Upon Final
      Payment.




Contractor
      covenants that it shall deliver to Owner an Unconditional Waiver and Release
      Upon Final Payment no later than two (2) Business Days after Contractor’s
      receipt of Final Payment.  Concurrently with Owner’s release of
      Retainage pursuant to Section6.8.3.2, Owner shall surrender to Contractor,
      or take such actions as reasonably necessary to cause such surrender of, any
      Letter(s) of Credit held in lieu of Retainage.




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6.10           Method
      of Payment.  All payments to be made to Contractor under this
      Agreement shall be paid in Dollars and shall be paid electronically (via ACH
      or
      wire) in immediately available funds on the date due or, if such date is not
      a
      Business Day, on the immediately succeeding Business Day to such account as
      may
      be designated by Contractor from time to time by Notice to Owner in accordance
      with Article30.




6.11           Disputes
      Regarding Payments.  Subject to Contractor’s rights and remedies
      under Section19.4(f) and
Section19.5,
      failure by Owner
      to pay any amount disputed in good faith until resolution of such dispute in
      accordance with this Agreement shall not alleviate, diminish, modify nor excuse
      the performance of, Contractor’s obligations to perform hereunder in any
      respect, including Contractor’s obligation to meet the Substantial Completion
      Guaranteed Dates.  Contractor’s acceptance of any payment shall not be
      deemed to constitute a waiver of amounts that are then in
      dispute.  Contractor and Owner shall use their reasonable efforts to
      resolve all disputed amounts reasonably expeditiously and in accordance with
      the
      provisions of Article32.  No payment made hereunder shall
      be construed to be acceptance or approval of that part of the Work to which
      such
      payment relates or to relieve Contractor of any of its obligations
      hereunder.  If a Contractor’s Invoice was properly submitted in
      accordance with all of the provisions of this Agreement and amounts disputed
      by
      Owner in regards to such invoice are later resolved in favor of Contractor,
      Owner shall pay interest on such disputed amounts due Contractor at the rate
      set
      forth in Section6.7, from the
      date on which the payment was originally due pursuant to such invoice until
      payment was received by Contractor.




6.12           Holdbacks.




6.12.1                      Owner
      Holdbacks.  Notwithstanding anything to the contrary herein, in
      addition to the Retainage, upon the occurrence and continuance of any of the
      following events, Owner, upon Notice to Contractor in accordance with
Section6.12.2, may withhold or
      retain such portion (including all) of any payment due to Contractor under
      this
      Agreement as Owner deems appropriate in Owner’s reasonable discretion to confirm
      that performance of the Work will be effected in accordance with this Agreement
      or to protect fully the rights of Owner hereunder:




(a)           Any
      part of such payment is attributable to Work which is not materially in
      compliance with this Agreement;




(b)           Owner
      has received a notice of lien from any Subcontractor, Upgrade Supplier or
      Supplier or any other Person claiming payments due with respect to the
      Work;




(c)           Contractor’s
      failure to comply with the requirements of Article21;




(d)           Owner
      has paid or is required to pay any amount pursuant to an official notice from
      a
      state agency, or employee benefit trust fund, for which Owner is or may
      reasonably be liable for Contractor or any Subcontractor, in accordance with
      Applicable Law; and




(e)           As
      one or more of the following shall occur:




(i)           A
      Contractor Event of Default shall have occurred hereunder;




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(ii)           a
      lien claim has been filed for which Contractor is obligated to obtain a release
      pursuant to Article29 and
      Contractor has not obtained such release within fifteen (15) days after such
      lien claim was filed;




(iii)           Contractor
      shall have failed to deliver any Contractor Deliverable included in Contractor’s
      Invoice to Owner on or before the date of such Contractor’s Invoice or any such
      Contractor Deliverable shall not have been prepared by Contractor in good
      faith;




(iv)           Contractor
      shall have failed to provide appropriate evidence of insurance in conformance
      with the requirements of this Agreement;




(v)           Owner
      shall have determined that any portion of the Work for which payment has already
      been made pursuant to a previous Contractor’s Invoice shall contain one or more
      Errors or Omissions or Defects; provided that the amount so withheld shall
      not
      exceed the amount reasonably expected to correct such Error or Omission or
      Defect; and




(vi)           a
      third-party claim has been filed for which Contractor is obligated to indemnify
      Owner pursuant to any of the provisions of Article23 and Contractor has failed to
      provide the
      indemnification for such claim in accordance with Section23.5 within the ten (10) day period
      provided
      therein.




6.12.2                      Notice
      of Withholding; Notice of Correction.  If, pursuant to
Section6.12.1, Owner intends to
      withhold any amount from a payment to be made to Contractor, Owner shall, on
      or
      before the date that the applicable payment is due to Contractor hereunder,
      provide a Notice of Withholding to Contractor of any amount that will be so
      withheld.  Such Notice of Withholding delivered pursuant to this
Section6.12.2 shall identify
      the amount that will be withheld from Contractor, give a reasonably detailed
      explanation of the reason Owner will withhold such amount, and shall be signed
      by an authorized agent of Owner.  If Contractor receives a Notice of
      Withholding from Owner pursuant to this Section6.12.2, Contractor may provide a Notice
      of
      Correction to Owner of a condition described in such Notice of Withholding
      delivered pursuant to this Section6.12.2.  Such Notice of Correction
      shall be sufficient to identify the scope and manner of the corrective actions
      to be taken to correct the conditions that are the subject of
Section6.12.1 as identified in
      such Withholding Notice, and shall be signed by an authorized representative
      of
      Contractor.




6.12.3                      Payment
      Following Notice of Correction.  If Owner receives a Notice of
      Correction describing the actions taken to correct any condition described
      in a
      Notice of Withholding delivered pursuant to Section6.12.2, Owner shall pay the amount
      withheld by
      Owner for that condition on the date the next payment is due Contractor
      hereunder, or object to the scope and manner of the correction of the condition,
      on or before the date the next payment is due to Contractor, in a written
      statement that sets forth the reason for the objection and otherwise complies
      with the provisions of Section6.12.2.  If Owner objects to the
      scope and manner of the corrective actions to be taken with respect to a
      condition, Owner shall pay to Contractor, along with payment made pursuant
      to
      Contractor’s next payment request, the amount withheld for the correction of
      conditions to which Owner no longer objects.




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6.12.4                      Limitation
      on Contractor’s Rights.  Notwithstanding the provisions of
Sections19.5 and 32.3,
      Contractor shall not have any rights of
      termination or suspension under Section19.5 as a result of Owner’s good faith exercise
      or attempted exercise of its rights under this Section6.12.




6.13           Application
      of Monies.  Contractor shall use the sums paid to it pursuant to
      this Article6 for the purpose
      of performing the Work and designing, furnishing, equipping, testing and
      commissioning the Project in accordance with the Statement of Work and this
      Agreement, including payment of the Subcontractors.  No provision
      hereof shall be construed, however, to require Owner or any Financing Entity
      to
      see to the proper disposition or application of the monies so paid to
      Contractor.




6.14           Release
      of Liability.  Acceptance by Contractor of the Final Payment shall
      constitute a release by Contractor of Owner, their respective Affiliates, the
      Financing Entities, if any, and every officer, director and employees thereof
      from all liens (whether statutory or otherwise and including mechanics’ or
      suppliers’ liens), claims for compensation hereunder with respect to any Work
      performed or furnished in connection with this Agreement, except claims for
      which Contractor has delivered a Notice of dispute to
      Owner.




6.15           Certifications.




6.15.1                      Payment
      Certifications.  Upon Notice from Owner requesting the same (which
      Notice shall not occur more frequently than quarterly), Contractor shall use
      commercially reasonable efforts to obtain and submit within ten (10) Business
      Days after the date of such Notice a certification from each direct (i.e.,
      first
      tier) Major Subcontractor to the effect that:




(a)           Contractor
      has paid such Subcontractor currently and there are no payments due in
      accordance with the terms of such subcontract from Contractor to such
      Subcontractor in connection with the Work except for disputed payments as
      identified in such certification or amounts that are not yet due and owing;
      and




(b)           Contractor
      has paid such Subcontractor all amounts other than retainage that will be paid
      for all Work completed by such Subcontractor through the end of the preceding
      month.




6.15.2                      Certifications
      on Final Payment.  Concurrently with Contractor’s delivery of the
      Final Contractor’s Invoice, Contractor shall deliver to Owner:




(a)           With
      respect to each Major Subcontractor contracting directly with Contractor, a
      certification from such Subcontractor to the effect that such Subcontractor
      has
      been paid all amounts that are owing or may become owing to such Subcontractor
      with respect to the Project and the performance of the Work, except for disputed
      payments as identified in such certification; and




(b)           With
      respect to Contractor, a certification to the effect that:




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(i)           Contractor
      has been paid in full all amounts owing or that may become owing to Contractor
      with respect to the Project and the performance of the Work except for amounts
      requested in the Final Contractor’s Invoice; and




(ii)           Contractor
      has paid all amounts that Contractor will be required to pay in connection
      with
      the performance of the Work, including all amounts to be paid any Subcontractor
      with respect to the Project and the performance of the Work, except for amounts
      identified in such certification; and




(iii)           all
      amounts remaining to be paid by Contractor with respect to the Work are in
      the
      aggregate less than the amount of the Final Payment.




7.           **COMMENCEMENT
      AND SCHEDULING OF THE WORK**




7.1           Notices
      to Proceed.




7.1.1                      Pre-Contract
      Letter of Authorization.  Owner and Contractor have executed a
      Pre-Contract Letter Authorization dated April 7, 2006 (the
“**Pre-Authorization**”), whereby Owner authorized Contractor to
      perform certain engineering, professional and certain other services to be
      performed in advance of the Parties execution of the Original
      Agreement.  Work performed by Contractor pursuant to the
      Pre-Authorization was governed by and subject to the terms of the Original
      Agreement effective as of the execution thereof.  Upon execution of
      the Original Agreement, the Pre-Authorization was terminated and had no further
      force and effect and the Original Agreement superseded the Pre-Authorization
      in
      all respects.  Payments made by Owner to Contractor pursuant to the
      Pre-Authorization shall be credited against the Separated Target Price and
      Separated Contract Price, as applicable.




7.1.2                      Phase
      One EPC Activities.  Upon the execution of the Original Agreement,
      Contractor was authorized to perform the Work identified in the Phase One EPC
      Activities set forth in and attached hereto as Exhibit CC, and
      Contractor shall diligently perform the Work pursuant to such Phase One EPC
      Activities, assigning to it a priority as necessary for each Unit to achieve
      Substantial Completion on or before the Substantial Completion Guaranteed Date
      for such Unit.  Notwithstanding Contractor’s authorization to proceed
      with Phase One EPC Activities, in no event shall Contractor proceed with
      procurement of any Equipment or Materials during the Open Book Review period
      costing in the aggregate in excess of One Hundred Thousand Dollars ($100,000)
      without Owner’s prior written approval, such approval or denial to be provided
      within five (5) days.  The scope of the Work to be completed pursuant
      to the Phase One EPC Activities may be altered or expanded from time to time
      pursuant to one or more further written authorizations until Owner has issued
      a
      Full Notice to Proceed.




7.1.3                      Full
      Notice to Proceed.  On the Full Notice to Proceed Date, Contractor
      shall commence with the performance of the remainder of the Work in accordance
      with the Project Schedule and shall thereafter diligently pursue the Work
      assigning to it a priority as necessary for each Unit to achieve Substantial
      Completion on or before the Substantial Completion Guaranteed Date for such
      Unit.  If the Full Notice to Proceed Date is later than March 1, 2007,
      such delay in the Full Notice to Proceed Date shall be an Excusable Event for
      purposes of this Agreement.




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7.2           Contractor’s
      Acknowledgment.  Contractor expressly agrees that the period of
      time specified to complete all Work and the timely achievement of the
      Substantial Completion Guaranteed Dates includes allowance for coordination
      with
      Owner, Owner’s Engineer and for all hindrances and delays incident to the Work
      (other than an Excusable Event or an event of Force Majeure).  No
      claim shall be made by Contractor for hindrances or delays for any cause during
      the progress of the Work, except as provided under Articles8 and 16.




7.3           Prosecution
      of Work.  Contractor shall prosecute the Work in accordance with
      the Project Schedule.  Contractor shall cause Substantial Completion
      of each Unit to occur on or before the applicable Substantial Completion
      Guaranteed Date.




7.4           Project
      Schedule.




7.4.1                      Project
      Schedule.  Within sixty (60) days after the date hereof,
      Contractor shall provide Owner with an electronic and hard copy of the Project
      Schedule that satisfies the requirements set forth in
Exhibit A-1–Section 01320.  Until Final Completion,
      Contractor shall update its Project Schedule to reflect the current status
      of
      the Work.  At a minimum, the updates shall be performed and provided
      to Owner (in electronic and hard-copy form) on a monthly basis as part of the
      Monthly Progress Report.  Except for the Substantial Completion
      Guaranteed Dates, which may only be revised or adjusted with Owner’s prior
      written approval pursuant to a Change In Work Form, Contractor shall revise
      the
      Project Schedule from time to time to reflect the current schedule, including
      Contractor’s then scheduled date of Substantial
      Completion.  Contractor shall employ a project management system
      capable of providing schedule monitoring and analysis which shall include a
      comparison of the Project Schedule with the actual progress for each time period
      with all variances noted.  Schedule analysis shall include a
      determination of the impact of such variance, if material, on the Project
      Schedule and any action necessary to correct the
      variance.




7.4.2                      Milestone
      Items.  Included within the Project Schedule set forth in
Exhibit G are the Milestone Items, including the Project Guaranteed
      Dates, and the applicable dates of scheduled completion for each such Milestone
      Item.  Except for the Substantial Completion Guaranteed Dates, which
      shall not be amended, adjusted or revised without Owner’s prior written approval
      pursuant to a Change In Work Form, Contractor shall revise the Project Schedule
      from time to time to reflect any changes to the scheduled dates of completion
      for each Milestone Item.  Notwithstanding anything to the contrary in
      the foregoing, Contractor shall promptly advise Owner of any proposed changes
      in
      the scheduled completion of Milestone Items of more than thirty (30) days and
      the reasons therefor.




7.5           Progress
      Reporting.  From and after the date hereof, Contractor shall
      prepare a true and correct Monthly Progress Report in the form of
Exhibit K and submit it to Owner within ten (10) days after the
      end of each calendar month.  In addition, Contractor shall keep, and
      furnish to Owner at Owner’s request, such information as Owner may reasonably
      require to determine that the Work is progressing according to the Milestone
      Items in the Project Schedule and for the purpose of confirming that Invoice
      Payments are due hereunder.  Contractor also shall keep daily logs at
      the Site and shall provide to Owner weekly reports of actual construction
      progress as compared with scheduled progress.




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7.6           Meetings.  Contractor
      shall schedule and conduct monthly meetings with Owner in accordance with the
      requirements of Exhibit A-1–Section 01320 at the Site, or such
      other location as the Parties may agree, for the purpose of reviewing the
      progress of the Work and adherence to the Project Schedule.  The
      frequency of such meetings shall be established and modified, from time to
      time,
      by mutual agreement of the Parties; provided, however, such
      meetings shall occur no less frequently than monthly; provided,
further, if Owner believes that Contractor will complete fewer than
      all
      of the Milestone Items within ten (10) days after the date scheduled on
Exhibit G for such Milestone Items to be achieved, Owner shall be
      entitled to require that meetings occur as frequently as weekly.  At
      Owner’s reasonable request, Contractor shall cause a representative of any
      Subcontractor to attend such meeting.  After commencement of the
      on-Site Work, Owner, Contractor, and any Major Subcontractor then performing
      Work on the Site****shall each designate a representative to
      attend meetings as required under this Section7.6 to review and discuss the progress
      of the
      Work.  Contractor’s representative at such meetings shall provide a
      rolling four-week look ahead schedule outlining the Work to be performed at
      the
      Site during the four calendar weeks following such meetings.




8.           **FORCE
      MAJEURE AND AN EXCUSABLE EVENT**




8.1           Force
      Majeure.  No failure or omission to carry out or observe any of
      the terms, provisions, or conditions of this Agreement shall give rise to any
      claim by either Party against any other Party hereto, or be deemed to be a
      breach or default of this Agreement if such failure or omission shall be caused
      by or arise out of an event of Force Majeure.  No obligations of
      either Party that matured before the occurrence of an event of Force Majeure
      causing the suspension of performance shall be excused as a result of such
      occurrence.  Notwithstanding anything to the contrary in the
      foregoing, the obligation to pay money in a timely manner shall not be subject
      to the Force Majeure provisions.




8.2           Notice.  If
      either Party’s ability to perform its obligations under this Agreement is
      affected by an event of Force Majeure or an Excusable Event, such Party shall,
      within ten (10) days after the Project Director in the case of Contractor and
      the Project Representative in the case of Owner, or their respective designees
      in the Project Director’s or Project Representative’s absence, becomes aware or
      reasonably should have become aware of such delay, give Notice to the other
      Party (a “**Delay Notice**”) of the occurrence of such event,
      including as to when such Project Director or Project Representative, as
      applicable, became aware of the occurrence of such event of Force
      Majeure.  Within ten (10) Business Days after delivery of such
      Notice, the Party claiming an event of Force Majeure or an Excusable Event
      shall
      provide reasonable preliminary information to the other Party of the nature
      of
      the event, its anticipated duration and effect upon the performance of such
      Party’s obligations, and any action being taken to avoid or minimize its
      effect.  The Party claiming an event of Force Majeure or an Excusable
      Event shall have a continuing obligation to deliver to the other Party
      additional documentation and analysis supporting its claim regarding an event
      of
      Force Majeure or an Excusable Event promptly after such information is available
      to the Party claiming such event of Force Majeure or an Excusable
      Event.  The burden of proof shall be on the Party claiming to be
      affected pursuant to this Section8.2.  Within ten (10) Business Days
      after an event of Force Majeure or an Excusable Event has ended, the Party
      that
      was affected by such event of Force Majeure




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 or
        an Excusable Event shall give Notice to the other Party of: (i) the length
        of time such event of Force Majeure or an Excusable Event was in effect;
        and
        (ii) the effect such Party claims such event of Force Majeure or an
        Excusable Event had on the applicable Substantial Completion Guaranteed
        Date.




8.3           Scope
      of Suspension; Duty to Mitigate.  The suspension of or impact on
      performance due to an event of Force Majeure or an Excusable Event shall be
      of
      no greater scope and no longer duration than is required by such
      event.  The excused Party shall use its reasonable
      efforts:




(a)           to
      mitigate the duration of, and costs arising from, any suspension or delay in,
      or
      other impact to the performance of its obligations under this
      Agreement;




(b)           to
      continue to perform its obligations hereunder; and




(c)           to
      remedy its inability to perform, as applicable.




When
      the affected Party is able to resume performance of its obligation under this
      Agreement, such affected Party shall give the other Party Notice to that
      effect.




8.4           Removal
      of Force Majeure.  If, within a reasonable time after the
      occurrence of an event of Force Majeure that has caused Contractor to suspend
      or
      delay performance of the Work, Owner has identified and recommended to
      Contractor commercially reasonable action to be undertaken, and Contractor
      has
      failed within five (5) days after receipt of Notice from Owner thereof to
      take such action as Contractor could lawfully and reasonably initiate to remove
      or relieve either the event which caused such an event of Force Majeure or
      its
      direct or indirect effects, Owner may, in its sole discretion and after Notice
      to Contractor, initiate such reasonable measures as will be designed to remove
      or relieve such an event of Force Majeure or its direct or indirect effects
      and
      thereafter require Contractor to resume full or partial performance of the
      Work.




8.5           Responsibility
      of Contractor.  Subject to the limitations on liability contained
      in this Agreement, damages or injuries to persons or properties resulting from
      an event of Force Majeure during the performance of the obligations provided
      for
      in this Agreement shall not relieve Contractor of any responsibility it may
      have
      pursuant to the terms of this Agreement to bear the cost of the damage or
      injuries as provided herein.




8.6           Contractor’s
      Remedies.




8.6.1                      Force
      Majeure.  As Contractor’s only remedy for the occurrence of an
      event of Force Majeure, and provided Contractor has otherwise complied with
      the
      provisions of Sections8.2 and
8.3,
      if an event of Force Majeure
      occurs:  (i) the applicable Substantial Completion Guaranteed
      Dates shall be extended and the Project Schedule, Milestone Items and any
      related modifications to the Work shall be correspondingly adjusted by the
      period of time, if any, that Contractor is actually and demonstrably delayed
      in
      the performance of the Work as a result of the impact of such an event of Force
      Majeure, less any extensions of such event of Force Majeure that occur due
      to
      Contractor’s failure to take action as requested by Owner pursuant to
Section8.4, and (ii) and
      the impact of such event of Force Majeure delays the Work for five (5) or more
      consecutive days with respect to any one Force Majeure event, or the impact
      of
      multiple Force Majeure events delays the Work for greater than fifteen (15)
      days
      in the




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 aggregate,
        and Contractor’s costs actually and demonstrably increase despite Contractor’s
        commercially reasonable efforts to mitigate any such increases, the Separated
        Contract Price shall be adjusted.




8.6.2                      Excusable
      Event.  As Contractor’s only remedy for the occurrence of an
      Excusable Event, and provided that Contractor has otherwise complied with the
      provisions of Sections8.2 and
8.3,
      if an Excusable Event occurs:
      (i) the applicable Substantial Completion Guaranteed Dates shall be
      extended and the Project Schedule, Milestone Items, and any related
      modifications to the Work shall be correspondingly adjusted by the period of
      time, if any, that Contractor is actually and demonstrably delayed in the
      performance of the Work as a result of the impact of such an Excusable Event,
      less any extensions of such Excusable Event that occur due to Contractor’s
      failure to take action as requested by Owner pursuant to Section8.4, and (ii) if Contractor’s costs
      actually and demonstrably increase despite Contractor’s commercially reasonable
      efforts to mitigate any such increases, the Separated Contract Price shall
      be
      adjusted. Notwithstanding anything to the contrary in the foregoing or in this
      Agreement, upon the occurrence of an Excusable Event as described in
      subsection (f) of the definition of Excusable
      Event, Contractor’s only remedy for such Excusable Event shall be an adjustment
      of the Net Unit Capacity Guarantee and Net Unit Heat Rate Guarantee for
      Unit 1 or Unit 2, as the case may be, to the extent necessary to
      reflect the total volume discharge limitations in the current Discharge Permit,
      and Contractor shall not be entitled to a Change In Work adjusting the
      Substantial Completion Guaranteed Date or Separated Contract Price in connection
      with such Excusable Event.  Contractor and Owner shall document the
      adjusted Net Unit Capacity Guarantees and Net Unit Heat Rate Guarantees in
      writing, which shall be signed by duly authorized representatives of both such
      Parties.




8.6.3                      Changes
      In Work.  Upon the occurrence of an event of Force Majeure or an
      Excusable Event to which Contractor is entitled to a change in the applicable
      Substantial Completion Guaranteed Dates, Separated Contract Price or
      modifications to the Work pursuant to this Section8.6, Contractor and Owner shall
      prepare a
      Change In Work form in accordance with Article16.




8.7           Owner’s
      Right to Terminate.  If an event of Force Majeure has occurred and
      continues for more than six (6) months, Owner may terminate this Agreement
      by
      notice to Contractor.  Upon such termination, Contractor shall be
      entitled to receive the payments as set forth in Section20.1.1.




9.           **SUBCONTRACTORS
      AND VENDORS**




9.1           Use
      of Subcontractors.  Attached hereto as Exhibit O is a
      schedule of certain Equipment and Materials and services, and the
      subcontractors, suppliers and vendors approved by Owner with whom Contractor
      may
      contract (whether by contract or purchase order) for the acquisition of such
      Equipment and Materials and services.  Contractor shall notify Owner
      of any additional subcontractors, suppliers or vendors with whom Contractor
      anticipates subcontracting and any portion of the Work to be performed by such
      proposed subcontractor, supplier or vendor, for Owner’s review, and approval
      with respect to Major Subcontractors; provided that after completion of
      the Open Book Review, Exhibit O shall not be amended with respect to
      any Major Subcontractor previously approved by Owner without Owner’s written
      approval, and




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Contractor
      shall notify Owner of any changes to Exhibit O with respect to any
      additional subcontractors, suppliers or vendors with whom Contractor anticipates
      subcontracting and any portion of the Work to be performed by such proposed
      subcontractor, supplier or vendor, for Owner’s review, and approval with respect
      only to direct (i.e., first tier) Major Subcontractors.  Contractor
      shall update and amend Exhibit O by Notice to Owner from time to
      time as necessary to reflect additions or changes thereto.  Contractor
      shall use commercially reasonable efforts to ensure that each Subcontractor
      is
      licensed or qualified to do business and is in good standing under the laws
      of
      the jurisdiction where the Work is to be performed, including the State of
      Texas
      or otherwise not to contract with such Subcontractor for any portion of the
      Work.  Contractor acknowledges and agrees that Owner’s selection of
      Contractor to perform the Work was due in part to Contractor’s commitment to,
      and Contractor hereby agrees to, directly hire and self perform the majority
      of
      mechanical and electrical construction portions of the Work.




9.2           Agency
      Subcontracts Prior to Assignment.  Prior to assignment of the
      Agency Subcontracts to Contractor pursuant to Section4.2.7(b), Contractor shall act as Owner’s agent
      to prepare and execute the Agency Subcontracts (including an amendment to the
      STG Upgrade Contract), subject to Owner’s approval of such Agency Subcontracts
      prior to execution thereof.  Owner and Contractor shall cooperate to
      negotiate and finalize the Agency Subcontracts, including amending the STG
      Upgrade Contracts to the extent mutually agreed upon by Owner and Contractor,
      as
      required and by such dates so as to avoid delays to the Work.  In the
      event the negotiation and execution of any such Agency Subcontracts is delayed
      and the Project Schedule is adversely impacted (provided that Contractor is
      not
      acting in a commercially unreasonable manner), Contractor shall be entitled
      to a
      Change In Work to the extent such delay actually and demonstrably impacts the
      Substantial Completion Guaranteed Date for the applicable Unit or the Separated
      Contract Price.  With respect to the STG Upgrade Contract, Owner
      shall, or shall cause TXU Energy Company LLC to appoint Contractor as Owner’s or
      TXU Energy Company LLC’s agent, respectively.  While acting as Owner’s
      agent, Contractor shall administer and enforce the Agency Subcontracts as
      necessary to accomplish the Work.




9.3           Use
      of Contractor’s Affiliates.  Notwithstanding the above, Contractor
      may have portions of the Work performed by certain of its Affiliates or their
      employees, in which event Contractor shall be responsible for such Work, Owner
      will look solely to Contractor as if the Work were performed by Contractor,
      and
      such Affiliates shall comply with the obligations of Contractor hereunder to
      the
      extent applicable to the Work they perform.




9.4           Assignment.  No
      subcontract or purchase order shall bind or purport to bind Owner, but each
      subcontract and purchase order entered into by Contractor with respect to the
      Work where the applicable subcontract price or purchase order value exceeds
      One
      Hundred Thousand Dollars ($100,000) shall provide for assignment of such
      subcontract as set forth in Section9.6.




9.5           Information
      and Access.  Contractor shall furnish such information and access
      relative to the identity of and scope of services or supply of its
      Subcontractors as Owner may reasonably request; provided that nothing
      herein shall be deemed to limit Owner’s rights to information and access to
      Subcontractors during the Open Book Review; provided, further,
      that Owner shall be entitled to such information as reasonably necessary to
      enable Owner to verify compliance with the provisions of Section9.6.




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9.6           Terms
      in Subcontracts.  All subcontracts between Contractor and its
      direct (i.e., first tier) Subcontractors, as well as Subcontractors which have
      contract values in excess of $1,000,000 or provide critical parts or components,
      shall be consistent with the requirements of this Agreement, insofar as
      applicable.  All Work performed for Contractor by such direct (i.e.,
      first tier) Subcontractors shall be pursuant to an appropriate written agreement
      between Contractor and the Subcontractor that contains provisions
      that:




(a)           reasonably
      preserve and protect all the rights of Owner under this Agreement and to the
      Work to be performed under the subcontract, so that the subcontracting thereof
      will not prejudice such rights;




(b)           require
      that such Work be performed in accordance with the applicable requirements
      of
      this Agreement;




(c)           require
      such Subcontractor to make available a representative with whom Owner or the
      Financing Entities, if any, may, subject to Contractor’s coordination and
      participation, discuss questions regarding the Work being performed by the
      Subcontractor;




(d)           with
      respect only to Subcontractors that are supplying goods for which functional
      spare parts are customarily provided, require such Subcontractors which have
      contract values in excess of $250,000 or provide critical parts or components
      to
      notify Contractor and Owner in the event such Subcontractor decides to
      discontinue supplying any functional spare parts at any time within five (5)
      years after completion of such Subcontractor’s portion of the Work, so that
      Owner may seek to order any quantity of any of such parts at the prices
      prevailing at the time of such order, prior to such discontinuance of
      supply;




(e)           require
      such Subcontractor to participate in the OCIP if eligible and to provide and
      maintain adequate insurance consistent with its obligations related to this
      Agreement (as adjusted by Contractor and Owner pursuant to
Section21.2.3);




(f)           when
      such Subcontractor performs Work at the Site, require such Subcontractor to
      participate in the approved safety program for the Site and the Ancillary
      Sites;




(g)           require
      such Subcontractor to enter into a new contract directly with Owner on
      substantially the same terms and conditions as such subcontract in the event
      that any trustee in bankruptcy for Contractor rejects the subcontract, or the
      Subcontractor terminates such subcontract as a result of the bankruptcy of
      Contractor;




(h)           allow
      assignment, including any performance assurance provided by such Subcontractor,
      of such agreement to Owner, to another contractor providing engineering,
      procurement and construction services to Owner that replaces the Contractor
      as
      designated by Owner, or at Owner’s request, to the Financing Entities, if any,
      upon the termination or expiration of this Agreement in accordance with its
      terms, upon notice to Subcontractor but not subject to Subcontractor’s consent
      provided that any such assignee (except for collateral assigns) shall have
      sufficient creditworthiness to meet its payment obligations to Subcontractor
      and
      provided further that any such assignee shall not be a direct competitor of
      such
      Subcontractor;




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(i)           require
      such Subcontractor to remove any employee or independent contractor of such
      Subcontractor used in the Work at the Site or in such Subcontractor’s warranty
      obligations within ten (10) days after receiving notice from Contractor
      that Owner requires  removal of such employee or independent
      contractor;




(j)           if
      commercially obtainable, provide that if this Agreement is terminated before
      Final Completion, such Subcontractor shall not be entitled to any profit or
      fee
      to the extent any portion of its Work has not been completed;




(k)           require
      such Subcontractor to abide by Contractor’s confidentiality obligations
      hereunder and to otherwise hold in strict confidence all of Owner’s Confidential
      Information; and




(l)           require
      such Subcontractor to deliver to Owner any “stop-work” notice or termination
      notice delivered to Contractor pursuant to Applicable Law.




Notwithstanding
      the foregoing, Owner acknowledges and agrees that the STG Upgrade Contract
      was
      initially entered into by an Affiliate of Owner and may not contain all of
      the
      provisions set forth in the foregoing.  Contractor shall use
      commercially reasonable efforts to incorporate the missing provisions into
      the
      STG Upgrade Contract.




In
      addition to the provisions of this Section9.6, this Agreement contains numerous
      references expressly requiring Contractor to cause its Subcontractors to perform
      certain actions or adhere to certain requirements (such additional required
      actions or requirements, “Flowdowns”).  Contractor may exercise its
      reasonable discretion, in consultation with Owner, in negotiating the terms
      of
      its subcontracts with its Subcontractors that result in either excluding the
      use
      of certain Flowdowns that are not applicable to a particular Subcontractor
      based
      on the scope and nature of the subcontracted work or scope of supply, or
      modifying the terms of such Flowdowns in order to effect a reasonable commercial
      agreement with such Subcontractors, and Contractor’s exclusion or modification
      of such Flowdowns in such subcontracts shall not be considered a breach of
      this
      Agreement; provided that notwithstanding the foregoing, Contractor shall require
      each Subcontractor, insofar as applicable, to take such actions or adhere to
      such requirements as provided in Section3.13, Section4.1.8,
Section5.7.2,
Section10.4
      (with respect to Subcontractors that
      perform Work on the Site), Section21.3 and Article28
      (with respect to Subcontractors that perform
      Work on the Site).  Contractor acknowledges and agrees that the
      provisions of this paragraph shall not constitute a waiver or modification
      by
      Owner of any of Contractor’s other obligations hereunder.




9.7           Minority
      and Women-Owned Businesses.  Contractor acknowledges that Owner
      and its Affiliates are committed to the development, utilization and inclusion
      of certified women and minority owned businesses, as well as small businesses,
      businesses owned by veterans and service-disabled veterans, and businesses
      located in historically underutilized business zones, in Owner’s and its
      Affiliates’ sourcing and procurement processes.  Contractor shall
      provide Owner with reasonably satisfactory evidence that Contractor considered
      such businesses for inclusion in Contractor’s Subcontractors and
      Suppliers.  Contractor acknowledges that Contractor’s Invoices shall
      include information regarding the amount of such Invoices reflecting utilization
      of and amounts spent with such businesses by Contractor, and to the extent
      such
      information can be




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 obtained
        from the Subcontractors using commercially reasonable efforts, by the
        Subcontractors, and Contractor agrees to provide such additional information,
        and to use commercially reasonable efforts to cause the Subcontractors to
        provide such information, regarding utilization of such businesses as Owner
        reasonably requests. Contractor shall further provide Owner with reasonably
        satisfactory evidence that its Subcontractors and Suppliers were selected
        in a
        non-discriminatory manner and, at least in part, on the basis of their
        qualifications and capabilities.




10.           **LABOR
      RELATIONS**




10.1           General
      Management of Employees.  Subject to Section10.6, and notwithstanding the
      provisions of
Section10.3, Contractor shall
      preserve its rights to exercise and shall exercise its management rights in
      performing the Work.  Such management rights shall include the rights
      to hire, discharge, promote, and transfer employees; to select and remove
      foremen or other persons at other levels of supervision; to establish and
      enforce reasonable standards of production; to introduce, to the extent
      feasible, labor saving Equipment and Materials; to determine the number of
      craftsmen necessary to perform a task, job, or project; and to establish,
      maintain, and enforce rules and regulations conducive to efficient and
      productive operations.




10.2           Worker
      Recruitment and Training Program.  Contractor shall implement a
      worker recruitment and training program targeting local residents (Persons
      with
      current zip codes within one hours driving distance of the Site) with respect
      to
      the Project.  Contractor shall submit its proposed program regarding
      local worker recruitment to Owner within sixty (60) days after the date hereof,
      and Owner and Contractor shall agree upon such program by the end of the Open
      Book Review.  Contractor shall submit its proposed program regarding
      its proposed worker training program to Owner for review within sixty (60)
      days
      after the date hereof.  Contractor shall implement and follow the
      approved program during the performance of the Work.




10.3           Labor
      Disputes.  Contractor shall use reasonable efforts to adopt
      policies and practices designed to avoid work stoppages, slowdowns, disputes
      and
      strikes, and to minimize the risk of labor-related delays or disruption of
      the
      progress of the Work.  Contractor shall promptly take any and all
      reasonable steps that may be available in connection with the resolution of
      violations of collective bargaining agreements or labor jurisdictional disputes,
      including the filing of appropriate processes with any court or administrative
      agency having jurisdiction to settle, enjoin, or award damages resulting from
      violations of collective bargaining agreements or labor jurisdictional
      disputes.  Contractor shall advise Owner promptly, in writing, of any
      actual or threatened labor dispute of which Contractor has knowledge that might
      materially affect the performance of the Work by Contractor or by any of its
      Subcontractors.  Notwithstanding the foregoing, the settlement of
      strikes, walkouts, lockouts or other labor disputes shall be at the discretion
      of the Party having the difficulty.




10.4           Personnel
      Documents.  Contractor shall ensure that at the time of hiring,
      all its personnel and personnel of any Subcontractors performing the Work are
      in
      possession of all such documents (including visas, driver’s licenses and work
      permits) as may be required by any and all Applicable Laws.




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10.5           Key
      Personnel.  Contractor shall provide staff to supervise and
      coordinate the work of Contractor and Subcontractors on the Site.  The
      Key Personnel shall at all times hold the positions and be dedicated to the
      performance of the duties described in Exhibit J.  Any
      replacement of the Key Personnel shall be subject to the prior written consent
      of Owner, which consent shall not be unreasonably withheld.  If Owner
      fails to respond to a request for consent within five (5) Business Days
      after Contractor’s request, Owner shall be deemed to have consented to the
      proposed individual.




10.6           Replacement
      of Employees and Other Persons at Owner’s Request.  Within
      ten (10) days after receiving a written request by Owner identifying the
      lawful reason for such request, Contractor shall remove from the Project, the
      Site and from any performance of the Work, and cause any Subcontractor to remove
      from the Project, the Site and from any performance of the Work, as soon as
      reasonably practicable, any Person performing the Work (including any of the
      Key
      Personnel other than the Project Director and his direct reports) whom Owner
      reasonably demonstrates to be creating a material safety hazard or risk of
      either:  (a) non-achievement of any of the Substantial Completion
      Guaranteed Dates for either Unit; or (b) material non-performance by
      Contractor in accordance with this Agreement.  Contractor acknowledges
      that Owner desires to maintain a positive perception of the Project and a good
      working relationship with the surrounding communities and that actions of
      Contractor’s employees or agents, including the Subcontractor’s employees may
      affect the local communities.  Accordingly, Contractor shall also
      remove, and cause its Subcontractors to remove, any employee, agent or other
      Person engaged in the performance of the Work for Contractor or such
      Subcontractor, as the case may be, whose off-Site conduct Owner reasonably
      demonstrates is harming or having a negative effect on the perception of the
      Project or Owner’s relationship with the surrounding community.  In
      the event Contractor disagrees that any such Person should be removed pursuant
      to this Section10.6,
      Owner and Contractor shall submit such disagreement to their executive
      management pursuant to Section32.1.




11.           **INSPECTION;
      EFFECT OF REVIEW AND COMMENT**




11.1           Right
      to Reject Work.  Prior to Final Completion, regardless of whether
      payment has been made therefor, Owner shall have the right to reject any portion
      of the Work that contains any Error or Omission or Defect.  Upon such
      rejection, Contractor shall remedy, at its sole cost and expense, any Error
      or
      Omission or Defect that is identified by Owner as giving rise to such
      rejection.




11.2           Inspection.  Contractor
      understands that Owner, its representatives and any other person authorized
      in
      writing by Owner, including the Financing Entities and their agents, if any,
      have the right to reasonably observe and inspect the Work, any item of Equipment
      and Materials (including Equipment and Materials under fabrication), design,
      engineering, service, or workmanship (including all Contractor Deliverables,
      technical details and inspection and testing reports) to be provided hereunder
      and to observe all quality inspections and tests, results and data pertaining
      to
      the Work and the Project (including factory or other tests performed at a
      location other than the Site).  Contractor shall allow Owner and its
      representatives, including Owner’s Engineer and the Financing Entities, if any,
      and their representatives and agents, reasonable access to the Work (including
      Equipment and Materials under fabrication) and the Project during business
      hours
      for the Project and upon reasonable advance notice given, provided such access




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 does
        not unreasonably interfere with Contractor’s prosecution of the
        Work.  Contractor shall incorporate all such inspection rights in all
        Equipment and Materials purchase orders and subcontracts.  To
        facilitate such observations and inspections, Contractor shall maintain at
        the
        Site a complete set of all Submittals, Supplier reports, and current Project
        Schedule.




11.3           Contractor
      Submittals Table.  Within fifteen (15) Business Days after
      the date hereof, Contractor shall provide a Notice to Owner attaching an initial
      proposed Contractor Submittals Table identifying all Contractor Deliverables
      to
      be delivered to Owner for review and comment in accordance with
Exhibit A-1–Section 01330, the deadline for delivery thereof,
      and reference to this Agreement or Exhibit where such submittal is
      required.  Owner shall have the right to review and approve such
      Contractor Submittals Table.  Contractor shall update such Contractor
      Submittals Table from time to time throughout the Open Book Review process,
      until finalized.




11.4           Owner
      Review of Documents.  Contractor shall submit to Owner for review,
      and approval or acceptance as provided herein, hard (printed) copies and soft
      copies (in a format agreed to by Owner) of all Contractor Deliverables in
      accordance with the requirements of Exhibit A-1-Section 01330
      and the Contractor Submittals Table.  Owner shall have the right to
      make all such materials available to Owner’s Engineer and the Financing
      Entities, if any.  Owner reserves the right to reject any submittals
      for lack of legibility, accuracy or completeness and shall retain the full
      time
      period for review of such submittal in accordance with the review period
      specified in the Contractor Submittals Table.  Notwithstanding
      anything in Article6 to the
      contrary, if Contractor: (a) issues any purchase order based on any
      Contractor Deliverable; (b) releases any Contractor Deliverable for use in
      connection with the Work; (c) authorizes any Subcontractor or Supplier to
      proceed with any of the Work; or (d) submits any Contractor’s Invoice with
      respect to any Contractor Deliverable, before Owner has completed its review,
      Contractor shall do so at its own risk and shall remain responsible for any
      costs incurred before Owner indicates its approval or acceptance, if at
      all.




11.5           Remedy
      of Flaws.  If Owner identifies any errors or omissions with
      respect to any Contractor Deliverable submitted for review, Contractor shall
      incorporate changes into such Contractor Deliverable addressing and remedying
      the errors and omissions and resubmit the same to Owner, and such incorporation
      of changes to address Owner’s comments shall not be considered a Change In Work
      and shall not affect the Substantial Completion Guaranteed Dates.




12.           **SITE
      CONDITIONS**




12.1           Site
      Conditions.  Owner has advised Contractor of any Site Conditions
      known to Owner; provided that Contractor acknowledges that Owner has not had
      and
      will not have any duty to investigate or review any information regarding any
      Site Conditions.  Contractor represents and warrants that Contractor
      has investigated the Site and each other location, including the Ancillary
      Sites, where any portion of the Work shall be performed and surrounding
      locations to the full extent Contractor deems necessary for Contractor’s
      purposes and that Contractor is familiar with, and has satisfied itself with
      respect to, the nature and location of the Work and Site
      Conditions.




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12.2           Differing
      Site Conditions.  Contractor specifically acknowledges and accepts
      the Site Conditions and agrees that, except as set forth in
Section12.3, no Substantial
      Completion Guaranteed Date shall be extended, the Separated Contract Price
      shall
      not be modified, and Contractor shall not be entitled to request or be granted
      any Change In Work, as a result of any Site Conditions or any variance between
      the condition of the Site indicated by this Agreement or expected to exist
      by
      Contractor, and the Site Conditions, including any unknown physical conditions
      above the surface of the ground.




12.3           Unforeseen
      Site Conditions.  In the event any conditions (including the
      presence of any Hazardous Materials, any archeological resources or any man-made
      subsurface conditions) are found at the Site that differ materially from those
      set forth in, or which could not reasonably have been concluded from a review
      of, the available information regarding the Site, including information derived
      from Contractor’s investigation pursuant to Section12.1 (each such materially differing
      condition,
      an “**Unforeseen Site Condition**”), Contractor shall promptly
      notify Owner of such Unforeseen Site Condition and Owner and Contractor shall
      agree upon a plan to mitigate or remediate such condition.  Any
      changes to the Work required to mitigate or remediate such condition shall
      be
      deemed a Change In Work initiated by Owner and shall be subject to the
      provisions of Article16.




13.           **PERFORMANCE
      GUARANTEES AND TESTS**




13.1           Performance
      Guarantees and Other Requirements.  Subject to
Section15.4.1(a), Contractor
      shall perform the Work so that each Unit satisfies the Performance Guarantees
      and the tests applicable to such Unit as set forth in
Exhibit I-1.  Contractor shall demonstrate that each Unit
      satisfies the Performance Guarantees  and the tests applicable thereto
      set forth in Exhibit I-1 prior to Final Completion by satisfactorily
      running and completing the Acceptance Tests and such other tests as set forth
      in
Exhibit I-1; provided that results of the applicable
      Acceptance Test of each Unit reflect achievement of the Minimum Performance
      Criteria prior to Substantial Completion.  Contractor shall conduct
      and collect the data produced during the Performance Tests and shall prepare
      the
      reports in accordance with Section13.3.




13.2           Start
      up and Commissioning Procedures.  Contractor shall provide for
      Owner’s review and approval detailed start up and commissioning procedures in
      accordance with the requirements of Exhibit S.




13.3           Acceptance
      Test Procedures.  Contractor shall develop detailed Acceptance
      Test procedures in accordance with Exhibit I-1 and shall provide
      such procedures to Owner for Owner’s review and approval not less than one
      hundred twenty (120) days prior to the date on which Contractor anticipates
      the commencement of the testing of Unit 1.




13.4           Acceptance
      Test Schedules.  Contractor shall agree on Acceptance Test
      schedules for each Unit with Owner and shall give Owner Notice of the first
      of
      each Acceptance Test at least twenty (20) days prior to commencing any such
      test.  Contractor shall keep the Project Representative continuously
      apprised of the specified schedule, and changes therein, for the commencement
      and performance of Acceptance Tests, and shall give the Project Representative
      at least three (3)****Business Days prior Notice of the
      re-performance of any Acceptance Test; provided that such period of prior
      notice may be reduced if the Project Representative is at the




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 Site
        and receives reasonable prior notice of re-performance of any Acceptance
        Test.  An Acceptance Test conducted without the required Notice shall
        not be valid for the purposes of this Agreement.




13.5           Testing.  Contractor
      shall achieve Mechanical Completion, start up each Unit and shall satisfy all
      of
      its other obligations under this Agreement with respect to each Unit to complete
      the Unit in accordance with the terms of this Agreement and properly adjust
      and
      test components as Contractor determines is necessary prior to conducting the
      Acceptance Tests.  Contractor shall conduct the Acceptance Tests in
      accordance with the approved Acceptance Test Procedures and
Exhibit I-1.  Representatives of Owner, Owner’s Engineer,
      the Financing Entities and their agents, if any, shall have the right to be
      present during any Acceptance Tests performed by Contractor under this
Article13.  Notwithstanding the foregoing,
      Contractor shall not be obligated to delay such Acceptance Tests so long as
      the
      Notices required under Section13.4 have been properly
      given.  Contractor must submit a preliminary test report for each
      Acceptance Test within forty eight (48) hours after the completion of such
      Acceptance Test providing a summary of each Acceptance Test and raw data taken
      during such Acceptance Test, and a final test report within thirty (30) days
      thereafter.  Contractor shall include sufficient results of testing in
      the preliminary test reports to allow Owner to reasonably determine that the
      final test results are expected to be satisfactory for the purposes of obtaining
      Substantial Completion.




13.6           Non-Conforming
      Work.  At any time during and promptly after completion (whether
      or not successful) of the Acceptance Tests under Section13.3 (or any re-performance of any
      Acceptance
      Test under Section13.5,
Section13.9
      or pursuant to any
      Remedial Plan), Owner shall advise Contractor and Contractor shall advise Owner
      in writing of any Error or Omission or Defect that was discovered during an
      Acceptance Test.  Contractor shall, at Contractor’s sole cost and
      expense, correct any Error or Omission or Defect (except if such Error or
      Omission or Defect is a Non-Critical Deficiency, in which case it shall be
      included on the Punchlist for the relevant Unit) and promptly provide Notice
      to
      Owner in writing that such corrective measures have been
      completed.  Any dispute regarding the existence or correction of any
      such Error or Omission or Defect shall be resolved pursuant to
Article32.




13.7           Certificate
      of Completion of Testing.  Upon the Successful Run of an
      Acceptance Test as demonstrated by a test report delivered to Owner by
      Contractor, Owner shall issue a Notice that such test has been Successfully
      Run.




13.8           Revenues.  Any
      revenues generated by the Project during start up and commissioning, or the
      performance of any Acceptance Test or any other testing otherwise performed
      shall be paid to and for the benefit of Owner.




13.9           Post
      Test Modifications.  If prior to Substantial Completion of a
      Unit:




(a)           an
      Acceptance Test has been completed;




(b)           a
      certificate of completion of such Acceptance Test has been issued pursuant
      to
Section13.7;




(c)           Contractor
      or any Subcontractor makes any modification to such Unit; and




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(d)           such
      modification could have had a material effect on the outcome of such Acceptance
      Test, if it had been made before the completion of such Acceptance Test, then
      such Acceptance Test shall be re-run, as a condition to achieving Substantial
      Completion for such Unit.




14.           **SUBSTANTIAL
      COMPLETION AND FINAL COMPLETION**




14.1           Punchlists.




14.1.1                      Creation
      of Punchlists.  When Contractor believes that a system of a Unit
      is ready for commissioning and start up, Contractor shall prepare and submit
      to
      Owner a punchlist of Work remaining to be completed with respect to such system
      in accordance with Exhibit S.  Any Non-Critical
      Deficiencies with respect to each system of a Unit will be included on a list
      of
      items of Work that may be completed after the Substantial Completion Date,
      which
      list shall include, for each Non-Critical Deficiency, a proposed schedule and
      estimated cost for the completion or repair of such Non-Critical Deficiency
      (the
“**Proposed Punchlist**”).  Owner and Contractor shall
      determine whether the Proposed Punchlist for a Unit includes all Non-Critical
      Deficiencies for such Unit, whether the Proposed Punchlist includes only
      Non-Critical Deficiencies and whether the Unit is complete except for those
      items described in the Proposed Punchlist.  If Owner’s inspection
      discloses any Non-Critical Deficiency that has been excluded from the Proposed
      Punchlist, any item described on the Proposed Punchlist that is not a
      Non-Critical Deficiency, any item of Work included in the system that is
      incomplete or not in accordance with this Agreement (other than Non-Critical
      Deficiencies described on the Proposed Punchlist), Owner shall deliver Notice
      thereof to Contractor.  If Owner does not deliver such a Notice to
      Contractor within a reasonable period of time not to exceed ten (10) days,
      the
      Proposed Punchlist shall be deemed acceptable to Owner.  If Owner
      delivers such a Notice to Contractor, Contractor shall complete any items of
      Work other than Non-Critical Deficiencies, revise the Proposed Punchlist to
      include all Non-Critical Deficiencies identified by Owner (whether or not such
      items are disputed by Contractor) and resubmit the revised Proposed Punchlist
      to
      Owner for review.  Until the Substantial Completion Date, Owner may
      re-inspect the Unit and the foregoing process shall continue on an iterative
      basis until Owner has approved the Proposed Punchlist for such
      Unit.  If the Proposed Punchlists are prepared or separated by systems
      of a Unit, the aggregate of all Proposed Punchlists for a Unit that are
      acceptable or deemed acceptable to Owner shall sometimes be referred to as
      the
“**Punchlist**.”  If the Punchlist for a Unit is not
      finalized by the Substantial Completion Date for such Unit, the Proposed
      Punchlist as modified by Owner shall be deemed the Punchlist for such Unit
      for
      all purposes hereunder until the Parties resolve such dispute and otherwise
      finalize the Punchlist.  Contractor shall note on such Proposed
      Punchlist the items under dispute.  Prior to the Substantial
      Completion Date of each Unit, any Non-Critical Deficiencies discovered by
      Contractor or identified by Owner after the initial inspection of each system
      of
      such Unit by Owner and Contractor or during the testing of the Unit shall be
      added to the Punchlist.




14.1.2                      Completion
      of Punchlists.  Contractor shall proceed promptly to complete and
      correct all items on the Punchlist for a Unit in accordance with the schedule
      to
      complete such items to be agreed upon by the Parties as soon as practical after
      Substantial Completion of such Unit.  Contractor shall complete all
      items on the Punchlist promptly after Owner receives such Punchlist and in
      any
      event in accordance with the schedule set forth in such Punchlist.  On
      a




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 weekly
        basis after Substantial Completion of each Unit, Contractor shall revise
        and
        update the Punchlist for such Unit to include the date(s) that items listed
        on
        such Punchlist are completed by Contractor and accepted by
        Owner.  Notwithstanding any of the foregoing, the items listed on such
        Punchlist shall not be considered complete until Owner shall have inspected
        such
        Non-Critical Deficiencies and acknowledged, by notation on the updated
        Punchlists, that such item of Work is complete.  If Owner does not so
        inspect and deliver such notations on the updated Punchlists to Contractor
        within a reasonable period of time, and Contractor has actually completed
        and
        corrected all items on the Punchlist, the Punchlist shall be deemed completed
        on
        the date that is twenty (20) days after Contractor submits the updated Punchlist
        to Owner after having completed the last Punchlist item.




14.1.3                      Owner’s
      Punchlist Option.  At any time after the one hundred eightieth
      (180th) day
      after the Substantial Completion Date of a Unit, Owner may elect, by Notice
      to
      Contractor to deduct and keep from the Retainage or draw from the Letter of
      Credit an amount equal to one hundred fifty percent (150%) of the estimated
      cost
      to complete the uncompleted items on the Punchlist for such Unit in lieu of
      requiring Contractor to complete such items.  Following Contractor’s
      receipt of such Notice, Owner shall determine, which items on such Punchlist
      have not been completed and Contractor shall prepare an estimate of the cost
      to
      complete such items.  Owner shall then be permitted to deduct and keep
      from the Retainage, or draw from the Letter of Credit, such amount in
      satisfaction of Contractor’s obligation to complete such items.




14.2           Substantial
      Completion.  The following are conditions precedent to Substantial
      Completion for each Unit:




(a)           the
      results of the applicable Acceptance Test of such Unit reflect achievement
      of
      the Minimum Performance Criteria;




(b)           subject
      to Section14.3, Contractor
      shall have paid all undisputed Delay Liquidated Damages due pursuant to
Section15.1 (provided that all
      amounts of disputed Delay Liquidated Damages that are ultimately determined
      to
      be due and owing shall accrue interest from the date such amounts are determined
      to have been owed);




(c)           Owner
      has received all Contractor Deliverables in accordance with the Contractor
      Submittals Table, including all Required Manuals identified therein for delivery
      prior to Substantial Completion;




(d)           pursuant
      to Section3.19.1, training of
      Operating Personnel is complete;




(e)           the
      Punchlist for such Unit shall be in final form or be deemed to be in final
      form
      as provided in Section14.1.1;




(f)           all
      Work related to such Unit other than record drawings and items of Non-Critical
      Deficiency listed on the Punchlist shall have been completed without any Errors
      or Omissions or Defects;




(g)           Contractor
      shall have licensed or granted, in accordance with this Agreement, all
      Intellectual Property Rights necessary for such Unit to be operated by Owner




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 without
        violating any of Contractor’s, any Subcontractor’s or any third party’s rights
        to such Intellectual Property Rights;




(h)           Contractor
      shall have delivered all applicable Conditional Waivers and Releases Upon
      Milestone or Progress Payment from Contractor, and, as applicable, Conditional
      Waivers and Releases Upon Milestone or Progress Payment, Conditional Waivers
      and
      Releases Upon Final Payment and Unconditional Waivers and Releases Upon Final
      Payment from each Major Subcontractor, or shall have delivered security in
      lieu
      thereof, as required to be delivered pursuant to Section6.4; and




(i)           all
      operational spare parts used by Contractor prior to the Substantial Completion
      Date that are to be replaced or reconditioned by Contractor pursuant to
Section3.20.3 have been
      delivered or purchased for delivery to Owner and all special tools have been
      turned over to Owner.




14.3           Notice
      of Substantial Completion.  When Contractor believes that it has
      satisfied the provisions of Section14.2 for a Unit, Contractor shall
      deliver to
      Owner a Notice of Substantial Completion, including a certification of all
      applicable Performance Test results.  The Substantial Completion Date
      for such Unit shall be the day after the date on which the last of the
      conditions of Section14.2 was
      satisfied for such Unit or, in the sole discretion of Owner,
      waived.  Owner shall, within five (5) days after receipt of a Notice
      of Substantial Completion, issue an Owner’s Certificate of Substantial
      Completion for such Unit dated to reflect the Substantial Completion Date for
      such Unit, or if Owner rejects Contractor’s Notice of Substantial Completion,
      respond in writing giving its reasons for such rejection and Contractor shall
      take the appropriate corrective action.  If Owner fails to respond to
      a Notice of Substantial Completion within such five (5) day period, Substantial
      Completion shall be deemed to have occurred as of the date of Contractor’s
      Notice of Substantial Completion.  Upon completion of such corrective
      action, Contractor shall provide a new Notice of Substantial Completion for
      such
      Unit to Owner for approval.  This process shall be repeated on an
      iterative basis until Owner accepts the Notice of Substantial Completion for
      such Unit and issues an Owner’s Certificate of Substantial
      Completion.  Notwithstanding the provisions of Section14.2(a), in order to properly determine
      the
      amount of Delay Liquidated Damages due and owing (if any), and to arrange a
      wire
      transfer or other means of payment, Contractor shall be deemed to have satisfied
      the provisions of Section14.2(a) with respect to the payment
      of
      undisputed Delay Liquidated Damages due and owing if Contractor pays such amount
      to Owner by the date which is five (5) days after the date on which the last
      of
      the conditions of Section14.2
      was satisfied (other than clause (a) thereof) or, in the sole discretion of
      Owner, waived.  Notwithstanding the foregoing, if Contractor does not
      pay all such undisputed Delay Liquidated Damages by such date to Owner, then
      Substantial Completion for such Unit shall not be deemed to have occurred
      hereunder until the date on which Contractor shall have paid all such undisputed
      amounts (which undisputed amounts shall include, for purposes of clarification,
      Delay Liquidated Damages in the amounts required under Section15.1 for the five (5) day period
      noted above
      and for each day thereafter up to and including the day on which Contractor
      actually makes such payment to Owner).




14.4           Final
      Completion.  Final Completion of a Unit shall be deemed to have
      occurred only if all of the following have occurred:




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(a)           Substantial
      Completion of such Unit has been achieved;




(b)           intentionally
      omitted;




(c)           Owner
      has received copies of all Contractor Acquired Permits and associated approvals
      required to be obtained by Contractor pursuant to Section3.9;




(d)           intentionally
      omitted;




(e)           Contractor
      shall have completed all items on the Punchlist for such Unit unless Owner
      shall
      have relieved Contractor of its obligation to do so under Section14.1.3;




(f)           Contractor
      shall have completed all of the Work related to such Unit;




(g)           Owner
      shall have received all Submittals, copies of final record drawings,
      electronically prepared computer drawing file(s) as prepared by Contractor
      on a
      software program acceptable to Owner as required by
Exhibit A-1–Section 01330, calculations, test data, performance
      data, Equipment and Materials descriptions (other than the Owner Furnished
      Equipment), Required Manuals, training aids (which, in the case of Unit 1,
      shall include the common facilities to Units 1 and 2);




(h)           Contractor
      and each Subcontractor enrolled in the OCIP shall have complied with the audit
      and closeout report requirements of the OCIP in accordance with
Section21.1;




(i)           with
      regards to Final Completion of Unit 2, all Contractor’s and Subcontractors’
personnel shall have left the Site, and all surplus materials, waste materials,
      rubbish, and construction facilities other than those to which Owner holds
      title
      shall have been removed from the Site as required by
Exhibit A-1–Section 01530, and any permanent facilities used by
      Contractor and the Site shall have been restored to the same condition that
      such
      permanent facilities and the Site were in on the Full Notice to Proceed Date,
      ordinary wear and tear excepted.  All cleanup and disposal shall be
      conducted in accordance with all Applicable Laws and Applicable
      Permits;




(j)           Contractor
      shall have assigned to Owner, or provided Owner, with all warranties or
      guarantees with respect to such Unit that Contractor received from
      Subcontractors to the extent Contractor is obligated to do so pursuant to
Article17;




(k)           Contractor
      has delivered an Unconditional Waiver and Release Upon Final Payment of
      Contractor and an Unconditional Waiver and Release Upon Final Payment of
      Subcontractor from such Major Subcontractors, or the bonds, in accordance with
      Section6.9, with respect to
      such Unit, and has delivered such other documents and certificates with respect
      to such Unit as Owner has reasonably requested to ensure compliance with all
      Applicable Laws for which Owner could be liable; and




(l)           Contractor
      shall have paid to Owner all Delay Liquidated Damages and Performance Liquidated
      Damages (including any disputed amounts not previously paid) due and owing
      pursuant to the terms of Sections15.1 and 15.3
      with respect to such Unit.




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14.5           Notice
      of Final Completion.  Contractor shall deliver to Owner a Notice
      of Final Completion stating that Contractor believes it has satisfied the
      provisions of Section14.4 with
      respect to such Unit.  Within ten (10) business days after receipt of
      the Notice of Final Completion, Owner shall issue an Owner’s Certificate of
      Final Completion to Contractor evidencing that, to the best of Owner’s
      knowledge, all of Contractor’s construction obligations under this Agreement
      with respect to such Unit have been satisfied and Final Completion of such
      Unit
      has been achieved, or if Owner rejects Contractor’s Notice of Final Completion,
      respond in writing giving Owner’s reasons for such rejection and Contractor
      shall promptly take the appropriate corrective action.  Upon
      completion of such corrective action, Contractor shall resubmit a Notice of
      Final Completion for such Unit to Owner for approval.  This process
      shall be repeated until Owner accepts Contractor’s Notice of Final Completion
      and issues an Owner’s Certificate of Final Completion.  Owner shall
      use commercially reasonable efforts to advise Contractor within ten (10)
      business days after Contractor has delivered a Notice of Final Completion why
      a
      Unit has not achieved Final Completion, and if Owner has not responded to such
      Notice of within twenty (20) business days after Contractor delivers such Notice
      of Final Completion, Final Completion of such Unit shall be deemed to have
      occurred.




14.6           Contractor’s
      Access After Substantial Completion and Final
      Completion.  Following Substantial Completion of a Unit, Owner
      shall provide Contractor with reasonable and timely access to such Unit to
      complete all items on the Punchlist for such Unit and to satisfy the other
      requirements with respect to that Unit for Final Completion.  The
      Parties expect that Contractor shall accomplish any necessary modification,
      repairs or additional work with minimal interference with commercial operation
      of the Project and that reductions in and shut-downs of the Project’s operations
      will be required only when necessary, taking into consideration the length
      of
      the proposed reduction or shut-down, and Owner’s obligations and liabilities to
      customers or others.  Notwithstanding the foregoing, should a
      reduction in or shut-down of the Project’s operations be required to complete
      any items on the Punchlists, then such reduction or shut-down shall be scheduled
      solely at the discretion of Owner and Contractor shall complete such Work during
      such Owner scheduled reduction or shut-down.  Contractor acknowledges
      that Owner may schedule such reduction or shut-down at any time including
      off-peak hours, nights, weekends and holidays.




15.           **LIQUIDATED
      DAMAGES**




15.1           Liquidated
      Damages for Delay in the Substantial Completion Dates.  Contractor
      understands that if the Substantial Completion Date for each Unit does not
      occur
      on or before the Substantial Completion Guaranteed Date for such Unit, Owner
      will suffer substantial damages, including the loss of operating revenue,
      additional interest and financing charges on funds obtained by Owner to finance
      the Work, reduction of return on Owner’s equity investment in the Project, and
      other operating and construction costs and charges.  Therefore,
      Contractor agrees that if Substantial Completion for a Unit is not achieved
      by
      the Substantial Completion Guaranteed Date for such Unit, Contractor shall
      pay
      liquidated damages (“**Delay Liquidated Damages**”) to Owner in the
      amount of (a)  beginning on the thirty-first (31st) day of
      such delay,
      and for each day (or portion thereof) of delay thereafter through the sixtieth
      (60th) day of
      such






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delay,
      *** Dollars ($***) per day for each day (or portion thereof) of such delay;
      (b) beginning on the sixty-first (61st) day of
      such delay
      and for each day (or portion thereof) of delay thereafter through the ninetieth
      (90th) day of
      such delay, *** ($***), per day for each day (or portion thereof) of such delay;
      and (c) beginning on the ninety-first (91st) day of
      such delay
      and for each day (or portion thereof) of delay thereafter, *** Dollars ($***),
      per day for each day (or portion thereof) of such delay.  Any amount
      Contractor is obligated to pay to Owner under this Section15.1 shall be subject to
      the limitations set
      forth in Section31.2.2
      and shall be due and payable ten (10) Business Days after receipt of a
      Notice from Owner requesting such payment.




15.2           Intentionally
      Omitted.




15.3           Liquidated
      Damages for Failure to Satisfy Net Unit Capacity and Net Unit Heat Rate
      Guarantees.  Contractor understands that if the Units do not each
      achieve the Net Unit Capacity Guarantee and the Net Unit Heat Rate Guarantee,
      Owner will suffer substantial damages, including the loss of operating revenue,
      reduction of return on Owner’s equity investment in the Project, and other
      operating and construction costs and charges.  Therefore, Contractor
      agrees that if a Unit does not achieve the Net Unit Capacity Guarantee, as
      calculated in accordance with Exhibit I-2, Contractor shall pay
      liquidated damages to Owner in the amount of *** Dollars ($***) per kilowatt
      for
      each kilowatt by which such Unit fails to satisfy the Net Unit Capacity
      Guarantee.  Contractor further agrees that if a Unit does not achieve
      the Net Unit Heat Rate Guarantee, as calculated in accordance with
Exhibit I-2, Contractor shall pay liquidated damages to Owner in the
      amount of *** Dollars ($***) per Btu/kilowatt hour for each Btu/kilowatt hour
      by
      which such Unit exceeds the Net Unit Heat Rate Guarantee.  Any amount
      Contractor is obligated to pay to Owner under this Section15.3 shall be subject to the limitations
      set
      forth in Section31.2.2
      and shall be due and payable as determined in accordance with
Sections15.4 and 15.5.




15.4           Actions
      During the Cure Period.




15.4.1                      If
      Minimum Performance Criteria are Satisfied.  If based on the
      results from the most recent Performance Tests for a Unit, such Unit shall
      have
      satisfied the Minimum Performance Criteria but not the Net Unit Capacity
      Guarantee or the Net Unit Heat Rate Guarantee, and each Acceptance Test for
      such
      Unit has been Successfully Run, Contractor, at its option, shall elect to
      either:




(a)           pay
      Owner the Performance Liquidated Damages as determined pursuant to
Section15.3 based on the
      results of the most recently completed Performance Test of such Unit, in which
      case Owner shall calculate such amount and deliver a Notice For Payment of
      Performance Liquidated Damages for such Unit to Contractor, and after payment
      of
      such Performance Liquidated Damages, Contractor shall have no further obligation
      to try to achieve the Net Unit Capacity Guarantee and Net Unit Heat Rate
      Guarantee, as applicable, with respect




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 to
        such Unit; or




(b)           continue
      to attempt to satisfy the applicable Performance Guarantees for such Unit,
      until
      the earlier of one hundred eighty (180) days after the Substantial Completion
      Guaranteed Date for such Unit or until the expiration of a previously
      implemented Remedial Plan and Contractor’s election to pay Owner the Performance
      Liquidated Damages and achieve Substantial Completion as provided in
Section15.4.1(a).




15.4.2                      Remedial
      Plans.  If Contractor elects to attempt to satisfy the applicable
      Performance Guarantees as provided in Section15.4.1(b), Contractor shall submit a Remedial
      Plan for such Unit to Owner for review and approval, such approval not to be
      unreasonably withheld.  Each Remedial Plan shall, at a minimum,
      specify the corrective actions Contractor proposes to take, the commencement
      date of such corrective action, the component or system that will be tested
      after such corrective actions are implemented, and the tests that will be
      performed on such component or system, including any Performance Tests, and
      any
      required Outage Periods for such corrective actions and tests.  The
      corrective actions described in the Remedial Plan that Contractor proposes
      to
      undertake with respect to the Work must be designed and intended to cause the
      Project to satisfy the applicable Performance Guarantees without negative
      effects on Acceptance Tests results used to obtain Substantial Completion,
      must
      have a reasonable probability of success, and may not involve a material risk
      of
      damaging or diminishing the performance of any of the Work.  The
      projected completion date for such corrective action must fall within the Cure
      Period.  If in any dispute between Owner and Contractor regarding the
      approval of a proposed Remedial Plan it is determined that Owner’s failure to
      approve a proposed Remedial Plan was in violation of this Agreement,
      Contractor’s sole remedy for such violation shall be an equitable extension of
      the Cure Period, and such failure shall not otherwise be considered a breach
      of
      any covenant, condition, representation or warranty of Owner, and shall not
      be
      construed as an Owner Event of Default.




15.4.3                 Prosecution
      of Remedial Plan.  In the event Contractor elects to attempt to
      achieve the Performance Guarantees and proceeds with a Remedial Plan, Contractor
      shall:




(a)           promptly
      and diligently pursue completion of the Remedial Plan at Contractor’s sole
      cost;




(b)           in
      performing the corrective actions described in the Remedial Plan, neither cause
      the Project to be unable to meet the Minimum Performance Criteria or satisfy
      the
      Emission Guarantees, nor cause the Project to be unable to comply with
      Applicable Laws; and




(c)           make
      substantial and demonstrable progress toward completion of the Remedial Plan
      in
      accordance with its terms.




15.4.4                      Additional
      Remedial Plans.  If Contractor is unable to satisfy the applicable
      Performance Guarantees after completing the initial Remedial Plan, Contractor
      may deliver a new Remedial Plan to Owner within ten (10) days after completion
      of such initial Remedial Plan; provided that the Cure Period has not or
      will not expire during the period covered by such new Remedial
      Plan.




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15.4.5                      Election
      of Option.  Contractor shall exercise the option provided in
Section15.4.1 by delivery of
      Notice to Owner not later than ten (10) days after (i) the later of the
      Substantial Completion Guaranteed Date for such Unit, or (ii) the
      expiration of a previously implemented Remedial Plan, as
      applicable.  For the avoidance of doubt, Contractor may,
      notwithstanding Contractor’s election of option (b) of
Section15.4.1 elect to pay the
      Performance Liquidated Damages pursuant to option (a) of
Section15.4.1 after the
      expiration of its previously implemented Remedial Plan if Contractor fails
      to
      satisfy the applicable Performance Guarantees by such date; provided that
      the Unit continues to meet the Minimum Performance
      Criteria.




15.4.6                      Buy-Down
      Not Available.  For the avoidance of doubt, if Contractor fails to
      achieve the Minimum Performance Criteria with respect to the Net Unit Capacity
      and the Net Unit Heat Rate, Contractor shall not be entitled to pay the
      Performance Liquidated Damages pursuant to option (a) of
Section15.4.1 to achieve
      Substantial Completion of a Unit and must continue seeking to satisfy the
      applicable Performance Guarantees and to achieve Substantial Completion, and
      shall continue to pay Delay Liquidated Damages with respect to such Unit under
      Section15.1 until Contractor
      achieves Substantial Completion of such Unit.




15.4.7                 Access
      During Cure Period.  Upon Substantial Completion of a Unit, Owner
      shall assume care, custody and control of such Unit in accordance with
Section14.6.  Notwithstanding the foregoing,
      during the Cure Period and upon approval of a Remedial Plan, Owner shall provide
      Contractor with reasonable access to such Unit Upon Owner’s approval of the
      Remedial Plan for a Unit, Contractor shall be granted reasonable access to
      the
      Unit, subject to Section15.4.8,
      for purposes of achieving the Performance Guarantees and for the period as
      set
      forth in the Remedial Plan, to:




(a)           perform
      corrective actions pursuant to the Remedial Plan; and




(b)           perform
      the applicable tests, including Performance Tests, as provided in such Remedial
      Plan.




15.4.8                      Operations
      During Cure Period.  During the Cure Period, Owner shall have the
      right to operate such Unit in its sole discretion, including the right to
      maximize the economic benefits of such Unit.  Contractor understands
      and accepts that the desire of Owner to maximize the economic benefits of such
      Unit likely will significantly curtail Contractor’s freedom of action during the
      Cure Period and Owner will likely not provide access to such Unit to Contractor
      for any significant modifications during the peak season from June 1 through
      September 30 of any year.  Any failure by Owner to provide Contractor
      with reasonable access to such Unit during the Cure Period shall not be
      considered a breach of any covenant, condition, representation or warranty
      of
      Owner, and shall not be construed as an Owner Event of
      Default.  Contractor’s only remedy for a failure by Owner to provide
      Contractor with reasonable access to such Unit during the Cure Period shall
      be
      an equitable extension of the Cure Period until such reasonable access is
      provided.




15.4.9                      Shut
      Downs During Cure Period.  Owner and Contractor agree to cooperate
      in good faith in determining when and to what extent such Unit will be taken
      out
      of service in order for Contractor to take corrective actions or perform any
      tests required as part of




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 Contractor’s
        proposed Remedial Plans during the Cure Period.  Owner and Contractor
        agree to cooperate in good faith to minimize the periods of time during the
        Cure
        Period when a Unit will be taken out of service or any material limitations
        will
        be imposed on Owner’s operation of such Unit (each such period, an
“**Outage Period**”).  Contractor shall use its best
        efforts to conduct corrective actions during periods when a Unit is undergoing
        scheduled maintenance outages and Owner agrees to grant Contractor access
        to
        such Unit during such scheduled maintenance outage to the extent Contractor’s
        corrective actions do not unreasonably interfere with Owner’s scheduled
        maintenance.  Unless Owner expressly agrees otherwise (which agreement
        may be withheld in Owner’s sole discretion for any or no reason), no Outage
        Period shall be scheduled during the months of June, July, August and
        September.  Notwithstanding the foregoing, Contractor will have the
        right to at least three (3) Outage Periods not to exceed twenty (20) days
        in the
        aggregate, to be scheduled in consultation with Owner pursuant to this
Section15.4.9; provided
        that any additional Outage Periods shall be subject to Owner’s approval which
        may be withheld in Owner’s sole and absolute discretion for any or no
        reason.  Each Outage Period will begin after a 24-hour cool down
        period (if necessary for Contractor’s proposed corrective action) and will end
        when Contractor restores the Unit to normal operational conditions and turns
        the
        Unit over to Owner for operation.  Subject to Section31.2.2, if the duration of an Outage
        Period
        exceeds the duration agreed to by the Parties for such Outage Period, Contractor
        shall pay Owner an amount equal to *** Dollars ($***) for each day in excess
        of
        such agreed duration, not to exceed a maximum aggregate amount of *** Dollars
        ($***); provided, that Contractor shall not pay any amounts pursuant to
        the foregoing for the additional time that the Unit is out of service beyond
        the
        agreed-upon Outage Period if Owner is engaged in a scheduled maintenance
        outage
        and in any event would keep the Unit shut down.  Accrued amounts of
        such payments shall be due and payable from time to time within five (5)
        days
        after Owner provides a Notice to Contractor demanding payment
        thereof.  If Owner instructs Contractor to cease performing a test of
        a Unit or conducting corrective actions during an Outage Period or otherwise
        during the remainder of the Cure Period (for reasons other than safety or
        other
        concerns arising from Errors or Omissions or Defects), Contractor shall be
        granted a day for day extension of the Cure
        Period.




15.5           Extension
      of Cure Period.  Notwithstanding anything to the contrary herein,
      in the event Contractor has been unable to meet the applicable Performance
      Guarantees with respect to a Unit on or prior to the expiration of the initial
      one hundred eight (180) day Cure Period for such Unit, Contractor may submit
      to
      Owner for approval a revised Remedial Plan setting forth in specificity and
      detail the corrective actions which Contractor proposes to undertake to enable
      the Unit to achieve the applicable Performance Guarantees during any extended
      Cure Period.  Upon Owner’s approval of such revised Remedial Plan, not
      to be unreasonably withheld, the Cure Period for such Unit shall be extended
      for
      the period of time set forth in the Remedial Plan, but in no event for more
      than
      one hundred eighty (180) days; provided, however, that the Unit
      continues to meet the Minimum Performance Criteria with respect to both Net
      Unit
      Capacity and Net Unit Heat Rate; provided, further, that
      Contractor shall pay the Performance Liquidated Damages due and owing to Owner
      pursuant to Section15.3 with
      respect to such Unit within ten (10) business days of Owner’s approval of such
      revised Remedial Plan, such Performance Liquidated
      Damages.  Notwithstanding anything to the contrary, in the event the
      Unit 1 Boiler Upgrade Supplier, Alstom Power Inc., is entitled to an
      extension of the initial one hundred eighty




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(180)
      day Cure Period pursuant to the terms of such Boiler Upgrade Supplier’s Boiler
      Upgrade Contract, and Contractor and such Boiler Upgrade Supplier submit a
      Remedial Plan requiring an extension that will exceed one hundred eighty (180)
      days, Owner shall not unreasonably withhold approval of such Remedial Plan
      and,
      provided Unit 1 continues to meet the Minimum Performance Criteria with
      respect to both Net Unit Capacity and Net Unit Heat Rate and Contractor pays
      the
      Performance Liquidated Damages as provided in the foregoing sentence, the Cure
      Period for Unit 1 for such Boiler Upgrade Supplier only shall be extended
      for the period of time set forth in the Remedial Plan, but in no event for
      more
      than three hundred sixty (360) days.




15.6           Sole
      Remedy; Liquidated Damages Not a Penalty.  The amounts payable
      under Sections15.1 or 15.3,
      as limited by Article31, and the other remedies provided
      for in this
Article15 shall be the sole and
      exclusive remedies of Owner for delays in Substantial Completion, and for
      failure of a Unit to meet the Performance Guarantees (other than the
      Environmental Compliance Guarantees) during the Acceptance Tests, except to
      the
      extent a delay in Substantial Completion becomes a Contractor Event of Default
      pursuant to Section19.1(g).  The Parties agree that
      Owner’s actual damages, as applicable, in the event of such delays or failures
      would be extremely difficult or impracticable to determine and that Owner’s
      estimate of its costs and revenues in the event of such delays or failures
      significantly exceed the amount of the liquidated damages provided
      herein.  After negotiation, the Parties have agreed that the Delay
      Liquidated Damages and the Performance Liquidated Damages do not exceed the
      damages that Owner would incur as a result of such delays or failures and are
      in
      the nature of liquidated damages, and not a penalty.  For the
      avoidance of doubt, Contractor shall have an absolute obligation to cause each
      Unit (subject to Sections19.3,
31.1
      and 31.2):  (a) to successfully
      achieve Mechanical Completion; (b) to successfully achieve the
      Environmental Compliance Guarantees; and (c) to achieve the Minimum
      Performance Criteria.




15.7           Enforceability.  The
      Parties explicitly agree and intend that the provisions of this
Article15 shall be fully
      enforceable by any court exercising jurisdiction over any dispute between the
      Parties arising under this Agreement.  Each party hereby irrevocably
      waives any defenses available to it under law or equity relating to the
      enforceability of the liquidated damages provisions set forth in this
Article15.




15.8           True-Up.  The
      Parties acknowledge and agree that the Performance Liquidated Damages, if any,
      paid upon the extension of the Cure Period for a Unit pursuant to
Section15.5 will be based upon
      results of the most recent Performance Tests, and that the results of the
      Performance Tests at the end of the extended Cure Period may
      vary.  Upon completion of the final Performance Tests of such Unit
      completed during any such extended Cure Period, the Parties shall meet and
      review the results of such Performance Tests.  If the amounts paid as
      Performance Liquidated Damages pursuant to Section15.5 are less than the amounts that
      Contractor
      should have paid based on the results of the final Performance Tests of such
      Unit completed during such extended Cure Period, Contractor shall pay to Owner
      such deficiency within ten (10) days after the Parties agree on such
      results.  If the amounts paid as Performance Liquidated Damages
      pursuant to Section15.5 exceed
      the amounts that Contractor should have paid based on the final Performance
      Test
      results of such Unit completed during such extended Cure Period, Owner shall
      refund to Contractor such excess within ten (10) days after the Parties agree
      on
      such results.




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16.           **CHANGES
      IN THE WORK**




16.1           Change
      In Work.  A Change In Work may result only from any of the
      following:




(a)           Changes
      in the Work required by Owner in writing;




(b)           the
      addition to, modification of or deletion from the Work (performed or yet to
      be
      performed) or the Project during the performance of the Work;




(c)           the
      occurrence of an Excusable Event (as and only to the extent permitted by
Section8.6.2);




(d)           the
      occurrence of an event of Force Majeure (as and only to the extent permitted
      by
Section8.6.1);




(e)           Owner’s
      request to accelerate the Work;




(f)           an
      Owner Directive, in accordance with Section16.7;




(g)           in
      the event Contractor fails to achieve the Substantial Completion Guaranteed
      Date
      for a Unit due to a delay solely attributable to failure of the pressure
      induction welds in Unit 1 or the pressure induction welds in the economizer
      for the Unit 2 boiler;




(h)           in
      the event Roberts and Schafer is selected as the Subcontractor for supply of
      the
      materials handling system, and fails to complete its scope of work under its
      subcontract due to its insolvency or bankruptcy, and Contractor fails to achieve
      the Substantial Completion Guaranteed Date for a Unit due to a delay solely
      attributable to such Subcontractor’s failure to complete its scope of
      work;




(i)           the
      determination by the Executive Labor Committee that the Craft Labor Compensation
      must be increased in order for Contractor to attract or retain sufficient
      qualified craft labor personnel to perform the on-Site Work as necessary for
      Contractor to maintain the Project Schedule;




(j)           Owner
      requested delay in the Work or actions by third parties providing services
      to
      the Project at the Site but that are outside the scope of the Work and that
      impact Contractor’s performance of the Work; or




(k)           Events
      entitling Contractor to a change in the Work, Separated Target Price, Separated
      Contract Price or the Substantial Completion Guaranteed Dates as set forth
      in
Sections2.7.1, 3.5.7,
5.3.1,
9.2,
      16.7, 21.1.2,
21.1.15,
22.1.2,
33.9.1,
      and
Exhibit DD.




Contractor
      and Owner acknowledge and
      agree that as of the date hereof Contractor is negotiating amendments and
      modifications to the STG Upgrade Contract with the STG Upgrade
      Supplier.  Notwithstanding anything to the contrary herein, Contractor
      acknowledges and agrees that Contractor shall not be entitled to a Change In
      Work with respect to any such amendment or modification to the STG Upgrade
      Contract; provided that Contractor may be entitled to a Change




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in
      Work to the extent such amendment or modification is made in connection with
      resolution of an open item identified on Exhibit DD.




16.2           By
      Owner.  Owner shall have the right to make changes in the Work,
      within the general scope thereof, whether such changes are modifications,
      accelerations, alterations, additions, or deletions.  All such changes
      shall be made in accordance with this Article16, be documented in accordance
      with
Section16.4 and shall be
      considered, for all purposes of this Agreement, as part of the
      Work.




16.3           Adjustment
      to Substantial Completion Guaranteed Dates and Separated Contract Price Due
      to
      Certain Events.




16.3.1                      Adjustments
      to Substantial Completion Guaranteed Dates.  If an Excusable Event
      occurs, the Project Schedule (and the Substantial Completion Guaranteed Dates
      referenced therein) shall be extended as and to the extent provided in
Section8.6.2 and as set forth
      in the Change In Work Form accepted by Owner.  If an event of Force
      Majeure occurs, the Project Schedule (and the Substantial Completion Guaranteed
      Dates referenced therein) shall be extended as and to the extent provided in
      Section8.6.1 and as set forth
      in a Change In Work Form accepted by Owner.  If an event described in
Section16.1(g) occurs, the
      Project Schedule (and the Substantial Completion Guaranteed Date referenced
      therein for Unit 1 or Unit 2, as applicable) shall be equitably
      extended as necessary for the repair of such welds and as set forth in a Change
      In Work Form accepted by Owner; provided that Contractor uses all
      reasonable efforts to mitigate the duration of any delay in achieving the
      Substantial Completion Guaranteed Date.  If an event described in
Section16.1(h) occurs, the
      Project Schedule (and the Substantial Completion Guaranteed Date referenced
      therein for Unit 1 and Unit 2, as applicable) shall be equitably
      extended to the extent necessary to complete such scope of work and as set
      forth
      in a Change In Work Form accepted by Owner; provided that Contractor uses
      all reasonable efforts to mitigate the duration of any delay in achieving the
      Substantial Completion Guaranteed Date.




16.3.2                      Adjustments
      to Separated Target Price and Separated Contract Price.  In the
      event of an Excusable Event, or the occurrence of an event of Force Majeure
      that
      delays the Work for five (5) or more consecutive days or of multiple events
      of
      Force Majeure that delays the Work for more than fifteen (15) days in the
      aggregate, the Separated Target Price or the Separated Contract Price, as
      applicable, shall be adjusted by the sum of:  (i) the difference
      of the direct costs (without profit, overhead or contingency), including third
      party costs, incurred by Contractor because of such Change In Work; less any
      savings or costs not incurred because of such Change In Work; plus (ii) an
      allowance for profit in accordance with Exhibit Y; provided
      that Contractor shall be entitled to a Change In Work adjusting the Separated
      Target Price or the Separated Contract Price, as applicable, only to the extent
      Contractor can reasonably demonstrate that the Separated Target Price or the
      Separated Contract Price, as applicable, is affected by such Excusable Event
      or
      event of Force Majeure.




16.3.3                      Adjustments
      to Separated Contract Price.  If an event described in
Section16.1(i) occurs, the
      Separated Contract Price shall be adjusted by an amount equal to the Craft
      Labor
      Compensation Escalation Amount pursuant to a Change In Work reflecting such
      amount.  If Contractor’s representatives on the Executive Labor
      Committee approve an increase in Craft Labor Compensation, but the Executive
      Labor Committee does not unanimously




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 approve
        such an increase, Contractor may submit a Change In Work to adjust the
        Substantial Completion Guaranteed Dates for Unit 1 or Unit 2, as
        applicable, and to adjust the Separated Contract Price.  If Contractor
        is entitled to submit a Change In Work pursuant to the foregoing sentence,
        the
        Substantial Completion Guaranteed Date for Unit 1 or Unit 2, as
        applicable, shall be equitably adjusted pursuant to a Change In Work by the
        amount of time Contractor is actually and demonstrably delayed in the
        performance of the Work due to the lack of sufficient qualified craft labor
        personnel, and such Change In Work may also adjust the Separated Contract
        Price
        to the extent Contractor can reasonably demonstrate that Contractor will
        incur
        additional costs (but not including any increases in Craft Labor Compensation)
        not included in the Separated Contract Price as a direct result of such change
        in such Substantial Completion Guaranteed Dates.




16.4           Preparation
      of Change In Work Form.  Upon the occurrence of any of the events
      set forth in Section16.1, Owner
      or Contractor, as applicable, shall provide the other party with a Notice of
      the
      occurrence of such event, subject to Section8.2, and Contractor shall, as soon
      as
      practicable, prepare and submit to Owner a preliminary written estimate relating
      to the proposed Change In Work, including (i) any projected change in the
      cost of the performance of the Work and any projected modification of the
      Separated Target Price, or the Separated Contract Price, as applicable,
      occasioned by such Change In Work, (ii) the effect such Change In Work
      could be expected to have on the Project Schedule, the Milestone Items, the
      Substantial Completion Guaranteed Dates or any other schedule or dates for
      performance by Contractor hereunder, and (iii) the potential effect of such
      Change In Work on Contractor’s ability to comply with any of its obligations
      hereunder, including Contractor’s warranties and the Performance
      Guarantees.  If Owner elects to proceed with a more detailed
      examination of such proposed Change In Work, within such period as shall be
      agreed upon by the parties, Contractor shall submit to Owner a detailed estimate
      relating to the contemplated Change on a written Change Order.  If
      Owner elects to proceed with the proposed Change In Work, Owner and Contractor
      shall agree upon a Change In Work Form, and the cost of preparation of
      Contractor’s detailed estimate shall be included in such Change In
      Work.  If Owner elects not to proceed with such proposed Change In
      Work, Owner agrees to reimburse Contractor for Contractor’s reasonable expenses
      incurred in connection with the preparation of the detailed estimate of such
      proposed Change In Work in accordance with the rates and markups pursuant to
      Exhibit Y, and as part of the next Invoice Payment on which such
      costs are included.  Contractor’s proposed change in the Contract
      Price for such Change In Work shall propose a lump sum (with detailed estimates
      and quotation backup).  Contractor’s estimate of the cost of any
      Change shall include and identify all elements of cost and a total lump sum
      cost
      using the following guidelines: labor to include category and estimated hours,
      travel and other related expenses; materials to include category and quantity;
      Subcontractor and Supplier work to be identified with quotation or other
      estimate basis; and fee.




16.5           Execution
      of Change In Work Form.  If Contractor and Owner reach agreement
      on the matters listed in the Change In Work Form submitted by Contractor,
      Contractor shall execute such Change In Work Form in accordance with
Section33.4, and Owner shall
      sign “Accepted by Owner” on such Change In Work Form and execute such Change In
      Work Form (indicating any amendments necessary to reflect the agreement of
      the
      Parties) in accordance with Section33.4.  If the Parties cannot reach
      agreement on the matters listed in the Change In Work Form submitted pursuant
      to
      this Section16.5, then such
      matter shall be referred to dispute resolution under Article32.  Notwithstanding anything to the
      contrary in the foregoing, the Project Representative shall be authorized to
      execute Change In Work Forms to the extent of the




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 approval
        amount authorized in Owner’s delegation of authority for such Project
        Representative; provided that Owner shall notify Contractor in writing
        prior to the Full Notice to Proceed Date of the Project Representative’s
        approval amount.




16.6           No
      Obligation or Payment Without Executed Change In Work
      Form.  CONTRACTOR SHALL NOT BE ENTITLED TO UNDERTAKE OR BE
      OBLIGATED TO UNDERTAKE A CHANGE IN WORK UNTIL CONTRACTOR HAS RECEIVED A CHANGE
      IN WORK FORM SUBMITTED BY CONTRACTOR AND ACCEPTED BY OWNER AND, EXCEPT AS SET
      FORTH IN SECTION16.7, OR IN THE
      EVENT IMMEDIATE ACTION IS REASONABLY REQUIRED TO ADDRESS AN EMERGENCY WHICH
      ENDANGERS HUMAN HEALTH OR PROPERTY.  IN THE ABSENCE OF SUCH EXECUTED
      CHANGE IN WORK FORM, IF CONTRACTOR UNDERTAKES ANY CHANGES IN THE WORK,
      CONTRACTOR SHALL MAKE ANY SUCH CHANGES AT CONTRACTOR’S SOLE RISK AND EXPENSE AND
      SHALL NOT BE ENTITLED TO ANY SCHEDULE MODIFICATION OR PAYMENT HEREUNDER FOR
      UNDERTAKING SUCH CHANGES.  NOTHING IN THIS SECTION16.6 SHALL BE DEEMED TO WAIVE CONTRACTOR’S OR
      OWNER’S RIGHT TO AVAIL ITSELF OF THE DISPUTE RESOLUTION PROCEDURES PURSUANT TO
ARTICLE32 WITH RESPECT TO
      DISPUTED CHANGE IN WORK FORMS.




16.7           Owner
      Directives.  If Contractor and Owner are unable to agree on
      whether a Change In Work has occurred or on the matters described in a Change
      In
      Work Form, whether such Change In Work Form was initiated by Contractor or
      by
      Owner, Contractor shall perform the Work as Owner so directs in writing (an
      “**Owner Directive**”) on a time-and-materials basis in accordance
      with the rates set forth on the rates set forth on Exhibit Y, and
      the Parties shall mutually agree on an equitable adjustment of the applicable
      Substantial Completion Guaranteed Dates on account of such Change In
      Work.  Owner shall assign a Pending Item Claim number to the Work in
      question and shall issue Contractor a notice to proceed.  Contractor
      shall proceed to perform the work in question on a time and material basis
      in
      accordance with the compensation schedule set forth in
Exhibit Y.  Using the Pending Item Claim number to
      identify the Work in question, Contractor shall be entitled to submit a
      Contractor’s Invoice to Owner for payment for the time and material costs, and
      subject to the provisions of Article6, Owner shall pay such invoiced
      amount until
      Contractor and Owner resolve their dispute regarding such Owner
      Directive.




16.8           Disputed
      Changes In Work.  Any disputes regarding a Change In Work Form or
      whether a Change In Work has occurred or that are otherwise related to a Change
      In Work shall be subject to the dispute resolution provisions of
Article32.




16.9           Changes
      in Work All Inclusive.  Contractor agrees that each Change In Work
      Form executed pursuant to the provisions of this Article16 shall include all compensation
      to be
      provided to Contractor related to such Change In Work within the agreed scope,
      qualifications and assumptions at the time of execution of such Change In Work
      Form, including any changes in the Substantial Completion Guaranteed Dates
      or
      the Separated Contract Price.




16.10                      No
      Suspension.  Notwithstanding any dispute between Owner and
      Contractor regarding a proposed Change In Work, Owner Directive, Contractor’s
      claim regarding the




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 impact
        of a change upon the Separated Contract Price or whether a Change In Work
        has in
        fact occurred, Contractor shall not suspend the Work unless directed by Owner
        in
        writing in accordance with Section20.4, and Owner shall continue
        to make payments
        to Contractor based on the Schedule of Payment Values then in effect, pending
        resolution of such dispute.




16.11                      Change
      for Contractor’s Convenience.  Contractor shall have the right to
      take any action at its own expense that is generally consistent with this
      Agreement and that Contractor in good faith determines to be reasonably
      necessary to meet the requirements of this Agreement.  In the event
      such action involves substitution of Equipment or Materials as set forth in
      this
      Agreement or the replacement of Subcontractors, or a deletion from, or
      modification of the Work as described in this Agreement or any Contractor
      Deliverable, Contractor shall obtain Owner’s written approval prior to
      undertaking such action.  Contractor shall not be entitled to any
      adjustment to the Separated Contract Price, any Substantial Completion
      Guaranteed Date, or any other term or condition of this Agreement in respect
      of
      any action undertaken pursuant to this Section16.11.




17.           **WARRANTIES
      CONCERNING THE WORK**




17.1           Work
      Warranty.  Contractor warrants to Owner (the “**Work
      Warranty**”) that all Work (other than engineering and design Work and
      Work covered by the Materials Warranty), including Contractor’s (and its
      Subcontractor’s) construction of the Project and the installation of the
      Equipment and Materials:




(a)           shall
      be Industry Grade;




(b)           shall
      be free from Defects;




(c)           shall
      conform to all applicable requirements of this Agreement, the Submittals
      approved or accepted by Owner, Applicable Laws and the Applicable Permits;
      and




(d)           shall
      be generally fit for the purpose of generation of electric power in accordance
      with and subject to the terms of this Agreement when operated in accordance
      with
      prudent operating practices.




Contractor
      further warrants that the engineering and design Work shall be completed without
      Errors and Omissions.




17.2           Materials
      Warranty.  Contractor further warrants that all Equipment and
      Materials, including the Owner Furnished Equipment, furnished by Contractor
      and
      any Subcontractors hereunder (the “**Materials
      Warranty**”):




(a)           shall
      be new (other than the Owner Furnished Equipment) and of good quality when
      installed;




(b)           shall
      conform to the requirements of this Agreement, the Submittals, all Applicable
      Laws and the Applicable Permits;




(c)           shall
      be free from any charge, lien, security interest or other
      encumbrance;




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(d)           shall
      be free of Defects including Defects in materials, fabrication or workmanship;
      and




(e)           shall
      be generally fit for the purpose of generation of electric power in accordance
      with and subject to the terms of this Agreement when operated in accordance
      with
      prudent operating practices.




If
      reasonably requested by Owner during the Warranty Period due to concerns that
      any Work or Equipment and Materials may not satisfy the Work Warranty or the
      Materials Warranty, Contractor shall promptly provide Owner with reasonable
      evidence that such item(s) of the Work or Equipment and Materials do satisfy
      the
      Work Warranty or Materials Warranty, as applicable.




17.3           Warranty
      Period.  Contractor shall have no liability under
Section17.1 or 17.2
      with respect to a Unit from and after the
      end of the twelve (12) month period commencing on the Substantial Completion
      Date of such Unit (the “**Warranty Period**”); provided,
however, that the Warranty Period for any Work,
      Equipment and Materials,
      item or part required to be re-performed, repaired, corrected or replaced
      following discovery of an Error or Omission or Defect during the original
      Warranty Period shall be extended from the time of such re-performance, repair,
      correction or replacement for a period equal to the original Warranty Period
      for
      such item or part; provided, further, in no event shall the
      Warranty Period as extended for any Work, item or part extend for more than
      twelve (12) months after the end of the initial Warranty Period for the relevant
      Unit.




17.4           Enforcement
      by Owner.  Commencing on the expiration of the applicable Warranty
      Period, Owner shall be entitled to enforce all unexpired representations,
      warranties, and guarantees with respect to the Project from Subcontractors,
      and
      Contractor shall provide reasonable assistance to Owner, at no additional cost,
      in enforcing such representations, warranties, and guarantees, when and as
      reasonably requested by Owner.  In addition, prior to the expiration
      of the applicable Warranty Period, Owner, at its option and upon prior written
      Notice to Contractor, may enforce the particular warranty, the Work Warranty
      or
      the Materials Warranty against any Subcontractor if:




(a)           a
      Contractor Event of Default exists and this Agreement has been terminated in
      accordance with Article19.




17.5           Exclusions.  The
      Work Warranty and Materials Warranty set forth in Sections17.1 and 17.2
      shall not apply to:




(a)           Damage
      to or failure of any Equipment and Materials to the extent such damage or
      failure is caused by:




(i)           a
      material failure by Owner or its representatives, agents or contractors to
      operate and maintain such Equipment and Materials in accordance with Industry
      Standards or in accordance with the recommendations set forth in the Required
      Manuals but only if such failure occurs after Substantial Completion of the
      relevant Unit;




(ii)           operation
      of such Equipment and Materials by Owner in excess of or outside of the
      operating parameters or specifications for such Equipment and Materials as
      set




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 forth
        in the Required Manuals but only if such failure occurs after Substantial
        Completion of the relevant Unit;




(iii)           the
      use of spare parts and normal consumables by Owner in the repair or maintenance
      of such Equipment and Materials that are not materially in accordance with
      specifications and recommendations set forth in the Required Manuals but only
      if
      such failure occurs after Substantial Completion of the relevant Unit;
      or




(iv)           an
      event of Force Majeure.




(b)           Normal
      Operating Consumables or items that require replacement due to normal wear
      and
      tear, normal erosion or corrosion, or casualty loss (other than as a result
      of
      any failure of the Work Warranty or the Materials Warranty).




Notwithstanding
      the foregoing, during the period that Contractor has care, custody and control
      of a Unit, any adverse stress or damage to the Equipment and Materials caused
      by
      Operating Personnel while under the direction of Contractor shall be the
      responsibility of Contractor, except to the extent such Operating Personnels’
acts or omissions constitute gross negligence or willful
      misconduct.




Further,
      Contractor shall have no warranty obligation or liability for Defects or
      deficiencies in the Work if Contractor reasonably demonstrates that the Defect
      or deficiency is attributable to Contractor’s reliance upon or use of design
      criteria, drawings or specifications provided by Owner expressly for use in
      the
      performance of the Work.




17.6           Subcontractor
      Warranties.  Contractor shall obtain warranties for all Work
      performed by each Subcontractor on terms at least as favorable as this
Article17.  Notwithstanding the foregoing,
      Contractor shall obtain from the Supplier supplying the emission reduction
      catalysts a warranty that the emission reduction catalysts for the Project
      shall
      provide the emission reductions set forth in Exhibit I-1 for a
      period ending forty-eight (48) months after the Substantial Completion
      Date, and an affirmative obligation of the Suppliers of the components of the
      emissions system to provide technical assistance and field support in optimizing
      the performance of their respective components of the emissions system, as
      Owner
      requests.  Contractor shall assign all unexpired representations,
      warranties, guarantees, and obligations of all Subcontractors, at the request
      and direction of Owner, to Owner or any Financing Entity upon termination or
      expiration of this Agreement in accordance with its terms; provided,
however, that, notwithstanding such assignment, Contractor shall be
      entitled to enforce each such representation, warranty, guarantee, and
      obligation through the end of the Warranty Period.  In addition,
      Contractor hereby assigns to Owner, effective as of the end of the Warranty
      Period, all remaining representations, warranties, guarantees and obligations
      of
      all Subcontractors (excluding performance or schedule guarantees for which
      liquidated damages are provided as a remedy and for which the maximum amount
      of
      liquidated damages have already been paid to
      Contractor).  Notwithstanding the foregoing, Contractor shall not be
      obligated to assign any claims of Contractor with respect to such subcontract
      or
      Subcontractor then existing.  Contractor shall cause Owner to be an
      express third-party beneficiary of all such representations, warranties,
      guarantees and obligations.  Contractor shall deliver to Owner
      promptly following




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 execution
        thereof duly executed copies of all subcontracts containing such
        representations, warranties, guarantees, and
        obligations.




17.7           Correction
      of Errors or Omissions and Defects.




17.7.1                      Notice
      of Warranty Claim.  Subject to Section17.7.5, Owner shall provide Notice
      to
      Contractor within a reasonable period after discovery that any of the Work
      fails
      to satisfy the Work Warranty or the Materials Warranty during the applicable
      Warranty Period.  Contractor shall, at Contractor’s own cost and
      expense (including overtime, but excluding insurance proceeds to the extent
      actually received) refinish, repair or replace, at its option, such
      nonconforming or defective part of the Work, within its original Scope of Work,
      including re-performing any necessary engineering and purchasing relating to
      such Work, and shall pay the cost of removing any Error or Omission or Defect
      and the cost of re-performing, repairing, replacing or testing such subject
      Work, including any damage to the surrounding Work (subject to the limitations
      provided in Section22.2), as
      shall be necessary to cause the Work and the Project to conform to the Work
      Warranty or Materials Warranty.  In addition, subject to the
      limitations provided in Section22.2, Contractor shall, at its own
      cost and
      expense (including overtime, but excluding insurance proceeds to the extent
      actually received), repair and replace any portion of the Work that is damaged
      or destroyed because any of the Work shall fail to satisfy the Work Warranty
      or
      the Materials Warranty during the applicable Warranty Period, all in accordance
      with the Warranty Procedures.  Within five (5) Business Days
      after receipt by Contractor of a Notice from Owner delivered during the Warranty
      Period specifying a failure of any of the Work to satisfy Contractor’s Work
      Warranty or the Materials Warranty and requesting Contractor to correct the
      failure, Contractor and Owner shall mutually agree when and how Contractor
      shall
      remedy such failure (the “**Warranty Procedures**”).  The
      timing of and the Work to be completed with respect to any such remediation
      or
      repair shall be subject to Owner’s approval.  No such remediation or
      repair shall be considered complete until Owner shall have reviewed and approved
      such completed remedial work.  Notwithstanding the foregoing and
      subject to Section17.7.2.2, if
      any of the Work shall fail to satisfy Contractor’s Work Warranty or the
      Materials Warranty, and such failure endangers human health or property or
      materially and adversely affects the operation of the Project, Contractor shall
      correct the failure as soon as is reasonably practicable.




17.7.2                      Owner
      Performance.




17.7.2.1                      Upon
      Contractor’s Request.  Notwithstanding the foregoing, Contractor
      may request Owner to perform all or any portion of Contractor’s obligations with
      respect to any warranty claim.  Upon such request, Owner may elect to
      perform such obligations in Owner’s sole discretion, and if Owner elects not to
      perform such obligations, Contractor shall remain obligated to and shall perform
      such obligations.  Contractor shall reimburse Owner for all costs and
      expenses incurred by Owner (including costs of Owner’s personnel, but excluding
      overhead, corporate burdens, profit, and the like) to perform Contractor’s
      obligations with respect to such warranty claim within ten (10) Business Days
      of
      receiving Owner’s request for payment of such costs.




17.7.2.2                      Failure
      of Contractor to Perform Warranty Work.  If Contractor does not
      use its reasonable efforts to proceed to complete the Work, or cause any
      relevant




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 Subcontractor
        to proceed to complete the Work, required to satisfy any warranty claim properly
        asserted under the terms of this Article17 within the agreed time, or
        if Contractor and
        Owner fail to reach such an agreement within such five (5) day period set
        forth in Section17.7.1, Owner
        shall, after giving Contractor at least five (5) days prior Notice of Owner’s
        intent to perform the remedy itself, have the right to perform the necessary
        remedy, or have third parties perform the necessary remedy and Contractor
        shall
        bear the reasonable costs thereof.  If Contractor (or the relevant
        Subcontractor) begins to perform the Work to satisfy such warranty claim
        during
        such five (5) day period, Owner shall not perform, or cause any third party
        to
        perform, such remedy.  In the event any of the Work fails to satisfy
        the Work Warranty or the Materials Warranty during the applicable Warranty
        Period and any such failure occurs under circumstances in which there is
        an
        immediate need for repairs, Owner may perform such warranty work for
        Contractor’s account; provided that Owner provides reasonably prompt
        Notice to Contractor of such immediate need.




17.7.3                      Replaced
      Components Demonstrations.  If, during the Warranty Period,
      Contractor changes, repairs or replaces any Equipment and Materials (any such
      item changed, repaired or replaced, a “**Component**”), Contractor
      and Owner shall mutually agree on how to demonstrate to Owner, taking into
      consideration Owner’s reasonable requirements, that such Component meets the
      intent of the Project design conditions.




17.7.4                      Continual
      Failure of Component.  Should Contractor fail to correct any Error
      or Omission or Defect in the Work during the Warranty Period that results in
      a
      Component failing more than once to meet the Work Warranty or the Material
      Warranty during the Warranty Period, Owner shall provide Notice to Contractor
      of
      such failure, Contractor shall determine what changes, repairs or replacements
      to the Component are necessary to correct the Error or Omission or Defect or
      avoid further failures of such Component, and shall make such necessary changes,
      repairs or replacements.  In each case, during the Warranty Period
      Contractor shall repeat such process on an iterative basis until the Error
      or
      Omission or Defect and the underlying cause thereof or of the continuing failure
      is corrected.




17.7.5                      Owner’s
      Warranty Option.  Owner and Contractor acknowledge and agree that
      it may be impracticable or otherwise not in Owner’s best interest to re-perform
      any Work or fix any defective Equipment and Materials which fails to satisfy
      the
      Work Warranty or Materials Warranty pursuant to the provisions of
Section17.7.1.  Such
      impracticability may be due to, among other things, considerations concerning
      the length of time a Unit may be shutdown in order to re-perform such
      nonconforming Work or risks to the other portions of the Project as a result
      of
      such re-performance.  As a consequence thereof, the Parties expressly
      agree that in lieu of re-performing any Work so as to cause the Project to
      satisfy the Work Warranty and Materials Warranty, Owner shall have the option
      (the “**Warranty Payment Option**”) (which option Owner shall
      exercise (if at all) by Notice to Contractor within ten (10) days after Owner
      initially Notifies Contractor of such non-conforming Work pursuant to the first
      sentence of Section17.7.1) to
      require Contractor to pay to Owner, in lieu of re-performing such Work, an
      amount equal to the estimated cost to Contractor to re-perform any necessary
      engineering and purchasing relating to such non-conforming Work, plus the cost
      of removing any non-conforming Work and the cost of re-performing, repairing
      or
      replacing such subject Work, including any damage to the surrounding Work
      (subject to the limitations provided in Section22.2), all as would be necessary
      to cause the
      Work and or the applicable Equipment and




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 Materials
        to conform to the Work Warranty and Materials Warranty.  If Owner
        exercises its Warranty Payment Option with respect to any non-conforming
        Work,
        Contractor shall provide its estimated costs to Owner for approval within
        ten
        (10) days of receipt of Notice from Owner that Owner has exercised the Warranty
        Payment Option, and shall pay all such estimated costs, as approved by Owner,
        to
        Owner within ten (10) Business Days after Notice of such demand from
        Owner.  If Owner exercises its Warranty Payment Option with respect to
        any non-conforming Work, and Contractor pays all such costs with respect
        to such
        non-conforming Work, Contractor’s warranty obligations hereunder with respect to
        such non-conforming Work shall be deemed satisfied.




17.8           Limitations
      On Warranties.  EXCEPT FOR THE EXPRESS WARRANTIES AND
      REPRESENTATIONS SET FORTH IN ARTICLE4, THIS ARTICLE17
      AND SECTION25.4, CONTRACTOR DOES NOT MAKE ANY
      OTHER
      EXPRESS WARRANTIES OR REPRESENTATIONS, OR ANY IMPLIED WARRANTIES OR
      REPRESENTATIONS, OF ANY KIND, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY
      OR FITNESS FOR PURPOSE.  THE REMEDIES PROVIDED FOR IN THIS
ARTICLE17 WITH RESPECT TO ANY
      WORK WHICH FAILS TO SATISFY THE WORK WARRANTY OR THE MATERIALS WARRANTY DURING
      THE WARRANTY PERIOD, AND IF SUCH FAILURE CONSTITUTES A CONTRACTOR EVENT OF
      DEFAULT, THE REMEDIES PROVIDED FOR IN SECTIONS19.2(B) AND 19.2(D)THROUGH
19.2(G),
      SHALL BE THE SOLE AND EXCLUSIVE
      REMEDIES FOR OWNER AS A RESULT OF SUCH FAILURE.




18.           **EQUIPMENT
      IMPORTATION; TITLE**




18.1           Importation
      of Equipment and Materials.  Contractor, at its own cost and
      expense, shall make all arrangements, including the processing of all
      documentation, necessary to import into the United States Equipment and
      Materials to be incorporated into the Project and any other equipment and other
      items necessary to perform the Work and shall coordinate with the applicable
      Governmental Authorities in achieving clearance of United States customs for
      all
      such Equipment and Materials and other items and, to the extent available under
      Applicable Laws of the United States but without limiting Contractor’s liability
      for any and all import duties, taxes and levies as specified in
Sections5.7 and 5.8,
      achieving such importation duty- and
      tax-free.  In no event shall Owner be responsible for any delays in
      customs clearance or any resulting delays in performance of the
      Work.




18.2           Title.




18.2.1                      Condition.  To
      the extent Owner’s payments to Contractor are made in accordance with this
      Agreement, Contractor warrants good title, free and clear of all liens, claims,
      charges, security interests, and encumbrances whatsoever, to all Equipment
      and
      Materials and other items furnished by it or any of its Subcontractors that
      become part of the Project or that are to be used for the operation,
      maintenance, or repair thereof; provided that such warranty with respect
      to the Owner Furnished Equipment and the Leased Equipment, if any, shall be
      limited to title being free and clear of all liens, claims, charges, security
      interests and encumbrances, except for those encumbrances which may be created
      by action of Owner associated with any financing of the Project.




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18.2.2                      Transfer.  Title
      to all Equipment and Materials and other items, other than the Owner Furnished
      Equipment and the Leased Equipment, shall pass to Owner, and with respect to
      the
      Owner Furnished Equipment, shall be retained by Owner, free and clear of all
      liens, claims, charges, security interests, and encumbrances whatsoever, except
      for those encumbrances which may be created by action of Owner associated with
      any financing of, upon delivery of such Equipment and Materials or other items
      to the Project and payment by Owner to Contractor therefor.




18.2.3                      Custody
      During Performance.  The transfer of title shall in no way affect
      Owner’s rights as set forth in any other provision of this
      Agreement.  Subject to Section3.5.5, Contractor shall have care,
      custody, and
      control of all Equipment and Materials, the Owner Furnished Equipment and other
      items and exercise due care with respect thereto until the earlier of the
      Substantial Completion Date and the termination of this Agreement.




18.3           Protection.  For
      the purpose of protecting Owner’s interest in all Equipment and Materials,
      including the Owner Furnished Equipment, and other items with respect to which
      title has passed to Owner pursuant to Section18.2 but that remain in possession
      of
      Contractor or any Subcontractor, Contractor shall take or cause to be taken
      all
      steps necessary under the laws of the appropriate jurisdictions(s) (including
      obtaining bailee’s and warehousemen’s waivers) to protect Owner’ title and to
      protect Owner against claims by other parties with respect thereto.




18.4           Owner
      Possession.  On the Substantial Completion Date of each Unit,
      Owner shall take complete possession and control and assume responsibility
      for
      the daily operation and maintenance of such Unit.




19.           **DEFAULT**




19.1           Contractor
      Events of Default.  Contractor immediately shall be in material
      default of its obligations pursuant to this Agreement upon the occurrence of
      any
      one or more events of default set forth below (each, a “**Contractor Event
      of Default**”):




(a)           Contractor
      becomes insolvent, generally does not pay its debts as they become due, admits
      in writing its inability to pay its debts, or makes a general assignment for
      the
      benefit of creditors, or Contractor commences any case, proceeding or other
      action seeking reorganization or receivership, or adopts an arrangement with
      creditors, under any bankruptcy, insolvency, reorganization or similar law
      of
      the United States or any state thereof for the relief of creditors or affecting
      the rights or remedies of creditors generally;




(b)           insolvency,
      receivership, reorganization, or bankruptcy or similar proceedings are commenced
      against Contractor and such proceeding shall remain undismissed or unstayed
      for
      a period of thirty (30) days;




(c)           any
      material representation or warranty made by Contractor herein was false or
      misleading when made and Contractor fails to remedy such false or misleading
      representation or warranty within thirty (30) days after Contractor
      receives a Notice from Owner with respect thereto, except such thirty (30)
      day limit shall be extended if: (i) curing such failure reasonably requires
      more than thirty (30) days; (ii) Contractor commences such cure within
      such thirty (30) day period and diligently prosecutes such cure; and
      (iii) such cure is accomplished




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 within
        seventy five (75) days after the earlier of the date on which Contractor
        first
        knew of such misrepresentation or falsity or the date on which Contractor
        receives a Notice from Owner with respect thereto;




(d)           Contractor
      assigns or transfers this Agreement or any right or interest herein except
      in
      accordance with Article27;




(e)           Contractor
      fails to maintain any insurance coverages required of it in accordance with
      Article21 and Contractor fails
      to remedy such breach within five (5) days after the earlier of the date on
      which Contractor first knew of such breach or the date on which Contractor
      first
      receives a Notice from Owner with respect thereto;




(f)           Contractor
      fails to perform or observe in any respect any provision of this Agreement
      providing for the payment of money to Owner or any other material provision
      of
      this Agreement not otherwise addressed in this Section19.1, including Section19.1(g),
      and such failure continues for
      ten (10) days in the case of a payment obligation and thirty (30) days
      in the case of any other obligation, except such thirty (30) day limit
      shall be extended if: (i) curing such failure reasonably requires more than
      thirty (30) days, (ii) Contractor commences such cure within such
      thirty (30) day period and diligently prosecutes such cure, and (iii) such
      cure is accomplished within seventy five (75) days after the earlier of the
      date
      on which Contractor first knew of such failure to perform or the date on which
      Contractor receives a Notice from Owner with respect thereto;




(g)           the
      Substantial Completion Date of a Unit has not occurred by the three hundred
      sixty-fifth (365th) day after
      the
      Substantial Completion Guaranteed Date for such Unit, as such date may be
      extended pursuant to the provisions of this Agreement; or




(h)           except
      as a result of a Force Majeure event or during the pendency of a suspension
      under Section19.5 herein,
      Contractor abandons the Work;




19.2           Owner’s
      Rights and Remedies.  In the event of a Contractor Event of
      Default Owner or its permitted assignees shall have the following rights and
      remedies and may elect to pursue any or all of them, in addition to any other
      rights and remedies under this Agreement that may be available to Owner or
      its
      permitted assignees, and Contractor shall have the following obligations:




(a)           Owner,
      without prejudice to any of its other rights or remedies under this Agreement,
      may terminate this Agreement by giving written Notice of such termination to
      Contractor; provided that in the event of a Contractor Event of Default
      pursuant to Section19.1(a) or
(b),
      Owner shall be deemed to have given
      Notice of termination to Contractor immediately upon the occurrence of such
      a
      Contractor Event of Default, and all amounts owing by Contractor to Owner
      hereunder shall immediately become due and payable;




(b)           Owner
      may, without prejudice to any of its other rights or remedies under this
      Agreement, proceed against any bond, guarantee, letter of credit, or other
      security given by or for the benefit of Contractor for its performance under
      this Agreement;




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(c)           in
      the event Owner terminates this Agreement in accordance with the provisions
      hereof, Contractor shall withdraw from the Site, shall assign to Owner (without
      recourse to Contractor) such of Contractor’s subcontracts as Owner may request,
      and shall deliver and make available to Owner all information, patents, and
      licenses of Contractor related to the Work reasonably necessary to permit Owner
      to complete or cause the completion of the Work, and in connection therewith
      Contractor authorizes Owner and its respective agents to use such information
      in
      completing the Work, shall remove such materials, equipment, tools, and
      instruments used by and any debris or waste materials generated by Contractor
      in
      the performance of the Work as Owner may direct, and Owner may take possession
      of any or all Contractor Deliverables and Site facilities of Contractor related
      to the Work necessary for completion of the Work (whether or not such Contractor
      Deliverables and Site facilities are complete);




(d)           Owner
      shall have the right  to have the Work finished whether by enforcing
      any security given by or for the benefit of Contractor for its performance
      under
      this Agreement or otherwise;




(e)           Owner,
      without limiting Owner’s right to terminate this Agreement, may seek equitable
      relief to cause Contractor to take action, or to refrain from taking action
      pursuant to this Agreement;




(f)           Owner,
      without limiting Owner’s right to terminate this Agreement, may pursue the
      dispute resolution procedures set forth in Article32 to enforce the provisions of
      this
      Agreement;




(g)           Owner
      may make such payments or perform such obligations as are reasonably required
      to
      cure any Contractor Event of Default and offset the cost of such payment or
      performance against payments otherwise due to Contractor under this Agreement;
      and




(h)           in
      the event Owner terminates this Agreement, Owner may seek damages as provided
      in
Section19.3, including
      proceeding against any bond, guarantee, letter of credit, or other security
      given by or for the benefit of Contractor for its performance under this
      Agreement.




19.3           Damages
      for Contractor Default.  In the event of a Contractor Event of
      Default, Owner may terminate this Agreement by delivery of written notice to
      Contractor, and, subject to Article31, Contractor shall be liable
      to Owner
      for  the actual costs of completing the Work, including compensation
      for obtaining a replacement contractor or for obtaining additional professional
      services  required as a consequence of Contractor’s Event of Default,
      in excess of those costs that would have been payable to Contractor but for
      such
      Contractor’s Event of Default (and, to the extent applicable, Contractor shall
      remain liable for the satisfaction of all liabilities incurred prior to Owner’s
      termination (including Contractor’s indemnification obligations hereunder and
      payment of all Delay Liquidated Damages and Performance Liquidated
      Damages)).  In addition, whether or not Owner terminates the
      Agreement, in the event of a Contractor Event of Default, Owner shall be
      entitled to withhold further payments to Contractor for the Work performed
      prior
      to termination of this Agreement until Owner reasonably determines the liability
      of Contractor, if any, under this Section19.3, and in any event no later than
      the date a
      court of competent jurisdiction finally determines Contractor’s




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 liability
        hereunder.  Upon determination of the total cost of the Work, Owner
        shall notify Contractor in writing of the amount, if any, that Contractor
        shall
        pay Owner or Owner shall pay Contractor.  Contractor acknowledges that
        in the event of such a termination, Owner may enter into a turnkey contract
        for
        the completion of the Project with substantially similar or more favorable
        performance guarantees, completion deadlines and liquidated damages as are
        provided for in this Agreement, that such turnkey contract may require the
        replacement contractor to perform all such work on an accelerated basis,
        and
        that, as a result thereof, the cost to complete the Project may greatly exceed
        the cost hereunder.  If it is determined for any reason that
        Contractor was not in default or that Owner was not entitled to the remedy
        against Contractor provided above, the termination will be deemed to be a
        termination for convenience *ab initio* pursuant to
Section20.1 and Contractor’s
        sole and exclusive remedies whether in tort, contract or otherwise against
        Owner
        shall be the same as and shall be strictly limited to those afforded in
Article20 and
Section33.18.  Nothing
        in this paragraph
        shall be deemed to modify the provisions of Article31, nor Contractor’s obligation (a) to
        successfully achieve Mechanical Completion; (b) to successfully achieve the
        Environmental Compliance Guarantees; (c) intentionally omitted;
        (d) intentionally omitted; and (e) to achieve the Minimum Performance
        Criteria.




19.4           Owner
      Event of Default.  Owner shall be immediately in default of its
      obligations pursuant to this Agreement upon the occurrence of any one or more
      events of default below (each, an “**Owner Event of
      Default**”):




(a)           Owner
      becomes insolvent, generally does not pay its debts as they become due, admits
      in writing its inability to pay its debts, or makes a general assignment for
      the
      benefit of creditors, or commences any case, proceeding or other action seeking
      reorganization or receivership, or adopts an arrangement with creditors, under
      any bankruptcy, insolvency, reorganization or similar law of the United States
      or any state thereof for the relief of creditors or affecting the rights or
      remedies of creditors generally;




(b)           insolvency,
      receivership, reorganization, or bankruptcy or similar proceedings are commenced
      against Owner and such proceeding shall remain undismissed or unstayed for
      a
      period of thirty (30) days;




(c)           any
      material representation or warranty made by Owner herein was false or misleading
      when made and Owner fails to remedy such false or misleading representation
      or
      warranty within thirty (30) days after Owner receives a Notice from
      Contractor with respect thereto, except such thirty (30) day limit shall be
      extended if: (i) curing such failure reasonably requires more than
      thirty (30) days, (ii) Owner commences such cure and diligently
      prosecutes such cure, and (iii) such cure is accomplished within seventy
      five (75) days after the earlier of the date on which Owner first knew of the
      misrepresentation or falsity or the date on which Owner first receives a Notice
      from Contractor with respect thereto;




(d)           Owner
      assigns or transfers this Agreement or any right or interest herein, except
      in
      accordance with Article26;




(e)           Owner
      fails to maintain any insurance coverages required of it in accordance with
      Article21 and Owner fails to
      remedy such breach within five (5) days after the




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 earlier
        of the date on which Owner first knew of such misrepresentation or falsity
        or
        the date on which Owner first receives a Notice from Contractor with respect
        thereto; or




(f)           Owner
      fails to perform or observe in any respect any provision of this Agreement
      providing for the payment of money to Contractor or any other material provision
      of this Agreement not otherwise addressed in this Section19.4, and such failure continues
      for
      ten (10) days in the case of a payment obligation and thirty (30) days
      in the case of any other obligation, except such thirty (30) day limit
      shall be extended if: (i) curing such failure reasonably requires more than
      thirty (30) days; (ii) Owner commences such cure within such
      thirty (30) day period and diligently prosecutes such cure; and
      (iii) such cure is accomplished within seventy five (75) days, in each case
      after the earlier of the date on which Owner first knew of such failure to
      perform or the date on which Owner first receives a Notice from Owner with
      respect thereto.




19.5           Contractor’s
      Remedies.  In the event of an Owner Event of Default and subject
      to Article31, Contractor shall
      only have the following rights:




(a)           to
      enforce the guarantee of the Owner’s parent provided pursuant to
Section4.2.6 for the benefit of
      Contractor;




(b)           to
      suspend performance of the Work until Owner cures such Owner Event of Default
      (in which event, Contractor shall be compensated in the manner specified in
      Section20.4.2);




(c)           to
      terminate this Agreement (in which event Contractor shall be compensated in
      the
      manner described in Section20.1
      for termination by Owner for convenience);




(d)           to
      seek equitable relief to enforce the provisions of this Agreement;
      and




(e)           to
      pursue the dispute resolution procedures set forth in Article32 to enforce the provisions of
      this
      Agreement.




20.           **TERMINATION
      FOR CONVENIENCE AND SUSPENSION**




20.1           Termination
      for Convenience.




20.1.1                      Owner’s
      Right to Terminate; Payment.  Owner may in its sole discretion
      terminate the Work with or without cause at any time by giving Notice of
      termination to Contractor, to be effective upon the receipt of such Notice
      by
      Contractor or upon such other termination date specifically identified by Owner
      therein.  If this Agreement is terminated pursuant to this
Section20.1 after the Open Book
      Review has been concluded and the Separated Contract Price has been agreed
      to by
      the Parties, as compensation for the Work performed through the effective date
      of termination, subject to reductions as set in this paragraph below, Owner
      shall pay to Contractor an amount equal to the sum of (g) the reasonable
      cost of the Work properly performed in accordance with this Agreement to the
      date of termination based on the Schedule of Payment Values (and pro-rated
      if
      necessary); plus (h) Contractor’s reasonably incurred out-of-pocket- costs
      of demobilization (as evidenced in writing) including




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 demobilization
        and termination or cancellation or breakage costs of Subcontractors if their
        agreements with Contractor are not assigned to and assumed by Owner pursuant
        to
Section20.1.3; less
        (i) any amounts previously paid to Contractor under this
        Agreement.  If such termination occurs prior to the Completion of the
        Open Book Review and before the Separated Contract Price has been agreed
        upon,
        Owner shall pay Contractor (x) the cost of the Work properly performed in
        accordance with this Agreement to the date of termination based on the rate
        schedule set forth in Exhibit Y, plus (y) Contractor’s
        reasonably incurred out-of-pocket- costs of demobilization (as evidenced
        in
        writing) including demobilization and termination or cancellation costs of
        Subcontractors if their agreements with Contractor are not assigned to and
        assumed by Owner pursuant to Section20.1.3.  Owner shall make payments
        under this Section20.1 in
        accordance with Article6.  Contractor shall not include
        any
        cancellation fees of Contractor in the Schedule of Payment Values or the
        estimated cancellation costs, and shall not be entitled to receive any
        cancellation fees.




20.1.2                      Limitation
      on Payment.  Except as provided in this Section20.1, Contractor shall not be
      entitled to any
      lost profit upon any termination of this Agreement.




20.1.3                      Owner’s
      Right to Elect to Assume Obligations with Subcontractors.  In
      addition, Owner shall have the right, at its sole option, to assume and become
      liable for any written obligations and commitments that Contractor may have
      in
      good faith undertaken with third-parties in connection with the Work to be
      performed at the Site.  If Owner elects to assume any obligation of
      Contractor as described in this Section20.1.3, then (a) the amount paid pursuant
      to Section20.1.1shall be reduced by the
      amount of such obligations and commitments (unless they relate to
      termination or demobilization costs or to payments due for work already
      completed for which Contractor remains obligated to pay); (b) Contractor
      shall execute all assignments or other documents and take all other reasonable
      steps requested by Owner which may be required to vest in Owner all rights,
      set-offs, benefits and titles necessary to such assumption by Owner;
      (c) Contractor’s satisfaction of its obligations under this
Section20.1.3 shall be a
      condition precedent to Owner’s obligation to comply with its obligations under
      this Section20.1 (including its
      obligation to make any payment to Contractor); and (d) Owner shall
      simultaneously agree to indemnify Contractor against liabilities thereafter
      arising under the assumed obligations or commitments.




20.2           Contractor
      Conduct.  Upon receipt of written notice from Owner of termination
      pursuant to Section20.1,
      Contractor shall: (a) cease operations as directed by Owner in the notice;
      (b) take action necessary, or that Owner may direct, for the protection and
      preservation of the Work and the Project; and (c) except for Work directed
      to be performed prior to the effective date of termination stated in notice,
      or
      except as expressly requested by Owner in writing, terminate all existing
      subcontracts and purchase orders and enter into no further subcontracts or
      purchase orders with respect to the Work or the Project.




20.3           Nature
      of Termination Payments.  The payments described in
Section20.1 include payment
      for:  (a) all costs of Equipment and Materials, temporary
      equipment, labor, transportation, engineering, design and other services
      relating to Contractor’s performance of its obligations under this Agreement and
      said Owner-requested Work (including any intellectual property rights licensed
      under this Agreement, expressly or by implication) provided by Contractor or
      such Subcontractors; (b) all national, state, regional and local taxes, and
      other sales




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 taxes
        imposed on Contractor or its Subcontractors or the Work; (c) all other
        taxes, duties, levies, imposts, fees, or charges of any kind (whether in
        the
        United States or elsewhere) arising out of Contractor’s or any Subcontractor’s
        performance of the Work; and (d) any duties, levies, imposts, fees,
        charges, and royalties imposed on Contractor or its Subcontractors with respect
        to any Equipment and Materials, labor, or services provided under this
        Agreement.  The taxes covered hereby include occupational, excise,
        unemployment, ownership, value-added, gross receipts, and any and all other
        taxes and duties on any item or service that is part of the Work, whether
        such
        tax is normally included in the price of such item or service or is normally
        stated separately.  The above-described payments shall not be
        increased with respect to any of the foregoing or with respect to any
        withholdings in respect of any of the foregoing items that Owner may be required
        to make.




20.4           Suspension
      by Owner.  Owner may suspend performance of the Work at any time
      by giving ten (10) days advance Notice thereof to Contractor.  Such
      suspension shall continue for the period specified in the suspension
      Notice.  The Separated Contract Price shall be adjusted as provided in
      clause (b) of Section20.4.2 to reflect any additional increased
      costs of Contractor resulting from any such suspension, as demonstrated by
      Contractor to Owner’s reasonable satisfaction.  No adjustment shall be
      made to the extent that performance is suspended, delayed, or interrupted for
      any cause due to Contractor’s negligence, willful misconduct, or noncompliance
      with the material terms of this Agreement.  At any time after the
      effective date of the suspension, Owner may require Contractor to resume
      performance of the Work on seven (7) days prior Notice.




20.4.1                      Contractor’s
      Termination Right.  Subject to Applicable Law, if, at the end of
      the suspension period specified pursuant to Section20.4, Owner has not requested a resumption
      of
      the Work or has not notified Contractor of any extension of the suspension
      period (but in no event beyond one hundred eighty (180) days in the aggregate
      for all such suspensions, other than suspensions for any reason due to
      Contractor’s negligence, willful misconduct or noncompliance with the material
      terms of this Agreement) at Contractor’s option this Agreement shall be deemed
      terminated as of the commencement date of the suspension period, and Owner
      shall
      promptly pay Contractor for the Work performed pursuant to
Section20.1.  In the
      event the Full Notice to Proceed has not been issued by December 31, 2007,
      Contractor may, upon ten (10) days prior Notice to Owner, terminate this
      Agreement and Owner shall pay Contractor for the Work performed pursuant to
      Section20.1.  Notwithstanding anything to
      the contrary herein, Contractor shall not be entitled to terminate this
      Agreement regardless of the number of days a Suspension for Cause (as defined
      in
Section20.6) may
      extend.




20.4.2                      Extension
      of Time and Compensation Rights.  In the case of any suspension
      under this Section20.4 or any
      suspension by Contractor under Section19.5, other than a Suspension for
      Cause (as
      defined below):




(a)           the
      applicable Substantial Completion Guaranteed Dates shall be extended by a period
      no less than the suspension period, plus a reasonable period for demobilization
      and remobilization, as mutually agreed upon by Contractor and
      Owner;




(b)           Owner
      shall pay Contractor within thirty (30) days after receipt of each
      Contractor’s invoice (which invoices shall be submitted on or about the first
      (1st) and the




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 fifteenth
        (15th) day of
        each month during the applicable suspension period) for those costs incurred
        during the suspension period that are documented by Contractor to the reasonable
        satisfaction of Owner, to the extent attributable to the suspension, and
        that
        are:




(i)           for
      the purpose of safeguarding or storing the Work and the Equipment and Materials
      at the point of fabrication, in transit, or at the Site;




(ii)           for
      personnel, Subcontractors, or rented Equipment and Materials, the payments
      for
      which, with Owner’s prior written concurrence, are continued during the
      suspension period;




(iii)           for
      reasonable costs of demobilization and remobilization of Contractor and its
      Subcontractors, including suspension costs set forth in any subcontract or
      purchase order; or




(iv)           for
      rescheduling the Work (including penalties or additional payments to
      Subcontractors for the same); and




(c)           the
      Project Schedule, the Milestone Items and the Schedule of Payment Values shall
      be adjusted to account for same, as mutually agreed upon by Contractor and
      Owner.




20.5           Claims
      for Payment.  All claims by Contractor for compensation or
      extension of time under Sections20.1 and 20.4
      must be made within forty-five (45)
      days after the Work has been terminated or the suspension period has ended,
      respectively.  Failure of Contractor to make such claim within said
      period shall be deemed a waiver by Contractor of any such claims.




20.6           Suspension
      for Cause.  Notwithstanding the foregoing, neither the Separated
      Contract Price nor any Substantial Completion Guaranteed Date shall be adjusted
      for a Suspension for Cause.  Any suspension shall be a
“**Suspension for Cause**” if:




(i)           a
      Contractor Event of Default shall have occurred and is continuing hereunder;
      or




(ii)           in
      the case of a suspension due to the occurrence of a Contractor Event of Default
      identified in Section19.1(b),
      Owner shall have given Notice of such default to Contractor, at least
      five (5) days shall have elapsed since delivery of such Notice and
      Contractor shall have failed to cure, or if such default cannot reasonably
      be
      cured within such five (5) day period, commenced to cure, such default within
      such five (5) days.




21.           **INSURANCE**




21.1           Owner
      Controlled Insurance Program.




21.1.1                      OCIP
      Coverages.  Owner will implement, and shall procure, pay for, and
      administer an “Owner Controlled Insurance Program” (the “**OCIP**”)
      commencing on or before Contractor commences Work at the Site; provided
      that with respect to the builders’ all risk coverage as set forth on
Exhibit N-2, Owner may, prior to the Full Notice to Proceed Date,
      provide equivalent coverage in lieu of procuring such coverage under the
      OCIP.  The OCIP




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 will
        provide workers compensation, employers liability, commercial general liability,
        excess liability and builders’ risk coverage (including inland/marine transit
        coverage).  The OCIP is intended to reduce the cost of completing the
        Project and does not constitute any representation by Owner with respect
        to the
        adequacy of the insurance to protect Contractor or the Subcontractors against
        obligations imposed by law or by this Agreement or any other
        contract.  Except as otherwise provided in this Agreement, neither the
        provision of the insurance described in this Section21.1 nor the extent of coverage
        or the limits
        of liability under such insurance policies shall be construed to be a limitation
        on the nature or extent of Contractor’s or the Subcontractors’ obligations or to
        relieve Contractor or the Subcontractors of any such
        obligations.




21.1.2                      OCIP
      Costs.  Contractor has excluded from the Separated Target Price
      and shall exclude from the Separated Contract Price and any Change In Work
      Forms
      all charges for insurance costs which duplicate the coverage provided under
      the
      OCIP.  Contractor shall include a provision in its subcontracts
      requiring Subcontractors of all tiers that are eligible to participate in the
      OCIP to exclude from their subcontract price and any Change In Work Forms all
      charges for insurance coverages which duplicate the coverage provided under
      the
      OCIP.  Notwithstanding anything to the contrary in the foregoing, if
      Owner elects not to include an eligible Subcontractor in the OCIP, a Change
      In
      Work Form may be submitted to adjust the Separated Target Price or Separated
      Contract Price, as applicable, to account for such Subcontractor’s insurance
      costs.




21.1.3                      OCIP
      Deductibles.  Contractor shall, or shall cause its Subcontractors
      to,  pay deductibles under the workers’ compensation and employers’
liability OCIP policies, up to Two Hundred Fifty Thousand Dollars ($250,000)
      per
      occurrence and Two Hundred Fifty Thousand Dollars ($250,000) annual
      aggregate.  Contractor shall, or shall cause its Subcontractors to,
      pay deductibles under the commercial general liability OCIP policy, up to Two
      Hundred Fifty Thousand Dollars ($250,000) per occurrence and Two Hundred Fifty
      Thousand Dollars ($250,000) annual aggregate, when coverage is provided
      thereunder for a loss for which Contractor is responsible under
Section23.1.




21.1.4                      Participation.  The
      OCIP shall include coverage for Owner, Contractor and the Subcontractors that
      are eligible to participate in the OCIP, including Subcontractors providing
      temporary labor services, taking part in or contributing to the actual Work
      at
      the Site who complete enrollment in the OCIP and are accepted by
      Owner.  Coverage under the OCIP insurance policies shall be limited to
      the Site and the Ancillary Sites, and as regards the builders’ risk coverage
      shall extend to the Owner Furnished Equipment while located at the Ancillary
      Sites, but  shall not, in any event, include any of Contractor’s and
      any Subcontractor’s regularly established workplace, plant, factory, office,
      shop, warehouse, yard or other property, even if utilized in the fabrication
      of
      Equipment and Materials to be incorporated into the
      Project.  Subcontractors that do not actually perform Work at the Site
      such as Persons that provide security or janitorial services or that deliver
      Equipment and Materials to the Site but do not otherwise engage in any of the
      Work at the Site, shall not be eligible to participate in the
      OCIP.  Any Subcontractors that are on the Site for a cumulative amount
      of time less than two weeks, and any Subcontractors whose subcontract has a
      cumulative value of less than Twenty Five Thousand Dollars ($25,000) shall
      not
      be eligible to participate in the OCIP unless approved by Owner in
      writing.




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21.1.5                      Enrollment.  Participation
      in the OCIP by Contractor and eligible Subcontractors is mandatory but not
      automatic.  Contractor shall, and shall cause each of its
      Subcontractors, to complete enrollment procedures with the OCIP
      Administrator.  The form of enrollment summary, including an insurance
      cost worksheet, is attached hereto as
Exhibit N-3.  Contractor shall not allow any personnel of
      any eligible Subcontractor to perform any of the Work on the Site until such
      Subcontractor has completed the enrollment process with the OCIP
      Administrator.




21.1.6                      OCIP
      Administration.  Any questions concerning the OCIP or the
      specifications outlined herein should be directed to (the “**OCIP
      Administrator**”):




Becky
      Hubert




Willis
      Construction Practice




13355
      Noel Road, Suite 1100




Dallas,
      Texas 75240-6643




Telephone:
      (972) 715-6239




Facsimile:  (972)
      386-5561




Email:  becky.hubert@willis.com




Contractor
      will cooperate with, and
      will require all of its Subcontractors to cooperate with, Owner and the OCIP
      Administrator with regards to the administration and operation of the
      OCIP.  Contractor shall, and shall cause the Subcontractors enrolled
      in the OCIP to:




(a)           comply
      with all rules and regulations of the applicable state insurance bureau, board
      or department;




(b)           comply
      with Contractor’s approved safety program during the performance of the
      Work;




(c)           provide
      Owner and the OCIP Administrator with such information as requested regarding
      such Person’s contact, operations and insurance information pursuant to
Exhibit N-3; and




(d)           cooperate
      with any insurance company or the OCIP Administrator with respect to requests
      for claim, payroll or other information reasonably required in connection with
      the OCIP.




21.1.7                      Coverage.  Owner
      will procure and pay the premiums for the OCIP insurance policies as set forth
      on Exhibit N-2.  Notwithstanding anything to the contrary
      herein, Owner may, by Notice to Contractor, update and revise
Exhibit N-2 from time to time as Owner deems necessary or desirable
      to reflect any change in Applicable Laws.  Any other modifications or
      revisions to the OCIP coverages as set forth on Exhibit N-2 shall be
      subject to the provisions of Section21.1.14.




21.1.8                      OCIP
      Insurance Policies.  All insurance coverages furnished by Owner
      pursuant to this Section21.1
      shall be written by insurance companies approved to do business in the State
      of
      Texas with an A.M. Best rating of no less than A X.  Owner shall
      provide Contractor




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 and
        the applicable Subcontractors with appropriate certificates of insurance
        evidencing the general liability and excess liability coverage provided under
        the OCIP and, upon request, shall provide copies of such policies to Contractor
        and the applicable Subcontractors, except for workers’ compensation and employer
        liability policies, for which individual policies will be provided to Contractor
        and each enrolled Subcontractor.  The terms and conditions of the OCIP
        insurance policies shall be binding on Contractor and the enrolled
        Subcontractors.




21.1.9                      Commencement
      of Work.  Neither Contractor nor any eligible Subcontractor shall
      commence any Work at the Site until it has completed the OCIP enrollment
      requirements and has received the appropriate certificates or policies of
      insurance.




21.1.10                      Non-Violation.  Contractor
      shall neither knowingly violate nor knowingly permit to be violated, whether
      by
      the Subcontractors or other Persons, any conditions of the OCIP policies and
      shall at all times use reasonable efforts to satisfy the requirements of the
      insurance companies issuing such policies.




21.1.11                      Payroll
      Reports.  Contractor shall, and shall cause each Subcontractor
      enrolled in the OCIP to, keep and maintain accurate and complete records of
      such
      Person’s payroll for operations in connection with the Work and the Project, and
      to furnish a completed monthly payroll report in the form of Form 5 – Payroll
      Reporting Form included in Exhibit N-3, to the OCIP Administrator no
      later than the twentieth (20th) day of
      each month
      until the month following the Final Completion Date of
      Unit 2.  Contractor shall attach a copy of each such report
      submitted during the previous month to each Contractor’s Invoice submitted for
      the next month.  Notwithstanding anything to the contrary herein,
      Owner may withhold payment with respect to any Contractor’s Invoice if
      Contractor or any of its Subcontractors fails to provide such monthly payroll
      reports to the OCIP Administrator within thirty (30) days after the date such
      report is due.




21.1.12                      Audit
      Rights and Closeout Reports.  The OCIP Administrator, at Owner’s
      request, may examine or audit the books and records of Contractor and all
      eligible Subcontractors participating in the OCIP with respect to Contractor’s
      and such Subcontractor’s payroll with regards to workers’ compensation and
      experience modification factors.  At least thirty (30) days prior to
      the estimated Final Completion Date of each Unit, Contractor shall and shall
      cause each of the Subcontractors enrolled in the OCIP to furnish a completed
      Notice of Anticipated Completion, the form of which is attached hereto as Form-4
      in Exhibit N-3, to the OCIP Administrator.




21.1.13                      Dividends
      and Refunds.  All dividends, premium refunds, return premiums,
      premium discounts, retentions, or credits payable or available under any of
      the
      OCIP insurance policies shall belong to Owner, and are hereby assigned to
      Owner.  Contractor, at the request of Owner, shall, and shall cause
      its Subcontractors enrolled in the OCIP to, execute and deliver to Owner any
      waiver, release, assignment, direction, or authorization which Owner or any
      insurance company may require for such purpose.




21.1.14                      Safety
      and Accident Reporting.  Contractor shall, and shall cause its
      Subcontractors to, follow and adhere to Contractor’s safety program for the
      Site, and to report to Owner and the OCIP Administrator, on forms to be
      provided, any accident at the Site and




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 shall
        assist in every manner reasonable in the investigation of any
        accident.  Upon request, Contractor shall cooperate with Owner and the
        insurance company designated by Owner to handle any claim by securing and
        giving
        evidence and obtaining the attendance of witnesses as required for any claim
        or
        suit.




21.1.15                      Modification
      and Termination.  While it is the intent of Owner to keep the OCIP
      in force until the Final Completion Date of Unit 2, Owner reserves the
      right to terminate the OCIP or to modify the OCIP or any insurance policy
      provided thereunder, from time to time.  Owner shall provide thirty
      (30) days prior Notice to Contractor and the Subcontractors enrolled in the
      OCIP
      of any termination or material modification of any OCIP policy.  If
      the OCIP or any insurance coverage provided thereunder is terminated, Contractor
      shall, to the extent such coverage is commercially available, immediately obtain
      replacement insurance coverage at the limits provided under the
      OCIP.  If any revisions or modifications of this insurance coverage
      under the OCIP reduces or materially adversely affects the scope of insurance
      coverage provided thereunder, Owner and Contractor shall mutually agree upon
      appropriate insurance coverage to be provided by Contractor and its
      Subcontractors, and any increased costs for changes in insurance coverage
      provided by Contractor or the Subcontractors shall be included in a Change
      In
      Work Form in accordance with Article16.  Replacement of the OCIP with
      individual insurance policies by Contractor and such Subcontractors shall
      constitute an Owner-initiated Change in Work and shall be reimbursable by Owner
      upon submission of Change In Work Forms in accordance with the provisions of
      Section16.4.  Contractor shall, and shall
      cause each such Subcontractor, to provide certificates of such replacement
      insurance to Owner prior to the termination date of the
      OCIP.




21.1.16                      Duplication;
      Cancellation.  Contractor shall not, and shall cause its
      Subcontractors that are eligible to participate in the OCIP not to, duplicate
      coverages afforded under the OCIP with Contractor’s, or Subcontractor’s, as
      applicable, own insurance, unless such Subcontractor is not accepted for
      enrollment in the OCIP.  Contractor shall not, and shall cause its
      Subcontractor not to, attempt to exercise any right to cancel any of its OCIP
      insurance policies without the express written consent of Owner, and any
      attempted cancellation of an OCIP insurance policy by Contractor or any
      Subcontractor without said express written consent shall be null and
      void.




21.1.17                      Work
      After Termination of OCIP Coverage.  In the event insurance
      coverage under the OCIP has terminated with respect to Contractor or any
      enrolled Subcontractor, and Contractor or such Subcontractor performs any
      further Work on the Site, or performs any warranty work on the Site after
      termination of such coverage, Contractor and such Subcontractor shall provide
      its own insurance coverage with respect to any such Work or warranty work and
      may not rely on insurance coverage provided under the OCIP.




21.2           Contractor’s
      Additional Insurance.




21.2.1                      Insurance
      Policies.  Contractor shall purchase from and maintain, from a
      company or companies lawfully authorized to do business in Texas, such
      additional insurance coverage as set forth on
Exhibit N-1.  All insurance coverage furnished by
      Contractor pursuant to this Section21.1.17 (or by Subcontractors
      pursuant to
Section21.2.3) shall be written
      by insurance companies with an A.M. Best rating of no less than
      A X.




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21.2.2                      Effectiveness.  All
      insurance required under this Section21.2 shall be in effect no later
      than thirty
      (30) days after the date of execution of this Agreement.  The
      insurance required by this Section21.2 shall be written for the limits
      of
      liability specified in this Agreement or required by law, whichever coverage
      is
      greater.  Coverage shall be maintained without interruption from date
      of commencement of the Work until the end of Contractor’s Warranty Period or the
      Final Completion Date of Unit 2, whichever is later, subject to the
      requirements for extended products and completed operations liability set forth
      in Exhibit N-1.




21.2.3                      General
      Requirements.  The insurance policies required to be obtained by
      Contractor as set forth on Exhibit N-1 shall be obtained on a
      Project-specific basis (except such workers’ compensation or employers’
liability policy), shall list Owner, and upon request of Owner, the Financing
      Entities, if any, Owner’s Engineer and any of Owner’s other consultants or
      contractors as an additional insured.  Notwithstanding anything herein
      to the contrary, the additional insured status of Owner, the Financing Entities,
      Owner’s Engineer, and any of Owner’s other consultants or contractors, and any
      other additional insured party, shall be limited to the Project-specific
      insurance policies providing the coverage as set forth on
Exhibit N-1 and shall not extend to any other policy or policies
      that Contractor may carry.  Any workers’ compensation or employers’
liability policy shall name Owner and its Affiliates or associated companies
      as
“Alternate Employer” with a waiver of subrogation.  The policies shall
      contain a provision that coverage will not be terminated, canceled or not
      renewed without at least thirty (30) days’ prior Notice given to Owner and the
      Financing Entities, if applicable.  Certificates of insurance showing
      required coverage to be in force shall be provided to Owner and filed with
      the
      OCIP Administrator prior to commencement of the Work.  Copies of all
      Project-specific policies provided as set forth on Exhibit N-1 and
      any subsequent endorsements shall be furnished promptly to Owner upon Owner’s
      reasonable request.  Any Project-specific insurance policy as set
      forth on Exhibit N-1 provided by Contractor shall be in form and
      content acceptable to Owner.  Contractor shall give Owner, and the
      Financing Entities, if applicable, thirty (30) days’ Notice of cancellation,
      non-renewal, or any endorsements restricting or reducing
      coverage.  Copies of all policies provided as set forth on
Exhibit N-1 or other coverage documents, including Declaration pages
      and applications for coverage, shall be provided to any additional insured
      upon
      request.  If any of the foregoing insurance coverage is required to
      remain in force after Final Completion of Unit 1 or Unit 2, an
      additional certificate evidencing continuation of such coverage shall be
      submitted with the application for Final Payment and upon renewal of such
      insurance coverage during the duration of the required period.




21.3           Subcontractors’
      Insurance.  Contractor shall cause any and all eligible
      Subcontractors and Suppliers to participate in the OCIP, and shall cause all
      of
      the Subcontractors and Suppliers to obtain the insurance coverage as set forth
      in Exhibit N-1.  All policies obtained by Subcontractors
      and Suppliers shall satisfy the requirements of Section21.2 and shall provide releases and
      waivers of
      all rights of subrogation and recovery as set forth in Section21.4.  Contractor may waive the
      foregoing insurance coverage requirement with respect to any Subcontractor
      that
      does not perform any of the Work on the Site and does not otherwise physically
      come onto the Site.  Notwithstanding anything to the contrary herein
      or in Exhibit N-1, Contractor and Owner acknowledge and agree that
      (i) the Suppliers that are party to the STG Upgrade Contract and the Boiler
      Upgrade Contracts will provide insurance coverage in the amounts and of the
      type
      as set forth in such subcontracts, (ii) if the STG Upgrade Supplier agrees
      to amend the insurance provisions of the STG Upgrade Contract as requested
      by
      Owner




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 and
        Contractor, the STG Upgrade Supplier will not be required to and will not
        participate in the OCIP, (iii) Contractor may reduce the insurance coverage
        required to be maintained under this Section21.3 by any eligible Subcontractor
        with
        subcontract values of less than Fifteen Million Dollars ($15,000,000) as
        set
        forth on Exhibit N-1, and (iv) Contractor may also excuse
        Subcontractors with subcontract values of less than Twenty Five Thousand
        Dollars
        ($25,000) from excluding the Site and the Ancillary Sites under such
        Subcontractors’ insurance policies.




21.4           Subrogation
      Waivers.  The OCIP policies and any other insurance policies
      provided by Owner shall provided for a waiver of all rights of subrogation
      against, as applicable, Contractor, the Subcontractors, Owner’s Engineer and the
      Financing Entities, if any, and their assigns, subsidiaries, Affiliates,
      directors, officers, employees, agents, and of any right of the insurers to
      any
      set-off or counterclaim or any other deduction, whether by attachment or
      otherwise, in respect of any liability of any such Person insured under any
      such
      policy, except that Owner shall not and does not waive its rights of subrogation
      as against any Suppliers with respect to the builders’ risk policy except with
      respect to losses arising out of a Supplier’s activities at the
      Site.  All policies otherwise supplied by Contractor pursuant to this
      Agreement or with respect to the Work, including any insurance policies covering
      owned, leased or borrowed equipment, shall provide for a waiver of all rights
      of
      subrogation against, as applicable, Owner, Owner’s Engineer and the Financing
      Entities, if any, and their assigns, subsidiaries, Affiliates, directors,
      officers, employees, agents, and of any right of the insurers to any set-off
      or
      counterclaim or any other deduction, whether by attachment or otherwise, in
      respect of any liability of any such Person insured under any such
      policy.




21.5           Insurance
      Coverages.  All amounts of insurance coverage specified in
Exhibits N-1 and N-2 are required
      minimums.  Contractor and its Subcontractors shall each be solely
      responsible for determining the appropriate amount of insurance, if any, that
      Contractor or such Subcontractor desires or determines is appropriate that
      is in
      excess of or in addition to the insurance coverage set forth on
Exhibit N-1 at such Contractor’s or Subcontractor’s sole cost and
      expense.  The required minimum amounts of insurance shall not operate
      as limits on recoveries available under this Agreement.




21.6           Failure
      to Maintain Insurance.  If at any time the insurance required to
      be provided hereunder by Contractor or any Subcontractor shall be reduced or
      cease to be maintained, then (without limiting the rights of Owner in respect
      of
      any default that arises as a result of such failure) Owner may at its option
      maintain the insurance required hereby upon written notice to Contractor and
      ten
      (10) days opportunity to cure.  In such event, Owner may withhold the
      cost of such replacement insurance from any payments to Contractor otherwise
      due
      to Contractor hereunder.




21.7           Claims
      Compensation.  Contractor shall be responsible for preparing all
      claim loss data, claim forms, proof of loss statements, and coordinating with
      the various underwriters and the appointed loss adjusters with respect to all
      claims to be made under the OCIP, all without increase to the Separated Contract
      Price.  Owner shall cooperate with Contractor in preparing all such
      claims.  To the extent that Contractor is unable to recover under the
      builders’ risk policy its costs incurred pursuant to this Section21.7 in connection with the builders’ risk
      policy, Owner shall reimburse Contractor for such costs in accordance with
      Exhibit Y.




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22.           **RISK
      OF LOSS OR DAMAGE**




22.1           Contractor
      Assumption of Risk.  Until the Substantial Completion Date of each
      Unit, Contractor shall have care, custody and control of such
      Unit.




22.1.1                      Risk
      of Loss.  Until the Substantial Completion Date of each Unit,
      subject to the provisions of this Article22, Contractor assumes risk of
      loss for, and
      full responsibility for the cost of replacing or repairing any damage to, such
      Unit or any of the Work related to such Unit (including any Owner Furnished
      Equipment or Owner Provided Facilities and Services) and all Equipment and
      Materials and maintenance equipment (including temporary materials, equipment
      and supplies) which are purchased by Contractor or Owner for permanent
      installation in or for use during construction of the Project regardless of
      whether Owner has title thereto under this Agreement.




22.1.2                      Repair
      or Replacement.  Until the Substantial Completion Date of each
      Unit, if any portion of such Unit or the Work related to such Unit (including
      any Owner Furnished Equipment or Owner Provided Facilities and Services) is
      lost
      or damaged, Contractor shall replace or repair any such loss or damage and
      complete the Work in accordance with this Agreement.  Notwithstanding
      the foregoing, if there is any loss or damage to such Unit or any portion of
      the
      Work (including any Owner Furnished Equipment or Owner Provided Facilities
      and
      Services) in Contractor’s care, custody and control, Contractor shall not be
      obligated to replace or repair any such loss or damage if the cost of such
      replacement and repair is more than the amount of Contractor’s responsibility
      for any amount pursuant to Section22.1.3, unless Contractor has received
      reasonable assurances from Owner that Contractor will receive from Owner any
      insurance proceeds paid under such insurance policies or will otherwise be
      paid
      such amounts necessary to complete such repair or replacement pursuant to a
      Change In Work.




22.1.3                      Payment
      Amounts.  Subject to Section22.1.2, Contractor’s liability for any loss
      or
      damage to any Unit or otherwise to the Project (including any Owner Furnished
      Equipment or Owner Provided Facilities and Services), shall, to the extent
      any
      loss or damage to any Unit or otherwise to the Project is caused by the
      negligence of Contractor or any Subcontractor, be the payment of the amount
      of
      such loss or damage, not to exceed Two Hundred Fifty Thousand Dollars ($250,000)
      per occurrence and not to exceed Two Hundred Fifty Thousand Dollars ($250,000)
      in any year; provided that in any year in which a Unit is being hot
      tested, such liability shall, to the extent any loss or damage to any Unit
      or
      otherwise to the Project is caused by the negligence of Contractor or any
      Subcontractor, be the payment of the amount of such loss or damage not to exceed
      Five Hundred Thousand Dollars ($500,000) per hot testing occurrence and Two
      Hundred Fifty Thousand Dollars ($250,000) per occurrence for other occurrences,
      and not to exceed Five Hundred Thousand Dollars ($500,000) in such year;
provided, further, that in any such year in which a Unit is being
      hot-tested, the aggregate of all deductibles paid during such year shall not
      exceed Five Hundred Thousand Dollars ($500,000) per
      Unit.  Notwithstanding anything to the contrary herein, Owner shall be
      responsible for payment of deductible amounts due under the builders’ risk
      coverage in the event of the occurrence of an event of Force Majeure that causes
      loss or damage to the Project covered by the builders’ risk
      policy.




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22.2           Risk
      of Loss After Substantial Completion.  Subject to Contractor’s
      obligations hereunder to satisfy the Performance Guarantees and pursuant to
      Articles15, 17
      and 23,
      Owner shall bear the risk of loss for, and full responsibility for, the cost
      of
      replacing or repairing any damage to a Unit or the Project from and after
      Substantial Completion.  Notwithstanding the foregoing, if any portion
      of a Unit or the Project is lost or damaged after Substantial Completion due
      to
      any negligent act or omission of Contractor, any Affiliate of Contractor or
      any
      Subcontractor, or anyone directly or indirectly employed by any of them,
      Contractor’s liability for replacing or repairing such loss or damage shall be
      limited in amount to the amount of such loss or damage, not to exceed $250,000
      per occurrence and $250,000 in any given year, regardless of whether or not
      Owner carries insurance coverage for such loss or damage.  In any
      event, the care, custody, and control of each Unit shall pass to Owner no later
      than the Substantial Completion Date of such Unit.  From and after the
      Substantial Completion Date of such Unit, Owner shall assume all risks of
      physical loss or damage thereto, subject to Contractor’s obligation to pay the
      costs of losses or damage to the Unit to the extent caused by any negligent
      act
      or omission of Contractor or any of its Subcontractors, not to exceed $250,000
      per occurrence and $250,000 in any given year.




23.           **INDEMNIFICATION**




23.1           By
      Contractor.  Contractor shall defend, indemnify, and hold harmless
      Owner, the Financing Entities, if any, and any Person acting for or on behalf
      of
      Owner, and its respective employees, agents, partners, Affiliates, shareholders,
      directors, officers, and permitted assigns (each an “**Owner
      Indemnitee**”), from and against the following:




(a)           all
      Losses arising from third-party claims for property damage or bodily injury
      or
      death to the extent caused by any negligent, willful, reckless, or otherwise
      tortious act or omission (including strict liability) during the performance
      of
      the Work or from performing or failing to perform any of its obligations under
      this Agreement, or any curative action under any warranty following performance
      of the Work, of Contractor, any Subcontractor or any of their respective
      Affiliates, or anyone directly or indirectly employed by any of them, or anyone
      for whose acts such Person may be liable; provided that Contractor’s
      obligations hereunder with respect to claims of damage to property owned by
      Owner shall be limited to amounts due under Sections21.1.3 and 22.1.3,
      if and to the extent applicable, and
      claims of damage to property owned by any of Owner’s Affiliates shall be limited
      to Five Hundred Thousand Dollars ($500,000) per occurrence if such damage occurs
      to such property located at the Site or Five Million Dollars ($5,000,000) per
      occurrence if such damage occurs to such property at locations other than the
      Site; provided, further, that during the period from the Final
      Completion Date of Unit 2 until the end of the Warranty Period,
      Contractor’s obligations hereunder with respect to claims of damage to property
      owned by any of Owner’s Affiliates shall be limited to Two Hundred Fifty
      Thousand Dollars ($250,000) per occurrence and in the annual aggregate if such
      damage occurs to such property located at the Site or at locations other than
      the Site; provided, further, that Contractor’s obligations
      hereunder with respect to Losses arising from third party claims for property
      damage or bodily injury or death to the extent caused by Alstom Power Inc.,
      shall include only such Losses to the extent caused by Alstom Power Inc. that
      arise before the date that is sixty months after such Subcontractor achieves
      final completion of the Unit 1 boiler under the terms of the relevant
      Boiler Upgrade Contract;




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(b)           all
      Losses that directly arise out of or result from




(i)           all
      claims for payment of compensation for Work performed hereunder, whether or
      not
      reduced to a lien or mechanics lien, filed by Contractor or any Subcontractors,
      or other persons performing any portion of the Work, including reasonable
      attorneys’ fees and expenses incurred by any Owner Indemnitee in discharging any
      Contractor Lien, except to the extent of an Owner’s Event of Default with
      respect to its payment obligations hereunder; and




(ii)           employers’
      liability or workers’ compensation claims filed by any employees or agents of
      Contractor or any of its Subcontractors;




(c)           all
      Losses arising from third-party claims, including claims by Subcontractors,
      including claims for property damage or bodily injury or death that directly
      or
      indirectly arise out of or result from the failure of Contractor or any of
      its
      Subcontractors to comply with the terms and conditions of Applicable Laws during
      their performance of the Work or the conditions or provisions of the Contractor
      Acquired Permits; provided that Contractor’s obligations hereunder with
      respect to claims of damage to property owned by Owner shall be limited to
      amounts due under Sections21.1.3 and 22.1.3,
      if and to the extent applicable, and
      claims of damage to property owned by any of Owner’s Affiliates shall be limited
      to Five Hundred Thousand Dollars ($500,000) per occurrence if such damage occurs
      to such property located at the Site or Five Million Dollars ($5,000,000) per
      occurrence if such damage occurs to such property at locations other than the
      Site; provided, further, that during the period from the Final
      Completion Date of Unit 2 until the end of the Warranty Period,
      Contractor’s obligations hereunder with respect to claims of damage to property
      owned by any of Owner’s Affiliates shall be limited to Two Hundred Fifty
      Thousand Dollars ($250,000) per occurrence and in the annual aggregate if such
      damage occurs to such property located at the Site or at locations other than
      the Site;




(d)           all
      fines, penalties, or assessments issued by any Governmental Authority prior
      to
      the Substantial Completion Date that directly arise out of or result from the
      failure of a Unit or the Project, as designed, constructed and completed by
      Contractor or any Subcontractor, to be capable of operating in compliance with
      all Applicable Laws or the conditions or provisions of all Applicable
      Permits;




(e)           any
      and all fines, penalties, or assessments issued by any Governmental Authority
      that Owner may incur as a result of executing any applications at Contractor’s
      request;




(f)           all
      Losses arising from claims by any Governmental Authority that directly or
      indirectly arise out of or result from the failure of Contractor to pay, as
      and
      when due, all taxes, duties, levies, assessments, tariffs, imposts, fees or
      charges of any kind (together with any and all interest, penalties, additions
      to
      tax and additional amounts imposed with respect thereto) imposed by any
      Governmental Authority for which Contractor is obligated to pay pursuant to
      the
      terms of this Agreement;




(g)           all
      Losses arising from claims by any Governmental Authority claiming taxes based
      on
      gross receipts or on income of Contractor, any of its Subcontractors, or any
      of




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 their
        respective agents or employees with respect to any payment for the Work made
        to
        or earned by Contractor, any of its Subcontractors, or any of their respective
        agents or employees under this Agreement;




(h)           all
      Losses, including claims for property damage or bodily injury or death, whether
      or not involving damage to the Project or the Site or any Ancillary Site, that
      arise out of or result from the use of Hazardous Materials, whether lawful
      or
      unlawful, brought onto the Site or any Ancillary Site by Contractor or any
      Subcontractor.  Such use of or contamination by Hazardous Materials
      include:




(i)           the
      storage, transportation, processing or disposal of such Hazardous Materials;
      and




(ii)           any
      environmental condition caused by such Hazardous Materials; and




(i)           all
      Losses incurred in connection with the Agency Subcontracts related to matters
      in
      which Contractor acted outside the scope of its agency pursuant to
Section3.23, including failure
      to make payments to such Suppliers (provided Owner has paid
      Contractor).




23.2           By
      Owner.  Owner shall defend, indemnify, and hold harmless
      Contractor, its Subcontractors and any Person acting for or on behalf of
      Contractor and their respective employees, agents, partners, Affiliates,
      shareholders, directors, officers, and assigns (each an “**Contractor
      Indemnitee**”) from and against the following:




(a)           all
      Losses arising from third-party claims for property damage or  bodily
      injury or death to the extent caused by any negligent, reckless, or otherwise
      tortious act or omission (including strict liability) during the performance
      of
      Owner’s obligations under this Agreement, of Owner or any of Owner’s Affiliates,
      or anyone directly or indirectly employed by any of them (but not including
      Operating Personnel prior to Substantial Completion), or anyone for whose acts
      such Person may be liable (but not including Operating Personnel prior to
      Substantial Completion);




(b)           all
      Losses arising from claims by any Governmental Authority that directly or
      indirectly arise out of or result from the failure of Owner to pay, as and
      when
      due, all taxes, duties, levies, assessments, tariffs, imposts, fees or charges
      of any kind (together with any and all interest, penalties, additions to tax
      and
      additional amounts imposed with respect thereto) imposed by any Governmental
      Authority for which Owner is obligated to pay pursuant to the terms of this
      Agreement;




(c)           all
      Losses, including claims for property damage or bodily injury or death that
      directly or indirectly arise out of or result from:




(i)           the
      presence or existence of Hazardous Materials (including pre-existing
      contamination) at the Site or any Ancillary Site (A) brought onto or
      generated at the Site or such Ancillary Site on or before the date of the
      Original Agreement; (B) brought onto or generated at the Site by Owner or
      such Ancillary Site (other than Hazardous Materials that were brought onto
      the
      Site or the Ancillary Sites or delivered to Contractor or any Subcontractor
      to
      be




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 handled
        by the same in the course of performing the Work); or (C) which migrated
        onto the Site from another location (other than such Hazardous Materials
        that
        were previously in the care, custody or control of Contractor or any
        Subcontractor), except to the extent the remediation of any such Hazardous
        Materials is part of the Work; or




(ii)           the
      unlawful release or spill by Owner or its Affiliates after the Substantial
      Completion Date of Hazardous Materials otherwise brought onto the Site by
      Contractor or any Subcontractor in accordance with the terms of this Agreement
      and all Applicable Laws;




(d)           All
      Losses incurred in connection with damage to property other than the Project
      owned by or in the possession of any of the Owner Indemnitees, in excess of
      the
      deductible under any such Owner Indemnitees’ applicable insurance policy not to
      exceed Five Million Dollars ($5,000,000), whether or not caused by the acts,
      omissions, fault or negligence of Contractor or its Subcontractors;
      and




(e)           Until
      assignment and assumption of such Agency Subcontracts, Owner shall indemnify
      Contractor and the Contractor Indemnitees against all Losses incurred in
      connection with the Agency Subcontracts related to the period prior to the
      date
      on which Contractor assumed such agreements, including Losses arising out of
      claims by the Suppliers under the Agency Subcontracts for payment and
      cancellation costs, except to the extent such claims or Losses related to
      matters in which Contractor acted outside the scope of its agency pursuant
      to
Section3.23, including
      Contractor’s failure to pay such Suppliers after receiving payment therefor from
      Owner.




23.3           Patent
      Infringement and Other Indemnification Rights.  Contractor shall
      defend, indemnify, and hold harmless the Owner Indemnitees against all Losses
      arising from any Intellectual Property Claim.  If Owner provides
      Notice to Contractor of the receipt of any such claim, Contractor shall, in
      addition, at its own expense settle or defend any such Intellectual Property
      Claim and pay all damages and costs awarded in it against Owner and either;
      (a) procure for Owner, or reimburse Owner for procuring, the right to
      continue using the infringing service, Equipment and Materials, or other Work,
      as the case may be; (b) modify the infringing service, Equipment and
      Materials, or other Work, as the case may be, so that the same becomes
      non-infringing; or (c) replace the infringing service, Equipment and
      Materials, or other Work, as the case may be, with noninfringing service,
      Equipment and Materials, or other Work, as the case may be.  If Owner
      is enjoined from completing the Project or any part thereof, or from the use,
      operation, or enjoyment of the Project or any part thereof, as a result of
      such
      claim or legal action or any litigation based thereon, Contractor shall promptly
      use its best efforts to have such injunction removed and to take one or more
      of
      the actions under the preceding clauses (a), (b) or (c), provided,
that in no case shall Contractor take any action which materially
      adversely affects Owner’s continued use and enjoyment of the applicable service,
      Equipment and Materials, or other Work, as the case may be, without the prior
      written consent of Owner.  Owner’s acceptance of the Contractor
      Deliverables or supplied Materials and Equipment shall not be construed to
      relieve Contractor of any obligation hereunder.




23.4           Use
      of Electronic Data Files.  Any electronic data files furnished to
      Owner pursuant to this Agreement are provided only for the convenience of
      Owner.  Owner recognizes




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 that
        the electronic data files may not be adequate or appropriate for Owner’s
        needs.  In the case of any discrepancies between the Submittals
        represented by electronic data files and the plotted hardcopy of such files
        bearing the seal of Contractor’s registered professional engineer, the sealed
        hardcopy shall govern.  Contractor assumes no responsibility for the
        accuracy or completeness of the electronic data files and any use or reuse
        of
        such electronic data for any purpose shall be at Owner’s sole
        risk.  Furthermore, in consideration for the use of the electronic
        data, Owner agrees, to the fullest extent permitted by law, to defend, indemnify
        and hold Contractor harmless from any and all claims, damages, losses, costs,
        and expenses, including reasonable attorneys’ fees and court costs (including
        the costs of any appeals) arising out of or resulting from Owner’s use, reuse,
        of such electronic data regardless of whether such claims, damages, losses,
        costs, and expenses are caused in whole or in part by
        Contractor.




23.5           Claim
      Notice.  An Indemnitee shall provide Notice to the indemnifying
      party, within ten (10) days after receiving written notice of the
      commencement of any legal action or of any claims or threatened claims against
      such Indemnitee in respect of which indemnification may be sought pursuant
      to
      the foregoing provisions of this Article23 or any other provision of this
      Agreement
      providing for an indemnity (such notice, a “**Claim
      Notice**”).  The Indemnitee’s failure to give, or tardiness in
      giving, such Claim Notice will reduce the liability of the Indemnifying Party
      only by the amount of damages proven to be attributable and prejudicial to
      such
      failure or tardiness, but shall not otherwise relieve the indemnifying party
      from any liability that it may have under this Agreement.  In case any
      such claim or legal action shall be made or brought against an Indemnitee and
      such Indemnitee shall Notify (by sending a Claim Notice) the indemnifying party
      thereof, and the Indemnitee may by such Claim Notice require the indemnifying
      party to assume and control the defense of the claim that is the subject of
      such
      Claim Notice, in which case the indemnifying party may select counsel after
      consultation with the Indemnitee, and the indemnifying party shall pay all
      expenses of the conduct of such defense.  The Indemnitee shall have
      the right to employ separate counsel in any such proceeding and to participate
      in (but not control) the defense of such claim, but the fees and expenses of
      such counsel shall be borne by the Indemnitee unless the indemnifying party
      shall agree otherwise; provided, however, if the named parties to
      any such proceeding (including any impleaded parties) include both the
      Indemnitee and the indemnifying party, the indemnifying party requires that
      the
      same counsel represent both the Indemnitee and the indemnifying party, and
      representation of both parties by the same counsel would be inappropriate due
      to
      actual or potential differing interests between them, then the Indemnitee shall
      have the right to retain its own counsel at the cost and expense of the
      Indemnifying Party.  If the indemnifying party shall have failed to
      assume or diligently prosecute the defense of any claim in accordance with
      the
      provisions of this Section23.5,
      then the Indemnitee shall have the absolute right to control the defense of
      such
      claim and the fees and expenses of such defense, including reasonable attorneys’
fees of the Indemnitee’s counsel and any reasonable amount determined to be owed
      by Indemnitee pursuant to such claim, shall be borne by the indemnifying party,
      provided that the indemnifying party shall be entitled, at its expense, to
      participate in (but not control) such defense.  Subject to all of the
      foregoing provisions of this Section23.5, (a) the indemnifying party shall
      control the settlement of all claims, in coordination with any insurer as
      required under the applicable insurance policies set forth in
Exhibit N-1 or Exhibit N-2, as applicable, as to which
      it has assumed the defense; provided, however, that (i) such
      settlement  shall include a dismissal with prejudice of the claim and
      an explicit and unconditional release from the party bringing such claim or
      other proceedings of all Indemnitees; and (ii) the indemnifying party shall




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 not
        conclude any settlement without the prior approval of the Indemnitee, which
        approval shall not be unreasonably withheld; and (b) except as provided in
        the preceding sentence concerning the indemnifying party’s failure to assume or
        to diligently prosecute the defense of any claim, no Indemnitee seeking
        reimbursement pursuant to the foregoing indemnity shall, without the prior
        written consent of the indemnifying party, settle, compromise, consent to
        the
        entry of any judgment in or otherwise seek to terminate any action, claim,
        suit,
        investigation or proceeding for which indemnity is afforded hereunder unless
        such Indemnitee reasonably believes that the matter in question involves
        potential criminal liability against such Indemnitee.  The Indemnitee
        shall provide reasonable assistance to the indemnifying party when the
        indemnifying party so requests, at the indemnifying party’s expense, in
        connection with such legal action or claim, including executing any
        powers-of-attorney or other documents required by the indemnifying party
        with
        regard to the defense or indemnity obligations.




23.6           Survival
      of Indemnity Obligations.  The indemnities set forth in this
Article23 shall survive
      completion of the Work or the earlier termination of this Agreement for a period
      expiring five (5) years following the Final Completion Date or said termination,
      whichever first occurs.  All Claim Notices must be delivered, if at
      all, to the applicable Party prior to the expiration of such five (5) year
      period.  If any Claim Notice is made within such five (5) year period,
      then the indemnifying period  with respect to all claims identified in
      such Claim Notice (and the indemnity obligation of the Parties hereunder with
      respect to such claim) shall extend through the final, non-appealable resolution
      of such claims.  For purposes of clarification hereunder, without
      limiting the other rights granted hereunder to either Party, a Party may enforce
      the indemnity provisions hereunder pursuant to the provisions of
Article32 without having to
      declare an Owner Event of Default or a Contractor Event of Default, as
      applicable.




24.           **TREATMENT
      OF CONFIDENTIAL INFORMATION**




24.1           Confidential
      Information.  Any Confidential Information is disclosed in
      confidence, and the transferee shall restrict its use of such information solely
      to uses related to the Project or performance of this Agreement and shall not
      use the Confidential Information in any way detrimental to the transferor or
      its
      stockholders, including, without limitation, to gain a competitive advantage
      with the businesses of the transferor.  The transferee shall not
      publish or otherwise disclose any Confidential Information received to others
      without the prior written approval of the transferor, including the fact that
      the Confidential Information has been made available to the transferee, that
      it
      has entered into this Agreement, or any of the terms, conditions, or other
      facts
      with respect to this Agreement.  Contractor shall disclose only such
      Confidential Information to those of its Subcontractors (of all tiers) and
      its
      and their Affiliates as is necessary to carry out the purposes of this
      Agreement.  Contractor shall require each of its Subcontractors and
      their Affiliates to abide by the terms and conditions relating to Confidential
      Information contained herein.  Contractor shall inform its
      Subcontractors and Affiliates of the confidential nature of the Confidential
      Information and shall indemnify Owner for any acts or omissions by Contractor
      or
      its Subcontractors or their Affiliates with respect to the Confidential
      Information provided by Owner.  Nothing herein shall limit:
      (a) the right of Owner to provide any information regarding Contractor, any
      Subcontractor, this Agreement, or the Work to its legal, technical and other
      officers, its then existing or prospective successors or assigns or any
      Financing Entity (or advisors retained on their behalf) or its successors and
      assigns; (b) the right of either Party to supply such information to any
      Governmental Authority as may be required by




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 Applicable
        Law or any securities exchange; or (c) the right of Owner to reproduce and
        use as many copies of any Submittals or other documents provided to Owner
        as
        Owner in its sole discretion considers useful or necessary for the furtherance
        of the Work, operation and maintenance of the Project, or otherwise related
        to
        the Project, regardless of any notices, legends, or disclaimers on such
        Submittals or other documents.  No right or license is granted to
        Contractor or any third-party respecting the use of such Confidential
        Information by virtue of this Agreement, except to the extent required for
        Contractor’s performance of its obligations hereunder.  Contractor
        shall deliver all Owner’s Confidential Information, including all copies
        thereof, to Owner upon request.  The transferee’s obligations
        regarding Confidential Information shall extend to all derivatives or references
        to such Confidential Information that are incorporated in any documentation
        prepared by the transferee in connection with the Work.




24.2           Applicable
      Law Disclosures.  In the event that a transferee is requested or
      required (by oral questions, interrogatories, requests for information or
      documents in legal proceedings, or by the Securities and Exchange Commission,
      subpoena, civil investigative demand or other similar process) to disclose
      any
      Confidential Information, the transferee shall provide the transferor with
      prompt written notice of any such request or requirement so that the transferor
      may seek a protective order or other appropriate remedy and/or waive compliance
      with the provisions of this Agreement.  If, in the absence of a
      protective order or other remedy or the receipt of a waiver by the transferor,
      the transferee is nonetheless legally compelled to make any such disclosure
      of
      Confidential Information or else stand liable for contempt, the transferee
      may,
      without liability hereunder, disclose to such Person only that portion of the
      Confidential Information that on the advice of counsel is legally required
      to be
      disclosed, provided that the transferee uses its reasonable efforts to
      assist the transferor in obtaining an appropriate protective order or other
      reliable assurance that confidential treatment will be accorded the Confidential
      Information.




24.3           Ownership
      of Confidential Information.  All Confidential Information
      obtained, developed or created by or for Contractor exclusively for the Project,
      including the drawings and specifications and any copies of Confidential
      Information, is the exclusive property of Owner whether delivered to Owner
      or
      not; provided, however, that Contractor may also use such
      Confidential Information for internal purposes.  No right or license
      is granted to Contractor or any third-party respecting the use of such
      Confidential Information by virtue of this Agreement, except to the extent
      required for Contractor’s performance of its obligations
      hereunder.  Contractor shall deliver all Owner’s Confidential
      Information, including all copies thereof, to Owner upon request;
provided, however, that Contractor may keep one copy for archival
      purposes only, which copy shall remain subject to the obligations of this
Article24.




24.4           Remedies.  Contractor
      and Owner each recognize and acknowledge the competitive and confidential nature
      of the Confidential Information and each agrees that irreparable damage may
      result to the other Party if Confidential Information of such other Party is
      disclosed to any third party except as herein permitted or is used for any
      purpose other than the purposes of this Agreement.  The Parties agree
      that money damages may not be a sufficient remedy for any breach of this
Article24.  Accordingly, the Parties agree
      that a Party whose Confidential Information is disclosed to a third party in
      breach of this Article24 shall
      be entitled to an injunction or injunctions (without the posting of any bond
      and
      without proof of actual damages) to prevent breaches or threatened breaches
      of
      this Article24, and to specific




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 performance
        of this Article24, and that
        neither the other Party nor its Affiliates will oppose the granting of such
        relief.  Such remedies shall not be deemed to be the exclusive
        remedies for a breach of this Article24, but shall be in addition
        to all other
        remedies available at law or equity.




24.5           Exclusions.  For
      purposes of determining liability under this Article24, Confidential Information shall
      not
      include:  (i) information that is publicly available through no
      fault of the receiving Party; or (ii) acquired by the receiving Party from
      a source having no direct or indirect obligation of confidentiality to the
      disclosing Party regarding such information; provided that Contractor
      nonetheless continues to treat such information as Confidential Information
      pursuant to this Article24.




25.           **INVENTIONS
      AND LICENSES**




25.1           Invention,
      License.  Any idea, invention, work of authorship, drawing,
      design, formula, algorithm, utility, tool, pattern, compilation, program,
      device, method, technique, process, improvement, development or discovery
      (collectively, “**Invention**”), whether or not patentable, or
      copyrightable, or entitled to legal protection as a trade secret or otherwise,
      that Contractor may conceive, make, develop, create, reduce to practice, or
      work
      on, in whole or in part, in the course of performing the Work shall be owned
      and
      retained by Contractor.  Contractor hereby grants to Owner an
      irrevocable, nonexclusive royalty-free license (which license is freely
      assignable (a) to any Financing Entity or any assignee of such Financing
      Entity; and (b) to any party to which the Project is sold or otherwise
      transferred) to use all Inventions, other proprietary rights and specialized
      knowledge of Contractor which, in each case, form a part of the Work for Owner’s
      use to the extent reasonably necessary for the operation, maintenance, repair,
      or alteration of the Project or any subsystem or components thereof in
      connection with the Project or to the extent such Inventions are related to
      any
      specific design concepts developed primarily for the Project, for the operation,
      maintenance, repair, or alteration of any other project developed by Owner
      or
      any Affiliate of Owner or of any subsystem or component thereof, with Owner’s or
      its Affiliate’s exercise of such license to be at Owner’s and its Affiliate’s
      sole risk and expense and subject to the rights of
      third-parties.  Contractor shall, prior to directing any Subcontractor
      to produce any design or engineering work in connection with the Project, obtain
      a valid written license of any such inventions, specialized knowledge or other
      proprietary property from such Subcontractor in terms substantially similar
      to
      those that obligate Contractor to Owner as expressed in this
Section25.1.  Without
      diminishing the rights granted in the previous sentence, Contractor also
      acknowledges and agrees that it shall not be deemed a breach of the license
      granted in this Section25.1 for
      any Affiliate of Owner wholly-owned by Owner’s direct or indirect corporate
      parent to utilize as reference material any such Invention, proprietary right
      or
      specialized knowledge.  Contractor shall promptly notify Owner of any
      such Invention or discovery.  All Contractor Deliverables and computer
      software prepared by Contractor pursuant to this Agreement are instruments
      of
      service in respect to the Project.  They are not intended or
      represented to be suitable for reuse by Owner or others on extensions of the
      Project or on any other project.  Any reuse without prior written
      verification or adaptation by Contractor for the specific purpose intended
      will
      be at Owner’s sole risk and without liability or legal exposure to
      Contractor.  Owner shall defend, indemnify, and hold harmless
      Contractor against all Losses arising out of or resulting from such
      reuse.  Contractor shall, at Owner’s expense and request, execute or
      cause the execution of any documentation reasonably requested by Owner in order
      to




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 effectuate
        the foregoing.  Except as specifically stated herein, no other license
        in such patents and proprietary information is granted pursuant to this
        Agreement.




25.2           Contractor
      Deliverables.  Subject to Section25.1, the Contractor Deliverables
      accumulated
      or developed by Contractor or its employees, to the extent Owner may determine,
      shall become the property of Owner without any further consideration to be
      provided therefore, when prepared or in process, whether or not delivered by
      Contractor.  Contractor shall deliver the Contractor Deliverables to
      Owner upon its request upon any termination of this Agreement, or completion
      of
      the Work.




25.3           Software
      Licenses.  To the extent Contractor purchases any software which
      software is necessary or otherwise desirable for the continued operation of
      the
      Project after Substantial Completion, Contractor shall register Owner as the
      licensee of such software with the applicable Supplier.




25.4           Warranty.  Contractor
      expressly warrants that there has been, and covenants that there will be, no
      violation, misappropriation or infringement of any trade secret, patent,
      trademark, copyright, or other third-party property right (including any
      violation of a third-party license) in any way connected with or arising out
      of
      performing the work specified in this Agreement.




25.5           Subcontractors.  Notwithstanding
      anything to the contrary in the foregoing, Contractor and Owner acknowledge
      and
      agree that, despite Contractor’s commercially reasonable efforts to satisfy the
      requirements of Section25.1
      with respect to obtaining licenses of intellectual property from certain
      Subcontractors, certain of the subcontracts include provisions that licenses
      of
      intellectual property provided by the applicable Subcontractor are granted
      with
      respect to use on or in connection with the Project and not in connection with
      any other project of Owner, and that Owner’s ability to use such intellectual
      property in altering the Project or any other project of Owner may be restricted
      or prohibited.  Contractor shall provide Owner a list of subcontracts
      with such restrictions or limitations.




26.           **ASSIGNMENT
      BY OWNER**




26.1           Assignment.




26.1.1                      Assignment
      to Financing Entities.  Owner may, without Contractor’s prior
      consent but upon five (5) days prior Notice to Contractor, make a collateral
      assignment of all or part of its right, title, and interest in this Agreement
      to
      any Financing Entity.  Any such Financing Entity may further
      sub-assign all or any portion of Owner’s rights and obligations hereunder to
      Owner or any Affiliate of Owner in connection with any financing or refinancing
      related to the development, construction, operation and maintenance of the
      Project.  Contractor acknowledges that the Financing Parties may under
      certain circumstances assume the interests and rights of Owner under the
      Contract Documents, and that the Financing Parties may under certain
      circumstances foreclose upon and sell, or cause Owner to sell or lease the
      Project and cause any new lessee or purchaser of the Project to assume all
      of
      the interests, rights and obligations of Owner arising under the Contract
      Documents.  In such event, Contractor hereby agrees to the assignment
      by Owner and the Financing Parties of the Contract Documents and its




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 rights
        herein to such purchaser or lessee.  Contractor agrees that, upon
        receipt of written notice of such permitted assignment, it shall deliver
        all
        documents, data, Notices, and other communications required to be delivered
        to
        Owner hereunder to Owner and to the Financing Entities or to any other permitted
        assignee at such address as such Persons shall designate to Contractor in
        writing.




26.1.2                      Assignment
      to an Affiliate of Owner.  Owner may, without Contractor’s prior
      consent but upon five (5) days prior Notice to Contractor, assign all or part
      of
      Owner’s right, title, obligations and interest in this Agreement to any
      Affiliate of Owner (for purposes of this Section26.1.2 only, the reference to “twenty percent
      (20%)” in the last sentence of the definition of Affiliate shall be replaced
      with “fifty percent (50%)”) if performance security for such Affiliate’s
      obligations is provided in accordance with any of subsections (a), (b), (c)
      or (d) in this
Section26.1.2
      below.  Owner’s Notice shall provide reasonable supporting
      documentation and financial calculations reasonably demonstrating that the
      relevant conditions set forth in either subsection (a), (b), (c)
      or (d) of this
Section26.1.2
      are
      satisfied.




(a)           Such
      Affiliate has a Tangible Net Worth of at least Two Hundred Million Dollars
      ($200,000,000) (the “**Minimum Tangible Net Worth**”) and a credit
      rating equal to or greater than the Threshold Rating; provided,
however, if such Affiliate’s Tangible Net Worth declines by more than
      thirty percent (30%) of the Minimum Tangible Net Worth or its credit rating
      falls below the Threshold Rating, such Affiliate shall provide, or cause to
      be
      provided, either: (i) a letter of credit, bond or other form of security
      from a financial institution reasonably acceptable to Contractor, securing
      its
      obligations under this Agreement in an amount equal to the Guaranteed Amount;
      or
      (ii) a guaranty from an entity having an equivalent or higher credit rating
      than the Threshold Rating, guaranteeing such Affiliate’s obligations under this
      Agreement in an amount equal to the Guaranteed Amount.




(b)           Such
      Affiliate has written commitments from lenders or equity investors (where the
      lead lender or investor has an equivalent or higher credit rating than the
      Threshold Rating) to provide financing for the Project in an amount equal to
      no
      less than the portion of the Separated Contract Price then remaining to be
      paid,
      and all conditions precedent to such commitments (except such assignment) have
      been met to close financing and fund the Project.




(c)           Such
      Affiliate causes to be provided a letter of credit in support of its obligations
      under this Agreement from a bank that has senior unsecured debt rated at least
      A- by Standard & Poors or A3 by Moody’s (or an equivalent rating from a
      similar rating agency), and such letter of credit: (i) names Contractor as
      the stated beneficiary, and (ii) has a stated amount at least equal to the
      sum of the Guaranteed Amount.




(d)           If (i) the
      Owner’s Parent Guaranty remains in effect, or (ii) Owner provides a
      guarantee of such Affiliate’s obligations under this Agreement from an entity
      having an equivalent or higher credit rating than the Threshold Rating, in
      form
      and substance reasonably acceptable to Contractor as set forth in
Exhibit Z-2, and in an amount equal to the Guaranteed
      Amount.  In the event that the guarantee provided by Owner pursuant to
      this Section26.1.2(d) lapses or
      terminates, such Affiliate shall provide, within twenty (20) days of Notice
      of
      such lapse or termination from Contractor, a substitute guarantee in form and
      substance reasonably acceptable to Contractor as set forth in
Exhibit Z-2of assignee’s obligations under this




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 Agreement
        in an amount equal to the Guaranteed Amount from an entity having an equivalent
        or higher credit rating than the Threshold Rating.




Upon
      the assignment of Owner’s rights and obligations hereunder to any Affiliate
      pursuant to subsections (a), (b), (c)
      or (d) of this Section26.1.2,
      and such Affiliate’s assumption in
      writing of such rights and obligations, (1) Owner shall be deemed released
      from and shall have no further rights, obligations, responsibilities or
      liabilities under this Agreement, (2) in the case of subsections (a), (b), (c)
      and (d)(ii) of this
Section26.1.2,
      Owner’s Parent
      Guaranty shall be released in its entirety, and (3) Owner shall remain
      responsible for all liabilities relating to matters occurring prior to such
      assignment, except to the extent such Affiliate agrees in writing to be
      responsible for such liabilities.




26.1.3                      Assignment
      to Other Persons.  In addition, Owner may assign all or part of
      its right, title, obligations and interest in this Agreement to any other Person
      with the prior written approval of Contractor, which approval shall not be
      unreasonably withheld or delayed.  As a condition to any such
      assignment, Contractor in its sole discretion may require that the prospective
      assignee provide performance security for such assignee’s obligations hereunder
      as follows.  Owner shall provide Contractor with a written request for
      approval, together with reasonable supporting documentation and financial
      calculations reasonably demonstrating that, if Owner proposes to assign all
      or
      any part of its right, title, obligations and interest in this Agreement to
      an
      assignee pursuant to subsections (a), (b), (c)
      or (d) of this Section26.1.3,
      the relevant conditions are
      satisfied.  If the required conditions of any one of
      subsection (a), (b), (c)
      or (d) of this Section26.1.3
      are satisfied, Contractor shall not be
      entitled to withhold its approval of such assignment on the basis of
      insufficient payment and performance security.




(a)           If
      any proposed assignee has a Tangible Net Worth (calculated in accordance with
      generally accepted accounting principles) of at least the Minimum Tangible
      Net
      Worth and a credit rating equal to or greater than the Threshold Rating,
      Contractor may not require any performance security for Owner’s obligations from
      such prospective assignee upon such Person’s assumption of this Agreement;
provided, however, if such assignee’s Tangible Net Worth declines
      by more than thirty percent (30%) of the Minimum Tangible Net Worth or its
      credit rating falls below the Threshold Rating, such assignee shall provide,
      or
      cause to be provided, either:  (i) a letter of credit, bond or
      other form of security from a financial institution reasonably acceptable to
      Contractor, securing assignee’s obligations under this Agreement in an amount
      equal to the Guaranteed Amount, or (ii) a guaranty from an entity having an
      equivalent or higher credit rating than the Threshold Rating, guaranteeing
      assignee’s obligations under this Agreement in an amount equal to the Guaranteed
      Amount.




(b)           If
      any proposed assignee has written commitments from lenders or equity investors
      (where the lead lender or investor has an equivalent or higher credit rating
      than the Threshold Rating) to provide financing for the Project in an amount
      equal to no less than the portion of the Separated Contract Price then remaining
      to be paid, and all conditions precedent to such commitments (except such
      assignment) have been met to close financing and fund the Project, Contractor
      may not require any performance security for Owner’s obligations from such
      prospective assignee upon such Person’s assumption of this
      Agreement.




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(c)           If
      any proposed assignee causes to be provided a letter of credit in support of
      such assignee’s obligations under this Agreement from a bank that has senior
      unsecured debt rated at least A- by Standard & Poors or A3 by Moody’s (or an
      equivalent rating from a similar rating agency), and such letter of credit:
      (i) names Contractor as the stated beneficiary, and (ii) has a stated
      amount at least equal to the sum of the Guaranteed Amount, Contractor may not
      require further performance security from any prospective assignee.




(d)           If
      (iii) the Owner’s Parent Guaranty remains in effect, or (iv) Owner
      provides a guarantee of such assignee’s obligations under this Agreement from an
      entity having an equivalent or higher credit rating than the Threshold Rating,
      in form and substance reasonably acceptable to Contractor as set forth in
Exhibit Z-2, and in an amount equal to the Guaranteed Amount,
      Contractor may not require any performance security for Owner’s obligations from
      such prospective assignee upon such Person’s assumption of this
      Agreement.  In the event that the guarantee provided by Owner pursuant
      to this Section26.1.3(d) lapses
      or terminates, assignee shall provide, within twenty (20) days of Notice of
      such
      lapse or termination from Contractor, a substitute guarantee in form and
      substance reasonably acceptable to Contractor as set forth in
Exhibit Z-2 of assignee’s obligations under this Agreement in an
      amount equal to the Guaranteed Amount from an entity having an equivalent or
      higher credit rating than the Threshold Rating.




Upon
      the assignment of Owner’s rights and obligations as approved by Contractor under
      the first paragraph of this Section26.1.3, and such permitted assignee’s
      assumption in writing in of such rights and obligations, (1) Owner shall be
      deemed released from and shall have no further rights, obligations,
      responsibilities or liabilities under this Agreement, (2) in the case of
      subsection (a), (b), (c)
      and (d)(ii) of this
Section26.1.3,
      Owner’s Parent
      Guaranty shall be released in its entirety, and (3) Owner shall remain
      responsible for all liabilities relating to matters occurring prior to such
      assignment, except to the extent such permitted assignee agrees in writing
      to be
      responsible for such liabilities.




26.1.4                      Assignment
      in Violation.  Any attempted assignment or delegation in violation
      of this Section26.1 shall be
      null and void and shall be ineffective to relieve Owner of its obligations
      hereunder.




26.1.5                      Owner
      Indemnitee to Include Successors and Assigns.  Upon any assignment
      by Owner hereunder, the definition of “**Owner Indemnitee**” shall
      be deemed modified to include the assignor and permitted assignee under such
      assignment and each of their respective employees, agents, partners, Affiliates,
      shareholders, directors, officers, successors and
      assigns.




26.2           Transfer
      of Work; Third-Party Beneficiaries.  Owner may, upon reasonable
      advance written notice to Contractor not to be less than five (5) Business
      days,
      assign, convey or transfer all or part of its right, title, and interest in
      the
      Work to any Affiliate of Owner (whether or not such Affiliate provides
      consideration to Owner for such assignment, conveyance or
      transfer).  Each such Affiliate-assignee shall be deemed to be a
      third-party beneficiary of the following provisions of this
      Agreement:  Article17, but only to the extent any
      portion of the
      Work is assigned, conveyed or transferred to such Affiliate assignee,
Article23, but only to the
      extent any portion of the Work is assigned, conveyed or transferred to such
      Affiliate-assignee,




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        Article29.  Owner
        shall have the right to enforce any provisions of this Agreement with respect
        to
        any Work assigned, conveyed or transferred to an Affiliate (including any
        warranties, indemnities or rights to receive liquidated damages with respect
        to
        such Work) and such assignment, conveyance or transfer shall not affect Owner’s
        rights hereunder with respect to any Work.




27.           **ASSIGNMENT
      BY CONTRACTOR**




Contractor
      understands that this Agreement is personal to Contractor.  Contractor
      shall have no right, power, or authority to assign or delegate this Agreement
      or
      any portion thereof, either voluntarily or involuntarily, or by operation of
      law.  Absent Owner’s prior written approval, Contractor’s attempted
      assignment or delegation of any of its Work hereunder shall be null and void
      and
      shall be ineffective to relieve Contractor of its responsibility for the Work
      assigned or delegated.  Nothing herein shall be deemed to limit the
      right of Contractor to subcontract out portions of this Work to others in
      accordance with the other terms and conditions of this Agreement.




28.           **HAZARDOUS
      MATERIALS**




28.1           Use
      by Contractor.  Contractor shall not and shall not permit any of
      its Subcontractors, directly or indirectly to, permit the manufacture, storage,
      transmission or presence of any Hazardous Materials on the Site, and shall
      not
      and shall not permit any of its Subcontractors to release, discharge or
      otherwise dispose of any Hazardous Materials on the Site, in each case except
      in
      accordance with Applicable Laws.




28.2           Remediation
      by Contractor.  Without limiting what may constitute a “Change In
      Law” hereunder, Contractor shall conduct and complete all investigations,
      studies, sampling, testing and remediation of the Site in connection with the
      potential release, discharge or presence of Hazardous Materials brought onto
      or
      generated at the Site by Contractor or any Subcontractor or any third-party
      (other than Owner, except to the extent that such Hazardous Materials were
      brought onto or generated at the Site and delivered to Contractor or any
      Subcontractor to be handled by the same in the course of performing the Work)
      to
      the extent required under any Applicable Laws.  Contractor shall
      promptly comply with all lawful orders and directives of all Governmental
      Authorities regarding Applicable Laws relating to the use, transportation,
      storage, handling, presence, or release by Contractor, any Subcontractor or
      any
      Person acting on its or their behalf or under its or their control of any
      Hazardous Materials brought onto or generated at the Site by Contractor or
      any
      Subcontractor, except to the extent any such orders or directives are being
      contested in good faith by appropriate proceedings in connection with the
      Work.




28.3           Notice
      of Hazardous Materials.  If Contractor discovers, encounters or is
      notified of the existence of any contaminated materials or Hazardous Materials
      at the Site:




(a)           Contractor
      shall promptly notify Owner thereof and restrict access to the area containing
      such contaminated materials or Hazardous Materials;




(b)           if
      Contractor or any Subcontractor has brought such Hazardous Materials onto the
      Site or generated such Hazardous Materials, Contractor shall promptly remove
      such Hazardous Materials from the Site and remediate the Site in accordance
      with
      all Applicable




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 Laws
        and Applicable Permits (including Contractor’s EPA Hazardous Material Disposal
        Permit) and at Contractor’s sole cost and expense; and




(c)           if
      Contractor or any Subcontractor has brought such Hazardous Materials onto the
      Site or generated such Hazardous Materials, Contractor shall not be entitled
      to
      any extension of time or additional compensation hereunder for any delay or
      costs incurred by Contractor as a result of the existence of such Hazardous
      Materials.




28.4           Suspension
      and Mitigation.  Contractor shall suspend the Work if required by
      Owner in accordance with Section20.4.  Contractor shall use
      reasonable efforts consistent with the requirements of Applicable Law or the
      health and safety of persons or property to mitigate the effects of such
      suspension and the amount of Work so suspended.




28.5           Pre-Existing
      Contamination.  Owner shall advise Contractor of any known
      material “pre-existing contamination.”  For purposes of this section,
“**pre-existing contamination**” means any Hazardous Materials
      present at the Site or Ancillary Site that were not brought to the Site or
      Ancillary Site by Contractor or its Subcontractors.  Upon notice from
      Contractor, Owner shall, at Owner’s sole expense and risk, determine the
      appropriate action to be taken with respect to such pre-existing contamination,
      including, as Owner determines is necessary, arranging for the handling,
      storage, transportation, treatment or delivery for disposal of such pre-existing
      contamination.  In the event Contractor executes or completes (with
      the concurrence of the Owner’s Representative) any required governmental forms
      relating to regulated activities, including any storage, treatment,
      transportation, handling or disposal of Hazardous Materials, Contractor shall
      be
      acting as, and be deemed to have acted as, Owner’s agent.




28.6           Handling
      Pre-Existing Contamination as part of the Work.  Notwithstanding
      anything to the contrary herein, in the event that Contractor agrees to
      remediate or otherwise handle any pre-existing contamination as part of the
      Work, such remediation or handling shall be performed by specialty
      Subcontractors, Sections28.4 or 28.5
      shall not apply, and Contractor shall be
      responsible for such pre-existing contamination as though such materials were
      brought onto the Site or generated by Contractor or a Subcontractor;
provided that Contractor’s liabilities arising out of such pre-existing
      contamination shall not exceed the liability assumed by such specialty
      Subcontractor under the terms and conditions of its subcontract with Contractor
      for such Work.  Notwithstanding anything to the contrary herein, Owner
      shall have the right to review and approve any such subcontract before
      Contractor enters into such subcontract, such approval not to be unreasonably
      delayed.




29.           **NON-PAYMENT
      CLAIMS**




To
      the extent payment by Owner has been made in accordance with
Article6:  (a) Contractor shall not
      directly or indirectly create, incur, assume or suffer to be created by it
      or
      any Subcontractor, employee, laborer, materialman or other supplier of goods
      or
      services any right of retention, mortgage, pledge, assessment, security
      interest, lease, advance claim, levy, claim, lien, charge or encumbrance on
      the
      Work, the Site, the Project or any part thereof or interest therein (each a
      “**Contractor Lien**”); (b) Contractor shall keep the Site,
      the Work, the Equipment and Materials, including the Owner Furnished Equipment,
      the Leased Equipment




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        all Subcontractor equipment and materials free of Contractor Liens; and
        (c) Contractor shall promptly pay or discharge, and discharge of record,
        any such Contractor Lien or other charges which, if unpaid, might be or become a
        Contractor Lien.  Contractor shall notify Owner as soon as practicable
        of the assertion of any Contractor Lien.  If any Owner Indemnitee
        becomes aware of any Contractor Lien, such Owner Indemnitee may so notify
        Contractor in writing, and Contractor, to the extent payment by Owner has
        been
        made in accordance with Article6, shall then:  (x) satisfy and
        obtain the release of such Contractor Lien; or (y) defend Owner Indemnitees
        against any such Contractor Lien, provide assurances of payment as described
        in
        the last sentence of this Article29 and obtain the release of
        such Contractor
        Lien.  If Contractor does not promptly, and in any event within
        fifteen (15) days after such Notice, satisfy such Contractor Lien, give
        such Owner Indemnitee reasons in writing that are satisfactory to such Owner
        Indemnitee for not causing the release of such Contractor Lien, or contest
        such
        Contractor Lien in accordance with the provisions of the last sentence of
        this
Article29, then any Owner
        Indemnitee shall have the right, at its option, after written notification
        to
        Contractor, and subject to Applicable Law, to cause the release of, pay,
        or
        settle such Contractor Lien, and Owner at its sole option
        may:  (1) require Contractor to pay, within five (5) days
        after request by Owner; (2) draw on the Letter of Credit; or
        (3) withhold, in addition to the Retainage, other amounts due or to become
        due to Contractor (in which case Owner shall, if it is not the applicable
        Owner
        Indemnitee, pay such amounts directly to Owner Indemnitee causing the release,
        payment, or settlement of such liens or claims), all costs and expenses incurred
        by Owner Indemnitee in causing the release of, paying, or settling such
        Contractor Lien, including administrative costs, attorneys’ fees, and other
        expenses.  Contractor shall have the right to contest any such
        Contractor Lien, provided it first provides to Owner a bond or other assurances
        of payment reasonably satisfactory to Owner in the amount of such Contractor
        Lien and in form and substance reasonably satisfactory to
        Owner.




30.           **NOTICES
      AND COMMUNICATIONS**




30.1           Requirements.  Any
      Notice pursuant to the terms and conditions of this Agreement shall be in
      writing and:  (a) delivered personally; (b) sent by
      certified mail, return receipt requested; (c) sent by a recognized
      overnight mail or courier service, with delivery receipt requested; or
      (d) sent by confirmed facsimile transmission or electronic mail, with
      telephonic confirmation, to the following addresses:






If
                to Contractor:
            
            Fluor
                Enterprises, Inc.
              100
                Fluor Daniel Drive
              Greenville,
                SC  29607
              Attention:  Clinton
                W. Smith, Project Director
              Facsimile:  (864)
                567-1300
              E-mail:  Clinton.Smith@fluor.comWith
                a copy to:
            
            James
                J. Kenney
              Assistant
                General Counsel
              One
                Fluor Daniel Drive
              Sugar
                Land, TX  77478
              Facsimile:  (281)
                263-4093





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If
                  to Owner:
              
              Oak
                  Grove Management Company LLC
                1601
                  Bryan Street
                Dallas,
                  Texas  75201
                Attention:  Von
                  Thompson
                Facsimile:  (214)
                  812-6860
                E-mail:  Von.Thompson@txu.comWith
                  a copy to the
                Project
                  Representative:
              
              Oak
                  Grove Management Company LLC
                1601
                  Bryan Street
                Dallas,
                  Texas  75201
                Attention:  Von
                  Thompson
                Facsimile:  (214)
                  812-6860
                E-mail:  Von.Thompson@txu.comWith
                  a copy to:
              
              Oak
                  Grove Management Company LLC
                1601
                  Bryan Street
                Dallas,
                  Texas  75201
                Attention:  General
                  Counsel
                Facsimile:  (214)
                  812 6032


30.2           Effective
      Time.  Notices shall be effective when received by the other
      Party.




30.3           Representatives.  Any
      technical or other communications pertaining to the Work shall be with the
      Parties’ designated representative.  Each Party shall notify the other
      in writing of the name of such representatives.  The Project Director
      and the Project Representative each shall have knowledge of the Work and be
      available at all reasonable times for consultation.  Each Party’s
      representative shall be authorized on behalf of such Party to administer this
      Agreement, agree upon procedures for coordinating the efforts of the Parties,
      and, when appropriate, to furnish information to or receive information from
      the
      other Party in matters concerning the Work.




31.           **LIMITATIONS
      OF LIABILITY AND REMEDIES**




31.1           Limitations
      on Damages.  Except for liquidated damages as expressly set forth
      in this Agreement, or to the extent damages claimed by third-parties (other
      than
      Owner or Contractor Indemnitees) for which Contractor or Owner has a duty to
      indemnify hereunder as expressly provided in Article23 are shown to be consequential
      in nature,
      notwithstanding anything else in this Agreement to the contrary, no Party (nor
      that Party’s subcontractors) shall be liable to any other Party hereto for any
      loss of profits, loss of revenue, or loss of use of Equipment and Materials
      or
      the Project, downtime costs, increased expense of operation or maintenance
      of
      the Equipment and Materials or the Project, loss of opportunity or goodwill,
      cost of purchased or replacement power, equipment or systems, cost of capital,
      claims of customers for such damages, any governmental fines, penalties or
      sanctions imposed (except as otherwise expressly provided in
Article23) or any loss, damage
      or other liability otherwise equivalent to or in the nature of any indirect,
      incidental, consequential, exemplary, or special damages arising from performing
      or a failure to perform any obligation under this Agreement, whether such
      liability arises in contract, tort (including negligence or strict liability),
      or otherwise.




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31.2           Limitations
      on Contractor’s Liability.




31.2.1                      Maximum
      Liability Amount.  Prior to Substantial Completion of a Unit,
      Contractor’s and its Subcontractors’ liability for claims by Owner arising out
      of or relating to the performance or non-performance of obligations or the
      Work
      with respect to such Unit shall in no event be greater in the aggregate than
      an
      amount equal to *** percent (***%) of the Separated Contract Price related
      to
      such Unit; provided that Contractor’s liability for the Owner Furnished
      Equipment included in a Unit, howsoever arising, including the impacts on
      Contractor of any failures or deficiencies in the performance and warranties
      of,
      or delays, to the extent attributable in any way to the Owner Furnished
      Equipment, liquidated damages related thereto, and any failure or default by
      the
      Upgrade Suppliers to perform with respect to such Unit in accordance with the
      terms of the Upgrade Contracts to the extent such failure or default adversely
      affects the Contractor, shall not exceed *** Dollars ($***) per
      Unit.  Following the Substantial Completion Date of a Unit,
      Contractor’s and its Subcontractor’s liability, howsoever caused, for claims by
      Owner arising out of or relating to the performance or non-performance of
      obligations or the Work, including claims for payment of Performance Liquidated
      Damages and Delay Liquidated Damages, with respect to such Unit shall in no
      event be greater than an amount equal to *** percent (***%) of the portion
      of
      the Separated Contract Price related to such Unit; provided that
      Contractor’s liability for the Owner Furnished Equipment included in a Unit,
      howsoever arising, including the impacts on Contractor of any failures or
      deficiencies in the performance and warranties of, or delays, to the extent
      attributable in any way to the Owner Furnished Equipment, liquidated damages
      related thereto, and any failure or default by the Upgrade Suppliers to perform
      with respect to such Unit in accordance with the terms of the Upgrade Contracts
      to the extent such failure or default adversely affects the Contractor, shall
      not exceed *** Dollars ($***) per Unit.  Notwithstanding anything to
      the contrary in the foregoing, nothing contained in this Section31.2.1 shall be construed to limit
      Contractor’s
      liability (a) with respect to any of its indemnity obligations under
Article23, or (b) with
      respect to any willful misconduct or fraud on the part of Contractor’s senior
      supervisory personnel at the Project Director level or
      above.




31.2.2                      Maximum
      Liquidated Damages.  In no event shall Contractor’s aggregate
      liability (a) under Section15.1 for Delay Liquidated Damages
      exceed ***
      percent (***%) of the portion of the Separated Contract Price applicable to
      the
      Unit to which such Delay Liquidated Damages relate; (b) under
Section15.3 for Performance
      Liquidated Damages exceed *** percent (***%)****of the
      portion of the Separated Contract Price applicable to the Unit to which such
      Performance Liquidated Damages relate; and (c) in the aggregate under
Sections15.1 and 15.3
      exceed *** percent
      (***%)****in the aggregate of the portion of the Separated
      Contract Price applicable to the Unit to which such liquidated damages
      relate.  Notwithstanding any of the foregoing provisions of this
Section31.2.2, the limitations
      of this Section31.2.2 shall not
      limit Owner’s remedies for any other breach of this Agreement other than a
      failure of a Unit to achieve Substantial Completion on or before the Substantial
      Completion Guaranteed Date for such Unit or the failure of a Unit to satisfy
      the
      Performance Guarantees.




***
      CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE
      COMMISSION.




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31.2.3                      Calculation
      of Liability.  Notwithstanding anything herein to the contrary,
      for purposes of determining whether the maximum liability amounts provided
      in
Section31.2.1 have been
      exceeded, the following items shall be excluded from the calculation of any
      such
      maximum liability amount: (a) amounts expended to achieve Mechanical
      Completion, the Environmental Compliance Guarantees and the Minimum Performance
      Criteria (except, in each case, with respect to the Owner Furnished Equipment
      for which all amounts expended shall be included in the calculation of such
      maximum liability amounts); (b) insurance proceeds from the OCIP policies
      or the Project-specific insurance policies obtained by Contractor pursuant
      to
Article21 (not including any
      proceeds from any other insurance coverage of Contractor); and (c) amounts
      paid by Contractor to or on behalf of Owner in respect of any damages or
      third-party claims (other than Owner Indemnitees and Contractor Indemnitees)
      arising out of the willful misconduct or fraud of Contractor’s senior
      supervisory personnel at the Project Director level or above.  For the
      purposes of this Section31.2,
      the Separated Contract Price shall be allocated fifty percent (50%) to
      Unit 1 and fifty percent (50%) to Unit 2.




31.3           Specific
      Performance.  In addition to any other rights and remedies of
      Owner hereunder, as a specific performance obligation, Contractor guarantees
      that the Project shall as a condition to Substantial Completion, Successfully
      Run the Emissions Tests and achieve the Environmental Compliance
      Guarantees.  Contractor acknowledges that Contractor’s failure to
      Successfully Run the Emissions Tests and achieve the Environmental Compliance
      Guarantees would cause Owner irreparable harm for which money damages would
      not
      constitute an adequate remedy, and therefore Contractor stipulates that specific
      performance is an appropriate remedy should Contractor breach such
      obligation.




31.4           Limitation
      on Owner’s Liability.  In no event shall Owner’s liability
      pursuant to this Agreement, whether arising in contract warranty, or otherwise,
      be greater in the aggregate than the Separated Contract Price and any other
      amounts for which Owner is expressly obligated to pay Contractor pursuant
      hereto, less amounts previously paid by Owner; provided, however
      that nothing contained in this Section31.4 or in any other provision of
      this
      Agreement shall be construed to limit Owner’s liability
      for:  (a) its indemnity obligations pursuant to
Article23; or (b) with
      respect to any willful misconduct or fraud on the part of Owner’s senior
      supervisory personnel for the Project at an equivalent level to Project Director
      and above.  Contractor’s sole recourse for any damages or liabilities
      due to Contractor by Owner pursuant to this Agreement shall be limited to the
      assets of Owner and to the parent guarantee provided by Owner hereunder without
      recourse individually or collectively to the assets of the members or the
      Affiliates of Owner, the Financing Entities or their respective officers,
      directors, employees or agents of Owner, its members or their
      Affiliates.




31.5           Releases,
      Indemnities and Limitations.  The releases, indemnities, waivers,
      subrogation, assumptions of and limitations on liabilities and limitations
      on
      remedies expressed in this Agreement, subject to the terms hereof, shall apply
      even in the event of fault, negligence, or strict liability of the Party
      released or indemnified, or whose liability is limited or assumed or against
      whom right of subrogation are waived and shall extend to such Party’s
      subcontractors, and in each case to such Party’s and its subcontractors’
Affiliates, officers, directors, employees, licensees, agents or
      partners.  If Owner is not the sole owner or operator of the Site or
      the Ancillary Sites, Owner shall obtain from such other owners or operators
      the
      same releases from and limitations on liabilities for Contractor’s benefit that
      are afforded to Contractor under this




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 Agreement.  The
        Parties acknowledge and agree that this Agreement satisfies the Express
        Negligence Rule.




31.6           Representations
      and Remedies.  Each Party makes no representations, covenants,
      warranties, or guarantees, express or implied, other than those expressly set
      forth herein and in the Exhibits hereto.




31.7           Limitation
      on Remedies.  It is the intent of Owner and Contractor that the
      provisions of this Agreement state all of the rights and remedies of the Parties
      with respect to this Agreement, and are the sole or exclusive (or words of
      similar import) rights or remedies for the failure to satisfy the applicable
      obligation arising hereunder.  The Parties’ rights, liabilities,
      responsibilities and remedies as stated herein with respect to this Agreement
      and the Work shall be the sole and exclusive remedies of the Parties for failure
      to satisfy such obligations, notwithstanding any right or remedy otherwise
      available at law or in equity.  For purposes of clarity, the foregoing
      shall not be construed to limit a Party’s right to exercise its dispute
      resolution rights under Article32 at any time during the term
      of this
      Agreement.****




32.           **DISPUTES**




32.1           Negotiations.  Subject
      to Section32.2, any disputes
      arising under this Agreement shall first be referred to Owner’s Project
      Representative and the Project Director.  Any dispute that cannot be
      resolved between Owner’s Project Representative and the Project Director within
      fourteen (14) days, or in the case of payment disputes five (5) days,
      after receipt by each thereof of Notice of such dispute (specifically
      referencing this Section32.1)
      shall be referred, by Notice setting forth, in reasonable detail, the basis
      of
      the dispute and signed by Owner’s Project Representative and the Project
      Director, to the executive officers of the Parties designated by them as their
      designated representatives (which shall not be Owner’s Project Representative or
      the Project Director) for resolution.  If the Parties, negotiating in
      good faith, fail to reach an agreement within a reasonable period of time,
      not
      exceeding twenty (20) days or, in the case of payment disputes,
      ten (10) days after such referral, then either Owner or Contractor may, if
      the dispute is in regards to an issue subject to Section32.2, notify the other of its desire
      to engage
      an Independent Expert in accordance with Section32.2, or may bring a suit, claim
      or cause of
      action in any state or federal court of law to protect its rights and interest
      hereunder in accordance with the terms of Section33.2 hereof.




32.2           Disputed
      Invoice Payments and Changes InWork.  In the case of a dispute
      with respect to technical engineering, procurement or construction issues
      regarding whether a Change In Work has occurred or Contractor has achieved
      a
      payment milestone satisfying such condition to an Invoice Payment, that is
      not
      resolved by the management negotiation procedure described in
Section32.1, upon determining
      to select an Independent Expert to resolve such dispute, the Party electing
      to
      utilize the Independent Expert shall notify the other Party in writing,
      nominating five (5) Independent Experts for the other Party’s
      review.  The other Party shall promptly, and in any event within ten
      (10) days notify the nominating Party whether any of the nominated experts
      are
      acceptable, and if not, shall nominate five (5) Independent Experts for the
      original nominating Party’s consideration.  If the Parties are unable
      to agree upon an Independent Expert within thirty (30) days, either Party may
      bring a suit, claim or cause of action in any state or federal court of
      law.  Any decision or award made by the Independent Expert shall be
      limited




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 in
        scope to the direct issue regarding the disputed Change In Work or Milestone
        Payment and shall be binding on both Parties.




32.3           Work
      to Continue.  Unless otherwise agreed in writing, Contractor shall
      diligently carry on the Work during the pendency of any disputes so long as
      all
      undisputed amounts payable to Contractor hereunder have been
      paid.




33.           **MISCELLANEOUS**




33.1           Severability.  The
      invalidity or unenforceability of any portion or provision of this Agreement
      shall in no way affect the validity or enforceability of any other portion
      or
      provision hereof.  Any invalid or unenforceable portion or provision
      shall be deemed severed from this Agreement and the balance of this Agreement
      shall be construed and enforced as if this Agreement did not contain such
      invalid or unenforceable portion or provision.  If any such provision
      of this Agreement is so declared invalid, the Parties shall promptly negotiate
      in good faith new provisions to eliminate such invalidity and to restore this
      Agreement as near as possible to its original intent and effect.




33.2           Governing
      Law; Consent to Jurisdiction and Venue.  This Agreement shall be
      governed by the internal laws of the State of Texas, excluding its conflict
      of
      laws provisions.  EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT, AND
      TO THE EXTENT PERMITTED BY LAW, THE PARTIES HERETO AGREE THAT ALL ACTIONS OR
      PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT, SHALL BE TRIED AND
      LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF DALLAS,
      STATE OF TEXAS.  THE PARTIES, TO THE EXTENT THEY MAY LEGALLY DO SO,
      WAIVE ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF
FORUMNONCONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY
      PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION AND STIPULATE THAT THE
      STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF DALLAS, STATE OF TEXAS SHALL
      HAVE INPERSONAM JURISDICTION AND VENUE OVER SUCH PARTY FOR THE
      PURPOSE OF LITIGATING ANY SUCH DISPUTE, CONTROVERSY, OR PROCEEDING ARISING
      OUT
      OF RELATED TO THIS AGREEMENT.  THE PARTIES ACKNOWLEDGE AND AGREE THE
      TERMS AND CONDITIONS OF THIS AGREEMENT HAVE BEEN FREELY, FAIRLY AND THOROUGHLY
      NEGOTIATED.  FURTHER, THE PARTIES ACKNOWLEDGE AND AGREE SUCH TERMS AND
      CONDITIONS, INCLUDING THOSE RELATING TO WAIVERS, ALLOCATIONS OF, RELEASES FROM,
      INDEMNITIES AGAINST AND LIMITATIONS OF LIABILITY, WHICH MAY REQUIRE CONSPICUOUS
      IDENTIFICATION, HAVE NOT BEEN SO IDENTIFIED BY MUTUAL AGREEMENT AND THE PARTIES
      HAVE ACTUAL KNOWLEDGE OF THE INTENT AND EFFECT OF SUCH TERMS AND
      CONDITIONS.




33.3           Survival
      of Termination.  The provisions of this Agreement which by their
      nature are intended to survive the termination, cancellation, completion or
      expiration of this Agreement including any express limitations of or releases
      from liability shall continue as a valid and enforceable obligation of the
      Party
      notwithstanding any such termination, cancellation, completion or
      expiration.




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33.4           No
      Oral Modification.  No oral or written amendment or modification
      of this Agreement (including a Change In Work Form accepted under
Article16) by any officer,
      agent, or employee of Contractor or Owner, either before or after execution
      of
      this Agreement, shall be of any force or effect unless such amendment or
      modification is in writing and is signed by a duly authorized representative
      of
      the Party to be bound thereby.




33.5           No
      Waiver.  A Party’s waiver of any breach or failure to enforce any
      of the terms, covenants, conditions, or other provisions of this Agreement
      at
      any time shall not in any way affect, limit, modify, or waive that Party’s right
      thereafter to enforce or compel strict compliance with every term, covenant,
      condition, or other provision hereof, any course of dealing or custom of the
      trade notwithstanding.  All waivers must be in writing and signed on
      behalf of Owner and Contractor in accordance with Section33.4.  Contractor and Owner each
      represents and warrants to its knowledge that as of the date hereof the other
      Party isnot in breach or default of its obligations under this Agreement, and
      that Contractor and Owner, respectively, has no known unresolved claims against
      the other Party, nor has reason to make any claim not heretofore asserted and
      delivered by official Notice based on facts known as of this
      date.




33.6           Review
      and Approval.  Notwithstanding Owner’s or the Financing Entities’,
      if any, review or Owner’s approval of any items submitted to Owner or the
      Financing Entities for review or approval, neither Owner nor the Financing
      Entities, if any, or any of their representatives or agents reviewing such
      items, including the Owner’s Engineer, shall have any liability for, under or in
      connection with the items such Person reviews or approves and Contractor shall
      remain responsible for the quality and performance of the
      Work.  Neither Owner’s nor the Financing Entities’ review or approval
      of any items, including the Submittals, shall constitute a waiver of any claim
      or right that Owner may then or thereafter have against
      Contractor.  Unless otherwise expressly provided herein, Owner shall
      not unreasonably delay its review of any item submitted by Contractor for review
      or approval.  Any inspection comment, review or approval of any
      Contractor Deliverable shall be performed in Owner’s sole
      discretion.  The review or approval by Owner of any Subcontractor
      shall not constitute any approval of the Work undertaken by any such Person,
      cause Owner to have any responsibility for the actions, the Work, or payment
      of
      such Person or to be deemed to be in an employer-employee relationship with
      any
      such Subcontractor, or in any way relieve Contractor of its responsibilities
      and
      obligations under this Agreement.




33.7           Time.  Subject
      to the terms and conditions of this Agreement, including the express provisions
      providing for adjustment of the Substantial Completion Guaranteed Dates and
      the
      provisions limiting Contractor’s liability for its failure to achieve
      Substantial Completion by the Substantial Completion Guaranteed Date, Contractor
      acknowledges that timely achievement of Substantial Completion by the
      Substantial Completion Guaranteed Date is essential to Owner, and therefore
      TIME
      IS OF THE ESSENCE with respect to meeting the Substantial Completion Guaranteed
      Date; provided that Owner’s sole and exclusive remedies for delays in
      performance of the Work shall be as set forth in Sections15.1, 15.6
      and 19.1(g).****




33.8           Third
      Party Beneficiaries.  The provisions of this Agreement are
      intended for the sole benefit of Owner and Contractor and there are no
      third-party beneficiaries hereof, except the Financing Entities where expressly
      provided and assignees as contemplated by the terms of Article26.




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33.9           Financing
      Matters.




33.9.1                      Contractor
      Cooperation.  Contractor understands that Owner may obtain
      financing for the Project consisting of:  (a) one or more
      construction or permanent loans, to be secured by all or a portion of the
      Project and Owner’s rights under this Agreement; (b) lease financing
      pursuant to which Owner may assign this Agreement to one or more Financing
      Entities that may then collaterally assign this Agreement to other Financing
      Entities or sub-assign all or any portion of Owner’s rights and obligations
      hereunder to Owner or an Affiliate of Owner; or (c) a combination
      thereof.  In connection therewith, Contractor
      shall:  (x) execute any assignments, amendments and modifications
      hereto reasonably requested by the Financing Entities; provided that any
      such amendments or modifications to this Agreement are of a nature customarily
      obtained by financing parties for projects similar to the Project and do not
      alter the timeframes stated herein if altering such timeframes would adversely
      impact performance of the Work, or materially affect the obligations, benefits,
      risk or liability of Contractor arising out of the Agreement or the Separated
      Contract Price or proposed bonuses; (y) promptly execute or consent to
      other documents to the extent reasonably required by the Financing Entities,
      which consents may, among other things, include provisions whereby Contractor
      agrees to:  (i) provide such Financing Entities reasonable notice
      of and opportunity to cure Owner’s defaults hereunder; (ii) allow such
      Financing Entities (as security for Owner’s financing) to be assigned all of
      Owner’s rights hereunder and in such assets in the event of an Owner’s Event of
      Default; provided, however, that Owner shall keep Contractor
      currently informed of such assignment or reassignment; (iii) provide for
      other customary investor or lender protection provisions that are not in
      violation of Applicable Law; and (iv) provide copies of any Certificate of
      Substantial Completion, Notice of Non-Critical Deficiencies, or any other
      certificates, Notices and any documents and plans submitted to Owner for review
      or approval hereunder, to the Financing Entities and their designated agents
      or
      representatives; and (z) deliver customary legal opinions of counsel to
      Contractor in accordance with Section33.16.  Without limiting the
      foregoing, Contractor shall enter into such arrangements as Owner or the
      Financing Entities may reasonably request to ensure the continued availability
      of the Contractor’s Equipment and Materials at the Site and the right to use
      such Equipment and Materials (whether by Contractor, Owner, or Owner’s nominees)
      in the prosecution of the Work as contemplated by this Agreement until the
      Work
      is completed, including the granting of security interests in such Equipment
      and
      Materials and shall keep such Equipment and Materials free and clear of any
      liens or encumbrances that could materially affect Contractor’s, Owner’s, or
      Owner’s nominee’s rights with respect to such Equipment and Materials, except
      for those encumbrances which may be created by action of Owner associated with
      any financing of the Project.  Contractor shall respond promptly to
      requests for information regarding the qualifications, experience, past
      performance and financial condition of Contractor and other matters pertaining
      to Contractor’s obligations hereunder.  Notwithstanding the foregoing,
      under no circumstances shall Contractor be obligated to enter into any amendment
      and modification of this Agreement, or any other agreement with Owner or the
      Financing Entities, that materially (i) reduces Contractor’s rights as set
      forth in this Agreement; (ii) increases Contractor’s cost or risk to
      perform the Work, or (iii) reallocates to Contractor any risks or
      obligations that are allocated to Owner under this Agreement.




33.9.2                      Documents
      Requested by Financing Entities.  Contractor shall provide such
      data, reports, certifications and other documents, up to a maximum of five
      (5)
      copies each, or assistance related to the Work or this Agreement as may be
      reasonably requested by the




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 Financing
        Entities with respect to the financing of the Project; provided,
however, that the provision of this information shall not in any
        manner
        modify Contractor’s rights or obligations under any other provision of this
        Agreement.




33.10                      Other
      Assistance.  Contractor shall to the extent reasonably requested
      by Owner, assist Owner in dealing with Governmental Authorities and Financing
      Entities in any and all matters relating to the Work (including any
      interconnection facilities).




33.11                      Further
      Assurances.  Owner and Contractor will each use its
      reasonable  efforts to implement the provisions of this Agreement, and
      for such purpose each, at the reasonable request of the other, will, without
      further consideration, promptly execute and deliver or cause to be executed
      and
      delivered to the other such assistance, or assignments, consents or other
      instruments in addition to those required by this Agreement, in form and
      substance satisfactory to the other, as the other may reasonably deem necessary
      or desirable to implement any provision of this Agreement.




33.12                      Record
      Retention.  Contractor agrees to retain for a period of
      five (5) years from the Final Completion Date all records relating to its
      performance of the Work or Contractor’s warranty obligations herein, and to use
      commercially reasonable efforts to cause its Subcontractors engaged in
      connection with the Work or the performance by Contractor of its warranty
      obligations herein to retain for the same period all their records relating
      to
      the Work.




33.13                      Binding
      on Successors, Etc.  Subject to Articles26 and 27,
      this Agreement shall be binding on the Parties hereto and on their respective
      successors, heirs and assigns.




33.14                      Merger
      of Prior Contracts.  This Agreement supersedes any other
      agreement, including the Pre-Authorization, the Original Agreement and the
      Amendment, whether written or oral, that may have been made or entered into
      between Owner and Contractor or by any office or officer of such Party relating
      to the Project or the Work; provided that any Changes In Work executed in
      accordance with the provisions of the Original Agreement and the Amendment
      after
      February 5, 2007 shall be deemed to be Changes In Work to this Agreement and
      shall remain in effect.  This Agreement, including the Exhibits hereto
      and any Changes In Work executed in accordance with the provisions of the
      Original Agreement and the Amendment after February 5, 2007, shall constitute
      the entire agreement between the Parties with respect to the Project, and there
      are no other agreements or commitments with respect to the Project except as
      set
      forth herein and therein.




33.15                      Counterparts.  This
      Agreement may be executed in any number of counterparts, and any Party hereto
      may execute any such counterpart, each of which when executed and delivered
      shall be deemed to be an original and all of which counterparts taken together
      shall constitute but one and the same instrument. This Agreement shall become
      effective when each Party hereto shall have received a counterpart by facsimile
      or electronic mail hereof signed by the other Parties hereto. The Parties agree
      that the delivery of this Agreement may be effected by means of an exchange
      of
      facsimile signatures with original copies to follow by mail or courier
      service.




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33.16                      Opinions
      of Contractor’s Counsel.  At the request of any Financing Entity
      in connection with any financing, Contractor shall deliver to Owner and any
      such
      Financing Entity, an opinion of counsel to Contractor that is reasonably
      acceptable to Owner and any such Financing Entity, opining as to the matters
      set
      forth in Sections4.1.1, 4.1.3,
4.1.4
      and 4.1.6.




33.17                      Set-Off.  Either
      Party may at any time, but shall be under no obligation to, set off any and
      all
      sums due from the other Party against sums due to such Party
      hereunder.




33.18                      Attorneys’
      Fees.  In the event any action by legal proceeding shall be
      instituted between Owner and Contractor in connection with this Agreement,
      the
      Party prevailing in such action shall be entitled to recover from the other
      Party all of its reasonable costs and expenses incurred in connection with
      such
      action by legal proceeding, including reasonable attorneys’ fees.




33.19                      Announcements;
      Publications.  Contractor shall coordinate with Owner with respect
      to, and provide advance copies to Owner for review of, the text of any proposed
      announcement or publication concerning the Work prior to the dissemination
      thereof to the public or to any Person.  If Owner delivers written
      notice to Contractor rejecting any such proposed announcement or publication
      within five (5) Business Days after receiving such advance copies, Contractor
      shall not make such public announcement or publication.




33.20                      Independent
      Contractor.  Contractor is an independent contractor, and nothing
      contained herein shall be construed as constituting any relationship with Owner
      other than that of owner and independent contractor, except as expressly
      provided in this Agreement pursuant to which Owner appoints Contractor as
      Owner’s agent with respect to certain equipment purchase agreements or purchase
      orders, or as creating any relationship whatsoever between Owner and
      Contractor’s employees.  Neither Contractor nor any of its employees
      is or shall be deemed to be an employee of Owner.




33.21                      Non-Solicitation.  Neither
      party shall, during the period ending on the earlier of Substantial Completion
      of the second Unit or the expiration or termination of this Agreement, and
      for a
      period of ninety (90) days thereafter, directly or indirectly for itself or
      on
      behalf of, or in conjunction with, any of its Affiliates, solicit, hire or
      employ an employee of the other with whom that Party has had substantial contact
      during the term of this Agreement; provided that hiring any such Person
      who responds to a general advertisement not directly aimed at such other Party’s
      employees shall not be a violation of this Section33.21.




33.22                      Audit.  With
      respect to any Change In Work which adjusts the Separated Contract Price by
      compensating Contractor on a reimbursable cost or time and materials basis,
      or
      with respect to Work performed by Contractor on a reimbursable cost or time
      and
      materials basis pursuant to an Owner’s Directive, Contractor shall maintain, in
      accordance with generally accepted accounting principles consistently applied,
      records and books of account.  Owner, Owner’s Engineer, the OCIP
      Administrator, the Financing Entities, if any, and their authorized
      representatives shall be entitled to inspect and audit such records and books
      of
      account during normal business hours and upon reasonable advance notice during
      the course of the Work and for a period of one (1) year after Final Completion
      of the second Unit (or for such longer period of time as may be required
      pursuant to Section5.9);
provided that, the purpose of
      any such audit




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 shall
        be only for verification of such costs, and Contractor shall not be required
        to
        keep records of or provide access to those of its costs covered by the fee,
        allowances, fixed rates, unit prices, lump sum amounts, or of costs which
        are
        expressed in terms of percentages of other costs; providedfurther
        that Owner shall be permitted access and Contractor shall retain records
        and
        books of account for such longer period, not to exceed six (6) months, as
        may be
        required for Owner to complete an audit begun and which Owner has made
        reasonable efforts to complete during the initial period ending one (1) year
        after the Final Completion Date of the second Unit.  Contractor shall
        retain all such records and books of account for a period of one (1) year
        after
        the Final Completion Date of the second Unit.  Contractor shall cause
        all of its direct (i.e., first tier) Subcontractors, and shall use commercially
        reasonable efforts to cause its other Subcontractors, engaged in connection
        with
        the Work or the performance by Contractor of its warranty obligations herein
        to
        retain for the same period all their records relating to the Work subject
        to the
        same limitations set forth in this Section33.22.  Notwithstanding the
        foregoing, Owner acknowledges that Alstom Power Inc. may only retain such
        records and provide access for such audits for a period of two (2) years
        after
        the Final Completion Date of Unit 1.  Audit data shall not be
        released by the auditor to parties other than Contractor, Owner, Owner’s
        Engineer, the OCIP Administrator, the Financing Entities, if any, and their
        respective directors, officers, employees, and agents in connection with
        any
        such audit.  Without limiting the foregoing, Owner and Contractor
        acknowledge and agree that certain of the Agency Subcontracts provide that
        the
        respective Subcontractors will limit access to their books and records for
        audit
        or other purposes to approved third parties.  In any case where
        Contractor is instructed to proceed to comply with a Change In Work prior
        to the
        agreement of the change to the Separated Contract Price under
Article16, Contractor shall
        keep contemporary records of the cost of complying with the Change In Work
        and
        of time expended thereon.  Such records shall be open to inspection by
        Owner at all reasonable times until the expiration of the audit period set
        forth
        in this Section33.22.  If, as a result of any audit
        conducted pursuant to this Section33.22, the results of such audit
        indicate that
        Contractor received more or less than the amount to which it was entitled
        under
        this Agreement, either Owner shall pay the additional amount owed to Contractor
        or Contractor shall refund any overpayment to Owner, as applicable, in either
        case within ten (10) days of a written request therefor.  Owner shall
        be responsible for all costs and expenses of such audit.




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IN
      WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
      as
      of the date and the year first above written.




OWNER:OAK
                GROVE MANAGEMENT COMPANY LLC,
              a
                Delaware limited liability companyBy:
            /s/
              Michael P. ChildersName:            Michael
                P. Childers
              Its:                 President
                and Chief ExecutiveCONTRACTOR:FLUOR
                ENTERPRISES, INC.,
              a
                California corporationBy:
            /s/
              David E. ConstableName:            David
                E. Constable
              Its:                 Group
                President