Document:

ex10_a.htm

    Exhibit
      10(a)

    

    EXECUTION
      COPY

    

    

    AMENDMENT
      NO. 2 TO CREDIT AGREEMENT

    

    This
      AMENDMENT NO. 2, dated as of
      August 24, 2007 (this “Amendment”), is made to that
      certain $1,500,000,000 Revolving Credit Agreement, dated as of March 1, 2007,
      as
      amended by that certain Amendment No. 1 to Credit Agreement, dated as of June
      29, 2007 (as amended, the “Credit Agreement”), among
      Texas Competitive Electric Holdings Company LLC (formerly known as “TXU Energy
      Company LLC”) (“TCEH”), as the Borrower, certain
      lenders party thereto (the “Lenders”) and Credit
      Suisse, Cayman Islands Branch, as administrative agent for the Lenders (in
      such
      capacity, the “Agent”).

    

    PRELIMINARY
      STATEMENT:

    

    TCEH
      has requested that the Lenders agree to the further amendment of the Credit
      Agreement as set forth herein, and the Required Lenders have agreed to such
      request, subject to the terms and conditions of this
      Amendment.  Therefore, for good and valuable consideration, the
      receipt and adequacy of which are hereby acknowledged, the parties agree as
      follows:

    

    SECTION
      1.  Definitions.  Capitalized
      terms used but not defined herein have the meanings assigned to such terms
      in
      the Credit Agreement.

    

    SECTION
      2.  Amendments.  The
      Credit Agreement is hereby amended as follows:

    

    (a)           the
      definition of “Commitment Termination Date” set forth in Section 1.01 is hereby
      amended and restated in its entirety to read as
      follows:  ‘“Commitment Termination Date”
shall mean the earlier of: (i) the date of any issuance by the Borrower of
      any debt or preferred equity securities or the entering into by the Borrower
      of
      any credit facility, including any extension or refinancing of any other debt
      of
      the Borrower, but excluding (A) the issuance of pollution control revenue
      bonds, commercial paper, the Incremental Notes and the New Incremental Notes,
      (B) the entering into by the Borrower of any credit facility, the proceeds
      of
      which are to be used principally to support margin requirements under the
      long-term hedging program of the Borrower and its Affiliates consistent with
      that described in the Borrower’s report on Form 10-Q for the fiscal quarter
      ended June 30, 2007; and (C) borrowings, deemed borrowings and extensions
      of credit under uncommitted lines of credit and other credit facilities in
      place
      on February 24, 2007 or any credit facility described in clause (B) above;
      and (ii) February 23, 2008;

    

    (b)           the
      following definition is hereby added to Section 1.01 in appropriate alphabetical
      order:  ““New
      Incremental
      Notes”
means
      up to $1,500,000,000
      in unsecured notes issued on a single date by
      the Borrower after August 24,
      2007 and with a scheduled maturity
      after March 3, 2008.”;

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    

    

    (c)           the
      following subsection (f) is hereby added at the end of Section
      2.08:  “(f)The
Total
      Commitment shall, (i)
      on the date of execution of any
      credit facility described in clause (i)(B) of the definition of Commitment
      Termination Date, automatically and permanently reduce by an
      amount equal to (A) in the event that
      the Total Commitment has not already been reduced upon the issuance of New
      Incremental Notes pursuant to clause (ii) below, $500,000,000, or (B) in the
      event that the Total Commitment has already been reduced upon the issuance
      of
      New Incremental Notes pursuant to clause (ii) below, the lesser of (x)
      $500,000,000 and (y) the aggregate principal amount of the New
Incremental
      Notes that were issued, and
      (ii) on the
      date of issuance of any New
      Incremental Notes,
      automatically and permanently reduce by an amount equal to (A)
      in the event that
      the Total Commitment has not already been reduced pursuant to clause (i) above,
      the greater of (x) $500,000,000 and (y) the aggregate principal amount
of the New
Incremental
      Notes issued on
      such date, and (B) in the event
      that the Total
      Commitment has already been reduced pursuant to clause (i) above, the aggregate
      principal amount of the
New
Incremental
      Notes issued on
      such date.”; and

    

    (d)           Section
      2.09(b) is hereby amended and restated in its entirety to read as
      follows:  “(b) On any
      date on which the Total Commitment shall be reduced pursuant to
      Section 2.08(c),
      (d) or (f)
above,
      the Borrower shall, with respect
      to outstanding Loans, prepay such Loans and/or, with respect to LC Outstandings,
      deliver cash collateral to be held by the Agent in the Cash Collateral Account
      to the extent and for the duration necessary to cause the Outstanding Credits
      minus the amount of cash held in the Cash Collateral Account to be no greater
      than the Total Commitment (after giving effect to any such reduction pursuant
      to
      Section 2.08(c),
      (d) or
      (f)).  At
      such time that cash is no longer
      required to be held by the Agent as collateral under this Section 2.09(b),
      the Agent will repay and reassign to the Borrower any such cash then on deposit
      in the Cash Collateral Account, and the Lien of the Agent on the Cash Collateral
      Account with respect to such cash shall automatically
      terminate.”.

    

    SECTION
      3.
Effectiveness of Amendment.  This
      Amendment shall become effective as of the date first set forth above (the
      “Amendment Date”) when the Required Lenders and TCEH
      shall each have executed and delivered to the Agent a counterpart of this
      Amendment.

    

    SECTION
      4.  Representations and
      Warranties.  TCEH represents and warrants
      that:

    

    
      	
              (a)  

            	
              the
                representations and warranties contained in Article III of the Credit
                Agreement (with each reference therein to “this Agreement”, “hereunder”
                and words of like import referring to the Credit Agreement being
                deemed to
                be a reference to the Credit Agreement, as amended by this Amendment)
                are
                true and correct on and as of the Amendment Date as though made on
                and as
                of such date; and

            

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    

    
      	
              (b)  

            	
              no
                event has occurred and is continuing, or would result from the execution
                and delivery of this Amendment, that constitutes a Default or an
                Event of
                Default under the Credit Agreement, as amended by this
                Amendment.

            

    

    

    SECTION
      5.  Effect on the Credit
      Agreement.  Except as specifically provided above, the
      Credit Agreement shall continue to be in full force and effect and is hereby
      in
      all respects ratified and confirmed.

    

    SECTION
      6.  Cost, Expenses and
      Taxes.  TCEH agrees to pay on demand all costs and
      expenses of the Agent in connection with the preparation, execution and delivery
      of this Amendment and the other instruments and documents to be delivered
      hereunder, including, without limitation, the reasonable fees and out-of-pocket
      expenses of counsel for the Agent with respect thereto, and all costs and
      expenses (including, without limitation, reasonable counsel fees and expenses),
      if any, in connection with the enforcement (whether through negotiations, legal
      proceedings or otherwise) of this Amendment or such other instruments and
      documents.  In addition, TCEH agrees to pay any and all stamp and
      other taxes payable or determined to be payable in connection with the execution
      and delivery of this Amendment and the other instruments and documents to be
      delivered hereunder, and to save the Lenders and the Agent harmless from and
      against any and all liabilities with respect to or resulting from any delay
      in
      paying or omission to pay such taxes.

    

    SECTION
      7.  Execution in
      Counterparts.  This Amendment may be executed in any
      number of counterparts and by different parties hereto in separate counterparts,
      each of which when so executed and delivered shall be deemed to be an original
      and all of which taken together shall constitute but one and the same
      instrument.  Delivery of an executed counterpart of a signature page
      of this Amendment by facsimile transmission or other electronic transmission
      (i.e., a “pdf” or “tif”) shall be effective as delivery of a manually executed
      counterpart hereof.

    

    SECTION
      8.  Governing Law.  This
      Amendment shall be governed by, and construed in accordance with, the internal
      laws of the State of New York.

    

    

    

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              TEXAS
                COMPETITIVE ELECTRIC HOLDINGS COMPANY LLC

               

               

            
	 	
              By:

            	 
	 	 	
              Name:

            
	 	 	
              Title:

            

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

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              CITIBANK,
                N.A., as Lender

               

               

            
	 	
              By:

            	 
	 	 	
              Name:

            
	 	 	
              Title:

            

    

    

    

    

    

    

    

    

    

    

    

    

    

    

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              CREDIT
                SUISSE, CAYMAN ISLANDS BRANCH, as Lender

               

               

            
	 	
              By:

            	 
	 	 	
              Name:

            
	 	 	
              Title:

            

    

    

    

    

    

    

    

    

    

    

    

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        6ex10_b.htm

     

    
 

    
      EXHIBIT
        10(b)

      

      CONFIDENTIAL
        TREATMENT REQUESTED. 

      CONFIDENTIAL
        PORTIONS OF THIS DOCUMENT

      HAVE
        BEEN REDACTED AND HAVE BEEN FILED

      WITH
        THE COMMISSION.

    
      ENGINEERING,
        PROCUREMENT, AND CONSTRUCTION AGREEMENT

       

      by
        and between

       

      TXU
        US HOLDINGS COMPANY,

      a
        Texas corporation(“Owner”)

       

      and

       

      BECHTEL
        POWER CORPORATION,

       

      a
        Nevada corporation (“Contractor”)

       

      dated
        May 26, 2006

    

     

     

    

      
        
          EXECUTION
            COPY

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	 	 	
                TABLE
                  OF CONTENTS

              	
                Page

              
	
                1.

              	
                DEFINITIONS
                  AND RULES OF INTERPRETATION

              	
                1

              
	 	
                1.1

              	
                Definitions

              	
                1

              
	 	
                1.2

              	
                Exhibits

              	
                17

              
	 	
                1.3

              	
                Interpretation

              	
                17

              
	 	
                1.4

              	
                Headings

              	
                18

              
	 	
                1.5

              	
                Conflicts
                  in Documentation

              	
                18

              
	 	
                1.6

              	
                Documentation
                  Format

              	
                18

              
	 	 	 
	
                2.

              	
                RESPONSIBILITIES
                  OF OWNER

              	
                18

              
	 	
                2.1

              	
                Project
                  Representative

              	
                18

              
	 	
                2.2

              	
                Operating
                  Personnel

              	
                18

              
	 	
                2.3

              	
                Ministerial
                  Assistance

              	
                19

              
	 	
                2.4

              	
                Owner
                  Acquired Permits

              	
                19

              
	 	
                2.5

              	
                Access
                  to Project Site

              	
                19

              
	 	
                2.6

              	
                Project
                  Site Preparation

              	
                19

              
	 	
                2.7

              	
                Owner
                  Provided Facilities and Services

              	
                20

              
	 	
                2.8

              	
                Operating
                  Consumables and Commodity Scheduling

              	
                20

              
	 	
                2.9

              	
                Scheduling
                  and Delivery of Output

              	
                20

              
	 	
                2.10

              	
                Subcontractor
                  Communication

              	
                20

              
	 	
                2.11

              	
                Taxes

              	
                21

              
	 	
                2.12

              	
                Required
                  and Operational Spare Parts

              	
                21

              
	 	
                2.13

              	
                Time
                  and Manner of Owner’s Performance

              	
                21

              
	 	 	 
	
                3.

              	
                RESPONSIBILITIES
                  OF CONTRACTOR

              	
                21

              
	 	
                3.1

              	
                Turnkey
                  Basis

              	
                21

              
	 	
                3.2

              	
                Performance
                  of Work

              	
                21

              
	 	
                3.3

              	
                Design
                  and Construction of Project

              	
                21

              
	 	
                3.4

              	
                Project
                  Manager

              	
                22

              
	 	
                3.5

              	
                Utilities
                  and Services

              	
                22

              
	 	 	
                3.5.1               Provision
                  of Services

              	
                22

              
	 	 	
                3.5.2               Payment

              	
                22

              
	 	 	
                3.5.3               Supply
                  of Construction Facilities

              	
                22

              
	 	 	
                3.5.4               Operating
                  Consumables

              	
                22

              
	 	
                3.6

              	
                Inspection
                  by Contractor

              	
                23

              
	 	
                3.7

              	
                Organization

              	
                23

              
	 	
                3.8

              	
                Contractor
                  Acquired Permits

              	
                23

              
	 	
                3.9

              	
                Maintenance
                  of Project Site

              	
                24

              
	 	
                3.10

              	
                Hazardous
                  Materials Disposal System

              	
                24

              
	 	
                3.11

              	
                Project
                  Site Security

              	
                24

              
	 	
                3.12

              	
                Safety

              	
                24

              

      

      

      
        
          EXECUTION
            COPY

          
          

        

        
          i

          
            

          

        

        
          
          

        

      

      

      
        	 	 	
                TABLE
                  OF CONTENTS

              	
                Page

              
	 	
                3.13

              	
                Expediting

              	
                25

              
	 	
                3.14

              	
                Applicable
                  Laws and Permits

              	
                26

              
	 	
                3.15

              	
                Quality
                  Assurance Programs

              	
                26

              
	 	
                3.16

              	
                Access

              	
                26

              
	 	
                3.17

              	
                Project
                  Site Activities

              	
                26

              
	 	
                3.18

              	
                Delivery
                  of Documents; Owner Review

              	
                27

              
	 	 	
                3.18.1                Drawings
                  and Specifications

              	
                27

              
	 	 	
                3.18.2                Operational
                  Documents

              	
                27

              
	 	
                3.19

              	
                Training
                  of Operating Personnel

              	
                27

              
	 	 	
                3.19.1                Commencement
                  of Training

              	
                27

              
	 	 	
                3.19.2                Design
                  and Review of Training Program

              	
                27

              
	 	
                3.20

              	
                Spare
                  Parts.

              	
                28

              
	 	 	
                3.20.1                Spare
                  Parts Schedule

              	
                28

              
	 	 	
                3.20.2                Start-up
                  Spare Parts

              	
                28

              
	 	 	
                3.20.3                Spare
                  Parts Procurement

              	
                28

              
	 	
                3.21

              	
                Start
                  Up Personnel

              	
                28

              
	 	
                3.22

              	
                Commodity
                  Scheduling

              	
                29

              
	 	
                3.23

              	
                Financial
                  Reporting

              	
                29

              
	 	 	 	 
	
                4.

              	
                COVENANTS,
                  WARRANTIES AND REPRESENTATIONS

              	
                29

              
	 	
                4.1

              	
                Contractor

              	
                29

              
	 	 	
                4.1.1                Organization,
                  Standing and Qualification

              	
                29

              
	 	 	
                4.1.2                Professional
                  Skills

              	
                29

              
	 	 	
                4.1.3                Due
                  Authorization; Enforceability

              	
                30

              
	 	 	
                4.1.4                No
                  Conflict

              	
                30

              
	 	 	
                4.1.5                Government
                  Approvals

              	
                30

              
	 	 	
                4.1.6                No
                  Suits, Proceedings

              	
                30

              
	 	 	
                4.1.7                Intellectual
                  Property

              	
                30

              
	 	 	
                4.1.8                Business
                  Practices

              	
                30

              
	 	 	
                4.1.9                Owner
                  Provided Information

              	
                31

              
	 	 	
                4.1.10                Legal
                  Requirements

              	
                31

              
	 	 	
                4.1.11                Financial
                  Condition

              	
                31

              
	 	 	
                4.1.12                Licenses

              	
                32

              
	 	
                4.2

              	
                Owner

              	
                32

              
	 	 	
                4.2.1                Organization,
                  Standing and Qualification

              	
                32

              
	 	 	
                4.2.2                Due
                  Authorization; Enforceability

              	
                32

              
	 	 	
                4.2.3                No
                  Conflict

              	
                32

              

      

      

      
        
          EXECUTION
            COPY

          
          

        

        
          ii

          
            

          

        

        
          
          

        

      

      

      
        	 	 	
                TABLE
                  OF CONTENTS

              	
                Page

              
	 	 	
                4.2.4                Governmental
                  Approvals

              	
                32

              
	 	 	
                4.2.5                No
                  Suits, Proceedings

              	
                32

              
	 	 	
                4.2.6                Business
                  Practices

              	
                33

              
	 	 	
                4.2.7                Access
                  to Project Site

              	
                33

              
	 	 	
                4.2.8                Waivers
                  from Adjacent Property Owners

              	
                33

              
	 	 	
                4.2.9                Permit
                  Status

              	
                33

              
	 	 	
                4.2.10                Owner
                  Provided Information

              	
                33

              
	 	 	 	 
	
                5.

              	
                COST
                  OF WORK

              	
                33

              
	 	
                5.1

              	
                Contract
                  Price

              	
                33

              
	 	
                5.2

              	
                Cancellation
                  Cost Schedule and Payment Schedule

              	
                34

              
	 	
                5.3

              	
                All
                  Items of Work Included

              	
                34

              
	 	
                5.4

              	
                Texas
                  Sales and Use Taxes

              	
                34

              
	 	 	
                5.4.1                Separated
                  Contract

              	
                34

              
	 	 	
                5.4.2                Texas
                  Direct Payment Permit and Other Matters

              	
                34

              
	 	 	
                5.4.3                Certain
                  Reimbursements

              	
                35

              
	 	 	
                5.4.4                Statements
                  and Other Information

              	
                35

              
	 	 	
                5.4.5                Cooperation

              	
                35

              
	 	
                5.5

              	
                Bonuses

              	
                36

              
	 	 	
                5.2.1                Schedule
                  Bonus

              	
                36

              
	 	 	
                5.5.2                Performance
                  Bonus

              	
                37

              
	 	 	
                5.5.3                Payment
                  of Bonuses

              	
                37

              
	 	 	 	 
	
                6.

              	
                TERMS
                  OF PAYMENT

              	
                37

              
	 	
                6.1

              	
                Monthly
                  Payments

              	
                37

              
	 	
                6.2

              	
                Progress
                  Assessment

              	
                38

              
	 	
                6.3

              	
                Progress
                  Reporting

              	
                38

              
	 	
                6.4

              	
                Contractor’s
                  Invoices

              	
                38

              
	 	
                6.5

              	
                Owner
                  Review

              	
                39

              
	 	
                6.6

              	
                Payments

              	
                39

              
	 	 	
                6.6.1                Monthly
                  Payments and Withholding

              	
                39

              
	 	 	
                6.6.2                Payment
                  of Withheld Amounts

              	
                39

              
	 	 	
                6.6.3                Owner’s
                  Right to Offset

              	
                39

              
	 	 	
                6.6.4Payment;
                  Performance of the Work; Payment of Subcontractors

              	
                40

              
	 	 	
                6.6.5                TSA
                  Payments

              	
                40

              
	 	
                6.7

              	
                Retainage
                  Security

              	
                40

              
	 	
                6.7.1

              	
                Retainage
                  Security

              	
                40

              
	 	
                6.7.2

              	
                Draws
                  on Retainage Security

              	
                40

              

      

      

      
        
          EXECUTION
            COPY

          
          

        

        
          iii

          
            

          

        

        
          
          

        

      

      

      
        	 	 	
                TABLE
                  OF CONTENTS

              	
                Page

              
	 	 	
                6.7.3                Release
                  of Retainage Security

              	
                41

              
	 	 	
                6.7.4                Interest
                  on Excess Drawings

              	
                42

              
	 	
                6.8

              	
                Final
                  Payment

              	
                42

              
	 	
                6.9

              	
                Method
                  of Payment

              	
                42

              
	 	
                6.10

              	
                Disputes

              	
                43

              
	 	
                6.11

              	
                Holdbacks

              	
                43

              
	 	 	
                6.11.1                Owner
                  Holdbacks

              	
                43

              
	 	 	
                6.11.2                Notice
                  of Withholding; Notice of Correction

              	
                44

              
	 	 	
                6.11.3                Payment
                  Following Notice of Correction

              	
                44

              
	 	 	
                6.11.4                Limitation
                  on Contractor’s Rights

              	
                44

              
	 	
                6.12

              	
                Application
                  of Monies

              	
                44

              
	 	
                6.13

              	
                Release
                  of Liability

              	
                45

              
	 	
                6.14

              	
                Contract
                  Interest Rate

              	
                45

              
	 	 	 	 
	
                7.

              	
                COMMENCEMENT
                  AND SCHEDULING OF THE WORK

              	
                45

              
	 	
                7.1

              	
                Notices
                  to Proceed

              	
                45

              
	 	 	
                7.1.1                Limited
                  Notice to Proceed

              	
                45

              
	 	 	
                7.1.2                Full
                  Notice to Proceed

              	
                45

              
	 	
                7.2

              	
                Contractor’s
                  Acknowledgment

              	
                46

              
	 	
                7.3

              	
                Prosecution
                  of Work

              	
                46

              
	 	
                7.4

              	
                Project
                  Schedule

              	
                46

              
	 	 	
                7.4.1                Project
                  Schedule

              	
                46

              
	 	 	
                7.4.2                Milestone
                  Summary Schedule

              	
                46

              
	 	
                7.5

              	
                Acceleration
                  Plan

              	
                47

              
	 	
                7.6

              	
                Meetings

              	
                47

              
	 	
                7.7

              	
                Acceleration
                  of Work When Not Delayed

              	
                48

              
	 	
                7.8

              	
                Termination
                  if Limited Notice to Proceed Cap is Exceeded

              	
                48

              
	 	 	 	 
	
                8.

              	
                FORCE
                  MAJEURE AND EXCUSABLE EVENTS

              	
                48

              
	 	
                8.1

              	
                Force
                  Majeure

              	
                48

              
	 	
                8.2

              	
                Notice

              	
                49

              
	 	
                8.3

              	
                Scope
                  of Suspension; Duty to Mitigate

              	
                49

              
	 	
                8.4

              	
                Removal
                  of Force Majeure

              	
                50

              
	 	
                8.5

              	
                Responsibility
                  of Contractor

              	
                50

              
	 	
                8.6

              	
                Contractor’s
                  Remedies

              	
                50

              
	 	 	
                8.6.1                Force
                  Majeure

              	
                50

              
	 	 	
                8.6.2                Excusable
                  Event

              	
                50

              

      

      

      
        
          EXECUTION
            COPY

          
          

        

        
          iv

          
            

          

        

        
          
          

        

      

      

      
        	 	 	
                TABLE
                  OF CONTENTS

              	
                Page

              
	 	
                8.7

              	
                Rights
                  to Terminate

              	
                51

              
	 	 	 	 
	
                9.

              	
                SUBCONTRACTORS
                  AND VENDORS

              	
                51

              
	 	
                9.1

              	
                Use
                  of Subcontractors

              	
                51

              
	 	 	
                9.1.1                Subcontractors

              	
                51

              
	 	 	
                9.1.2                Major
                  Subcontractors

              	
                51

              
	 	 	
                9.1.3                Qualification

              	
                51

              
	 	
                9.2

              	
                Assignment

              	
                52

              
	 	
                9.3

              	
                Information
                  and Access

              	
                52

              
	 	
                9.4

              	
                Terms
                  in Subcontracts

              	
                52

              
	 	
                9.5

              	
                Minority
                  and Women-Owned Businesses

              	
                53

              
	 	 	 	 
	
                10.

              	
                LABOR
                  RELATIONS

              	
                54

              
	 	
                10.1

              	
                General
                  Management of Employees

              	
                54

              
	 	
                10.2

              	
                Worker
                  Recruitment and Training Program

              	
                54

              
	 	
                10.3

              	
                Labor
                  Disputes

              	
                54

              
	 	
                10.4

              	
                Personnel
                  Documents

              	
                54

              
	 	
                10.5

              	
                Key
                  Personnel

              	
                54

              
	 	
                10.6

              	
                Replacement
                  of Employees and Other Persons at Owner’s Request

              	
                55

              
	 	 	 	 
	
                11.

              	
                INSPECTION;
                  EFFECT OF REVIEW AND COMMENT

              	
                55

              
	 	
                11.1

              	
                Requirement
                  To Remedy Defect

              	
                55

              
	 	
                11.2

              	
                Inspection

              	
                55

              
	 	
                11.3

              	
                Contractor
                  Submittals Table

              	
                56

              
	 	
                11.4

              	
                Owner
                  Review of Documents

              	
                56

              
	 	
                11.5

              	
                Errors
                  and Omissions

              	
                56

              
	 	 	 	 
	
                12.

              	
                PROJECT
                  SITE CONDITIONS

              	
                56

              
	 	
                12.1

              	
                Project
                  Site Conditions

              	
                56

              
	 	
                12.2

              	
                Differing
                  Project Site Conditions

              	
                56

              
	 	
                12.3

              	
                Unforeseen
                  Project Site Conditions

              	
                57

              
	 	 	 	 
	
                13.

              	
                PERFORMANCE
                  GUARANTEES AND TESTS

              	
                57

              
	 	
                13.1

              	
                Performance
                  Guarantees and Other Requirements

              	
                57

              
	 	
                13.2

              	
                Start
                  up and Commissioning Procedures

              	
                57

              
	 	
                13.3

              	
                Acceptance
                  Test Procedures

              	
                57

              
	 	
                13.4

              	
                Acceptance
                  Test Schedules

              	
                58

              
	 	
                13.5

              	
                Testing

              	
                58

              
	 	 	
                13.5.1                Upon
                  Mechanical Completion

              	
                58

              

      

      

      
        
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                  OF CONTENTS

              	
                Page

              
	 	
                 

              	
                13.5.2            
                  Temporary Facilities

              	
                58

              
	 	
                 

              	
                13.5.3            
                  Conduct/Test and Test Reports

              	
                58

              
	 	
                13.6

              	
                Non-Conforming
                  Work

              	
                59

              
	 	
                13.7

              	
                Revenues

              	
                59

              
	 	
                13.8

              	
                Notice
                  of Minimum Stable Load

              	
                60

              
	 	
                13.9

              	
                Notice
                  of Mechanical Completion

              	
                60

              
	 	
                13.10

              	
                Post
                  Test Modifications

              	
                60

              
	 	 	 	 
	
                14.

              	
                SUBSTANTIAL
                  COMPLETION AND FINAL COMPLETION

              	
                60

              
	 	
                14.1

              	
                Punchlist

              	
                60

              
	 	 	
                14.1.1                Creation
                  of Punchlist

              	
                60

              
	 	 	
                14.1.2                Completion
                  of Punchlist

              	
                61

              
	 	 	
                14.1.3                Owner’s
                  Punchlist Option

              	
                61

              
	 	
                14.2

              	
                Substantial
                  Completion

              	
                62

              
	 	
                14.3

              	
                Notice
                  of Substantial Completion

              	
                62

              
	 	
                14.4

              	
                Final
                  Completion

              	
                63

              
	 	
                14.5

              	
                Notice
                  of Final Completion

              	
                65

              
	 	
                14.6

              	
                Contractor’s
                  Access After Substantial Completion and Final Completion

              	
                65

              
	 	
                14.7

              	
                Subcontractor
                  Air Quality Performance Requirements

              	
                65

              
	 	 	 	 
	
                15.

              	
                LIQUIDATED
                  DAMAGES AND CURE PERIOD

              	
                66

              
	 	
                15.1

              	
                Liquidated
                  Damages for Delay in the Substantial Completion Dates

              	
                66

              
	 	
                15.2

              	
                Liquidated
                  Damages for Failure to Satisfy the Reliability Guarantee

              	
                66

              
	 	
                15.3

              	
                Liquidated
                  Damages for Failure to Satisfy Certain Performance
                  Guarantees

              	
                66

              
	 	
                15.4

              	
                Actions
                  During the Cure Period

              	
                67

              
	 	 	
                15.4.1                Buy-Down
                  Not Available

              	
                67

              
	 	 	
                15.4.2                Buy-Down
                  or Cure

              	
                67

              
	 	 	
                15.4.3                Election
                  of Option

              	
                68

              
	 	 	
                15.4.4                Submission
                  of Remedial Plan

              	
                68

              
	 	 	
                15.4.5                Minimum
                  Requirements for Remedial Plan

              	
                68

              
	 	 	
                15.4.6                Approval
                  of Remedial Plan

              	
                68

              
	 	 	
                15.4.7                Prosecution
                  of Remedial Plan

              	
                69

              
	 	 	
                15.4.8                Additional
                  Remedial Plans

              	
                69

              
	 	 	
                15.4.9                Access
                  During Cure Period

              	
                69

              
	 	 	
                15.4.10Payment
                  of Performance Liquidated Damages or Performance Bonuses

              	
                69

              
	 	 	
                15.4.11                      Contractor’s
                  Buy-Down Option

              	
                70

              
	 	 	
                15.4.12                      Operation
                  During Cure Period

              	
                70

              

      

      

      
        
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                TABLE
                  OF CONTENTS

              	
                Page

              
	 	
                15.5

              	
                Offset
                  and Draws on Security

              	
                71

              
	 	
                15.6

              	
                Sole
                  Remedy; Liquidated Damages Not a Penalty

              	
                71

              
	 	
                15.7

              	
                Enforceability

              	
                72

              
	 	
                15.8

              	
                Extension
                  of Cure Period

              	
                72

              
	 	 	 
	
                16.

              	
                CHANGES
                  IN THE WORK

              	
                72

              
	 	
                16.1

              	
                Change
                  In Work

              	
                72

              
	 	
                16.2

              	
                By
                  Owner

              	
                73

              
	 	
                16.3

              	
                By
                  Contractor

              	
                73

              
	 	
                16.4

              	
                Owner
                  Initiated Change In Work

              	
                73

              
	 	
                16.5

              	
                Execution
                  of Change In Work Form

              	
                74

              
	 	
                16.6

              	
                No
                  Obligation or Payment Without Executed Change In Work Form

              	
                74

              
	 	
                16.7

              	
                Owner
                  Directives

              	
                74

              
	 	 	
                16.7.1                Non-Major
                  Change In Work

              	
                75

              
	 	 	
                16.7.2                Major
                  Change In Work

              	
                75

              
	 	 	
                16.7.3                Prosecution
                  of Owner Directive

              	
                75

              
	 	 	
                16.7.4Pricing
                  of Changes In Work Related to Owner Directives

              	
                75

              
	 	 	
                16.7.5                True-Up

              	
                76

              
	 	
                16.8

              	
                Express
                  Waiver

              	
                76

              
	 	
                16.9

              	
                No
                  Suspension

              	
                76

              
	 	
                16.10

              	
                Evidence
                  of Funds for Payment

              	
                76

              
	 	
                16.11

              	
                Change
                  for Contractor’s Convenience

              	
                76

              
	 	
                16.12

              	
                Audit
                  Rights

              	
                77

              
	 	 	 	 
	
                17.

              	
                WARRANTIES
                  CONCERNING THE WORK

              	
                77

              
	 	
                17.1

              	
                Work
                  Warranty

              	
                77

              
	 	
                17.2

              	
                Materials
                  Warranty

              	
                78

              
	 	
                17.3

              	
                Warranty
                  Period

              	
                78

              
	 	
                17.4

              	
                Enforcement
                  by Owner

              	
                78

              
	 	
                17.5

              	
                Exclusions

              	
                79

              
	 	
                17.6

              	
                Subcontractor
                  Warranties

              	
                79

              
	 	
                17.7

              	
                Correction
                  of Defects

              	
                80

              
	 	 	
                17.7.1                Notice
                  of Warranty Claim

              	
                80

              
	 	 	
                17.7.2                Owner
                  Performance

              	
                80

              
	 	 	
                17.7.3                Equipment
                  and Materials Testing and Demonstrations

              	
                81

              
	 	 	
                17.7.4                Chronic
                  Failure

              	
                81

              
	 	 	
                17.7.5                Owner’s
                  Warranty Option

              	
                81

              
	 	
                17.8

              	
                Limitations
                  on Warranties

              	
                82

              

      

      

      
        
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                TABLE
                  OF CONTENTS

              	
                Page

              
	
                18.

              	
                EQUIPMENT
                  IMPORTATION; TITLE

              	
                82

              
	 	
                18.1

              	
                Importation
                  of Equipment and Materials

              	
                82

              
	 	
                18.2

              	
                Title

              	
                82

              
	 	 	
                18.2.1                Condition

              	
                82

              
	 	 	
                18.2.2                Transfer

              	
                83

              
	 	 	
                18.2.3                Custody
                  During Performance

              	
                83

              
	 	
                18.3

              	
                Protection

              	
                83

              
	 	
                18.4

              	
                Owner
                  Possession

              	
                83

              
	 	 	 
	
                19.

              	
                DEFAULTS
                  AND REMEDIES

              	
                83

              
	 	
                19.1

              	
                Contractor
                  Events of Default

              	
                83

              
	 	
                19.2

              	
                Owner’s
                  Rights and Remedies

              	
                85

              
	 	
                19.3

              	
                Damages
                  for Contractor Default

              	
                86

              
	 	
                19.4

              	
                Owner
                  Event of Default

              	
                86

              
	 	
                19.5

              	
                Contractor’s
                  Remedies

              	
                87

              
	 	 	 
	
                20.

              	
                TERMINATION
                  AND SUSPENSION

              	
                88

              
	 	
                20.1

              	
                Termination
                  for Convenience; Payment

              	
                88

              
	 	
                20.2

              	
                Limitation
                  on Payment

              	
                88

              
	 	
                20.3

              	
                Adjustment
                  for Defects

              	
                88

              
	 	
                20.4

              	
                Owner’s
                  Right to Elect to Assume Obligations with Subcontractors

              	
                88

              
	 	
                20.5

              	
                Contractor
                  Conduct

              	
                89

              
	 	
                20.6

              	
                Nature
                  of Termination Payments

              	
                89

              
	 	
                20.7

              	
                Suspension
                  by Owner

              	
                89

              
	 	 	
                20.7.1                Adjustments
                  Due to Suspension

              	
                89

              
	 	 	
                20.7.2                Contractor’s
                  Termination Right

              	
                90

              
	 	 	
                20.7.3                Extension
                  of Time and Compensation Rights

              	
                90

              
	 	 	
                20.7.4                Claims
                  for Payment

              	
                91

              
	 	 	 
	
                21

              	
                INSURANCE

              	
                91

              
	 	
                21.1

              	
                Contractor’s
                  Insurance

              	
                91

              
	 	
                21.2

              	
                Limits
                  of Liability

              	
                91

              
	 	
                21.3

              	
                General
                  Requirements

              	
                91

              
	 	
                21.4

              	
                Subcontractors’
                  Insurance

              	
                92

              
	 	
                21.5

              	
                Subrogation
                  Waivers

              	
                92

              
	 	
                21.6

              	
                Insurance
                  Coverages

              	
                92

              
	 	
                21.7

              	
                Failure
                  to Maintain Insurance

              	
                92

              
	 	
                21.8

              	
                Claims
                  Compensation

              	
                93

              
	 	
                21.9

              	
                Owner’s
                  Insurance

              	
                93

              

      

      

      
        
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                TABLE
                  OF CONTENTS

              	
                Page

              
	
                22.

              	
                RISK
                  OF LOSS OR DAMAGE

              	
                93

              
	 	
                22.1

              	
                Contractor
                  Assumption of Risk

              	
                93

              
	 	 	
                22.1.1                Risk
                  of Loss; Deductible

              	
                93

              
	 	 	
                22.1.2                Repair
                  or Replacement

              	
                93

              
	 	
                22.2

              	
                Risk
                  of Loss After the Turnover Date

              	
                93

              
	 	 	 
	
                23

              	
                INDEMNIFICATION

              	
                94

              
	 	
                23.1

              	
                By
                  Contractor

              	
                94

              
	 	
                23.2

              	
                By
                  Owner

              	
                96

              
	 	
                23.3

              	
                Patent
                  Infringement And Other Indemnification Rights

              	
                97

              
	 	
                23.4

              	
                Claim
                  Notice

              	
                98

              
	 	
                23.5

              	
                Survival
                  of Indemnity Obligations

              	
                99

              
	 	 	 
	
                24.

              	
                TREATMENT
                  OF CONFIDENTIAL INFORMATION

              	
                100

              
	 	
                24.1

              	
                Confidential
                  Information

              	
                100

              
	 	
                24.2

              	
                Competitor
                  Representative

              	
                100

              
	 	
                24.3

              	
                Excluded
                  Information

              	
                101

              
	 	
                24.4

              	
                Acknowledgments
                  of Proprietary Operating Information

              	
                101

              
	 	
                24.5

              	
                Non-Disclosure

              	
                102

              
	 	
                24.6

              	
                Applicable
                  Law Disclosures

              	
                102

              
	 	
                24.7

              	
                Ownership
                  of Confidential Information

              	
                102

              
	 	
                24.8

              	
                Remedies

              	
                103

              
	 	 	 
	
                25.

              	
                INVENTIONS
                  AND LICENSES

              	
                103

              
	 	
                25.1

              	
                Invention,
                  License

              	
                103

              
	 	
                25.2

              	
                Contractor
                  Deliverables

              	
                104

              
	 	
                25.3

              	
                Software
                  Licenses

              	
                104

              
	 	
                25.4

              	
                Warranty

              	
                104

              
	 	 	 
	
                26.

              	
                ASSIGNMENT
                  BY OWNER

              	
                104

              
	 	
                26.1

              	
                Assignment

              	
                104

              
	 	 	
                26.1.1                Assignment
                  to Financing Entities

              	
                104

              
	 	 	
                26.1.2                Assignment
                  to Other Persons

              	
                105

              
	 	 	
                26.1.3                Owner
                  Indemnitee to Include Successors and Assigns

              	
                107

              
	 	
                26.2

              	
                Transfer
                  of Work; Third-Party Beneficiaries

              	
                107

              
	 	 	 
	
                27

              	
                ASSIGNMENT
                  BY CONTRACTOR

              	
                108

              
	 	 	 
	
                28.

              	
                HAZARDOUS
                  MATERIALS

              	
                108

              

      

      

      
        
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                TABLE
                  OF CONTENTS

              	
                Page

              
	 	
                28.1

              	
                Use
                  or Disposal by Contractor

              	
                108

              
	 	
                28.2

              	
                Remediation
                  by Contractor

              	
                108

              
	 	
                28.3

              	
                Notice
                  of Hazardous Materials

              	
                108

              
	 	
                28.4

              	
                Hazardous
                  Materials not brought on the Project Site by Contractor

              	
                109

              
	 	
                28.5

              	
                Losses
                  related to Hazardous Materials

              	
                109

              
	 	 	 
	
                29.

              	
                NON-PAYMENT
                  CLAIMS

              	
                109

              
	 	 	 
	
                30.

              	
                NOTICES
                  AND COMMUNICATIONS

              	
                110

              
	 	
                30.1

              	
                Requirements

              	
                110

              
	 	
                30.2

              	
                Representatives

              	
                111

              
	 	 	 
	
                31.

              	
                LIMITATIONS
                  OF LIABILITY AND REMEDIES

              	
                111

              
	 	
                31.1

              	
                Limitations
                  on Damages

              	
                111

              
	 	
                31.2

              	
                Limitations
                  on Contractor’s Liability

              	
                112

              
	 	 	
                31.2.1                Maximum
                  Liability Amount

              	
                112

              
	 	 	
                31.2.2                Maximum
                  Liquidated Damages

              	
                112

              
	 	 	
                31.2.3                Calculation
                  of Liability

              	
                112

              
	 	
                31.3

              	
                Specific
                  Performance

              	
                112

              
	 	
                31.4

              	
                Limitation
                  on Owner’s Liability

              	
                113

              
	 	
                31.5

              	
                Releases,
                  Indemnities and Limitations

              	
                113

              
	 	
                31.6

              	
                Representations
                  and Remedies

              	
                113

              
	 	
                31.7

              	
                Limitation
                  on Remedies

              	
                113

              
	 	 	 
	
                32.

              	
                DISPUTES

              	
                114

              
	 	
                32.1

              	
                Management
                  Negotiations

              	
                114

              
	 	
                32.2

              	
                DISPUTE
                  RESOLUTION; CONSENT TO JURISDICTION AND VENUE

              	
                114

              
	 	
                32.3

              	
                Work
                  to Continue

              	
                115

              
	 	 	 
	
                33.

              	
                MISCELLANEOUS

              	
                115

              
	 	
                33.1

              	
                Severability

              	
                115

              
	 	
                33.2

              	
                Governing
                  Law

              	
                115

              
	 	
                33.3

              	
                Survival
                  of Termination

              	
                115

              
	 	
                33.4

              	
                Amendments
                  and Modifications

              	
                115

              
	 	
                33.5

              	
                No
                  Waiver

              	
                115

              
	 	
                33.6

              	
                Review
                  and Approval

              	
                115

              
	 	
                33.7

              	
                Time
                  is of the Essence

              	
                116

              
	 	
                33.8

              	
                Third
                  Party Beneficiaries

              	
                116

              

      

      

      
        
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                TABLE
                  OF CONTENTS

              	
                Page

              
	 	
                33.9

              	
                Financing
                  Matters

              	
                116

              
	 	 	
                33.9.1                Contractor
                  Cooperation

              	
                116

              
	 	 	
                33.9.2                Documents
                  Requested by Financing Entities

              	
                117

              
	 	
                33.10

              	
                Other
                  Assistance

              	
                117

              
	 	
                33.11

              	
                Further
                  Assurances

              	
                117

              
	 	
                33.12

              	
                Record
                  Retention

              	
                117

              
	 	
                33.13

              	
                Binding
                  on Successors, Etc

              	
                117

              
	 	
                33.14

              	
                Merger
                  of Prior Contracts

              	
                118

              
	 	
                33.15

              	
                Counterparts

              	
                118

              
	 	
                33.16

              	
                Opinions
                  of Counsel

              	
                118

              
	 	
                33.17

              	
                Set-Off

              	
                118

              
	 	
                33.18

              	
                Attorneys’
                  Fees

              	
                118

              
	 	
                33.19

              	
                Announcements;
                  Publications

              	
                118

              
	 	
                33.20

              	
                Independent
                  Contractor

              	
                118

              

      

      

      
        
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          xi

          
            

          

        

        
          
          

        

      

      

      
        	 	
                TABLE
                  OF CONTENTS (CON’T)

              
	 	 
	
                EXHIBITS

              	 
	
                A

              	
                Scope
                  Book

              
	
                B

              	
                Provisional
                  Items

              
	
                C

              	
                Payment
                  Schedule

              
	
                D

              	
                Change
                  In Work Form

              
	
                E

              	
                Form
                  of Contractor’s Invoice

              
	
                F
                  1

              	
                Conditional
                  Waiver and Release Upon Progress Payment

              
	
                F
                  2

              	
                Conditional
                  Waiver and Release Upon Final Payment

              
	
                F
                  3

              	
                Unconditional
                  Waiver and Release Upon Final Payment

              
	
                G

              	
                Milestone
                  Summary Schedule

              
	
                H

              	
                Key
                  Personnel

              
	
                I

              	
                Contingency
                  Program

              
	
                J

              	
                Project
                  Site Description

              
	
                K-1

              	
                Contractor
                  Provided Insurance

              
	
                K-2

              	
                Owner
                  Provided Insurance

              
	
                L

              	
                Subcontractors
                  and Vendors

              
	
                M

              	
                Required
                  Owner Activities

              
	
                N

              	
                Form
                  of Letter of Credit

              
	
                O

              	
                Certificate
                  of Contractor Regarding Certain Subcontracts

              
	
                P

              	
                Form
                  of TXU Generation Waiver and Release

              
	
                Q

              	
                Separated
                  Contract Price

              

      

      

      
        
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            COPY

          
          

        

        
          xii

          
            

          

        

        
          
          

        

      

      This
        ENGINEERING, PROCUREMENT, AND CONSTRUCTION AGREEMENT (this
“Agreement”) is made and entered into as of this 26th day of
        May 2006, by and between TXU US HOLDINGS COMPANY, a Texas corporation (the
        “Owner”), and BECHTEL POWER CORPORATION, a Nevada corporation
        (the “Contractor”).  Each entity is sometimes
        individually referred to herein as a “Party” and both entities
        are sometimes collectively referred to herein as the
“Parties.”

       

      RECITALS

       

      A.           Owner
        desires to develop, finance, construct, own and operate an approximately
        564.65
        megawatt (net load) lignite coal-fired, circulating fluidized bed power
        generation facility, to be known as Sandow Steam Electric
        Station Unit 5, to be located near the City of Rockdale, County of Milam,
        State
        of Texas, adjacent to existing power generation facilities known as Sandow
        Units
        1 through 4 (“Units 1-4”) and nearby an aluminum smelter, of
        which the aluminum smelter and Units 1-3 are owned and operated by Alcoa
        Inc.
        (“Alcoa”) and Unit 4 is owned and operated by an Affiliate of
        Owner, and other facilities operated in support of Units 1-4 and the
        smelter.

       

      B.           Owner
        desires to engage 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, all on a fixed price and date certain to
        complete basis, and Contractor desires to provide such services, all in
        accordance with the terms and conditions set forth in this
        Agreement.

       

      C.           Contractor
        has reviewed the design basis information provided by Owner, inspected the
        real
        property on which the Project shall be constructed, and performed or reviewed
        such other investigations, studies, and analyses as possible as of the date
        hereof that Contractor has determined to be necessary or prudent in connection
        with entering into this Agreement.

       

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

       

      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:

       

      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 Section 19.1(l), that Contractor has substantially
        reduced personnel at the Project Site or removed required equipment from
        the
        Project Site such that, in the reasonable opinion of Owner, Contractor would
        not
        be capable of maintaining progress sufficient to achieve Substantial Completion
        by the Substantial Completion Guaranteed Date.

       

      
        
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      “Abnormally
        Severe Weather Conditions” means storms and other climatic and weather
        conditions that are abnormally severe or extreme, taking into consideration
        the
        period of time when, and the area where, such storms or conditions
        occur.

       

      “Acceleration
        Plan” shall have the meaning set forth in Section 7.5.

       

      “Acceptance
        Tests” means the Performance Tests, the Ammonia
        Consumption Rate Test, the Limestone Consumption Rate Test, 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 Section 13.3 and Part I, Section 8.2 of the Scope
        Book.

       

      “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.

       

      “Agreement” means
        this 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.

       

      “Alcoa”
        has the meaning set forth in the Recitals hereto.

       

      “Ammonia
        Consumption Rate Guarantee” means the guarantee as set forth in Part I,
        Section 8.1.4 of the Scope Book.

       

      “Ammonia
        Consumption Rate Test” means the test for measuring ammonia consumption
        as described in Part I, Section 8.2.4 of the Scope Book.

       

      “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 all rules and regulations
        promulgated thereunder, as any of the same may be amended, modified, codified,
        replaced or reenacted, 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 Project Site or the performance of
        any portion of the Work or the Work 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 Project 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,

       

      
        
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      Hazardous
        Materials or other industrial, toxic materials or wastes, as now or may at
        any
        time hereafter be in effect; for the avoidance of doubt, “Applicable Laws”
excludes Applicable Permits and Permit Requirements.

       

      “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.

       

      “Benchmark
        Performance” means the performance of the
        Project, or a component or system thereof, as determined by the Benchmark
        Test
        conducted prior to the performance of any Corrective Action.

       

      “Benchmark
        Test” means any test of a component or system
        proposed by Contractor in a Remedial Plan to determine Benchmark Performance,
        which has been accepted by Owner, or in the absence of such a component or
        system test, a Performance Test.

       

      “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.

       

      “Cancellation
        Cost Schedule” means a schedule of cancellation costs based on the
        month in which termination of this Agreement occurs as included in the Payment
        Schedule.

       

      “Change
        In Law” means (a) with respect to the Work
        performed under the TSA and prior to the date of this Agreement, the enactment,
        adoption, promulgation, modification (including change in written interpretation
        by a Governmental Authority), or repeal after January 27, 2006 of any Applicable
        Law and (b) with respect to the Work performed after the date of this Agreement,
        the enactment, adoption, promulgation, modification (including written change
        in
        interpretation by a Governmental Authority), or repeal after the date of
        this
        Agreement of any Applicable Law, or the issuance or modification (including
        written change in interpretation by a Governmental Authority) after the date
        of
        this Agreement of any Owner Acquired Permit or Contractor Acquired Permit
        issued
        or promulgated by any Governmental Authority that establishes requirements
        that
        materially and adversely affect Contractor’s costs or schedule for performing
        the Work; provided, however it shall not be a Change In Law
        pursuant to this Agreement if there is a change in any national, federal,
        provincial or any other income tax law or any other law imposing a tax, duty,
        levy, impost, fee, royalty, or similar charge based on the importation or
        exportation of any item or service for which Contractor is responsible
        hereunder, except to the extent the aggregate increase resulting from all
        such
        changes in such taxes, duties, levies, imposts, fees, royalties and similar
        charges exceeds One Million Dollars ($1,000,000).

       

      “Change
        In Work” means a change in the Work as defined in
Section 16.1.

       

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

       

      
        
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      “Claim
        Notice” shall have the meaning set forth in Section 23.4.

       

      “Common
        Facilities” means the existing equipment and systems, including all
        corridors and access reasonably required by Contractor to perform the Work,
        used
        or utilized by any of Units 1-4 and to be interconnected to the Project,
        all as more particularly described in Part I, Reference 7-3 of the Scope
        Book.

       

      “Competitor
        Representatives” shall have the meaning set forth in
Section 24.2.

       

      “Conditional
        Waiver and Release Upon Final Payment” means a
        written statement in the form attached hereto as Exhibit F-2,
        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 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 (whose contract or contracts with Contractor or any
        of its
        Subcontractors require total payments by Contractor or such Subcontractor
        of
        Five Million Dollars ($5,000,000) or more (in the aggregate)), 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, including Proprietary Operating
        Information, ideas or materials 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, together with all copies, summaries,
        analyses, or extracts thereof, based thereon or derived therefrom, 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”), or any such information identified in writing as
“Confidential” at the time of such disclosure by transferor; provided,
however, “Confidential Information” of Owner shall also
        mean information, ideas or materials related to the Work or the Project that
        are
        obtained, developed or created by or for Contractor directly through the
        use of
        Owner’s Confidential Information in connection with the Work, subject to the
        provisions of Article 24.

       

      “Contingency
        Program” shall have the meaning set forth in Section 5.1.

       

      “Contract
        Interest Rate” means, for any date, two percent (2%) over the per annum rate
        of interest
equal to the prime lending rate as may from time to time be published
        in
        the Wall Street Journal (Eastern edition) under “Money Rates”; provided
        the Contract Interest Rate shall never exceed the maximum lawful rate permitted
        by Applicable Laws.

       

      
        
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      “Contract
        Price” means the fixed price amount for
        performing the Work that is payable to Contractor, and subject to adjustments,
        in accordance with Section 5.1.

       

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

       

      “Contractor
        Acquired Permits” shall have the meaning set
        forth in Section 3.8.

       

      “Contractor
        Deliverables” means all of the design criteria,
        system descriptions, Required Manuals, drawings, specifications, design
        calculations, quality assurance reports and all other material documents
        relating to the Project to be delivered to Owner for review and comment,
        and
        approval, where applicable, in accordance with the requirements of Part I,
        Sections 2.3, 2.4, 2.5, 2.8, 2.9 and 2.10 of the Scope Book, and
Section 11.3, which shall be
        made available to Owner in hard copy or electronically, including native
        files
        as mutually agreed, if requested by Owner.

       

      “Contractor
        Event of Default” shall have the meaning set forth in
Section 19.1.

       

      “Contractor
        Lien” shall have the meaning set forth in Article 29.

       

      “Contractor
        Submittals Table” means the table of Contractor
        Deliverables to be prepared by Contractor in accordance with
Section 11.3 of this
        Agreement.

       

      “Contractor’s
        Indemnitee” shall have the meaning set forth in Section 23.2.

       

      “Contractor’s
        Invoice” means an invoice from Contractor to
        Owner in accordance with Section 6.4 and in the form of Exhibit E
        hereto.

       

      “Corrective
        Actions” means all Work necessary to make the
        Project meet the applicable Performance Guarantees.

       

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

       

      “Cure
        Period” means the period beginning on the Substantial Completion Date
        and ending one hundred eighty (180) days later, as adjusted pursuant to
Section 15.8.

       

      “Defect” means
        any design, engineering, Equipment and Materials, or installation or other
        Work
        which, in Owner’s reasonable judgment: (a) does not conform to this
        Agreement or the then current drawings and specifications; (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 in each case satisfies either 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 continuous or safe operation of the Project (as
        determined by the Independent Engineer).

       

      “Delay
        Liquidated Damages” shall have the meaning set
        forth in Section 15.1.

       

      “Delay
        Notice” shall have the meaning set forth
        in Section 8.2.

       

      
        
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      “Demonstration
        Tests” shall mean the demonstration tests as set forth in Part I,
        Section 8.2 of the Scope Book.

       

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

       

      “Emissions
        Guarantees” shall have the meaning set forth in Part I,
        Section 8.1.5 of the Scope Book.

       

      “Emissions
        Tests” means the tests set forth in Part I, Section 8.2.5 of the
        Scope Book to determine whether the Project satisfies the Emissions
        Guarantees.

       

      “Equipment
        and Materials” means all materials, supplies,
        apparatus, devices, machinery, equipment, parts, tools, special tools,
        components, instruments, appliances, spare parts and appurtenances thereto,
        that
        are required for the design, construction or operation of the Project in
        accordance with Industry Standards, including as such are described in, required
        by or inferable from the Scope Book or the drawings and specifications issued
        for construction, except Owner Provided Facilities and Services, Common
        Facilities, Shared Site Facilities and the spare parts provided by Owner
        pursuant to Section 2.12.  For purposes of clarity,
“Equipment and Materials” shall exclude
        any of the foregoing
        provided by Contractor and its Subcontractors in the course of the Work which
        do
        not become a permanent part of the Work and for which title is not intended
        to
        pass to Owner in accordance with the terms hereof.

       

      “Equivalent
        Availability Factor” means the percentage of hours during the
        Reliability Test in which the Project is available, as calculated in accordance
        with Part I, Section 8.2.6 of the Scope Book.

       

      “Excusable
        Event” means: (a) Owner’s failure or delay to perform any covenant
        or contractual obligation of Owner hereunder (including as a result of an
        event
        of Force Majeure affecting Owner but not including such failures or delays
        resulting from actions of Contractor or any Person acting on Contractor’s behalf
        or from Owner’s exercise of its rights under this Agreement, including the
        exercise by Owner of the right to have defective or nonconforming Work corrected
        or re-executed); (b) Owner’s failure to substantially complete the
        activities identified on Exhibit M attached hereto or to make the
        facilities identified on Exhibit J available to Contractor to perform its
        Work on or before the dates indicated on such Exhibits to the extent Owner’s
        delay causes a delay in the construction schedule of Contractor or causes
        Contractor to incur additional out of pocket costs; (c) Units 1 and 2 have
        not
        ceased operations by April 25, 2007 and Unit 3 has not ceased operations
        by
        August 25, 2007; (d) a Change In Law; (e) an Unforeseen Project Site
        Condition or other material difference between the Owner Provided Information
        and the conditions or terms actually existing; or (f) the encountering of
        Hazardous Materials as provided in Section 28.3(d), in each case (a) through
        (f) above, to
        the extent such event actually, demonstrably and adversely impacts Contractor’s
        performance of the Work.  In each case of clause (d) and (e) above,
        such an event shall be an Excusable Event only if Contractor notifies Owner
        thereof within ten (10) days after Contractor becomes aware of such Unforeseen
        Project Site Condition, material difference between Owner Provided Information
        and the conditions or terms actually existing or an impact caused by such
        Change
        in Law, as the case may be.

       

      
        
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      “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
        Section 14.4.

       

      “Final
        Completion Date” means the date on which Final
        Completion of the Project occurs.

       

      “Final
        Completion Guaranteed Date” means the date that
        is three hundred sixty-five (365) days after the Substantial Completion Date,
        as
        such date may be modified in accordance with the terms hereof.

       

      “Final
        Contractor’s Invoice” means the final
        Contractor’s Invoice submitted for Final Payment in accordance with
Section 6.8.

       

      “Final
        Payment” means the final payment made by Owner or
        the Financing Entities to Contractor in accordance with Section 6.8.

       

      “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 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.

       

      “Force
        Majeure” means any event, matter, or thing that
        prevents or delays the performance of any obligation arising under this
        Agreement (other than any Excusable Event), but only to the extent such event,
        matter or thing is demonstrably beyond the reasonable control or expectation
        of
        the Person claiming the same and the effect of such event, matter or thing
        would
        not have been avoided had such Person used reasonable care or acted in
        compliance with Industry Standards.  Subject to the foregoing, such
        events, matters or things include occurrences such as:  war, blockade,
        revolution, insurrection, riot, act of terrorism, 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 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; fire; flood; earthquake; volcano; tide, tidal wave,
        or
        perils of the sea; Abnormally Severe Weather Conditions; an epidemic or
        quarantine; acts of God; a failure of any Person providing electric transmission
        service to accept delivery of energy from the Project (except due to Owner’s
        failure to nominate and schedule such delivery in accordance with
Section 2.9); or labor strikes,
        disputes or disruptions; provided, further, that 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 absence of sufficient financial means of Contractor or any Subcontractor
        to
        perform any of the Work, including the insolvency or bankruptcy of any
        Subcontractor; (ii) any labor disturbance, strike or dispute of
        Contractor’s workers or personnel

       

      
        
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      or
        any Subcontractor’s workers or personnel or any independent contractor engaged
        by Contractor or any of its Subcontractors occurring at the Project Site
        (unless
        such event is part of a national or regional disturbance, strike or dispute
        or
        is in breach or violation of any applicable national, industry or construction
        supplementary labor or union agreement) 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.

       

      “Full
        Notice to Proceed Date” means the Business Day
        that 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 Project Site, the Project, the Work or the
        Parties.

       

      “Gross
        Negligence” means an act or omission: (a) which when viewed objectively
        from the standpoint of the actor at the time of its occurrence involves an
        extreme degree of risk, considering the probability and magnitude of the
        potential harm to other; and (b) of which the actor has actual, subjective
        awareness of the risk involved, but nevertheless proceeds with conscious
        indifference to the rights, safety, or welfare of others.

       

      “Guaranteed
        Amount” shall have the meaning set forth in Section 26.1.2(d).

       

      “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
        Engineer” means a contractor mutually agreed upon by the Parties, which
        shall be a reputable, experienced contractor in the major power plant
        construction business that does not have a material direct or indirect financial
        interest in either Party or any of their respective Affiliates and is not
        a
        former or present agent, representative, advisor, consultant or contractor
        of
        either Party or any of their Affiliates.

       

      
        
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      “Industry
        Standards” or “Industry Grade” means those
        standards of design, engineering, construction, operation, maintenance,
        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 similar
        industrial grade power projects in the United States and in accordance with
        good
        engineering design practices, Applicable Laws, Applicable Permits, or that
        conform in all material respects to the manufacturer’s operation and maintenance
        guidelines, in each case as applicable to the equipment in question, taking
        into
        account such equipment’s size, service and type; provided,
        notwithstanding anything to the contrary herein, Contractor’s obligation with
        respect to Applicable Laws and Applicable Permits governing emissions from
        the
        Project is limited to compliance with the Emissions Guarantees.

       

      “Intellectual
        Property Claim” means a third party 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.

       

      “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.

       

      “Intended
        Purposes” shall have the meaning set forth in Section 24.1.

       

      “Invention”
        shall have the meaning set forth in Section 25.1.

       

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

       

       “Limestone
        Consumption Rate Guarantee” means the guarantee relating to limestone
        consumption as set forth in Part I, Section 8.1.3 of the Scope
        Book.

       

      “Limestone
        Consumption Rate Test” means the test for measuring limestone
        consumption as described in Part I, Section 8.2.3 of the Scope
        Book.

       

      “Limited
        Notice to Proceed” means a written Notice from
        Owner to Contractor directing Contractor to begin production of the drawings
        and
        specifications described in Section 3.18.1 and to commence such other
        portions of
        the Work as indicated in such Limited Notice to Proceed.

       

      
        
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      “Limited
        Notice to Proceed Date” means the Business Day
        that Owner provides Contractor with a Limited Notice to Proceed.

       

      “Loss(es)” means
        subject to Section 31.1, 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 (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, and
        whether
        or not involving damages to the Project or the Project Site.

       

      “Major
        Change In Work” shall have the meaning set forth in
Section 16.7.1.

       

      “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
Section 17.2.

       

      “Maximum
        Total Liability” shall have the meaning set forth in
Section 31.2.

       

      “Mechanical
        Completion” means satisfaction of the following
        requirements to Owner’s reasonable satisfaction:

       

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

       

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

       

      (c)           all
        components and systems that are directly related to the production and delivery
        of electrical energy to the high side of the main step-up transformer have
        been
        properly checked-out, adjusted or tested, as appropriate, in preparation
        for
        start-up and commissioning.

       

      “Milestone
        Item(s)” means a discrete portion of the Work to
        be completed by the applicable date set forth in the Milestone Summary
        Schedule.

       

      “Milestone
        Summary Schedule” means the schedule prepared by
        Contractor in the form of Exhibit G attached hereto describing the
        Critical Path Items and other Project activities, as such schedule may be
        modified in accordance with the terms of this Agreement.

       

      
        
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      “Minimum
        Performance Criteria” means at least *** percent (***%) of the Net
        Capacity Guarantee during the Net Capacity Test and not more than *** percent
        (***%) of the Net Heat Rate Guarantee during the Net Heat Rate Performance
        Test,
        while in compliance with applicable constituents of the Emissions Guarantees
        as
        provided in Part I, Section 8 of the Scope Book.

       

      “Minimum
        Stable Load” means the Project has achieved at least *** percent (***%)
        of the nominal net plant capacity over a four (4) hour period during which
        each
        boiler must have operated at *** percent (***%) steam flow (or such greater
        percentage), in accordance with the terms of Part I, Section 8.2.7 of the
        Scope Book.

       

      “Minimum
        Tangible Net Worth” shall have the meaning set forth in
Section 26.1.2(a).

       

      “Monthly
        Payment” shall have the meaning set forth in Section 6.6.

       

      “MOU”
        shall have the meaning set forth in Section 33.14.

       

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

       

      “Net
        Capacity Guarantee” means the Net Capacity of the Project shall be at
        least *** kilowatts, at the conditions specified in Part I, Section 8.2.1
        of the Scope Book, or, as applicable, corrected to the guaranteed conditions
        provided in Part I, Section 8.4 of the Scope Book.

       

      “Net
        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
        Heat Rate Guarantee” means the Net Heat Rate of the Project shall be no
        greater than *** Btu/kWh, at the conditions specified in Part I,
        Section 8.2.2 of the Scope Book, or, as applicable, corrected to the
        guaranteed conditions provided in Part I, Section 8.4 of the Scope
        Book.

       

      “Non-Critical
        Deficiencies” means each item of Work that:
        (a) Owner or Contractor identifies as requiring completion or containing
        defects; (b) does not, in Owner’s reasonable judgment, impede the safe
        operation of the Project in accordance with Industry Standards; and
        (c) does not, in Owner’s reasonable judgment, affect the operability,
        safety or mechanical or electrical integrity of the Project.

       

      “Notice”
        or “notice” means a written
        communication between the Parties required or permitted by this Agreement
        and
        conforming to the requirements of Article 30.

       

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

       

      
        
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      “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 the 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
Section 6.11.2.

       

      “Notice
        of Final Completion” means a Notice from
        Contractor to Owner in accordance with Section 14.4 that the Project has satisfied
        the
        requirements for Final Completion.

       

      “Notice
        of Mechanical Completion” means a Notice from Contractor to Owner in
        accordance with Section 13.9
        that the Project has satisfied the requirements for Mechanical
        Completion.

       

      “Notice
        of Minimum Stable Load” means a Notice from Contractor to Owner in
        accordance with Section 13.8
        that the Project has satisfied the requirements for Minimum Stable
        Load.

       

      “Notice
        of Substantial Completion” means a Notice from
        Contractor to Owner in accordance with Section 14.3 that the Project 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
Section 6.11.2.

       

      “O&M
        Manual Supporting Documents” means with respect
        to the Project, Subcontractor and Vendor operation and maintenance manuals
        for
        Equipment and Materials, including piping and instrumentation diagrams,
        narrative descriptions, heat balances (with respect to minimum load, design
        load
        and maximum load) and system design and operating parameters, including
        procedures and operator responses to alarms.

       

       “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.

       

      “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).

       

      “Outage
        Period” shall have the meaning set forth in Section 15.4.12.1.

       

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

       

      “Owner
        Acquired Permits” shall have the meaning set forth in
Section 2.4.

       

      “Owner
        Directive” shall have the meaning set forth in Section 16.7.4.

       

      
        
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      “Owner
        Event of Default” shall have the meaning set forth in
Section 19.4.

       

      “Owner
        Indemnitee” shall have the meaning set forth in Section 23.1.

       

      “Owner
        Provided Facilities and Services” means the items
        and services to be provided by Owner as more particularly described in Part
        I,
        Section 7 of the Scope Book.

       

      “Owner
        Provided Information” means the information
        regarding the Project Site as set forth in Part I, Reference 7-1 of the Scope
        Book provided by or on behalf of Owner pursuant to Section 4.1.9.

       

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

       

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

       

      “Owner’s
        Certificate of Minimum Stable Load” means a
        certificate of Owner certifying that Minimum Stable Load has
        occurred.

       

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

       

      “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.

       

      “Payment
        Schedule” means the schedule as set forth in
Exhibit C setting forth the schedule of payments
        to be made by Owner
        and cancellation costs in accordance with Section 5.2.

       

      “Performance
        Assurance” means collateral in the form of a letter of credit, bond or
        parent company guaranty, such type of security as mutually agreed upon by
        the
        Parties, and in form, substance and amount reasonably acceptable to Owner;
        provided, however, Owner shall have the right to reject the
        provision of a parent company guaranty and require a letter of credit or
        bond.

       

      “Performance
        Guarantees” means the Net Capacity Guarantee, the
        Net Heat Rate Guarantee, the Ammonia Consumption Rate Guarantee, Limestone
        Consumption Rate Guarantee, and the Emissions Guarantees, each as more
        particularly defined in Part I, Section 8 of the Scope Book.

       

      “Performance
        Liquidated Damages” means the amounts, if any, paid or to be paid by
        Contractor pursuant to Section 15.3 in the event Contractor fails
        to satisfy
        certain of the Performance Guarantees.

       

      “Performance
        Tests” means the tests for measuring the Net
        Capacity and Net Heat Rate as described in Part I, Sections 8.2.1 and 8.2.2
        of
        the Scope Book.

       

      
        
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      “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.

       

      “POIAcknowledgment”
        shall have the meaning set forth in Section 24.4.

       

      “Project” means
        the complete lignite coal-fired, circulating fluidized bed 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), together
        with the interconnection of the Project to the Common Facilities and all
        supporting improvements and other interconnections, as generally described
        in,
        and including all items described, in or inferable from, this Agreement and
        Exhibit A.

       

      “Project
        Guaranteed Dates” means the Substantial
        Completion Guaranteed Date and the Final Completion Guaranteed
        Date.

       

      “Project
        Manager” means the Project Manager designated by
        Contractor and approved by Owner pursuant to Section 3.4.

       

      “Project
        Progress Report” means a written monthly progress
        report prepared by Contractor in form and content generally in accordance
        with
        Part I, Section 5.3 of the Scope Book.

       

      “Project
        Representative” means the Project Representative
        designated by Owner pursuant to Section 2.1.

       

      “Project
        Schedule” means a detailed schedule prepared by
        Contractor describing the time of completion by Contractor of all Work items
        including Critical Path activities, as such schedule may be modified in
        accordance with Section 7.4.1.

       

      "Project
        Schedules" shall mean collectively the Project Schedule and Milestone
        Summary Schedule.

       

      “Project
        Site” means that portion of the Site on which the Project shall be
        constructed and on which Contractor’s temporary facilities, including parking
        areas and temporary lay down areas will be located.

       

      “ProjectSite
        Conditions” means the physical and other
        conditions at the Project 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

       

      
        
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      Hazardous
        Materials), the geological and subsurface conditions of the Project Site
        and the
        location of underground utilities, and equipment and facilities needed before
        and during performance of Contractor’s obligations under this
        Agreement.

       

      “Proposed
        Punchlist” shall have the meaning set forth in Section 14.1.1.

       

      “Proprietary
        Operating Information” means Confidential Information containing
        elements of Owner’s or its Affiliates’ proprietary operating system that has
        been identified in writing as “Proprietary Operating Information.”  To
        the extent a Person who has signed a POI Acknowledgement and Contractor
        demonstrate that any Proprietary Operating Information such individual has
        received would have been excluded from the definition of Confidential
        Information pursuant to the exceptions identified in Section 24.3(i)-(iv), such Proprietary
        Operating
        Information shall no longer be treated as Confidential Information;
however, such individual shall be prohibited from disclosing that such
        information was received from Owner or otherwise attributing such information
        to
        Owner or developing any comparisons of such information to information received
        or developed by Contractor or relevant Subcontractor.

       

      “Provisional
        Items” shall have the meaning set forth in Section 5.1.

       

      “Punchlist” means
        a schedule of Non-Critical Deficiencies developed pursuant to
Section 14.1.1.

       

      “Reliability
        Guarantee” means that the Project will have an
        Equivalent Availability Factor of *** percent (***%) or more during a ***(***)
        consecutive hour (*** (***) consecutive day) period constituting a Reliability
        Test.

       

      “Reliability
        Test” means the operation of the Project during a *** (***) consecutive
        hour (*** (***) consecutive day) period at any time during the *** (***)
        days
        after the Substantial Completion Date, during which the Project’s Equivalent
        Availability Factor will be determined.

       

      “Reliability
        Liquidated Damages” shall have the meaning set forth in
Section 15.2.

       

      “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
Section 15.4.2(b) or 15.4.8.

       

      “Required
        LOC Amount” shall have the meaning set forth in Section 26.1.2(c).

       

      “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.

       

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

       

      
        
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      “Required
        Owner Activities” shall have the meaning set forth in
Section 2.6.

       

      “Retainage
        Security” shall have the meaning set forth in Section 6.7.

       

      “Scope
        Book” means the Scope Book attached hereto as Exhibit A,
        containing the specifications and requirements regarding the Work.

       

      “Shared
        Site Facilities” shall mean the facilities described as "Shared Site
        Facilities" on Exhibit J.

      

      “Site” means
        the real property in Milam County, Texas, on which the Project Site is located,
        as designated in Exhibit J.

       

      “Spare
        Parts Schedule” shall have the meaning set forth in
Section 3.20.1.

       

      “Subcontractor” means
        any Person, including any Vendor, that is in direct or indirect privity with
        Contractor (including any subcontractor of any tier), that performs any portion
        of the Work in furtherance of Contractor’s obligations under this
        Agreement.

       

      “Substantial
        Completion” means satisfaction or waiver of all
        of the conditions set forth in Section 14.2.

       

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

       

      “Substantial
        Completion Guaranteed Date” means the date of
        August 31, 2009, as such date may be modified in accordance with the terms
        hereof.

       

      “Suspension
        for Cause” means any suspension that arises as a result of the
        occurrence and continuance of a Contractor Event of Default.

       

      “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 or its
        equivalent equal to or greater than BB by Standard & Poors or Ba2 by Moody’s
        (or an equivalent rating from a similar rating agency).

       

      “TSA”
        shall have the meaning set forth in Section 6.6.5.

       

      “Turnover
        Date” shall have the meaning set forth in Section 22.1.

       

      “TXU
        Generation” means TXU Generation Company LP, a Texas limited
        partnership.

       

      
        
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      “Unconditional
        Waiver and Release Upon Final Payment” means a
        written statement in the form attached hereto as to 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 unconditionally
        waives and releases all mechanic’s liens, stop notices and bond rights with
        respect to all Work.

       

      “Unforeseen
        Project Site Conditions” shall have the meaning
        set forth in Section 12.3.

       

      “Units
        1-4” shall have the meaning set forth in the Recitals.

       

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

       

      “Warranty
        Payment Option” shall have the meaning set forth in
Section 17.7.5.

       

      “Warranty
        Period” shall have the meaning set forth in Section 17.3.

       

      “Warranty
        Procedures” shall have the meaning set forth in
Section 17.7.

       

      “Willful
        Misconduct” means an intentional act or omission demonstrating an
        entire want of care which would raise the belief that the act or omission
        was
        the result of a conscious indifference to the rights or welfare of the person
        or
        persons affected by it.

       

      “Work” means
        all obligations, duties, and responsibilities assigned to or undertaken by
        Contractor under this Agreement with respect to the Project, including all
        services, labor, supervision, engineering, design and construction of the
        Project, all procurement and provision of Equipment and Materials, all erection
        and installation of Equipment and Materials, interconnection of the Project
        to
        the Common Facilities and all training, start up (including calibration,
        inspection, and start up operation), and testing included in or required
        for the
        Project, including the items and services as generally described in the Scope
        Book, except to the extent Owner (or any third party acting on behalf of
        Owner)
        is expressly responsible under the terms of this Agreement
        therefor.  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.

       

      “Work
        Warranty” means the warranties of Contractor
        under Section 17.1.

       

      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,

       

      
        
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      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.

       

      (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)           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,
        this
        Agreement shall govern.  In general, unless Owner expressly agrees
        otherwise in writing, in the event of a conflict, 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.     

       

      2.           RESPONSIBILITIES
        OF OWNER

       

      Owner
        shall, at Owner’s cost and expense:

       

      2.1           Project
        Representative.  Designate (by a Notice delivered to Contractor) a
        Project Representative, who shall act as the single point of contact for
        Contractor with respect to the prosecution of the Work (but who shall not
        by
        virtue of such designation be authorized to 

       

      
        
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      execute
        a Change In Work Form or make any other amendments to, or provide waivers
        under,
        this Agreement).  Owner may designate Owner’s Engineer as its Project
        Representative, and may designate a new Project Representative from time
        to time
        by a Notice delivered to Contractor. 

       

      2.2           Operating
        Personnel.  Commencing on the date set forth on the Project
        Schedule for such activity, provide Operating Personnel with power plant
        operating experience, who shall be licensed where necessary, for training
        by
        Contractor as provided pursuant to Section 3.19 and to provide ordinary operating
        and
        maintenance support to Contractor for testing, start up and commissioning
        of the
        Project as provided in Section 3.19.  Until Substantial Completion,
        the Operating Personnel provided by Owner pursuant to this
Section 2.2 shall provide normal
        operating maintenance support under the supervision and
        direction of Contractor; provided, however, that such Operating
        Personnel shall not be deemed employees or Subcontractors of Contractor;
        provided, further, that Contractor shall remain solely responsible
        for performing the Work in accordance with this Agreement, including
        Contractor’s obligation to achieve Substantial Completion and Final Completion
        by the applicable Project Guaranteed Date, regardless of any act, omission,
        failure, non-achievement, negligence or non-performance of the Operating
        Personnel.

       

      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 (on or before the dates indicated in
        Part I, Reference 7-2 of the Scope Book), with Contractor’s reasonable
        assistance (to be provided at no cost to Owner) subject to
Section 3.14, maintain and pay
        for all the Applicable Permits set forth in Part I, Section 7.2.1 of the
        Scope Book as a permit to be acquired by Owner (collectively, the “Owner
        Acquired Permits”).  If a permit that is not listed in Part
        I, Section 7.2.1 of the Scope Book is subsequently identified as being
        required and it is of the type customarily obtained by an owner and not by
        a
        contractor, Owner shall obtain such permit and Contractor shall be entitled
        to
        submit a Change In Work for any delays in the Milestone Summary Schedule
        resulting from the lack of such permit and to an adjustment to the Contract
        Price and other modifications or amendments to the Agreement as may be agreed
        to
        by Owner and Contractor pursuant to Section 33.4 (but only to the extent the
        performance of
        the Work is actually delayed and Contractor’s costs to complete the Work are
        actually affected by such delay in the performance of the
        Work).  

       

      2.5           Access
        to Project Site.  Owner shall make the Project Site available to
        Contractor and assure reasonably unimpeded rights of access to the Project
        Site
        for performance of the Work.  Owner shall make the Common Facilities
        and the Shared Site Facilities available to Contractor to perform its Work
        in
        accordance with the Project Schedule, subject to Section 3.17.  For those facilities
        identified on Exhibit J and Part I, Reference 7-3 of the Scope Book, Owner
        shall
        make such facilities available to Contractor on or before the dates identified
        on such Exhibit J or Reference 7-3, as
        applicable.  Contractor shall coordinate and cooperate with Owner
        regarding entry onto the Project Site or any of the Shared Site Facilities
        or
        Common Facilities relating to Unit 4, or any part thereof, and with Alcoa
        until
        shutdown of Units 1-3, through Owner or Owner’s representative, regarding entry
        onto any part of the Shared Site Facilities and Common Facilities related
        to
        property owned and operated by Alcoa, and with Owner’s and Alcoa’s security
        procedures, if any, to the extent Owner has provided such procedures to

       

      
        
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      Contractor.  Owner
        shall cooperate with and assist Contractor to obtain excavation or dig permits
        or other clearances or work permits from Alcoa or Owner’s Affiliate conducting
        the Unit 4 operations as required to complete the Work.  With respect
        to the Project Site, Owner shall obtain excavation or dig permits or other
        clearances encompassing the major areas of the Project Site, which shall
        identify all known undergrounds at the Project Site and Owner’s proposed plan
        for removal as required by the Project Schedule.  

       

      2.6           Project
        Site Preparation.  Owner shall prepare or shall cause the Project
        Site to be prepared in accordance with the applicable provisions of Part
        I,
        Section 7.3 and Reference 7-4 of the Scope Book.  In connection
        therewith, Owner shall complete certain Project Site preparation activities,
        including geotechnical work, drainage and backfill of the existing pond located
        on the Project Site and certain other activities described on Exhibit M
        attached hereto (the “Required Owner
        Activities”).  To the extent Owner has released Contractor to
        begin Work on the Project Site, Owner shall reasonably cooperate with Contractor
        to coordinate Owner’s completion of the Required Owner Activities with
        Contractor’s performance of the Work.  During any such time that Owner
        is completing the Required Owner Activities and Contractor has been released
        to
        begin Work on the Project Site, Owner shall use commercially reasonable efforts
        to provide Contractor as much access to the Project Site as reasonably possible
        and shall not unreasonably interfere with Contractor’s performance of the
        Work.

       

      2.7           Owner
        Provided Facilities and Services.  Owner shall be responsible for
        constructing the interconnection facilities and for providing other Owner
        Provided Facilities and Services on or before the dates and as more fully
        described in Part I, Section 7.3 and Reference 7-3 of the Scope
        Book.  Notwithstanding anything herein 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 Section 8.6.2.  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.  

       

      2.8           Operating
        Consumables and Commodity Scheduling.  Owner shall schedule
        delivery of sufficient lignite coal, limestone, lime, and fuel oil, and other
        items as set forth in the relevant subsections of Part I, Section 7.3 of
        the Scope Book, as required to support Project start up and commissioning
        pursuant to the notification provided by Contractor pursuant to
Section 3.22.

       

      2.9           Scheduling
        and Delivery of Output.  Contractor shall provide notice to Owner
        in accordance with the scheduling and nomination procedures for delivery
        of
        electric energy to the interconnection facilities during testing of the Project,
        including any Minimum Stable Load demonstration, Reliability Test, Acceptance
        Test or Demonstration Test, which procedures are to be mutually developed
        by the
        Parties no later than sixty (60) Days prior to the date for such delivery
        set
        out in the Milestone Summary Schedule.  Contractor shall provide
        notice related to delivery of electric energy no later than 6 a.m. prevailing
        Central Time of the day prior to such delivery; provided that the timing
        of such notice to Owner may be modified from time to time to accommodate
        changes
        in ERCOT’s scheduling protocol.  Upon receipt of notice from
        Contractor in accordance with such scheduling and nomination procedures,
        Owner
        shall schedule delivery of electric energy from the Project to the
        interconnection facilities at the time (pursuant to 

       

      
        
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      ERCOT’s
        scheduling protocol) and in the amount as requested by Contractor and shall
        cooperate with Contractor to make any changes, adjustments or modifications
        to
        such schedule required to allow start-up and testing to proceed continuously
        without operational fluctuations that are materially detrimental to the
        achievement of the Performance Guarantees.  

       

      2.10           Subcontractor
        Communication.  Except as otherwise provided under this Agreement
        or agreed between the Parties, Owner shall direct all communications regarding
        the activities of Contractor’s agents, employees or Subcontractors to
        Contractor’s Project Manager.

       

      2.11           Taxes.  Owner
        shall be responsible for the payment of: (a) any property taxes in connection
        with the Project; (b) its corporate income taxes with respect to Owner’s
        profits; (c) any stamp duties levied on Project documents; (d) all taxes
        related
        to employment of its personnel; (e) any and all taxes as set forth in
Section 5.4.1; and (f) such
        other taxes relating to the Project which have not otherwise been allocated
        to
        Contractor hereunder.   

       

      2.12           Required
        and Operational Spare Parts.  Owner shall engage in the spare
        parts procurement program described in Part I, Section 3.3.2 of the Scope
        Book and otherwise procure, in its sole discretion, such recommended operational
        spare parts as indicated on the Spare Parts Schedule as Owner determines
        are
        appropriate or necessary; provided that if Owner does not engage in a
        spare parts procurement program and operational spare parts are not available
        during start up, Contractor shall be entitled to a Change In Work to reflect
        any
        delays in the performance of the Work resulting from Owner’s lack of a spare
        parts program.

       

      2.13           Time
        and Manner of Owner’s Performance.  Owner shall perform its
        responsibilities described in this Agreement at no cost to Contractor and
        in
        accordance with the express provisions of this Agreement, provided that
        if no time is specified for performance of any of such Owner’s responsibilities,
        Owner shall perform the same within a reasonable time after Notice from
        Contractor to Owner. 

       

      3.           RESPONSIBILITIES
        OF CONTRACTOR

       

      In
        order for Contractor to complete the Work, Contractor shall:

       

      3.1           Turnkey
        Basis.  On a turnkey basis, perform, furnish, be responsible for,
        and pay the cost of, all of the Work.  Contractor acknowledges and
        agrees that this Agreement constitutes a fixed price obligation to engineer,
        design, procure, expedite, inventory, construct, test and start up a turnkey
        Project (including the training of the Operating Personnel), within the time
        and
        for the purpose designated herein.  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 supply all of the Equipment and Materials, labor and design
        services and to supply and perform all of the Work, in each case as may
        reasonably be required, necessary, incidental, or appropriate (whether or
        not
        specifically set forth in this Agreement) to complete the Work such that
        the
        Project satisfies the applicable terms, conditions and requirements set forth
        in
        this Agreement, all for the 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,
        in accordance with the terms of this Agreement and with Industry Standards,
        and
        in compliance 

       

      
        
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      with
        Applicable Laws, Permit Requirements and Applicable Permits; provided,
        notwithstanding anything to the contrary contained herein, that Contractor’s
        obligation with respect to Applicable Laws, Permit Requirements or Applicable
        Permits governing emissions from the Project is limited to compliance with
        the
        Emissions Guarantees. 

       

      3.3           Design
        and Construction of Project.  Design, engineer and construct the
        Project so that it meets the requirements of the then current approved drawings
        and specifications, and is capable of operation, at the design levels specified
        in the Scope Book and in compliance with Industry Standards, Applicable Laws,
        Permit Requirements and Applicable Permits; provided, notwithstanding
        anything to the contrary contained herein, that Contractor’s obligation with
        respect to Applicable Laws, Permit Requirements or Applicable Permits governing
        emissions from the Project is limited to compliance with the Emissions
        Guarantees.  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 and for the
        construction of the Project in a manner which satisfies the requirements
        of this
        Agreement.  Contractor shall preserve any permanent survey
        construction monuments and benchmarks located on the Project Site during
        its
        performance of the Work.

       

      3.4           Project
        Manager.  Contractor shall designate a Project Manager, 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 Manager shall be one of
        the Key Personnel for purposes of this Agreement.  Contractor’s
        initial Project Manager is designated on Exhibit H.

       

      3.5          Utilities
        and Services.  

       

      3.5.1                Provision
        of Services.  Contractor shall install, connect, and maintain at
        its own expense during its performance under this Agreement all utilities,
        facilities, and services 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.

       

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

       

      3.5.3                Supply
        of Construction Facilities.  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 required for the proper and safe performance
        and
        completion of the Work or that Contractor must provide for the use of Contractor
        or other parties and that do 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, water and
        other
        consumables, 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,

       

      
        
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      water,
        power, and, except as provided in Part I, Section 7.3 of the Scope Book,
        all other necessary construction utility services (including fuel for
        construction equipment), all construction chemicals, lubricants, and
        construction consumables, and disposal of sewage, waste material, rubbish,
        and
        spoils generated by Contractor and its Subcontractors, in each case as necessary
        for Contractor’s performance of the Work.

       

      3.5.4                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 until Contractor
        achieves Substantial Completion, except for the Operating Consumables described
        in the relevant subsections of Part I, Section 7.3 of the Scope Book, which
        shall be provided by Owner; (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 scheduled Substantial Completion Date, a detailed list of suppliers
        of all Operating Consumables provided by Contractor.

       

      3.6           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.

       

      3.7           Organization.  Contractor
        shall maintain staff that are fully 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
        the
        Project Site who shall be completely supported by area and discipline
        superintendents and personnel as required.  Contractor shall maintain
        a qualified and competent organization at the Project 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
        Schedules.  

       

      3.8           Contractor
        Acquired Permits.  Contractor shall obtain all Applicable Permits
        identified in Part I, Section 7.2.2 of the Scope Book as a permit to be
        acquired by Contractor, and in the event an Applicable Permit is not listed
        therein, Contractor shall also obtain such Applicable Permit if it qualifies
        as
        one of the following types of permits:  (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 and all Subcontractors 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 

       

      
        
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      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 brought on to or generated on the Project Site, the Common
        Facilities or the Shared Site Facilities, by Contractor, or any Subcontractor
        (except to the extent any permit for such hazardous materials purpose is
        identified as one being obtained by Owner on Part I, Reference 7-2 of the
        Scope
        Book), 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.  

       

      3.9           Maintenance
        of Project Site.  Maintain the Project Site clear of debris, waste
        material, and rubbish.  Contractor shall dispose of such debris, waste
        material, and rubbish in accordance with Applicable Law.  At the
        completion of the Work and prior to Final Completion, Contractor shall remove
        from the Project Site, the Common Facilities and the Shared Site Facilities,
        all
        of its waste materials, tools, equipment, machinery and surplus materials
        that
        are not part of the Project.  If Owner reasonably believes additional
        materials, tools, equipment, machinery and surplus materials brought on to
        the
        Project Site, the Common Facilities or Shared Site Facilities by Contractor
        or
        any of its Subcontractors should be removed, Contractor shall remove same
        from
        the Project Site, the Common Facilities or Shared Site Facilities.

       

      3.10           Hazardous
        Materials Disposal System.  Contractor shall prepare and maintain
        accurate and complete documentation of all Hazardous Materials used by
        Contractor or Contractor’s Subcontractors in connection with the Project, and of
        the disposal of any such materials, including transportation documentation
        and
        the identity of all Subcontractors or Vendors 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.  

       

      3.11           Project
        Site Security.  During the performance of any of the Work at the
        Project Site, Contractor shall provide all necessary and reasonably appropriate
        safeguards at the Project 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.  Notwithstanding the
        foregoing, Contractor acknowledges that Owner and the other Persons operating
        at
        the Project Site have implemented their own security measures, and Contractor
        shall cooperate with and follow all such security measures to the extent
        Contractor has been provided copies of such security programs or
        measures.  Within thirty (30) days after the Full Notice to Proceed
        Date, Contractor shall provide a draft security assurance program to Owner
        for
        Owner’s review and approval.  Owner shall promptly review
        and provide
        any comments on such draft program to Contractor.  If Owner provides
        any comments with respect to such security assurance program to Contractor,
        Contractor shall incorporate changes into the security assurance program
        addressing such comments, and resubmit the security assurance program to
        Owner.  If Owner fails to comment within twenty (20) days after
        receipt of such draft, Owner shall be deemed to have accepted such security
        assurance program.  Contractor shall follow the approved
        security assurance program during the performance of the
        Work.  

       

      
        
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      3.12           Safety.  During
        the performance of the Work at the Project Site, Contractor shall be responsible
        for the safety of the Persons at the Project 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 Project Site 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 Project 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.  Contractor shall participate in a safety committee with Owner,
        which shall jointly and promptly
        review and finalize such draft program.  The safety committee will
        continue to meet during the period in which the Work is on-going at the Project
        Site as the committee members mutually agree.  Contractor will
        cooperate with and participate in the safety committee in good
        faith.  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 inspection of the
        Project Site and shall hold safety meetings with Contractor’s personnel,
        Subcontractors and others, as Contractor reasonably deems
        appropriate.  Contractor shall be solely responsible for implementing
        and following the approved safety program at the Project Site and shall perform
        the Work, and shall cause the Subcontractors to implement, follow and perform
        the Work, in accordance with such approved program.  Contractor shall
        promptly provide Owner with:

       

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

       

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

       

      (c)           written
        accident reports for O.S.H.A. lost time and recordable accidents that occur
        at
        the Project Site prepared in accordance with the safety program approved
        by
        Owner pursuant to this Section 3.12; and

       

      (d)           copies
        of all written communications with Governmental Authorities and insurance
        companies (including any notices) with respect to accidents that occur at
        the
        Project 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, and
        in
        cooperation with 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.  If Owner, in its sole discretion, determines
        that Contractor is performing the Work in an un-safe manner or that the revised
        safety program does not adequately address the underlying cause of the lost
        time

       

      
        
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      accidents
        that have occurred, Owner may require Contractor to immediately stop performance
        of the Work, and Owner and Contractor agree to meet within one (1) Business
        Day
        to establish criteria and timing for restarting the Work and in conjunction
        with
        such meeting revise the safety program.

       

      3.13           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
        in
        accordance with the Milestone Summary Schedule.  All Equipment and
        Materials shall be shipped, stored and maintained in storage in strict
        accordance with the applicable manufacturer’s
        recommendations.  

       

      3.14           Applicable
        Laws and Permits.  Promptly provide all reasonable technical
        support and information, and other reasonably requested information in
        Contractor’s possession at no additional cost, to enable Owner to apply for,
        obtain and maintain Owner Acquired Permits; provided, however,
        that such support shall be limited in the aggregate to five hundred (500)
        hours.  Comply in all respects with all Applicable Laws and Applicable
        Permits relating to the Project, the Project Site, and the performance of
        the
        Work, and perform the Work so that, upon Substantial Completion, the Project
        shall meet, and will be capable of being operated in compliance with, all
        requirements of Applicable Laws and Applicable Permits and using methods
        and
        Equipment and Materials that satisfy Industry Standards; provided that
        Contractor’s obligation with respect to Applicable Laws or Applicable Permits
        governing emissions from the Project is limited to compliance with the Emissions
        Guarantees.

       

      3.15           Quality
        Assurance Programs.  Use effective quality assurance programs,
        acceptable to Owner and consistent with Part I, Reference 4-1 of the Scope
        Book
        in performing the Work.  Within thirty (30) days after the Full
        Notice to Proceed Date, Contractor shall 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.  Owner shall review, comment on, and
        approve or disapprove such program in writing within thirty (30) days after
        submission by Contractor.  If Owner conditions its approval on
        reasonable changes in the quality assurance program submitted by Contractor,
        Contractor shall effect such changes at no additional cost to Owner and resubmit
        such program to Owner within ten (10) days after Contractor receives
        Owner’s conditional approval.  Owner will have ten (10) days
        after such resubmission to review, comment on, and approve or disapprove
        such
        programs resubmitted by Contractor.  Such procedure shall continue
        with the same ten (10) day time periods until such programs are approved by
        Owner; provided, however, that if the Parties cannot reach
        agreement after the third submittal by Contractor, the Parties’ differences
        shall be resolved in accordance with the procedures provided in
Article 32.  If Owner
        fails to respond within any of the applicable periods specified above, Owner
        shall be deemed to have approved the last such programs submitted by
        Contractor.  Contractor shall comply with the approved quality
        assurance program throughout the performance of the Work.  Contractor
        shall cause each Major Subcontractor to implement a Contractor-approved quality
        assurance program and comply with same throughout its performance of the
        Work.

       

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

       

      
        
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      3.17           Project
        Site Activities.  Contractor acknowledges that operations at Units
        1-4 are on-going and that Contractor will use commercially reasonable efforts
        to
        coordinate Contractor’s activities on or near the Project Site, the Shared Site
        Facilities and the Common Facilities with such on-going
        operations.  Contractor shall not allow its operations and activities
        on the Project Site, the Shared Site Facilities or the Common Facilities
        to
unreasonably interfere
        with any of the operations
        of Units 1-4 or Alcoa’s smelter, or
        other activities of Alcoa or Owner’s Affiliate in connection with such
        operations; provided,
however,
        that ordinary construction activities
        required for the Work shall not constitute unreasonable interference with
        such
        operations to the extent Contractor uses commercially reasonable efforts
        to
        avoid unreasonably interfering with such operations.  In addition,
Contractor hereby acknowledges that Owner may be on the Project Site
        conducting the Required Owner Activities after Contractor has been released
        to
        begin Work on the Project Site.  Contractor shall reasonably cooperate
        with Owner to coordinate Contractor’s performance of the Work with Owner’s
        completion of the Required Owner Activities.  During the time that
        Owner is completing the Required Owner Activities, Contractor shall not
        unreasonably interfere with Owner’s completion of such activities on the Project
        Site.  

       

      3.18           Delivery
        of Documents; Owner Review.  

       

      3.18.1                Drawings
        and Specifications.  Without limiting the obligations contained in
Section 11.3, Contractor shall
        submit all preliminary drawings and specifications with respect to the design,
        including the location of the Project on the Project Site, engineering,
        procurement, installation and construction of the Project to Owner, prior
        to the
        commencement of any fabrication, construction or installation with respect
        to
        the Project, pursuant to and in accordance with Part I, Section 2.9 of the
        Scope Book.  Upon acceptance or approval by Owner, as applicable, the
        drawings and specifications may not thereafter be amended or modified without
        the consent of Owner, other than minor modifications as permitted pursuant
        to
        Part I, Section 2.9 of the Scope Book. 

       

      3.18.2                Operational
        Documents.  Provide all operating data and preliminary,
        construction and final as-built drawings necessary to safely and efficiently
        start up, test, operate, shut down, and maintain the Project (including the
        O&M Manual Supporting Documents) as set forth in Part I, Section 2.1 of
        the Scope Book.  In order to facilitate observations and inspections,
        Contractor shall maintain at the Project Site in a safe place one working
        copy
        of all Project Schedules, drawings, specifications, addenda, executed Changes
        in
        Work, graphic or written instructions, interpretations and clarifications,
        and
        all other documents related to the Work, in good order and marked currently
        to
        record all changes made during construction, commissioning and start up,
        together with blueprints, general arrangements, manufacturing and shop drawings,
        product data and samples, and copies of all codes applicable to the
        Work.  Such documents shall be available to Owner and the Financing
        Entities, if any, for reference, copying and use.

       

      3.19           Training
        of Operating Personnel.

       

      3.19.1                Commencement
        of Training.  Commencing by the date set forth in the Project
        Schedule for the commencement of such activities, Contractor shall 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

       

      
        
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      Section 3.19.2.  Contractor
        shall also train
        or cause the applicable Subcontractor to train the Operating Personnel on
        all of
        the major items of the equipment installed at the Project.  In
        particular, without limiting the generality of the foregoing, the Subcontractor
        which provides the plant control system shall train the Operating Personnel
        on
        the operation and maintenance of such equipment.

       

      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 Part I, Section 6.2 of the Scope Book) and the
        proposed written materials to be used in the training program and submit
        such
        description to Owner, for Owner’s approval, by no later than the date that is
        six (6) months prior to the scheduled Project energization
        date.  Owner shall review, comment on, and approve or disapprove such
        program in writing within thirty (30) days after such submission by
        Contractor.  If Owner conditions its approval on reasonable changes in
        the program submitted by Contractor, Contractor shall effect such changes
        at no
        additional cost to Owner and resubmit the program to Owner within ten (10)
        days
        after Contractor receives Owner’s conditional approval.  If Owner
        fails to respond within the thirty (30) day period specified above, Owner
        shall
        be deemed to have approved the program submitted by Contractor. 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 Schedule.  Contractor shall deliver to Owner a schedule (the
“Spare Parts Schedule”) describing the spare parts that
        Contractor believes necessary for the successful start up, operation and
        maintenance of the Project, as well as a price list setting forth the unit
        cost
        for such parts.  The schedule shall, at a minimum, list the
        manufacturer’s part number or easily identifiable ordering
        number.  Contractor shall deliver the Spare Parts Schedule to Owner at
        least sixty (60) days before Owner would need to order such part so that it
        will be available at the Project Site before the scheduled Project energization
        date.  The Spare Parts Schedule shall be updated from time to time as
        additional spare parts are ordered by Contractor or
        Owner.  

       

      3.20.2                Start-up
        Spare Parts.  Contractor shall procure and have delivered to the
        Project Site in time to support the Project Schedule the spare parts customarily
        obtained by a prudent contractor in connection with the start up and testing
        of
        generation facilities of comparable size and nature as the
        Project.  Contractor shall also procure a spare boiler feed pump and
        boiler feed booster pump, complete with motors but shall have no obligation
        to
        purchase any other operational spare parts.  

       

      3.20.3                Spare
        Parts Procurement.  Contractor shall provide procurement support
        with respect to Owner’s procurement of all operational spare parts in accordance
        with Part I, Section 3.3 of the Scope Book.  Contractor shall be
        allowed to use all spare parts acquired by Contractor for Owner pursuant
        to
Section 3.20.2 and acquired by
        Owner pursuant to Section 2.12
        in its performance of the Work.  Contractor shall, at its own cost,
        promptly replace, recondition or procure for delivery any operational spare
        parts it uses prior to the Substantial Completion Date in accordance with
        Section 14.2(i) and shall, at
        its own cost, replace,

       

      
        
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      recondition
        or procure for delivery to Owner any start-up or operational spare parts
        used by
        Contractor during any Acceptance Test, Reliability Test or Demonstration
        Test
        that occurs after the Substantial Completion Date.

       

      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 lignite coal date for the Project, Contractor shall
        provide a Notice to Owner of the estimated amount of lignite coal, limestone,
        lime, fuel oil, ammonia, ash removal, and sand for bed inventory, required
        for
        the Project for the period beginning on the scheduled first fire on lignite
        coal
        date and ending on the Substantial Completion Date.  

       

      3.23           Financial
        Reporting.  Within
        thirty (30) days after the end of
        each calendar quarter and until Final Completion, Contractor shall deliver
        to
        Owner a copy of its unaudited quarterly account balances of cash and cash
        equivalents, total stockholders equity, revenue and net income prepared and
        reported in accordance with generally accepted accounting principles
        consistently applied and certified to their accuracy by an authorized
        officer.
        Upon Owner’s request,
        Contractor will make a representative available to provide,
        for review only,
        and discuss any quarterly
        and the most recent annual audited financial statement and Contractor’s
        financial status with Owner and any Financing Entity until Final
        Completion.  In addition, no later than June 30th of each year,
        Contractor shall provide Owner with a copy of Contractor’s annual “General Facts
        Statements,” summarizing Contractor’s balance of cash and cash equivalents,
        total stockholders equity and revenue for such previous calendar year, certified
        by Contractor’s external auditor, until Final Completion. Owner agrees to
        maintain the confidentiality of all financial reporting supplied or
        disclosed by Contractor in
        accordance with Article 24, and any
        Financing Entity will also agree in writing to maintain the confidentiality
        of
        all financial reporting supplied or disclosed by Contractor prior to any
        such
        disclosure.

       

      4.           COVENANTS,
        WARRANTIES AND REPRESENTATIONS

       

      4.1           Contractor.  Contractor
        represents, and warrants, and with respect to Sections 4.1.2.1, 4.1.8,
4.1.9,
4.1.11
        and 4.1.12 covenants, to Owner that:

       

      4.1.1                Organization,
        Standing and Qualification.  Contractor is a corporation, duly
        organized, validly existing, and in good standing  under the laws of
        the State of Nevada, 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.

       

      
        
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      4.1.2                Professional
        Skills.  

       

      4.1.2.1                      Contractor
        has and will have all the required authority, ability, skills, experience
        and
        capacity necessary to perform and shall diligently perform the Work in a
        timely
        and professional manner, utilizing sound engineering principles, project
        management procedures, construction procedures and supervisory procedures,
        all
        in accordance with Industry Standards.

       

      4.1.2.2                      Contractor
        has the experience and skills necessary to determine, and Contractor represents
        that Contractor can perform the Work for the Contract Price and in accordance
        with the Milestone Summary Schedule.

       

      4.1.3                Due
        Authorization; Enforceability.  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.  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 Project Site or any portion thereof to any lien other
        than
        as contemplated or permitted by this Agreement.

       

      4.1.5                Government
        Approvals.  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
        Schedules.  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.

       

      4.1.6                No
        Suits, Proceedings.  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.

       

      
        
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      4.1.7                Intellectual
        Property.  Contractor owns or has 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 and its representatives have not made any
        payment or given anything of value, and Contractor 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 has not, and will not, take any payment or
        accept anything of value (other than de minimus value), from any
        potential subcontractor, supplier or vendor that is being considered or that
        Contractor engages to perform any of the Work, and will require its
        Subcontractors to follow a similar policy.  None of Contractor, its
        Subcontractors, nor any of their employees or agents shall take any action
        that
        violates the United States Foreign Corrupt Practices Act or any similar
        Applicable Law.  Contractor shall immediately notify Owner of any
        violation of this covenant.

       

      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.  Contractor further represents and warrants that, subject to
Section 12.3, it is not relying
        on Owner for any information, data, inferences, conclusions, or other
        information with respect to Project Site Conditions, including the surface
        conditions of the Site and the surrounding areas.  Contractor shall
        promptly review copies of any Owner Provided Information delivered to Contractor
        following the date hereof and notify Owner within ten (10) days of receipt
        thereof, to the extent that such Owner Provided Information is inconsistent
        with
        (i) assumptions made by Contractor and agreed to by Owner or (ii) previously
        provided Owner Provided Information, and, subject to the following sentence,
        subsequently may submit a Change In Work to Owner pursuant to
Section 16.3, which shall
        provide details as to how such Owner Provided Information actually and
        demonstrably impacts the Milestone Summary Schedule or Contractor’s costs to
        complete the Work, and identifying any other affected terms of the
        Agreement.  If Contractor does not notify Owner of any inconsistencies
        in Owner Provided Information provided to Contractor following the date hereof
        within such ten (10) period, the Owner Provided Information shall be deemed
        to
        be consistent with Contractor’s assumptions or previously provided Owner
        Provided Information, as applicable and Contractor shall not be entitled
        to
        submit a Change In Work form in relation thereto. 

       

      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.  Subject to Owner’s performance of its
        responsibilities contained in Part I, Section 7.3 and Reference 7-3 of the
        Scope
        Book in accordance with Applicable Laws and Applicable Permits, 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;
        provided, however, notwithstanding anything to the contrary
        contained herein, Contractor’s obligation with respect

       

      
        
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      to
        Applicable Laws and Applicable Permits governing emissions from the Project
        is
        limited to compliance with the Emissions Guarantees.

       

      4.1.11                Financial
        Condition.  In the event Owner reasonably determines that
        Contractor’s financial condition, based on the financial reports provided to
        Owner pursuant to Section 3.23,
        has materially declined relative to its condition as of the date hereof,
        Owner
        shall notify Contractor of same and the respective Chief Financial Officers
        of
        each Party shall meet within ten (10) days of such notice to review Contractor’s
        financial condition and provide suggestions for the amount and type of
        Performance Assurance that Owner shall reasonably require to be delivered
        to
        Owner to secure Contractor’s obligations hereunder based on such decline in
        Contractor’s financial condition.  Owner shall shortly thereafter
        provide a Notice to Contractor, which shall indicate the amount of Performance
        Assurance reasonably required to be delivered to Owner based on such decline
        in
        Contractor’s financial condition, which shall not exceed Fifty Million Dollars
        ($50,000,000), and within fifteen (15) days thereof, Contractor shall cause
        to
        be delivered to Owner such required Performance Assurance.  Upon Final
        Completion, Owner's rights to give notice of material decline in Contractor's
        financial condition and to require provision of additional Performance Assurance
        under this Section 4.1.11 shall cease
        to apply.  

       

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

       

      4.2           Owner.  Owner
        represents, and warrants, and with respect to Sections 4.2.4, 4.2.6,
4.2.8,
4.2.9,
        and 4.2.10 covenants, to Contractor
        that:

       

      4.2.1                Organization,
        Standing and Qualification.  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.  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.  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.

       

      
        
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      4.2.4                Governmental
        Approvals.  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 Schedules.

       

      4.2.5                No
        Suits, Proceedings.  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                Business
        Practices.  Owner and its representatives have not made any
        payment or given anything of value, and Owner will not, and Owner will direct
        its employees, agents, 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 Contractor or Owner in connection
        with the Work to be performed hereunder.  Neither Owner nor any of its
        employees or agents shall take any action that violates the United States
        Foreign Corrupt Practices Act or any similar Applicable Law.  Owner
        shall immediately notify Contractor of any violation of this
        covenant.

       

      4.2.7                Access
        to Project Site.  Owner has the right to access the Project Site
        and to allow Contractor to access and use the Project Site for the performance
        of the Work.  

       

      4.2.8                Waivers
        from Adjacent Property Owners.  

       

      4.2.8.1                      TXU
        Generation.  Prior to Contractor commencing any of the Work on the
        Project Site, Owner shall obtain a release from TXU Generation in favor of
        Contractor in the form of Exhibit P attached hereto.

       

      4.2.8.2                      Alcoa.  Owner
        shall use commercially reasonable efforts to cause any release from any indirect
        consequential, exemplary, or special damages, including loss of profits or
        loss
        of revenue, contained in any agreement between Owner and Alcoa relating to
        the
        Project to also run for the benefit of Contractor; provided,
however, the foregoing undertaking by Owner shall not impose any
        obligation by Owner, nor shall Owner be required, to incur any actual costs
        or
        expenses, or otherwise result in any increased costs of any sort in any
        agreement between Owner and Alcoa, with respect to such
        undertaking.

       

      4.2.9                Permit
        Status.  Owner agrees to promptly notify Contract of any material
        change in status or event relating to any modification, application, or
        amendment of any Owner Acquired Permits.

       

      
        
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      4.2.10                Owner
        Provided Information.  Owner has provided, or will provide on or
        before the dates identified in Section 7.3 of the Scope Book, Contractor
        with copies of the Owner Provided Information as set forth in Part I,
        Section 7.3 of the Scope Book and Contractor acknowledges that all such
        documents or information have been or will be provided as an accommodation
        to
        Contractor and as a basis for Contractor to perform the
        Work.  

       

      5.           COST
        OF WORK

       

      5.1           Contract
        Price.  As full compensation for the Work and all of Contractor’s
        obligations hereunder Owner shall pay to Contractor a fixed price amount
        of
        Seven Hundred Nineteen Million Seven Hundred Seventy-Six Thousand Dollars
        ($719,776,000) (the “Contract Price”), which is
        divided into separately stated
        contract prices for incorporated materials and for services and labor as
        will be
        set forth substantially in the form of Exhibit Q
        within thirty (30) days of the
        Full Notice to Proceed Date; provided that
        such
        amount is subject to adjustment as documented pursuant to a Change In Work
        Form
        with respect to the matters set forth on Exhibit B attached hereto (the
“Provisional Items”) and Exhibit I attached hereto
        (the “Contingency Program”), and is exclusive of the sales and
        use taxes to be paid by Owner pursuant to Section 5.4.  The Contract Price shall be
        changed only as expressly set forth in this Agreement and shall be paid in
        accordance with Article 6.  

       

      5.2           Cancellation
        Cost Schedule and Payment Schedule.  Exhibit C sets
        forth (i) the payments to be made upon completion of the Work or portions
        thereof as set forth in such schedule, and (ii) the cancellation costs that
        will be incurred if this Agreement is terminated pursuant to
Section 20.1; provided
        that taxes to be paid by Owner and any bonuses earned and payable pursuant
        to
        the terms of this Agreement that are not included in such cancellation costs
        shall remain obligations of Owner. 

       

      5.3           All
        Items of Work Included.  The Contract Price will 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
        the Work (including any intellectual property rights licensed under this
        Agreement, expressly or by implication) provided by Contractor or its
        Subcontractors; (b) all United States federal, state, regional, and local
        taxes, goods and services taxes, sales taxes, use, ownership, value-added,
        or
        property taxes effective or enacted as of the date of execution of this
        Agreement or thereafter, each as imposed on Contractor’s or its Subcontractors’
equipment, tools, or supplies, and including any state and federal gasoline
        and
        fuel taxes; (c) fees and contributions on or measured by the net income,
        or
        assets of Contractor or its Subcontractors, all employees wages or other
        labor
        costs of Contractor or its Subcontractors, including, without limitation,
        all
        payroll or employment compensation tax, FICA, social security tax or similar
        taxes for Contractor's or its Subcontractor's employees; and (d) any
        duties, levies, imposts, fees, charges, and royalties (and including any
        of the
        foregoing related to the importation of any items into the United States)
        imposed on Contractor or its Subcontractors with respect to any Equipment
        and
        Materials, labor, or services provided under this Agreement.  The
        Contract Price shall not be increased with respect to any of the foregoing
        (unless such increase constitutes a Change In Law) or with respect to any
        withholdings that Owner may be required to make in respect of any of the
        foregoing items.  Notwithstanding the foregoing, Contractor shall not
        be liable for, and the Contract Price shall not include, any real estate
        taxes
        or ownership taxes on the

       

      
        
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      Project
        Site, nor any corporate income taxes with respect to Owner’s profits, nor any
        taxes to be paid by Owner as provided in Section 5.4.1.

       

      5.4           Texas
        Sales and Use Taxes.

       

      5.4.1                      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).  Sales and use taxes
        on Equipment and Materials purchased by Owner from Contractor that constitute
        Permanent Plant items shall be paid by Owner and are in addition to the Contract
        Price.

       

      5.4.2                      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 defined below) by Contractor
        to Owner in connection with the Work, 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 to issue, properly completed Texas Resale Certificates and/or
        other exemption certifications or other documentation, as appropriate, to
        all
        applicable Subcontractors, 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 Contractor under this
        Agreement or otherwise for any sales and use taxes paid, directly or indirectly,
        by Contractor or any Subcontractor with respect to such taxable items, including
        by reason of Contractor’s failure to comply, or to cause any Subcontractor 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 Section 5.4, the term “taxable item” has the meaning
        assigned to that term in Section 151.010 of the Texas Tax Code.

       

      5.4.3                      Certain
        Reimbursements.  Contractor shall pay and
        be responsible
        for, and Owner shall reimburse Contractor (without duplication and which amount shall
        be in addition
        to the Contract Price) for,
        all sales and use taxes imposed on (i)
        Contractor’s services and overhead
        related to the design, construction, or operation of the Project, but not
        incorporated into the Project, (ii) all consumables
        used in
        connection with the Work which are not incorporated into the Project or for
        which title has not transferred to Owner, and (iii) other indirect expenses
        including any lease or rental of equipment or other property related to the
        Work.  Such
        reimbursable amounts shall be
        included in Contractor's monthly Invoices and shall be paid pursuant to
Section 6.4.

       

      5.4.4                      Statements
        and Other Information.  Each Contractor’s Invoice shall be
        accompanied by a separate statement for sales and use tax purposes which
        shall
        break down in detail the aggregate amount reflected on such Contractor’s Invoice
        by clearly and separately listing and identifying each item (including any
        service relating to the repair, remodeling, maintenance and/or restoration
        of
        tangible personal property and/or real property) and the amount of the charges
        related thereto.  Contractor shall also provide Owner with any
        additional information regarding each such Contractor’s Invoice and the
        accompanying statement, and sales and use tax matters relating thereto,
        requested by Owner.

       

      
        
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      5.4.5                      Cooperation.  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 and/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 Subcontractors
        to
        grant to, Owner or Owner’s representatives access at all reasonable times during
        the course of the Work and for a period of six (6) years after the Final
        Completion Date to all of the information, books, and records relating to
        tax
        matters (including sales and use tax matters) pertaining to the Work within
        their possession or control (including, the right to take extracts therefrom
        and
        make copies thereof).  Contractor shall also furnish or cause to be
        furnished to Owner or Owner’s representatives the assistance and cooperation of
        personnel of Contractor, its Affiliates, and Subcontractors, as Owner may
        reasonably request in connection which such tax matters.

       

      
        
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      5.5           Bonuses.  

       

      5.5.1                Schedule
        Bonus.  Contractor shall be entitled to a bonus if Substantial
        Completion is achieved prior to the Substantial Completion Guaranteed Date
        calculated as set forth in this Section 5.5.1 using the table set forth
        below.
        Notwithstanding anything to the contrary herein, the bonus paid to Contractor
        pursuant to this Section 5.5.1
        shall in no event exceed *** Dollars ($***).  Subject to the foregoing
        sentence, for each day prior to the Substantial Completion Guaranteed Date
        that
        Substantial Completion is achieved, Contractor shall be entitled to receive
        an
        amount equal to the sum of the products of (A) the number of days in each
        period
        set forth in the following table, ending on the date on which Substantial
        Completion occurs, multiplied by (B) the dollars per day corresponding to
        such
        period.  

       

      
        	
                Number
                  of Days Prior to the Substantial Completion Guaranteed Date that
                  Substantial Completion occurs:

              	
                Dollars
                  ($) per Day

              
	
                1
                  to 29

              	
                $***

              
	
                30
                  to 75

              	
                 

                $***

                (for
                  each Day during such 30 to 75 day period but not
                  before)

              
	
                76
                  to 136

              	
                 

                $***

                (for
                  each day during such 76 to 136 day period but not
                  before)

              
	
                137
                  to 195

              	
                 

                $***

                (for
                  each day during such 137 to 195 day period but not
                  before)

              
	
                195
                  and greater

              	
                 

                $***

                (for
                  each day prior to the day which is the 195th day prior to the Substantial
                  Completion Guaranteed Date that Substantial Completion occurs,
                  but not
                  before)

              

      

      

       

      As
        an example only, if the Substantial Completion Date occurs 200 days prior
        to the
        Substantial Completion Guaranteed Date, such bonus would be equal
        to:

       

      (29
        days x $***) + (46 days x $***) + (60 days x $***) +

      (59
        days x $***) + (6 days x $***) = $***

       

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

       

      
        
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      The
        Parties agree that for purposes of this Section 5.5.1, Substantial Completion shall
        be deemed
        to have been achieved on the date of Contractor’s notice of Substantial
        Completion that was accepted by Owner pursuant to an Owner’s Certificate of
        Substantial Completion.  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 or an Excusable Event caused by an event
        of
        Force Majeure affecting Owner, for the sole purpose of calculating the amount
        of
        bonus to be paid to Contractor pursuant to this Section 5.5.1, 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) of the number of days by which the
        Substantial Completion Guaranteed Date was so adjusted and the bonus that
        Contractor would otherwise receive calculated using such adjusted number
        of
        days.  Owner shall consult with the Project Representative and
        thereafter may agree, after such consultation, in Owner’s sole discretion, to
        pay the bonus rates described above based on the Substantial Completion
        Guaranteed Date using a number of days that is not adjusted as described
        in the
        preceding sentence for such events of Force Majeure or Excusable Events,
        as
        applicable.

       

      5.5.2                Performance
        Bonus.  Provided that Contractor has met the Minimum Performance
        Criteria with respect to both the Net Capacity and Net Heat Rate, Contractor
        shall be entitled to a bonus (i) if the Project achieves Net Capacity in
        excess
        of the Net Capacity Guarantee in an amount equal to *** Dollars ($***) per
        kilowatt for each kilowatt by which the Project exceeds the Net Capacity
        Guarantee, and (ii) if the Project achieves a Net Heat Rate below the Net
        Heat
        Rate Guarantee in an amount equal to ***Dollars ($***) per Btu/kilowatt for
        each
        Btu/kilowatt by which the Project achieves a Net Heat Rate lower than the
        Net
        Heat Rate Guarantee.  

       

      5.5.3                Payment
        of Bonuses.  Owner shall pay any Schedule Bonus to Contractor
        monthly within thirty (30) Days of receipt of Contractor’s invoice delivered
        after the end of any calendar month during which such Schedule Bonus was
        earned.  Each such Notice shall specify the amount of such Schedule
        Bonus and shall include reasonable data and calculations on the basis of
        which
        such Schedule Bonus has been determined.  All Performance Bonuses will
        be paid with the Final Payment.  Subject to achievement of the Minimum
        Performance Criteria with respect to both the Net Capacity and Net Heat Rate
        Minimum Performance Criteria, better than guaranteed performance for one
        or more
        of the Performance Guarantees may be used as a credit at the applicable
        Performance Liquidated Damages rates provided in Article 15 to offset any Performance
        Liquidated Damages
        due hereunder; provided, however, any such better than guaranteed
        performance utilized in the foregoing manner shall not thereafter be included
        in
        the calculation of any Performance Bonus.

       

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

       

      
        
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      6.           TERMS
        OF PAYMENT 

       

      Payments
        to Contractor shall be made as follows:

       

      6.1           Monthly
        Payments.  Subject to the terms of this Agreement, Owner shall
        make progress payments to Contractor on a monthly basis in accordance with
        the
        Payment Schedule as set forth in Exhibit C.  Progress payments
        as set forth in the Payment Schedule for work properly invoiced and encompassed
        within the Project Progress Report submitted pursuant to Section 6.3 below shall be due and payable
        on the
        twenty-fifth (25th) day of
        each
        calendar month (or, if such day is not a Business Day, the next Business
        Day)
        (except as otherwise provided in Section 5.5.3).  In the event that Contractor
        fails to provide the Project Progress Report and pursuant to
Section 6.3 and Contractor’s
        Invoice pursuant to Section 6.4
        in any month by the fifth (5th) day of
        such month,
        Owner’s obligations to make the progress payment to Contractor for that month
        shall be extended on a day for day basis.  

       

      6.2           Progress
        Assessment.  Within five (5) Business Days of the issuance of each
        Project Progress Report, representatives of Contractor and Owner shall review
        the Work completed and assess the progress with respect to all of the Work
        completed during the previous month and in the aggregate.

       

      6.3           Progress
        Reporting.  Following the date of this Agreement, Contractor shall
        prepare a true and correct Project Progress Report and submit it to Owner
        monthly within five (5) days after the end of the preceding
        month.  Contractor’s submission of a Project Progress Report shall
        include its representation that the Work described in the Milestone Summary
        Schedule through the date of the Project Progress Report has, unless otherwise
        stated by Contractor, been performed in accordance with this
        Agreement.  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 Summary
        Schedule and the Project Schedule and for the purpose of confirming that
        Monthly
        Payments are due hereunder.  Contractor also shall keep daily logs at
        the Project Site and shall provide to Owner weekly reports of actual
        construction progress as compared with scheduled
        progress.  

       

      6.4           Contractor’s
        Invoices.  On or before the fifth (5th) day of each calendar month
        after the date of this Agreement, Contractor shall submit a Contractor’s Invoice
        in the form of Exhibit E to Owner for (i) the progress payment next due
        from Owner in accordance with the Payment Schedule, (ii) any amount due for
        Work
        for which payment was withheld from an earlier progress payment in accordance
        with Section 6.6, and (iii) any
        other amount due Contractor pursuant to this Agreement.  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 or (b) for the portion of the Work which has been reasonably
        disputed by Owner or Contractor (except to the extent such deficiency which
        caused such dispute has been remedied).  Each Contractor’s Invoice
        shall identify (x) the related payment set forth on the Payment Schedule
        that is then due, (y) any other amounts then payable by Owner to Contractor
        under Article 16 (without
        limiting Owner’s right to dispute any amounts requested for payment), and (z)
        any disputed payment amounts resolved and then due, and shall be accompanied
        by
        a

       

      
        
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      Conditional
        Waiver and Release Upon Progress Payment of Contractor for payments to be
        made
        pursuant to such Contractor’s Invoice.  In addition, with each
        Contractor’s Invoice Contractor shall submit to Owner a Conditional Waiver and
        Release Upon Progress Payment from each Major Subcontractor whose contract
        or
        contracts with Contractor or any of its Subcontractors require total payments
        by
        Contractor or such Subcontractor of Five Million Dollars ($5,000,000) or
        more
        (in the aggregate).  If any such Major Subcontractor has completed all
        Work that such Major Subcontractor is to perform, Contractor shall also submit
        a
        Conditional Waiver and Release Upon Final Payment from such Major
        Subcontractor.  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
Section 6.3, this
Section 6.4,
        and, with respect
        to a Contractor’s Invoice requesting the Final Payment, Section 6.8, shall not, to the extent
        of such
        deficiency, constitute a valid request for payment.  

       

      6.5           Owner
        Review.  Without limiting Owner’s rights of review under
Article 11, Owner shall promptly
        notify Contractor concerning any invoiced amount or portion thereof that
        is in
        dispute and of the basis for such dispute as soon as practicable after Owner
        receives a Contractor’s Invoice and all accompanying documentation required by
Section 6.4.

       

      6.6           Payments.  

       

      6.6.1                Monthly
        Payments and Withholding.  Owner shall pay all amounts that are
        then payable and not in dispute as set forth in the then current Contractor’s
        Invoice (each, a “Monthly Payment”) as provided in
Section 6.1; provided,
        however, that Owner may offset against such payment any amount then due
        from Contractor to Owner pursuant to any provision of this
        Agreement.  Such payment shall also be subject to withholdings by
        Owner on the following basis:

       

      (a)           Owner
        determines that Contractor has not made satisfactory progress during the
        previous month in accordance with the Milestone Summary Schedule.  In
        such event Owner and Contractor shall reasonably estimate the shortfall in
        the
        value of Work completed from that which should have been completed in accordance
        with the Milestone Summary Schedule provided that, if the Parties are unable
        to
        agree, the determination of any shortfall shall be determined pursuant to
        Article 32;

       

      (b)           Owner
        withholds monies otherwise due by way of a refund of any earlier overpayments;
        and

       

      (c)           Contractor
        has failed to pay Owner any sums or damages which are due and payable
        (including, but not limited to, any undisputed Delay Liquidated Damages,
        Performance Liquidated Damages or Reliability Liquidated Damages) within
        the
        time stipulated, or, if none is provided, within a reasonable time not to
        exceed
        fifteen (15) days, Owner has made demand (in the form of a Notice) in respect
        of
        any such sums and Contractor has failed to make such payment within ten (10)
        days of such demand.

       

      6.6.2                Payment
        of Withheld Amounts.  In the event of any withholding as provided
        above, Owner shall promptly deliver to Contractor, a Notice in accordance
        with
Section 6.11.1 specifying the
        determination and valuation of any uncompleted Work or the

       

      
        
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      details
        of its reasoning if Sections 6.6.1(b) or (c)
        apply.  Contractor may include
        amounts withheld pursuant to Section 6.6.1 on subsequent Contractor’s Invoices when
        and to the extent the uncompleted Work has been completed, the relevant
        overpayment of monies has been refunded to Owner by Contractor, the outstanding
        liquidated damages have been paid by Contractor to Owner, or the circumstances
        leading to such withholding no longer apply, as
        applicable.  

       

      6.6.3                Owner’s
        Right to Offset.  Without prejudice to Owner’s foregoing rights
        under this Section 6.6, Owner
        may set off against any payment due to Contractor any amounts due and owing
        from
        Contractor to Owner arising from Contractor’s failure to cure a Contractor Event
        of Default.

       

      6.6.4                Payment;
        Performance of the Work; Payment of Subcontractors.  Payment by
        Owner hereunder shall not of itself constitute acceptance of Work or waiver
        of
        any Defect or deficiency therein.  Contractor shall continue to
        perform the Work, notwithstanding a withholding or set off by Owner or a
        dispute
        over amounts due.  Owner shall in no event have any obligation to pay
        any Subcontractor with respect to the Work completed by such Subcontractor
        on
        the Project.

       

      6.6.5                TSA
        Payments.  Notwithstanding the foregoing provisions of this
Section 6.6, within five (5)
        Business Days after the date hereof, Owner shall pay to Contractor (i) all
        outstanding undisputed amounts invoiced under the Technical Services Agreement
        dated January 25, 2006 (the “TSA”), as amended, between an
        Affiliate of Owner and Contractor; and (ii) the payment identified on the
        Payment Schedule related to the execution of this Agreement.

       

      6.7           Retainage
        Security.

       

      6.7.1                Retainage
        Security.  As security for the performance of Contractor’s
        obligations hereunder, in lieu of any retainage, and within five (5) Business
        Days after the Limited Notice to Proceed Date, Contractor shall deliver a
        letter
        of credit in an amount equal to $5,000,000, issued by 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); and otherwise in form and substance reasonably
        acceptable to Owner (the “Retainage Security”).  The
        amount of Retainage Security shall be increased immediately prior to the
        expiration of each calendar quarter in an amount equal to the ten (10%) of
        the
        aggregate amount of the Contract Price to be paid by Owner to Contractor
        in
        accordance with the Payment Schedule as of the expiration of the following
        calendar quarter.  Such Retainage Security shall remain in full force
        and effect until released pursuant to Section 6.7.3.  

       

      6.7.2                Draws
        on Retainage Security.  Owner may draw on the Retainage Security
        from time to time in whole or in part on demand:

       

      (a)           in
        accordance with Article 29;

       

      (b)           if
        a Contractor Event of Default has occurred hereunder;

       

      
        
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      (c)           
        in an amount necessary to compensate Owner for amounts not received due to
        Contractor’s failure to pay Owner any sums or damages that are validly due and
        payable within the time stipulated, or, if none is provided, within a reasonable
        time not to exceed thirty (30) days, pursuant to this Agreement (provided
        Owner has provided a Notice to Contractor that such amount is due and owing,
        and
        Contractor has failed to pay such amount within ten (10) days thereof) after
        receipt of such Notice including but not limited to any undisputed Performance
        Liquidated Damages, Reliability Liquidated Damages or Delay Liquidated
        Damages;

       

      (d)           in
        full if the Retainage Security is due to expire within thirty (30) days,
        Final
        Completion has not occurred, and Contractor has not, if applicable, replaced
        or
        extended such Retainage Security; or

       

      (e)           in
        accordance with Section 14.1.3.

       

      Notwithstanding
        the foregoing, any drawdown under the Retainage Security shall also comply
        with
        the following requirements;

       

      (x)           the
        amount requested in such drawdown, when added to the amount of all previous
        draws under the Retainage Security (and its replacement, if applicable),
        shall
        not exceed ten percent (10%) of the total of amounts actually paid (or withheld)
        by Owner to Contractor under the Agreement as of such date; provided
        that, notwithstanding the foregoing, if Contractor has failed to obtain the
        release of any lien filed against any of Owner’s property, the Project Site or
        Owner’s interest therein and Owner is entitled to draw on the Retainage Security
        pursuant to Article 29, Owner may
        draw the amount required to obtain the release of such lien, including amounts
        to reimburse Owner’s costs incurred in relation thereto, up to the full amount
        of the Retainage Security;

       

      (y)           the
        amount being claimed in respect to any of the above circumstances does not
        exceed Owner’s good faith estimate of the amount that Owner is entitled to
        recover from Contractor under the Agreement; and

       

      (z)           Owner
        shall not be permitted to drawdown on the Retainage Security after a termination
        of this Agreement by Contractor solely by reason of an Owner Event of Default
        (as determined pursuant to the procedures of Article 32); except to discharge any
        Contractor Lien or
        other charges which, if unpaid, might be or become a Contractor Lien pursuant
        to
        Section 6.7.3.

       

      Nothing
        in this Section 6.7.2 shall
        prohibit Owner from drawing on the Retainage Security for any amount for
        which
        Contractor has provided its prior written consent.

       

      6.7.3                Release
        of Retainage Security.  By no later than the date which is eighty
        (80) days after the Substantial Completion Date, the amount of the Retainage
        Security shall be reduced to an amount not to exceed five percent (5%) of
        the
        Contract Price (as the same may be adjusted pursuant to the terms
        hereof).  By no later than the date which is the later to occur of
        (a) the date which is eighty (80) days after Final Payment; and
        (b) ten (10) days after the later to occur of (i) the date when Owner
        and Contractor have settled upon the final Performance Liquidated Damages
        and
        the final Reliability Liquidated Damages, if any, that Contractor is obligated
        to pay to Owner hereunder; and (ii) the date that Contractor actually pays
        all such

       

      
        
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      Performance
        Liquidated Damages and Reliability Liquidated Damages to Owner; Owner shall
        release all of the Retainage Security; provided that Contractor and each
        Major Subcontractor shall have delivered Unconditional Waivers and Releases
        Upon
        Final Payment to Owner prior to such release of the Retainage Security or
        Contractor shall have provided security in lieu thereof in accordance with
        Section 14.4(l).  In
        the event this Agreement is terminated prior to completion of the Work, for
        any
        reason other than a Contractor Event of Default, all of the Retainage Security
        shall be released to Contractor upon the later to occur of (x) eighty (80)
        days
        after the date of such termination, and (ii) ten (10) days after all disputes
        between Owner and Contractor have been resolved and all amounts, if any,
        due
        from Contractor have been paid; provided that Contractor and each Major
        Subcontractor shall have delivered Unconditional Waivers and Releases Upon
        Final
        Payment to Owner prior to such release of the Retainage Security, or Contractor
        shall have provided security in lieu thereof in accordance with
Section 14.4(l).  Notwithstanding the
        preceding sentence, in the event this Agreement is terminated prior to
        completion of the Work by Contractor as a result of an Owner Event of Default
        in
        accordance with the terms hereof, the Retainage Security shall be promptly
        returned to Contractor; provided, however, all or some portion of
        the Retainage Security in an amount equal to the aggregate amount represented
        by
        the Conditional Waivers and Releases Upon Progress Payment provided by
        Contractor in conjunction with the most recent invoice prior to such Owner
        Event
        of Default shall be placed into a lockbox account with a recognized national
        savings association pursuant to a lockbox agreement reasonably acceptable
        to
        Owner and Contractor, which shall provide, in pertinent part, that the Retainage
        Security shall be released (a) to Owner, if Contractor does not promptly,
        and in
        any event within ten (10) days after receipt of Notice of a Contractor Lien
        relating to Work performed by any Subcontractor for which Contractor has
        been
        paid, satisfy such Contractor Lien, or contest such Contractor Lien in
        accordance with the provisions of the last sentence of Article 29, or (b) to Contractor upon
        eighty (80) days
        after the date of such termination.  

       

      6.7.4                Interest
        on Excess Drawings.  In
        the event Owner has drawn under the
        Retainage Security, the Performance Assurance, or the security as provided
        in
Section 14.4(m),
        and it is subsequently determined that
        such drawdown was in excess of Owner’s rights hereunder, Owner shall return such
        excess amount to Contractor within ten (10) Business Days of such final
        determination with interest at the Contract Interest Rate from such drawdown
        until return of such excess amount.  

       

      6.8           Final
        Payment.  Upon the delivery of Owner’s Certificate of Final
        Completion, Contractor shall submit a final Contractor’s Invoice (the
“Final Contractor’s Invoice”) which shall set forth all amounts
        due to Contractor that remain unpaid (including amounts relating to the items
        on
        the Punchlist).  Upon approval thereof by Owner, 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 both the Final Contractor’s
        Invoice and Contractor’s delivery of the following items to Owner:

       

      (a)           with
        respect to each Major Subcontractor, a Conditional Waiver and Release Upon
        Final
        Payment or an Unconditional Waiver and Release Upon Final Payment to the
        extent
        such Subcontractor has received final payment; and

       

      (b)           with
        respect to Contractor,

       

      
        
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      (i)           a
        Conditional Waiver and Release Upon Final Payment; and

       

      (ii)           an
        Unconditional Waiver and Release Upon Final Payment no later than five (5)
        Business Days after Contractor’s receipt of Final Payment.

       

      6.9           Method
        of Payment.  All payments to be made to Contractor under this
        Agreement shall be paid in Dollars and shall be wire transferred 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
Article 30.

       

      6.10           Disputes.  Failure
        by Owner to pay any amount reasonably in dispute that is identified in
        accordance with Section 6.5
        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 Project 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 Article 32.  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.

       

      6.11           Holdbacks.

       

      6.11.1                Owner
        Holdbacks.  Notwithstanding anything to the contrary herein, in
        addition to the Retainage Security, upon the occurrence and continuance of
        any
        of the following events, Owner, upon Notice to Contractor in accordance with
        Section 6.11.2, 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 ensure
        the performance of the Work or to protect fully the rights of Owner hereunder
        (provided that amounts drawn down on Retainage Security or heldback pursuant
        to
        this Section 6.11 for any one
        event or occurrence may not exceed the total amount of the
        obligation):  

       

      (a)           in
        accordance with Section 6.6.1;

       

      (b)           in
        accordance with Article 29;

       

      (c)           in
        accordance with Section 14.1.3;

       

      (d)           Contractor’s  failure
        to comply with the requirements of Article 21, including failure to provide
        evidence of
        insurance in conformance with the requirements of this Agreement;

       

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

       

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

       

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

       

      (ii)           Contractor’s
        failure to increase the Retainage Security pursuant to Section 6.7.1;

       

      (iii)           Contractor
        shall have failed to deliver any Contractor Deliverable in accordance with
        the
        requirements of the Contractor Submittals Table to Owner on or before the
        date
        required, or any such Contractor Deliverable shall not have been prepared
        by
        Contractor in accordance with the requirements of this Agreement;

       

      (iv)           Owner
        shall have determined that any portion of the Work (but not including Work
        that
        Contractor is in the process of completing or is undertaking reperformance,
        repair or replacement with respect thereto) for which payment has already
        been
        made pursuant to a previous Contractor’s Invoice shall contain one or more
        Defects; provided that the amount so withheld shall not exceed the amount
        reasonably expected to correct such Defect; or

       

      (v)           a
        third-party claim has been filed for which Contractor is obligated to indemnify
        Owner pursuant to any of the provisions of Section 23.1 and Contractor has failed
        to provide the
        indemnification for such claim in accordance with Section 23.4.

       

      6.11.2                Notice
        of Withholding; Notice of Correction.  If, pursuant to
Section 6.11.2, 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
Section 6.11.2 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 Section 6.11.2, Contractor may provide a
        Notice of
        Correction to Owner of a condition described in such Notice of Withholding
        delivered pursuant to this Section 6.11.2.  Such Notice of Correction
        shall be sufficient to identify the scope and manner of the Corrective Actions
        to be taken and the condition, and shall be signed by an authorized
        representative of Contractor.  

       

      6.11.3                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 Section 6.11.2, 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 Section 6.11.2.  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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      6.11.4                Limitation
        on Contractor’s Rights.  Notwithstanding the provisions of
Sections 19.5 and 32.3,
        Contractor shall not have any rights of
        termination or suspension under Section 19.5 as a result of Owner’s good faith exercise
        or attempted exercise of its rights under this Section 6.11.

       

      6.12           Application
        of Monies.  Contractor shall use the sums paid to it pursuant to
        this Article 6 for the purpose
        of performing the Work and designing, furnishing, equipping, testing and
        commissioning the Project in accordance with the Scope Book 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.

       

      6.13           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 and agent thereof from all
        liens
        (whether statutory or otherwise and including mechanics’ or suppliers’ liens),
        claims and liability hereunder with respect to any Work performed or furnished
        in connection with this Agreement, or for any act or omission of Owner or
        of any
        person relating to or affecting this Agreement, except claims for which
        Contractor has delivered a Notice of dispute to Owner.  Nothing herein
        shall constitute a release by Contractor of claims or liability of which
        Contractor does not have actual knowledge as of the date of submittal of
        the
        Final Contractor’s Invoice.  For purposes of this
Section 6.13 only, Contractor
        shall be deemed to have actual knowledge of any claim or liability if Contractor
        would have discovered such claim or liability after conducting a reasonable
        investigation prior to submittal of the Final Contractor’s Invoice.

       

      6.14           Contract
        Interest Rate.  Overdue payment obligations of the Owner and the
        Contractor hereunder (regardless of whether such payment obligation is imposed
        by the terms of this Agreement or pursuant to Applicable Law, or otherwise)
        shall bear interest at the Contract Interest Rate as of the date due from
        the
        date due until the date paid.

       

      7.           COMMENCEMENT
        AND SCHEDULING OF THE WORK

       

      7.1           Notices
        to Proceed.

       

      7.1.1                Limited
        Notice to Proceed.  On the Limited Notice to Proceed Date,
        Contractor shall commence preparing the drawings and specifications described
        in
Section 3.18.1, in accordance
        with the Project Schedules, and shall thereafter diligently pursue such portions
        of the Work, assigning to it a priority as necessary for the Project to achieve
        Substantial Completion and Final Completion on or before the respective Project
        Guaranteed Dates.  Notwithstanding the issuance of a Limited Notice to
        Proceed, in no event shall Contractor proceed with procurement of any Equipment
        or Materials without Owner’s prior written approval.  The scope of the
        Work to be completed pursuant to the Limited Notice to Proceed may be altered
        or
        expanded from time to time pursuant to one or more further Limited Notices
        to
        Proceed until Owner issues a Full Notice to Proceed.

       

      7.1.2                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

       

      
        
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      Milestone
        Summary Schedule and shall thereafter diligently pursue the Work assigning
        to it
        a priority as necessary for the Project to achieve Substantial Completion
        on or
        before the Substantial Completion Guaranteed Date, and Final Completion on
        or
        before the Final Completion Guaranteed Date.  In the event Owner
        releases Contractor to commence Work on the Project Site prior to completing
        the
        Required Owner Activities pursuant to Section 2.6, Contractor shall use commercially
        reasonable efforts to commence certain on-Project Site portions of the Work,
        including, but not limited to, constructing a fence around the parameter
        of the
        Project Site, establishing access roads over the Project Site necessary for
        construction of the Project, establishing lay-down areas with respect to
        prosecution of the Work, or other activities described on the Project Schedule,
        so as not to cause a delay in the Milestone Summary Schedule, to the extent
        reasonably possible.  

       

      7.2           Contractor’s
        Acknowledgment.  Contractor expressly agrees that the period of
        time specified to complete all Work and the timely achievement of the Project
        Guaranteed Dates includes allowance for coordination with Owner, the existing
        operations at Units 1-4 (but with respect to Units 1-2 only until April 25,
        2007
        and with respect to Unit 3 only until August 25, 2007), 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 Articles 8 and 16.

       

      7.3           Prosecution
        of Work.  Subject to the terms and conditions of this Agreement,
        Contractor shall prosecute the Work in accordance with the Project Schedules
        to
        cause Substantial Completion and Final Completion to occur.

       

      7.4           Project
        Schedule.

       

      7.4.1                Project
        Schedule.  Within forty-five (45) days after the Limited
        Notice to Proceed Date, Contractor shall provide Owner with a digital and
        hard
        copy of the first one hundred eighty (180) days of the Project Schedule together
        with the Owner’s interfaces with Contractor.  Within ninety (90) days
        after the Full Notice to Proceed Date, Contractor shall provide Owner with
        a
        digital and hard copy of the Project Schedule that satisfies the requirements
        set forth in Part I, Section 5.2.2 of the Scope Book and is consistent with
        the
        Milestone Summary Schedule.  Until Substantial Completion, Contractor
        shall update the Milestone Summary Schedule to reflect the current status
        of the
        Work.  Following Substantial Completion, Contractor shall update the
        Milestone Summary Schedule in accordance with the Remedial Plan, if any,
        or
        otherwise periodically but not less than quarterly.  At a minimum, the
        updates shall be performed and provided to Owner (in digital and hard-copy
        form)
        on a monthly basis as part of the Project Progress Report.  Contractor
        shall also update the Project Schedule at least every three
        months.  Contractor shall promptly advise Owner of any proposed
        Milestone Summary Schedule changes of more than fifteen (15) days and the
        reasons therefor.  Contractor shall employ a project management system
        capable of providing schedule monitoring and analysis which shall include
        a
        comparison of the Milestone Summary 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 Milestone
        Summary Schedule and any action necessary to correct the
        variance.  Utilizing the critical path method, Contractor shall
        continually evaluate factors that are delaying or that could delay completion
        of
        the

       

      
        
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      Substantial
        Completion Guaranteed Date, and Contractor shall take remedial actions
        reasonably within its control to eliminate or minimize its schedule delays
        including over-time for the employees of Contractor and Subcontractors and
        the
        assignment of additional personnel or other resources.

       

      7.4.2                Milestone
        Summary Schedule.  Attached hereto as Exhibit G is the
        Milestone Summary Schedule which lists the Critical Path Items, including
        the
        Project Guaranteed Dates, and the applicable dates of completion for each
        such
        Critical Path Item.  The Project Guaranteed Dates shall not be
        amended, adjusted or revised without Owner’s prior written approval pursuant to
        a Change In Work Form.

       

      7.5           Acceleration
        Plan.  If the most recent version of the Milestone Summary
        Schedule shows Substantial Completion occurring thirty (30) or more days
        after
        the Substantial Completion Guaranteed Date, or Contractor fails to complete
        any
        of the Critical Path Items set forth in the Milestone Summary Schedule such
        that
        Substantial Completion is scheduled to occur thirty (30) days or more after
        the Substantial Completion Guaranteed Date, Contractor shall, within
        ten (10) days after Contractor becomes aware of such delay, submit for
        approval by Owner, a written plan (the “Acceleration Plan”)
        describing the actions (including acceleration of the Work, for example,
        by
        using additional shifts, overtime, additional crews or resequencing of the
        Work,
        as applicable) Contractor will take so that Substantial Completion of the
        Project will reasonably likely occur by the Substantial Completion Guaranteed
        Date.  Owner shall determine whether to approve or disapprove such
        proposed Acceleration Plan in good faith.  If Owner disapproves all or
        any portion of the Acceleration Plan, Owner shall approve those portions
        of the
        Acceleration Plan that are acceptable and provide comments to those portions
        of
        the Acceleration Plan that have been disapproved.  Contractor shall
        revise the Acceleration Plan to address such comments as shall have been
        provided by Owner, if any, and resubmit the revised Acceleration Plan for
        Owner’s further comments within two (2) Business Days after Contractor’s
        receipt of comments from Owner; provided, however, that in the
        event Contractor provides Notice to Owner within such (2) Business Day period
        that Contractor is attempting in good faith to incorporate such comments
        provided by Owner but requires additional time to resubmit the revised
        Acceleration Plan to Owner, Contractor shall have an additional five (5)
        Business Days to resubmit such revised Acceleration Plan to
        Owner.  Upon approval by Owner, Contractor shall promptly proceed with
        completing the Work in the manner specified by the Acceleration Plan and
        with
        any additional work as may be required under the Acceleration
        Plan.  Subject to Section 19.1(j), if Contractor, other than
        due to an
        Excusable Event or an event of Force Majeure, continues to fall behind the
        schedule set forth in an approved Acceleration Plan, then, upon Notice from
        Owner, Contractor shall update or modify such approved Acceleration Plan
        so as
        to remedy the failure to meet such schedule (and such update or modification
        shall be re-submitted for Owner’s approval pursuant to the provisions of this
Section 7.5).  Upon approval by Owner
        of any such update or modification, Contractor shall promptly proceed with
        completing the Work in the manner specified by such updated or modified
        Acceleration Plan.  Contractor shall be responsible for all costs and
        expenses of implementing the Acceleration Plan without any increase to the
        Contract Price.  Review and approval of the Acceleration Plan by Owner
        shall not be deemed in any way to relieve Contractor of its obligations under
        this Agreement relating to the failure to achieve Substantial Completion
        or
        Final Completion by the applicable Project Guaranteed Dates and shall not
        be a
        basis for an increase in the Contract Price.

       

      
        
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      7.6           Meetings.  Contractor
        shall schedule and conduct monthly meetings with Owner in accordance with
        the
        requirements of Exhibit A at the Project Site, or such other
        location as the Parties may agree, for the purpose of reviewing the progress
        of
        the Work and adherence to the Milestone Summary Schedule and 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 the Milestone Summary Schedule
        indicates that Substantial Completion is scheduled to occur thirty (30)
        days or more after the Substantial Completion Guaranteed Date, Owner shall
        be
        entitled to require that meetings occur as frequently as weekly.  If
        Owner so requests, Contractor shall cause a representative of any Subcontractor
        to attend such meeting.  After commencement of the Work at the Project
        Site, Owner, Contractor, and any Major Subcontractor then performing Work
        on the
        Project Site shall each designate a representative to attend weekly meetings
        to
        review and discuss the progress of the Work.  Contractor’s
        representative at such weekly meeting shall provide a rolling three-week
        look
        ahead schedule outlining the Work to be performed at the Project Site during
        the
        three calendar weeks following such meeting.

       

      7.7           Acceleration
        of Work When Not Delayed.  Owner shall also have the right to
        direct that the Work be accelerated by means of overtime, additional crews
        or
        additional shifts or resequencing of the Work notwithstanding that the Work
        is
        progressing without delay in accordance with the established Project Schedule
        except to the extent that Contractor, acting reasonably, determines and notifies
        Owner in writing that such acceleration would present safety concerns or
        has
        already been accelerated and further acceleration is not reasonably
        practicable.  Absent agreement on a fixed price, the Contract Price
        shall be adjusted in accordance with the terms of Sections 16.4 through 16.9.  In
        the event of any
        acceleration requested pursuant to this Section 7.7, Contractor shall promptly
        provide a plan
        for such acceleration, including Contractor’s recommendations for the most
        effective and economical acceleration.  The Critical Path Items and
        the Project Completion Dates shall be adjusted as agreed upon by Contractor
        and
        Owner pursuant to an Owner initiated Change In Work Form.  Any
        acceleration of the Work when the Work is not delayed and such acceleration
        is
        not specifically requested by Owner in writing shall be at Contractor’s sole
        cost and expense.

       

      7.8           Termination
        if Limited Notice to Proceed Cap is Exceeded.  Either Party may
        elect to terminate this Agreement, by providing five (5) Business Days Notice
        to
        the other Party, if the portion of the Contract Price for the Work performed
        up
        to the effective date of termination plus the amount of cancellation charges
        anticipated to be incurred with respect to Equipment and Materials ordered
        to
        date exceeds $50,000,000 in the aggregate, or a greater amount as mutually
        agreed by Owner and Contractor pursuant to any Limited Notice to
        Proceed.  Upon such election to terminate by Owner, Owner shall have
        the right at its sole option to assume and become liable for any written
        obligations and commitments that Contractor may have undertaken in accordance
        with Section 20.4.  Following such termination,
        Owner shall pay Contractor pursuant to Section 20.1 for Work performed, provided that
        such amounts may be modified by Owner's assumption of the liabilities referenced
        in the previous sentence. 

       

      8.           FORCE
        MAJEURE AND EXCUSABLE EVENTS

       

      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

       

      
        
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      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 two (2) Business Days with respect to an event of Force Majeure or
        five
        (5) Business Days with respect to an Excusable Event, after such Party becomes
        aware of the impact or it would be commercially reasonable to expect that
        such
        party should have became aware of impact of such event of Force Majeure or
        Excusable Event (without imposing any duty to investigate upon such party),
        give
        Notice to the other Party (a “Delay Notice”) of the occurrence
        of such event.  Within five (5) days after delivery of such
        Notice, the Party claiming an event of Force Majeure or an Excusable Event
        shall
        provide reasonable evidence 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 Section 8.2.  Within two (2) days after an
        event of Force Majeure or an Excusable Event has ended, the Party that was
        affected by such event of Force Majeure 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 such Party was affected by the impact
        of
        such event; and (ii) the effect, if any, such Party claims such event of
        Force Majeure or an Excusable Event had on the applicable Project Guaranteed
        Dates or the Contract Price as provided in Sections 8.6.1 and 8.6.2.  If
        Contractor fails to
        provide Notice of an event of Force Majeure within the time specified in
        this
Section 8.2, Contractor’s
        entitlement to adjustments to the Project Guaranteed Dates or the Contract
        Price
        pursuant to a Change In Work pursuant to Sections 8.6.1 and 8.6.2
        shall be reduced to the extent Owner has
        suffered any material adverse impact as a result of Contractor’s delay in
        providing such Notice.  Notwithstanding the forgoing, Contractor shall
        have no obligation to provide Notice of an event of Force Majeure to any
        Governmental Authority or Alcoa.

       

      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.

       

      
        
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      In
        addition, the Party not claiming an event of Force Majeure may identify and
        recommend measures designed to mitigate the duration of, and costs arising
        from,
        any suspension or delay in, or other impact to the performance of the affected
        Party hereunder and such affected Party shall adopt such measures to the
        extent
        the same are reasonable and lawful.  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 ten (10) 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.  Owner may off-set the reasonable costs it incurs in taking such
        measures against any payments owed to Contractor
        hereunder.  

       

      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 caused by Contractor’s negligence or misconduct.

       

      8.6           Contractor’s
        Remedies.  

       

      8.6.1                Force
        Majeure.  As Contractor’s only remedy for the occurrence of an
        event of Force Majeure, subject to Section 8.7, and provided that Contractor has
        complied with the provisions of Sections 8.2, 8.3
        and 8.4, if an event of Force Majeure
        occurs: (i) the Project Guaranteed Dates shall be extended and the
        Milestone Summary Schedule shall be correspondingly adjusted by the period
        of
        time, if any, that Contractor is actually and demonstrably delayed in the
        performance of Critical Path Item(s) as a result of the impact of such an
        event
        of Force Majeure, and (ii) if Contractor’s costs actually and demonstrably
        increase despite Contractor’s commercially reasonable efforts to mitigate any
        such increases, the Contract Price shall be adjusted by the sum of: (x) the
        difference of the direct costs (without profit, overhead or contingency)
        including incremental stand by costs, if any, incurred by the Contractor
        because
        of such Force Majeure, less any savings or costs not incurred because of
        such
        event of Force Majeure, plus (y) an allowance for profit, overhead, contingency
        and escalation, in each case as set forth in a Change In Work Form;
provided, however, that in no event shall any Change In Work
        include contingency amounts related to the Labor Pool (as defined in
Exhibit I); provided, further, that an event of Force
        Majeure may result in a modification or amendment to the Agreement if mutually
        agreed by Contractor and Owner as pursuant to Section 33.4.  Notwithstanding the foregoing,
        the Contract Price shall not be adjusted for the first Two Million Dollars
        ($2,000,000) in the aggregate of incremental standby costs incurred as a
        result
        of an event or events of Force Majeure in accordance with this Section 8.6.1. 

       

      
        
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      8.6.2                Excusable
        Event.  As Contractor’s only remedy for the occurrence of an
        Excusable Event, subject to Section 19.4, and provided that Contractor
        has complied
        with the provisions of Sections 8.2, 8.3
        and 8.4, if an Excusable Event occurs
        (i) the Project Guaranteed Dates shall be extended and the Milestone
        Summary Schedule shall be correspondingly adjusted by the period of time,
        if
        any, that Contractor is actually and demonstrably delayed in the performance
        of
        Critical Path Item(s) as a result of such Excusable Event, and (ii) if
        Contractor’s cost actually and demonstrably increase despite Contractor’s
        commercially reasonable efforts to mitigate any such increases, the Contract
        Price shall be adjusted by the sum of: (x) the difference of the direct costs
        (without profit, overhead or contingency) incurred by the Contractor because
        of
        such Excusable Event, less any savings or costs not incurred because of such
        Excusable Event, plus (y) an allowance for profit, overhead, contingency
        and
        escalation, in each case as set forth in a Change In Work Form; provided,
however, that in no event shall any Change In Work include contingency
        amounts related to the Labor Pool (as defined in Exhibit I); provided,
further, that an Excusable Event may result in a modification or
        amendment to the Agreement if mutually agreed by Contractor and Owner as
        pursuant to Section 33.4.

       

      8.7           Rights
        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.  If such Event of Force Majeure continues for
        more than nine (9) months and Owner has not terminated this Agreement pursuant
        to the preceding sentence, Contractor may terminate this Agreement by Notice
        to
        Owner.  Upon such termination, Contractor shall be entitled to receive
        the payments as set forth in Section 20.1, except that any payment pursuant
        to
Section 20.1 shall be reduced to
        the extent Owner exercises its right to assume the obligations that Contractor
        may have in good faith undertaken with any Major
        Subcontractor.   

       

      9.           SUBCONTRACTORS
        AND VENDORS

       

      9.1           Use
        of Subcontractors.  

       

      9.1.1                Subcontractors.  Attached
        hereto as Exhibit L is a schedule of the subcontractors, suppliers
        and vendors which may have contract values exceeding One Hundred Thousand
        Dollars ($100,000) with whom Contractor has indicated it may contract (whether
        by contract or purchase order) for the acquisition of Equipment and Materials
        and services for the performance of the Work.  

       

      9.1.2                Major
        Subcontractors.  Owner and Contractor have agreed that the vendors
        and suppliers of Equipment and Materials as identified in Part I, Reference
        3-2
        of the Scope Book, are acceptable as Subcontractors hereunder for such items
        of
        permanent Equipment and Materials as described therein.  Contractor
        shall notify Owner in the event Contractor intends to procure equipment
        identified in Part I, Reference 3-2 from any Vendor for the specified equipment
        listed in Part I, Reference 3-2 other than from the Vendors listed in Part
        I,
        Reference 3-2 for such specified equipment, and Owner shall have the right
        to
        review and approve such new Vendor, such approval not to be unreasonably
        withheld.  Owner’s approval rights with respect to Subcontractors are
        limited to the approval of such additional Vendors supplying equipment
        referenced in Part I, Reference 3-2.

       

      
        
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      9.1.3                Qualification.  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.  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           Assignment.  No
        subcontract or purchase order shall bind or purport to bind Owner, but each
        subcontract and purchase order entered into between Contractor and a Major
        Subcontractor shall name Owner as an intended third-party beneficiary with
        respect to provisions in the subcontract or purchase order that relate to
        warranties and indemnities, and shall provide for assignment of such subcontract
        as set forth in Section 9.4;
provided that Owner acknowledges
        that some subcontracts or purchase
        orders entered into by Contractor prior to the date hereof may not include
        the
        foregoing provisions.  As to such agreements, Contractor will utilize
        commercially reasonable efforts to amend the terms thereof within sixty (60)
        days after the Full Notice to Proceed Date to include the foregoing
        undertaking.  

       

      9.3           Information
        and Access.  Contractor shall furnish such information and access
        relative to its Subcontractors as Owner may reasonably
        request.  Contractor acknowledges and agrees that it shall provide
        Owner with copies of all specifications and applicable sections of contracts
        or
        purchase orders with Major Subcontractors for the procurement of equipment
        to be
        incorporated into the Project relating to assignment, warranties and
        indemnities.  Contractor shall provide concurrently herewith the
        sections of the contracts and purchase orders relating to the boilers and
        steam
        turbine generator relating to the assignment of any performance security
        provided by such Subcontractor, as well as a certificate in the form attached
        hereto as Exhibit O, executed by a duly authorized officer of
        Contractor, certifying that the subcontracts and purchase orders attached
        thereto are true and correct copies and have not been amended.  In
        addition, Contractor shall provide promptly following execution thereof the
        sections of the contracts and purchase orders relating to the bag house/scrubber
        relating to the assignment of any performance security provided by such
        Subcontractor, as well as a certificate in the form attached hereto as
Exhibit O, executed by a duly authorized officer of Contractor,
        certifying that the subcontracts and purchase orders attached thereto are
        true
        and correct copies and have not been amended.  Contractor agrees that
        it shall promptly provide to Owner notice of any subsequent amendments or
        modifications to the sections referenced above of such
        subcontracts.  

       

      9.4           Terms
        in Subcontracts.  All subcontracts shall conform to the
        requirements of this Agreement, insofar as applicable.  All Work
        performed for Contractor by a Subcontractor shall be pursuant to an appropriate
        written agreement between Contractor and the Subcontractor
        which  shall contain 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;

       

      
        
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      (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)           require
        such Subcontractor to notify Contractor and Owner in the event such
        Subcontractor intends to discontinue supplying any functional spare parts
        at any
        time within five (5) years after completion of such Subcontractor’s work and
        permit Owner to order any quantity of any of such parts at the prices therefor
        prevailing prior to such discontinuance of supply;

       

      (e)           require
        such Subcontractor to provide and maintain insurance identified by Contractor as
        required to be consistent with its obligations related to this
        Agreement;

       

      (f)           require
        such Subcontractor to participate in the approved safety program for the
        Project
        Site;

       

      (g)           require
        such Subcontractor to enter into a new contract directly with Owner on 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,
        upon
        notice to Subcontractor; and where requested by such Subcontractor, presentation
        of reasonable financial assurances but otherwise not subject to Subcontractor’s
        consent (provided that Owner acknowledges that some subcontracts or
        purchase orders entered into by Contractor prior to the date hereof may not
        include the foregoing provisions.  As to such agreements, Contractor
        will utilize commercially reasonable efforts to amend the terms thereof within
        sixty (60) days after the Full Notice to Proceed Date to include the foregoing
        undertaking);

       

      (h)           allow
        assignment, including any performance assurance provided by such Subcontractor,
        of such agreement to Owner, to another contractor that replaces the Contractor
        as designated by Owner, or at Owner’s request, to the Financing Entities, if
        any, upon the occurrence of a Contractor Event of Default or the termination
        or
        expiration of this Agreement, upon notice to Subcontractor, and where requested
        by such Subcontractor, presentation of reasonable financial assurances but
        otherwise not subject to Subcontractor’s consent;

       

      (i)           require
        such Subcontractor to remove any employee or independent contractor of such
        Subcontractor used in the Work or in such Subcontractor’s warranty obligations
        within one (1) Business Day after receiving notice from Contractor that
        Owner requires  removal of such employee or independent
        contractor;

       

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

       

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

       

      9.5           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

       

      
        
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      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 Vendors.  Contractor acknowledges
        that Contractor’s Invoices shall include information regarding the amount of
        such Invoices reflecting utilization of and amounts spent with such businesses
        and Contractor agrees to provide such additional information regarding
        utilization of such businesses as Owner reasonably
        requests.  Contractor shall further provide Owner with reasonably
        satisfactory evidence that its Subcontractors and Vendors 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 Section 10.6, and notwithstanding the
        provisions of
Section 10.3, 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 Project Site)
        with
        respect to the Project.  Contractor shall submit its proposed program
        regarding local worker recruitment and training to Owner for approval within
        thirty (30) days of the date hereof.  Contractor shall implement and
        follow the approved program during the performance of the
        Work.  Contractor shall provide Owner with a written report at least
        once every three (3) months detailing the turnover of Contractor’s employees and
        the results of such local resident recruitment and training
        program.

       

      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 shall require its Subcontractors to ensure that such
        Subcontractors’ personnel

       

      
        
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      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.  

       

      10.5           Key
        Personnel.  Contractor shall provide staff to supervise and
        coordinate the work of Contractor and Subcontractors on the Project
        Site.  The Key Personnel shall at all times hold the positions and be
        dedicated to the performance of the duties described in
Exhibit H.  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
        one (1) Business Day after request by Owner, Contractor shall remove from
        the Project, the Project Site and from any performance of the Work, and cause
        any Subcontractor to remove from the Project, the Project Site and from any
        performance of the Work, as soon as reasonably practicable, any Person
        performing the Work (including any of the Key Personnel) whom Owner believes
        to
        be creating a safety hazard or a risk of
        either:  (a) non-achievement of any of the Project Guaranteed
        Dates; 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, who engages in conduct (other than legally protected conduct) in the
        communities surrounding the Project that Owner believes is harming or having
        a
        negative effect on the perception of the Project or Owner’s relationship with
        the surrounding community.  Owner shall not be responsible directly or
        indirectly for the costs of demobilization of any employee of Contractor
        or
        Subcontractor removed from the Project Site pursuant to this
Section 10.6. 

       

      11.           INSPECTION;
        EFFECT OF REVIEW AND COMMENT

       

      11.1           Requirement
        To Remedy Defect.  Regardless of whether payment has been made
        therefor, Owner shall have the right to require Contractor to remedy any
        portion
        of the Work that contains any Defect.  Upon Notice of Owner’s request
        to remedy any Work, Contractor shall, subject to the limitations of
Article 17 if during or after
        the Warranty Period, promptly remedy, at its sole cost and expense, any Defect
        that is identified by Owner in such notice. 

       

      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 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 Project Site).  Upon reasonable notice to
        Contractor, Contractor shall allow Owner and its representatives, including
        Owner’s Engineer, and the Financing Entities, if any, and their

       

      
        
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      representatives
        and agents, reasonable access to the Work (including Equipment and Materials
        under fabrication) and the Project.  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 drawings and
        specifications, Vendor reports, and current Project Schedules.

       

      11.3           Contractor
        Submittals Table.  Within sixty (60) days after the Full Notice to
        Proceed Date, Contractor shall provide a Notice to Owner attaching an initial
        Contractor Submittals Table, for Owner’s review and approval, identifying all
        Contractor Deliverables to be delivered to Owner for review and comment,
        the
        deadline for delivery thereof and for Owner’s comments and approval, and
        reference to this Agreement or Exhibit where such submittal is
        required.    

       

      11.4           Owner
        Review of Documents.  Contractor shall submit to Owner for review,
        and approval 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 Part I, Section 2.9 of the Scope Book and the Contractor
        Submittals Table.  Contractor Deliverables to be approved by Owner
        shall be clearly and distinctly marked as for Owner’s Approval.  Owner
        shall have the right to make all such materials available to Owner’s Engineer
        (subject to the provisions of Article 24) 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
Article 6 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 Vendor 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.  Any
        Contractor Deliverable not approved by Owner within the time period for Owner’s
        review specified in the Contractor’s Submittals Table shall be deemed to have
        been reviewed and approved by Owner.

       

      11.5           Errors
        and Omissions.  Owner shall promptly notify Contractor of any
        errors or omissions identified by Owner with respect to any Contractor
        Deliverable submitted for review.  Incorporation of changes into such
        into Contractor Deliverable addressing and remedying the errors and omissions
        shall not be considered a Change In Work.  

       

      12.           PROJECT
        SITE CONDITIONS

       

      12.1           Project
        Site Conditions.  Contractor represents and warrants that
        Contractor has investigated the Project Site 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
        the Project Site Conditions; provided that Contractor’s familiarity and
        satisfaction with subsurface conditions regarding geotechnical characteristics
        is limited to the matters reasonably determinable or inferable from items
        listed
        under the heading “Subsurface Investigation” set forth on in Part 1,
        Reference 7-1 of the Scope Book.  Notwithstanding any of the
        foregoing, Contractor makes no representations or warranties with respect
        to
        subsurface

       

      
        
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      locations
        of utilities for any part of the Project Site or any location where any portion
        of the Work shall be performed (including the Common Facilities and the Shared
        Site Facilities).

       

      12.2           Differing
        Project Site Conditions.  Contractor specifically acknowledges and
        accepts the Project Site Conditions and agrees that, except as set forth
        in
Section 12.3, no Project
        Guaranteed Date shall be extended, the 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 Project Site Conditions or any variance between the condition
        of
        the Project Site indicated by this Agreement or expected to exist by Contractor,
        and the Project Site Conditions, including any unknown physical conditions
        above
        the surface of the ground.

       

      12.3           Unforeseen
        Project Site Conditions.  In the event any conditions which are,
        or may be, protected under Applicable Law or Applicable Permits or any
        archeological resources or any other man-made or naturally occurring condition
        contained below the surface of an area which pertains to Contractor’s Work in
        which Contractor is permitted to dig pursuant to a dig permit issued in
        accordance with Part I, Section 7.3 of the Scope Book (other than the presence
        of Hazardous Materials which are addressed separately in Article 28), are found at the Project
        Site, the Shared
        Site Facilities or the Common Facilities that differ materially from those
        set
        forth in the Owner Provided Information regarding the Project Site (each
        such
        materially differing condition, an “Unforeseen Project Site
        Condition”), Contractor shall promptly notify Owner of such Unforeseen
        Project Site Condition and Owner and Contractor shall agree upon a plan to
        address or mitigate such condition.  Notwithstanding anything to the
        contrary in the foregoing, in no event shall conditions at the Project Site
        arising after the date hereof resulting from ordinary operations as currently
        conducted at Units 1-4 or Alcoa’s aluminum smelter nearby the Project Site
        constitute an Unforeseen Project Site Condition; provided,
however, that release or disposal of any Hazardous Materials on
        or at the
        Project Site in violation of Applicable Laws or permits related to such disposal
        by Alcoa or Owner’s Affiliate, as the case may be, shall not constitute
“ordinary operations.”  Any changes to the Work required to address or
        mitigate an Unforeseen Project Site Condition shall be deemed an Excusable
        Event
        and be subject to the provisions of Article 8.

       

      13.           PERFORMANCE
        GUARANTEES AND TESTS

       

      13.1           Performance
        Guarantees and Other Requirements.  Subject to
Section 15.4.2(a), Contractor
        shall perform the Work so that the Project satisfies the Performance Guarantees,
        the Reliability Guarantee and successfully passes the Demonstration
        Tests.  Contractor shall demonstrate that the Project satisfies the
        Performance Guarantees, by satisfactorily running and completing the tests
        as
        set forth in Part I, Section 8 of the Scope Book.  Contractor
        shall conduct and collect the data produced during the Performance Tests
        and
        shall prepare the reports in accordance with Section 13.5.3.  Owner shall provide
        Contractor with the data derived from operation of the Project during the
        Reliability Test period that is used in calculating the Equivalent Availability
        Factor.

       

      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 Part I, Section 6.1.2 of the Scope
        Book.

       

      
        
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      13.3           Acceptance
        Test Procedures.  Contractor shall develop detailed Acceptance
        Test procedures in accordance with Part I, Sections 8.2 and 8.5 of the
        Scope Book and shall provide such procedures to Owner for Owner’s review and
        approval not less than one hundred fifty (150) days prior to the date
        on which Contractor anticipates the commencement of the Acceptance
        Tests.  Owner shall review such procedures and provide comments to
        Contractor as promptly as practicable.  Contractor and Owner shall
        cooperate
        reasonably to reach agreement on the Acceptance Test Procedures not less
        than
        sixty (60) days prior to the date on which Contractor anticipates commencing
        the
        Performance Tests.

       

      13.4           Acceptance
        Test Schedules.  Contractor shall give Owner Notice of the date
        that Contractor anticipates commencing the initial Acceptance Test at least
        sixty (60) days prior to commencing such test.  Contractor shall keep
        the Project Representative continuously apprised of the specified schedule,
        and
        changes therein, for the commencement and performance of the Acceptance Tests,
        and shall endeavor to give the Project Representative at least five
        (5) Business Days prior Notice, or such prior Notice as
        time reasonably allows, of the re-performance of any Acceptance
        Test.  An Acceptance Test conducted without the Notice to Owner
        pursuant to this Section 13.4
        shall not be valid for the purposes of this Agreement.

       

      13.5           Testing.  

       

      13.5.1               Upon
        Mechanical Completion.  Contractor shall achieve Mechanical
        Completion and start up the Project (with Owner’s Operating Personnel) prior to
        conducting the Acceptance Tests.  Contractor shall conduct the
        Acceptance Tests in accordance with the approved Acceptance Test Procedures
        and
        Part I, Section 8 of the Scope Book.  In the event the Parties do
        not agree that Contractor has achieved Mechanical Completion, Contractor
        may
        undertake the Acceptance Tests at any date not earlier than ninety (90) days
        prior to the Guaranteed Substantial Completion Date, subject to certifying
        in
        writing to Owner of Contractor’s good faith belief (including providing detailed
        reasons therefor) that Mechanical Completion has been achieved; provided,
further, in such event, Contractor shall also commence and diligently
        carry out such Work as Owner has specified in a Notice to Contractor to achieve
        Mechanical Completion.  The commencement of Acceptance Tests pursuant
        to this Section 13.5.1 shall,
        however, in no way limit Contractor’s obligation to achieve Mechanical
        Completion.  In the event Contractor commences the Acceptance Tests
        while Owner continues to dispute the achievement of Mechanical Completion,
        and
        it is subsequently determined by agreement or through the procedures set
        forth
        in Article 32 that Mechanical
        Completion had not been achieved, Owner may require Contractor to re-perform
        the
        Acceptance Tests.

       

      13.5.2               Temporary
        Facilities.  Notwithstanding anything to the contrary contained
        herein, Contractor, may request in writing Owner to timely approve Contractor’s
        use of temporary equipment, systems or operating practices for purposes of
        commencing and executing the Acceptance Tests to satisfy the requirements
        of
        Substantial Completion; provided that: (a) the Project can be operated in
        a safe and prudent manner based on such use; (b) all components and systems
        that are directly related to the production and delivery of electrical energy
        to
        the high side of the main step-up transformer  are mechanically
        complete; (c) any temporary equipment, system or operating practice used
        to
        sustain operation shall be replaced with the permanent equipment, system
        or
        operating practice prior to Final Completion; (d) the absence of any permanent
        equipment, system or operating practice, will not or will not be

       

      
        
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      expected
        to have any material adverse impact on the accuracy or reliability of the
        test
        data; and (e) such use does not adversely affect the commercial operation
        of the
        Project.  

       

      13.5.3               Conduct/Test
        and Test Reports.  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
Article 13; provided that
        as long as the required Notice has been given, Contractor shall not be required
        to postpone or delay any such test in the event such Persons are not
        present.  Contractor must submit to Owner a preliminary test report
        for each Acceptance Test as soon as reasonably practicable but in no event
        more
        than twenty-four (24) 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 Section 13.3 (or any re-performance of
        any Acceptance
        Test under Section 13.5,
Section 13.6
        or pursuant to any
        Remedial Plan), Owner shall advise Contractor and Contractor shall advise
        Owner
        in writing of any Defect that any such Party discovers during an Acceptance
        Test.  Contractor shall promptly, at Contractor’s sole cost and
        expense, correct any Defect (except if such Defect is a Non-Critical Deficiency,
        in which case it shall be included on the Punchlist) 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 Defect shall be resolved pursuant to Article 32.

       

      13.7           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.

       

      13.8           Notice
        of Minimum Stable Load.  When Contractor believes that it has
        achieved Minimum Stable Load, Contractor shall deliver to Owner a Notice
        of
        Minimum Stable Load.  Owner shall promptly issue an Owner’s
        Certificate of Minimum Stable Load, or if Owner rejects Contractor’s Notice of
        Minimum Stable Load, respond in writing giving its reasons for such rejection
        and Contractor shall take the appropriate corrective action, as
        applicable.  Upon completion of any such applicable corrective action,
        Contractor shall provide a new Notice of Minimum Stable Load to Owner for
        approval.  This process shall be repeated on an iterative basis until
        Owner accepts the Notice of Minimum Stable Load and issues an Owner’s
        Certificate of Minimum Stable Load.  Owner shall use commercially
        reasonable efforts to issue its acceptance or rejection of the initial Notice
        of
        Minimum Stable Load and any subsequent iterations within ten (10) days after
        receipt thereof.

       

      13.9           Notice
        of Mechanical Completion.  When Contractor believes that it has
        achieved Mechanical Completion, Contractor shall deliver to Owner a Notice
        of
        Mechanical Completion.  Owner shall promptly issue an Owner’s
        Certificate of Mechanical Completion or if Owner rejects Contractor’s Notice of
        Mechanical Completion, respond in writing giving its reasons for such rejection
        and Contractor shall take the appropriate corrective action, as
        applicable.  Upon completion of any such applicable corrective action,
        Contractor shall provide a new Notice of

       

      
        
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      Mechanical
        Completion to Owner for approval.  This process shall be repeated on
        an interactive basis until Owner accepts the Notice of Mechanical Completion
        and
        issues an Owner’s Certification of Mechanical Completion.  Owner shall
        use commercially reasonable efforts to issues its acceptance or rejection
        of the
        initial Notice of Mechanical Completion and any subsequent interactions within
        ten (10) days after receipt thereof.

       

      13.10                      Post
        Test Modifications.  If prior to Substantial
        Completion:

       

      (a)           an
        Acceptance Test has been completed;

       

      (b)           Contractor
        or any Subcontractor makes any modification to the Project; and

       

      (c)           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
        Contractor and Owner shall agree on an appropriate test of the modified
        components or such Acceptance Test shall be re-run, as a condition to achieving
        Substantial Completion.

       

      14.           SUBSTANTIAL
        COMPLETION AND FINAL COMPLETION

       

      14.1           Punchlist.

       

      14.1.1               Creation
        of Punchlist.  When Contractor believes that a system 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.  Any Non-Critical Deficiencies with respect to each system
        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 includes all Non-Critical Deficiencies for such system,
        whether the Proposed Punchlist includes only Non-Critical Deficiencies and
        whether the system 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 Defective (other
        than
        Non-Critical Deficiencies described on the Proposed Punchlist) or that the
        estimated cost for the completion or repair of any Non-Critical Deficiency
        is
        not a reasonable estimate of such costs, Owner shall deliver Notice thereof
        to
        Contractor.  If Owner does not deliver such a Notice to Contractor
        within twenty (20) days after Owner receives the Proposed Punchlist, 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.  Owner may then re-inspect the Project and the
        foregoing process shall continue on an iterative basis until Owner has approved
        the Proposed Punchlist.  The aggregate of all Proposed Punchlists that
        are acceptable or deemed acceptable to Owner shall sometimes be referred
        to as
        the “Punchlist.”  If the Punchlist is not finalized
        by the Substantial Completion Date, the Proposed Punchlist as

       

      
        
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      modified
        by Owner shall be deemed the Punchlist for all purposes hereunder until the
        Parties resolve such dispute and otherwise finalize the Punchlist, and
        Contractor shall note on such Proposed Punchlist the items under
        dispute.  Within five (5) days after Substantial Completion Date,
        Non-Critical Deficiencies discovered by Contractor or identified by Owner
        after
        the initial inspection of each system by Owner and Contractor or during the
        testing the Project shall be added to the Punchlist.

       

      14.1.2               Completion
        of Punchlist.  Contractor shall proceed promptly to complete and
        correct all items on the Punchlist in accordance with the schedule to complete
        such items to be agreed upon by the Parties as soon as practical after
        Substantial Completion.  Failure to include an item on the Punchlist
        does not alter Contractor’s responsibility to complete all Work in accordance
        with this Agreement.  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
        bi-weekly basis after Substantial Completion, Contractor shall revise and
        update
        the Punchlist 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.

       

      14.1.3               Owner’s
        Punchlist Option.  At any time after the Final Completion
        Guaranteed Date, Owner may elect by Notice to Contractor to draw an amount
        from
        the Retainage Security, or withhold or retain all or such portion of any
        payment
        due to Contractor, in an amount equal to one hundred fifty percent (150%)
        of the
        estimated cost to complete the uncompleted items on the Punchlist in lieu
        of
        requiring Contractor to complete such items.  Owner shall determine
        which items on the Punchlist have not been completed and, within fifteen
        (15)
        days of Owner’s written request, Contractor shall reasonably estimate in writing
        the cost to complete such items.  Owner may thereafter draw such
        amount from the Retainage Security or withhold or retain such amount from
        any
        payment due to Contractor in satisfaction of Contractor’s obligation to complete
        such items.  

       

      14.2           Substantial
        Completion.  The following are conditions precedent to Substantial
        Completion:

       

      (a)           Owner
        has received copies of all Contractor Acquired Permits and associated approvals
        required to be obtained by Contractor pursuant to Section 3.8;

       

      (b)           Owner
        has received all Contractor Deliverables required to be delivered by Substantial
        Completion in accordance with the Contractor Submittals Table, including
        all
        Required Manuals necessary to operate the Project in a safe and reliable
        manner;

       

      (c)           Contractor
        has certified by a Notice to Owner that all training of Operating Personnel
        is
        complete;

       

      (d)           the
        Punchlist shall have been finalized or deemed completed as provided in
Section 14.1.1; subject to the
        addition of further Punchlist items pursuant to Section 14.1.1;

       

      
        
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      (e)           Contractor
        shall have achieved Mechanical Completion as evidenced by an Owner’s Certificate
        of Mechanical Completion;

       

      (f)           all
        Work, including interconnection of the Common Facilities and correction of
        any
        Defects identified during the preparation of the Punchlist or during any
        testing, but not including the items listed on the Punchlist, shall have
        been
        completed;

       

      (g)           each
        of the following have been satisfied:

       

      (i)           each
        Acceptance Test that is required to be run for Substantial Completion pursuant
        to Part I, Section 8.3, Table 8-2 of the Scope Book, has been completed in
        accordance with the test procedures as set forth in Part I, Section 8.2 of
        the Scope Book, including such procedures as have been developed and mutually
        agreed to Owner and Contractor; and

       

      (ii)           the
        Project shall have achieved the Performance Guarantees (except for those
        Emissions Guarantees that will not be tested until after Substantial Completion
        pursuant to Part I, Section 8.1.5, Table 1 of the Scope Book, the Ammonia
        Consumption Rate Guarantee, and the Limestone Consumption Rate Guarantee),
        or
        the Project shall have achieved the Minimum Performance Criteria;

       

      (h)           Contractor
        shall have licensed all Intellectual Property Rights to Owner;
and

       

      (i)           all
        operational spare parts to be purchased or reconditioned by Contractor pursuant
        to Section 3.20.3 have, as
        applicable, been reconditioned or been delivered or purchased for delivery
        to
        Owner free and clear of any liens, claims, charges, security interests and
        encumbrances whatsoever, 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 Section 14.2, Contractor shall deliver
        to Owner a
        Notice of Substantial Completion.  Such Notice of Substantial
        Completion shall contain a report of the Work completed and a report setting
        forth the results of the completed Acceptance Tests with sufficient detail
        to
        enable Owner to determine whether Substantial Completion has been
        achieved.  The Substantial Completion Date shall be the date on which
        the last of the conditions of Section 14.2 was satisfied or, in the sole
        discretion
        of Owner, waived.  Owner shall promptly issue an Owner’s Certificate
        of Substantial Completion dated to reflect the Substantial Completion Date,
        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, as applicable.  Upon completion of any
        such applicable corrective action, Contractor shall provide a new Notice
        of
        Substantial Completion to Owner for approval.  This process shall be
        repeated on an iterative basis until Owner accepts the Notice of Substantial
        Completion and issues an Owner’s Certificate of Substantial
        Completion.  Owner shall issue its acceptance or rejection of the
        initial Notice of Substantial Completion and any subsequent iterations within
        ten (10) days after receipt thereof.  If Owner fails to respond to a
        Notice of Substantial Completion within such ten (10) day period and
        subsequently delivers comments to Contractor’s Notice of Substantial Completion,
        Owner shall waive any Delay Liquidated Damages that would have
        otherwise

       

      
        
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      accrued
        for the number of days equal to the number of days by which Owner’s response was
        delayed; provided, however, in the event that Owner’s response was
        delayed for a period greater than twenty (20) days Owner shall also be obligated
        to pay Contractor’s reasonable incremental stand-by costs, if any, for such
        extended period.  Contractor shall pay the amount of undisputed Delay
        Liquidated Damages due and owing pursuant to Section 15.1, if any, to Owner by the date
        which is
        five (5) days after the date on which Contractor receives an invoice from
        Owner
        for such Delay Liquidated Damages, provided such invoice shall be dated
        no earlier than the Owner’s Certificate of Substantial Completion. 

       

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

       

      (a)           Substantial
        Completion has been achieved;

       

      (b)           all
        of the Acceptance Tests not successfully completed prior to Substantial
        Completion shall have been completed in accordance with the test procedures
        as
        set forth in Part I, Section 8.2 of the Scope Book, including such
        procedures as have been developed and mutually agreed to Owner and
        Contractor;

       

      (c)           the
        Project shall have satisfied the Performance Guarantees (other than the
        Emissions Guarantees) or Contractor shall have paid all Performance Liquidated
        Damages due pursuant to Section 15.3;

       

      (d)           the
        Project shall have satisfied the Emissions Guarantees;

       

      (e)           the
        Project shall have satisfied the Reliability Guarantee, or the Reliability
        Liquidated Damages shall have been paid;

       

      (f)           the
        Demonstration Tests shall have been run and satisfactorily
        completed;

       

      (g)           Contractor
        shall have completed all items on the Punchlist unless Owner shall have relieved
        Contractor of its obligation to do so under Section 14.1.3;

       

      (h)           Contractor
        shall have completed all of the other Work (other than warranty
        work);

       

      (i)           Owner
        shall have received all drawings and specifications, copies of final as-built
        drawings, electronically prepared computer drawing file(s) as prepared by
        Contractor on a software program pursuant to Part I, Section 2 of the Scope
        Book, test data, performance data, Equipment and Materials descriptions,
        Required Manuals, training aids, Spare Parts Schedule, and other technical
        information each as required hereunder for Owner to operate and maintain
        the
        Project;

       

      (j)           all
        Contractor’s and Subcontractors’ personnel (except as required to perform any
        on-going warranty support services) shall have left the Project 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 Project
        Site as required by Exhibit A, and any permanent facilities used by
        Contractor and the Project Site shall have been restored to the
        same

       

      
        
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      condition
        that such permanent facilities and the Project 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;

       

      (k)           Contractor
        shall have assigned to Owner, or provided Owner, with all warranties or
        guarantees that Contractor received from Subcontractors to the extent Contractor
        is obligated to do so pursuant to Article 17;

       

      (l)           Contractor
        has delivered an Conditional Waiver and Release Upon Final Payment of Contractor
        and an Unconditional Waiver and Release Upon Final Payment of Subcontractor
        from
        the Major Subcontractors, or to the extent that Unconditional Waivers and
        Releases Upon Final Payment are not provided by any such Major Subcontractor,
        Contractor has delivered security in amount, form and from a provider acceptable
        to Owner that, in Owner’s reasonable discretion, is sufficient to ensure that
        any encumbrance that may be asserted can be removed without expense to Owner;
        and

       

      (m)           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 Sections 15.1 and 15.3,
        or, with respect to any Delay Liquidated
        Damages or Performance Liquidated Damages disputed by Contractor in good
        faith,
        Contractor shall have delivered an irrevocable standby letter of credit securing
        such disputed obligations, from 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), in form and substance reasonably acceptable to Owner, and in an amount
        equal to such disputed amount, which Owner may draw upon in the event of
        entry
        of a judgment against Contractor from a court having jurisdiction over such
        matter in accordance with Section 32.2 or upon receipt of notice
        from such
        financial institution that such letter of credit shall not be renewed and
        Owner
        has not been provided a replacement irrevocable standby letter of credit
        in
        equal amount and otherwise conforming to the requirements of this
Section 14.4(m).  Notwithstanding
        the
        foregoing, Contractor shall remain liable for payment of Delay Liquidated
        Damages and Performance Damages following Final Completion, unless and to
        the
        extent such liability has been fully extinguished by Owner's draws under
        such
        letter of credit.

       

      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 Section 14.4.  Owner shall promptly 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 have been satisfied and Final Completion 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 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
        accept or reject the initial Notice of Final Completion and any subsequent
        iterations within ten (10) days after receipt thereof.  If Owner fails
        to respond within  thirty (30) days of receipt beyond such time
        period, and at any time during such subsequent review process Owner rejects
        Contractor’s Notice of Final Completion, at such time as the

       

      
        
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      Owner’s
        Certificate of Final Completion is issued Owner agrees to reduce the amount
        of
        days by which it is obligated to make the Final Payment (including any
        applicable bonus amount) on a day for day basis for each day in excess of
        such
        time period by which Owner failed to respond.  

       

      14.6           Contractor’s
        Access After Substantial Completion and Final
        Completion.  Following Substantial Completion, Owner shall provide
        Contractor with reasonable and timely access to the Project to complete all
        items on the Punchlist and to satisfy the other requirements for Final
        Completion.  Contractor shall also be provided with access to the
        Project during the Cure Period in accordance with Section 15.4.9.  The Parties expect that
        Contractor shall accomplish any necessary modification, repairs or additional
        work to the extent practicable 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 Punchlist, then such reduction or shut-down shall
        be
        scheduled solely at the discretion of Owner in accordance with the provisions
        of
Section 15.4.12.1.

       

      14.7           Subcontractor
Air
        Quality Performance
        Requirements.
 If
        performance requirements or guarantees are
        secured from a Subcontractor
        providing the air quality control system which extend beyond or exceed the
        performance requirements required to
        support Contractor’s obligations under this Agreement and if, at Final
        Completion, such Subcontractor has not achieved such performance
        requirements or
        guarantees, Contractor will
        use commercially reasonable efforts (not including
        litigation) to enforce such performance
        requirements or guarantees
for
        the benefit of Owner,
        with the understanding that such efforts shall not prejudice Contractor’s
        enforcement of its own rights against such Subcontractor and that successful
        enforcement of such performance requirements or guarantees against
        such Subcontractor
will not be a condition
        of
        occurrence of Final Completion provided each of the
        conditions to
        Final Completion contained in Section 14.4
        have been successfully achieved by
        Contractor (provided
        that the required Unconditional
        Waiver and Release Upon Final Payment shall be
        waived with respect
        to payment of amounts
        related to the emissions guarantees under the subcontract
        or purchase order
        relating to air quality control system).  For
purposes
        of this Section 14.7,
“commercially
        reasonably efforts”
shall be limited to a maximum of two hundred (200) hours for all
        purposes, unless a Change
        in Work Form is agreed with respect to payment in excess of such
        maximum.  Contractor shall provide
        Notice to Owner following Contractor's exhaustion of commercially reasonable
        efforts to enforce such requirement or guarantees of such Subcontractor under
        this Section
14.7.  In
        the event that
        Contractor is unable, despite having used commercially reasonable efforts,
        to
        enforce such performance requirements or guarantees against a Subcontractor
        providing the air quality control systems which extend beyond or exceed the
        performance requirements required to support Contractor's obligations under
        this
        Agreement, Owner, at its option and upon prior written Notice to Contractor,
        may
        enforce the particular requirement or guarantee against such
        Subcontractor.  Without limiting Owner's rights under Section 17.6,
        Contractor shall, at the request and
        direction of Owner,
        and without recourse to Contractor, at any time following Owner's receipt
        of the
        Notice contemplated under this Section 14.7,
        (i) assign
        all such purchase order or
        subcontract relating to the air quality control system and (ii) pay to Owner the
        amounts remaining
        to be paid to such Subcontractor, if any and only to the extent such amounts
        have been previously paid by Owner to Contractor, related to the

       

      
        
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      emissions
        guarantees of such subcontract
        or purchase order
        relating to the air quality control system.   

       

      15.           LIQUIDATED
        DAMAGES AND CURE PERIOD

       

      15.1           Liquidated
        Damages for Delay in the Substantial Completion Dates.  Contractor
        acknowledges that if the Substantial Completion Date does not occur on or
        before
        the Substantial Completion Guaranteed Date, Owner will suffer substantial
        damages that are difficult to ascertain.  Therefore, the Parties agree
        that if Substantial Completion is not achieved by the Substantial Completion
        Guaranteed Date Contractor shall pay liquidated damages to Owner in the amount
        of *** Dollars ($***) for each day (or portion thereof) of such delay
        (“Delay Liquidated Damages”) and that the Delay Liquidated
        Damages shall apply regardless of the actual amount of damage that may be
        suffered.  Any amount Contractor is obligated to pay to Owner under
        this Section 15.1 shall be due
        and payable as set forth in Section 14.3.  Disputed Delay Liquidated
        Damages that are ultimately determined to be due and owing shall accrue interest
        at the Contract Interest Rate as of the date such amounts should have been
        paid
        if undisputed, from such date until paid. 

       

      15.2           Liquidated
        Damages for Failure to Satisfy the Reliability
        Guarantee.  Contractor acknowledges that if the Reliability
        Guarantee has not been satisfied by the Final Completion Guaranteed Date,
        Owner
        will suffer substantial damages that are difficult to
        ascertain.  Therefore, the Parties agree that if the Reliability
        Guarantee is not satisfied, Contractor shall pay liquidated damages to Owner
        in
        the amount of *** Dollars ($***) per percent by which the Equivalent
        Availability Factor is less than *** percent (***%) and equal to or greater
        than
        *** percent (***%), and *** Dollars ($***) per percent by which the Equivalent
        Availability Factor is less than *** percent (***%) during the Reliability
        Test,
        which in each case shall be pro rated for any portion of a percent by which
        the
        Equivalent Availability Factor is less than the applicable percentage (such
        damages collectively, the “Reliability Liquidated Damages”) and
        that the Reliability Liquidated Damages shall apply regardless of the actual
        amount of damage that may be suffered.  Any amount Contractor is
        obligated to pay to Owner under this Section 15.2 shall be due and payable on
        the earlier to
        occur of (a) the achievement of Final Completion (other than with respect
        to the
        condition contained in Section 14.4(e)) or (b) the Final Completion
        Guaranteed
        Date.

       

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      15.3           Liquidated
        Damages for Failure to Satisfy Certain Performance
        Guarantees.  Contractor acknowledges that if the Project does not
        achieve the Net Capacity Guarantee and the Net Heat Rate Guarantee, Owner
        will
        suffer substantial damages that are difficult to
        ascertain.  Therefore, the Parties agree that if the Project does not
        achieve the Net Capacity Guarantee, as calculated in accordance with Part
        I,
        Section 8.2.1 of the Scope Book, Contractor shall pay liquidated damages to
        Owner in the amount of *** Dollars ($***) per kilowatt for each kilowatt
        by
        which the Project fails to satisfy the Net Capacity Guarantee.  The
        Parties further agree that if the Project does not achieve the Net Heat Rate
        Guarantee, as calculated in accordance with Part I, Section 8.2.2 of the
        Scope Book, Contractor shall pay liquidated damages to Owner in the amount
        of
        *** Dollars ($***) per Btu/kilowatt for each Btu/kilowatt
        by which the Project exceeds the Net Heat Rate Guarantee.  In
        addition, the Parties agree that if the Project does not  achieve (i)
        the Ammonia Consumption Rate Guarantee, as calculated in accordance with
        Part I,
        Section 8.1.4 of the Scope Book, Contractor shall pay liquidated damages to
        Owner in the amount of *** Dollars ($***) per lb/hour for each lb/hour by
        which
        the Project exceeds the Ammonia Consumption Rate Guarantee, and (ii) the
        Limestone Consumption Rate Guarantee, as calculated in accordance with Part
        I,
        Section 8.1.3 of the Scope Book, Contractor shall pay liquidated damages to
        Owner in the amount of *** Dollars ($***) per lb/hour for each lb/hour by
        which
        the Project exceeds the Limestone Consumption Rate Guarantee.  The
        Parties agree that the foregoing liquidated damages described in this
Section 15.3 with respect to
        failure of the Project to achieve the Net Capacity Guarantee, the Net Heat
        Rate
        Guarantee, the Ammonia Consumption Rate Guarantee, or the Limestone Consumption
        Rate Guarantee shall apply regardless of the actual amount of damage that
        may be
        suffered.  Performance Liquidated Damages that are ultimately
        determined to be due and owing shall accrue interest at the Contract Interest
        Rate as of the date such amounts should have been paid if undisputed, from
        such
        date until paid.

       

      15.4           Actions
        During the Cure Period.

       

      15.4.1                Buy-Down
        Not Available.  If Contractor has failed to achieve the Minimum
        Performance Criteria with respect to the Net Capacity and the Net Heat Rate,
        Contractor shall not be entitled to pay the Performance Liquidated Damages
        pursuant to Section 15.4.2(a) to
        achieve Substantial Completion and must continue seeking to satisfy the
        Performance Guarantees and to achieve the Minimum Performance Criteria, and
        shall pay Delay Liquidated Damages due and owing under Section 15.1 until Contractor achieves
        Substantial
        Completion. 

       

      15.4.2                Buy-Down
        or Cure.  If the Project has achieved Substantial Completion, but
        has failed to achieve the Net Capacity Guarantee or the Net Heat Rate Guarantee,
        Contractor, at its option, may elect to either:

       

      

       

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      (a)           pay
        Owner the Performance Liquidated Damages as determined pursuant to
Section 15.3 based on the
        results of the most recently completed Performance Tests used to determine
        whether Contractor satisfied the applicable Performance Guarantee, and upon
        such
        payment Contractor shall have no further obligation to satisfy the Performance
        Guarantees, including for purposes of achieving Final Completion;
        or

       

      (b)           submit
        a Remedial Plan to Owner for review and approval as set forth in
Section 15.4.6 within
        ten (10) days after the Substantial Completion Date, or if related to
        further Remedial Plans implemented during the Cure Period, after Contractor
        completes additional Performance Tests, as applicable.

       

      15.4.3                Election
        of Option.  Contractor shall exercise the option provided in
Section 15.4.2 by delivery of
        Notice to Owner not later than ten (10) days after either the Substantial
        Completion Date or the date of the last completed Performance Test; or  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 Section 15.4.2, elect to pay the Performance
        Liquidated
        Damages and achieve Final Completion, pursuant to Section 15.4.2(a) after the expiration of its
        previously implemented Remedial Plan if Contractor fails to satisfy the
        Performance Guarantees by such date,  based on the most recent
        Performance Tests.  

       

      15.4.4                Submission
        of Remedial Plan.  All Corrective Actions performed after
        Substantial Completion shall be performed in accordance with a Remedial Plan
        submitted to Owner pursuant to Section 15.4.2(b).  

       

      15.4.5                Minimum
        Requirements for Remedial Plan.  Each Remedial Plan shall, at a
        minimum, specify the Corrective Actions Contractor proposes to take, the
        commencement date of the Corrective Action, the component or system that
        will be
        tested after such Corrective Actions are implemented, the kind of test that
        will
        be performed on such component or system, and the Benchmark Tests or Performance
        Tests.  Contractor will run the tests identified in the Remedial Plan
        to demonstrate satisfaction of the relevant Performance Guarantees;
provided, however, that upon the satisfaction of the Performance
        Guarantees, Contractor shall be limited to performing three (3) additional
        Performance 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 Performance Guarantees
        without negative effects on Acceptance Tests results used to obtain Substantial
        Completion, must have a reasonable probability of success, and must 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.

       

      15.4.6                Approval
        of Remedial Plan.  Owner shall, promptly but no later than ten
        (10) days after receipt of a Remedial Plan, approve or provide written comments
        concerning such plan to Contractor.  Unless Contractor accepts all of
        Owner’s comments with respect to such Remedial Plan, Contractor and Owner shall
        meet and confer as soon as practicable to discuss the Remedial Plan and Owner’s
        comments thereto.  Contractor and Owner shall then

       

      
        
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      endeavor
        to come to an agreement on the Remedial Plan.  If either Contractor or
        Owner determines, after using its reasonable efforts to come to an agreement
        on
        a proposed Remedial Plan, that such an agreement cannot be reached, then
        such
        dispute shall be resolved in accordance with Article 32.  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.

       

      15.4.7                Prosecution
        of Remedial Plan.  Upon satisfaction of the conditions of
Section 15.4.6, Contractor
        shall:

       

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

       

      (b)           in
        performing the Corrective Action described in the Remedial Plan, neither
        cause
        the Project to be unable to 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 the Remedial Plan
        in
        accordance with its terms.

       

      15.4.8                Additional
        Remedial Plans.  If Contractor is unable to satisfy the
        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.

       

      15.4.9                Access
        During Cure Period.  Upon Owner’s approval of the Remedial Plan
        submitted pursuant to Section 15.4.2(b), Contractor shall be granted
        reasonable access to the Project, subject to Section 15.4.12, for the period as set forth
        in the
        Remedial Plan approved by Owner, to:

       

      (a)           perform
        Corrective Actions pursuant to a Remedial Plan prepared and prosecuted in
        accordance with Section 15.4.5;
        and

       

      (b)           re-perform
        the applicable Benchmark Tests or Performance Tests as approved by
        Owner;

       

      all
        in order to improve the performance results of the Project and to reduce
        Contractor’s liability for amounts payable as Performance Liquidated Damages or
        to establish the basis for any performance bonuses pursuant to
Section 5.4.1.  The
        Net Capacity and Net Heat Rate shall be adjusted to the amounts determined
        by
        such Performance Tests.  Contractor shall keep Owner continuously
        apprised of the specific schedule, and changes therein, including the scheduled
        commencement and re-performance of the applicable Benchmark Tests or Performance
        Tests.  Notwithstanding anything herein to the contrary, Contractor
        shall use commercially reasonable efforts to ensure that Contractor’s
        performance of any Correction Action during the Cure Period

       

      
        
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      does
        not result in the Project operating at a level lower than the initial
        performance upon Substantial Completion.

       

      15.4.10                      Payment
        of Performance Liquidated Damages or Performance Bonuses.  At the
        end of the Cure Period, the results of the most recently completed Benchmark
        or
        Performance Tests shall be used to calculate the Performance Liquidated Damages
        or performance bonuses, as applicable.  Contractor shall provide Owner
        with all required test data and Owner shall calculate the Performance Liquidated
        Damages or performance bonuses, as applicable.  In the event any
        Performance Liquidated Damages have been paid pursuant to Section 15.8, Owner shall recalculate the
        Performance
        Liquidated Damages or performance bonus, as applicable, and:

       

      (a)           if
        Contractor does not meet the Performance Guarantees and Performance Liquidated
        Damages are less than the Performance Liquidated Damages calculated pursuant
        to
Section 15.8,  Owner
        shall notify Contractor and refund the difference thereof to Contractor within
        five (5) Business Days;

       

      (b)           if
        Contractor does not meet the Performance Guarantees and Performance Liquidated
        Damages are greater than the Performance Liquidated Damages calculated pursuant
        to Section 15.8, Owner shall
        notify Contractor and Contractor shall pay the difference thereof to Owner
        within five (5) Business Days after Contractor receives a Notice for such
        payment from Owner; or

       

      (c)           subject
        to Section 5.5.2, if the
        recalculated performance exceeds the Performance Guarantees, any performance
        bonuses shall be calculated pursuant to Section 5.5.2.

       

      In
        the event that Owner approves the
        Remedial Plan pursuant to Section 15.8, and at the end of the Cure
        Period (i) the
        Project does not meet the Performance Guarantees, Contractor shall pay the
        applicable Performance Liquidated Damages calculated pursuant to
Section 15.3 or (ii) the Project
        exceeds the Performance Guarantees, any performance bonuses shall be calculated
        pursuant to Section 5.5.2.

       

      15.4.11                      Contractor’s
        Buy-Down Option.  Notwithstanding any of the foregoing, during the
        Cure Period, Contractor may, by Notice to Owner, elect to calculate the
        Performance Liquidated Damages based on the then most recently completed
        Performance Tests and pay any applicable Performance Liquidated Damages rather
        than attempt further Corrective Action. 

       

      15.4.12                      Operation
        During Cure Period.  Upon the earlier of Substantial Completion or
        the date this Agreement is terminated, Owner shall assume care, custody and
        control of the Project in accordance with Section 18.4.  Notwithstanding the foregoing,
        during the Cure Period, Owner shall provide Contractor with reasonable access
        to
        the Project as and to the extent provided in Section 15.4.12.1 at such time or times as Owner
        shall
        approve.  During the Cure Period, Owner shall have the right to
        operate the Project in its sole discretion, including the right to maximize
        the
        economic benefits of the Project.  Contractor understands and accepts
        that the desire of Owner to maximize the economic benefits of the Project
        likely
        will curtail Contractor’s freedom of action during the Cure Period and Owner
        will likely not provide access

       

      
        
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      to
        the Project to Contractor for any significant modifications during the period
        from June 1 through September 30 of any year.  Except as set forth in
        the next sentence, any failure by Owner to provide Contractor with access
        to the
        Project as set forth in this Section 15.4.12 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 access to the Project as set
        forth
        in this Section 15.4.12 shall be
        an equitable extension of the Cure Period until such reasonable access is
        provided.

       

      15.4.12.1                      Shut
        Downs During Cure Period.  After Substantial Completion, Owner and
        Contractor agree to cooperate in good faith in determining when and to what
        extent the Project will be taken out of service in order to make Corrective
        Actions to improve the performance of the Project and to minimize the periods
        of
        time when the Project will be taken out of service or Contractor will be
        permitted to perform any Benchmark Tests or Performance Tests or conduct
        Corrective Actions that require any material limitation on Owner’s operation of
        the Project (each such period, an “Outage Period”);
provided, that Contractor shall use its best efforts to
        conduct such
        Corrective Actions during periods when the Project is undergoing scheduled
        maintenance outages.  Notwithstanding the foregoing, Contractor will
        have the right to at least two (2) Outage Periods, each not to exceed ten
        (10)
        consecutive days, which periods shall be scheduled in consultation with Owner;
        provided that any additional Outage Periods shall be subject to Owner’s
        approval which may be withheld in Owner’s sole
        discretion.  Notwithstanding anything to the contrary herein, unless
        Owner expressly agrees otherwise (which agreement may be withheld in Owner’s
        sole discretion), no Outage Period shall be scheduled during the period from
        June 1 through September 30 of any year.

       

      15.4.12.2                      Outage
        Periods.  Each Outage Period will begin after a twenty four (24)
        hour cool down period (if necessary for the Corrective Action) and will end
        when
        Contractor clears the Project to normal operational conditions and turns
        the
        Project over to Owner for operation.  For each outage day during the
        Cure Period in excess of twenty (20) in the aggregate, Contractor shall pay
        Owner an amount per day equal to *** percent (***%) of the average amount
        per
        day paid to Contractor as a bonus for achieving early Substantial Completion
        pursuant to Section 5.5.1 (such
        average amount to be calculated by taking the total bonus amount paid to
        Contractor and dividing by the sum of (x) the number of days prior to the
        Substantial Completion Guaranteed Date that Substantial Completion occurs
        less
        (y) twenty-nine (29)).  Notwithstanding the foregoing, Owner shall
        credit Contractor against sums due pursuant to the preceding sentence, one
        (1)
        outage day for each calendar week that the Substantial Completion Date occurred
        earlier than twenty-nine (29) days prior to the Substantial Completion
        Guaranteed Date.  Accrued amounts due pursuant to this
Section 15.4.12.2 shall be due
        and payable within ten (10) days after Owner provides a Notice to Contractor
        demanding payment thereof.  If Owner instructs Contractor to cease
        performing a Benchmark Test or Performance Test or conducting Corrective
        Actions
        during an Outage Period or otherwise during the remainder of the Cure Period
        (for reasons other than safety concerns arising from Defects), Contractor
        shall
        be granted a day for day extension of the Cure Period.

       

      ***
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      15.5           Offset
        and Draws on Security.  If Contractor is obligated to pay any
        amount to Owner, as applicable, pursuant to Sections 15.1, 15.2
        or 15.3, including any amounts payable
        pursuant to Section 15.4, as
        applicable, and such amount is not paid within the time period referred to
        in
        such Section, Owner shall have the right to offset pursuant to Sections
6.6.1 and 6.11
        any such amount against any amount then or
        thereafter due from Owner to Contractor under this Agreement and to exercise
        its
        rights against any security provided by or for the benefit of Contractor
        in
        accordance with Section 6.7.2 or any
        other applicable sections of this Agreement, in such order as Owner may elect
        in
        its sole discretion.

       

      15.6           Sole
        Remedy; Liquidated Damages Not a Penalty.  The amounts payable
        under Sections 15.1, 15.2
        or 15.3, as limited by Article 31,
        and the other remedies provided for in this
Article 15 and, if such failure
        constitutes a Contractor Event of Default pursuant to Section 19.1(j) or Section 19.1(k),
        the remedies provided for in
Sections 19.2(a) through (h),
        shall be the sole and exclusive remedies
        of Owner for delays in Substantial Completion, for failure to meet the
        Reliability Guarantee and for failure of the Project to meet the Performance
        Guarantees (other than the Emissions Guarantees) during the Acceptance
        Tests.  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.  ALTHOUGH OWNER’S ESTIMATE OF
ITS
        DAMAGES,
        INCLUDING THE LOSS OF OPERATING REVENUE AND
        OTHER OPERATING AND CONSTRUCTION COSTS AND CHARGES IN
        THE EVENT OF SUCH DELAYS OR FAILURES SIGNIFICANTLY EXCEEDS THE AMOUNT OF
        THE
        LIQUIDATED DAMAGES PROVIDED HEREIN, AFTER NEGOTIATION, THE PARTIES HAVE AGREED
        TO AMOUNTS THAT REPRESENT EACH OF THE DELAY LIQUIDATED DAMAGES, THE RELIABILITY
        LIQUIDATED DAMAGES AND THE PERFORMANCE LIQUIDATED DAMAGES, AND THAT SUCH
        LIQUIDATED DAMAGES ARE IN THE NATURE OF LIQUIDATED DAMAGES, AND NOT A
        PENALTY.  

       

      15.7           Enforceability.  The
        Parties explicitly agree and intend that the provisions of this
Article 15 shall be fully
        enforceable by any court exercising jurisdiction over any dispute between
        the
        Parties arising under this Agreement.  CONTRACTOR
AND OWNER HEREBY IRREVOCABLY WAIVE ANY DEFENSES
        AVAILABLE TO
        THEM UNDER LAW OR EQUITY RELATING TO THE ENFORCEABILITY OF THE LIQUIDATED
        DAMAGES PROVISIONS SET FORTH IN THIS
ARTICLE 15.

       

      15.8           Extension
        of Cure Period.  Notwithstanding anything to the contrary herein,
        in the event Contractor has been unable to meet the Performance Guarantees
        on or
        prior to the expiration of the initial one hundred eight (180) day Cure Period
        after fulfilling its obligations contained in Sections 15.4.7 and 15.4.9,
        Contractor may submit to Owner for
        approval a revised Remedial Plan meeting the requirements of
Section 15.4.5, but setting
        forth in specificity and detail Corrective Action(s) which Contractor proposes
        to undertake to enable the Project to achieve the Performance
        Guarantees.  Upon Owner’s approval of such revised Remedial Plan, not
        to be unreasonably withheld, the Cure Period shall be extended for the period
        of
        time set forth in the Remedial Plan approved by Owner, but in no event for
        more
        than one hundred eighty

       

      
        
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      (180)
        days.  In the event Owner disagrees that such proposed Remedial Plan
        will enable the Project to achieve the Performance Guarantees, then Owner
        shall
        notify Contractor in writing of same, whereupon Contractor may pay the
        Performance Liquidated Damages due and owing to Owner pursuant to
Section 15.3 and extend the Cure
        Period for the period of time set forth in the Remedial Plan submitted to
        Owner
        for approval, such period in no event to exceed one hundred eighty (180)
        days.

       

      16.           CHANGES
        IN THE WORK 

       

      16.1           Change
        In Work.  A change in Work (each, a “Change In
        Work”) may result only from any of the following:

       

      (a)           Changes
        in the Work required by Owner in writing, including an acceleration of Work
        in
        accordance with Section 7.7;

       

      (b)           the
        occurrence of an Excusable Event (as and only to the extent permitted by
        Section 8.6.2);

       

      (c)           the
        occurrence of an event of Force Majeure (as and only to the extent permitted
        by
Section 8.6.1);

       

      (d)           an
        Owner Directive, in accordance with Section 16.7;

       

      (e)           in
        accordance with Section 24.4;

       

      (f)           in
        accordance with Exhibit B; or

       

      (g)           in
        accordance with Exhibit I.

       

      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 Article 16, be documented in accordance
        with
Section 16.4 and shall be
        considered, for all purposes of this Agreement, as part of the
        Work.  Notwithstanding the foregoing, unless Contractor and Owner
        shall have agreed upon a Change In Work in accordance with the provisions
        of
Section 16.4 or Owner shall have
        issued an Owner Directive, Contractor shall have no obligation to, and shall
        not, perform or comply with any modification, acceleration, alteration,
        addition, or deletion to the Work unless required for the safe performance
        of
        the Work or otherwise in the event of an emergency or as required by Applicable
        Law.

       

      16.3           By
        Contractor.  Contractor shall be entitled to initiate and submit a
        Change In Work Form for approval by Owner only in the event of an Excusable
        Event or Force Majeure in accordance with Sections 8.6.1 and 8.6.2
        or pursuant to Section 24.4 (but, without limiting any
        other provision
        hereunder, with respect to Section 24.4, only to the extent Contractor’s
        performance hereunder was actually and demonstrably delayed by any delay
        in
        obtaining any POI Acknowledgement) or pursuant to Exhibits B and
I.

       

      
        
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      If
        Contractor provides Notice of or becomes aware of a Change In Work permitted
        pursuant to this Section 16.3,
        Contractor shall immediately serve Notice thereof to Owner and Contractor
        shall,
        as soon as practicable, prepare a Change In Work Form. 

       

      16.4           Owner
        Initiated Change In Work.  If Owner provides Notice to Contractor
        that Owner is proposing a Change In Work, Contractor shall, as soon as
        practicable, prepare and deliver to Owner an order of magnitude estimate
        of the
        costs, if any, expected to be incurred in connection with the proposed Change
        In
        Work, and an estimate of the change, if any, to the Milestone Schedule or
        Project Guaranteed Dates associated with such Change In Work.  If
        following review of such preliminary estimates, Owner requests that Contractor
        prepare a more detailed estimate, Contractor shall then prepare a detailed
        Change In Work Form which shall include, subject to the remaining provisions
        of
        this Section 16.4, a detailed
        proposal for such Change In Work, together with a detailed explanation and
        basis
        thereof, of: 

       

      (a)           the
        change, if any, to the Milestone Summary Schedule and the
        Project  Guaranteed Dates associated with such Change In
        Work;

       

      (b)           the
        increase or decrease, if any, in the cost required to complete the Work as
        described on the Change In Work Form.

       

      Any
        increases in the cost required to complete the Work shall be limited to actual
        and demonstrable increases which Contractor was unable to
        avoid.  Contractor’s proposed change in the Contract Price for such
        Change In Work shall propose a fixed price (with detailed estimates and
        quotation backup) which fixed price shall not exceed the difference of the
        direct costs (without profit, overhead or contingency) expected to be incurred
        by Contractor because of such Change In Work; less any savings expected to
        be
        realized because of such Change In Work, plus an allowance for profit, overhead,
        contingency and escalation, in each case as set forth in a Change In Work
        Form;
provided, however, that in no event shall any Change In Work
        include any contingency amount related to the Labor Pool (as defined in
Exhibit I).  The adjustment in the Contract Price specified in
        this Section 16.4, and
        the Project Schedule, as applicable, shall be the sole adjustment related
        to a
        specific Change In Work Form unless expressly stated otherwise therein or
        as may
        be provided elsewhere as mutually agreed by Owner and Contractor pursuant
        to
Section 33.4.  In the event
        that Owner requests that Contractor prepare a Change In Work Form after having
        received an order of magnitude estimate of the costs related to such proposed
        Change In Work, and thereafter elects not to proceed with such proposed Change
        In Work, Owner shall be responsible to reimburse Contractor fifty percent
        (50%)
        of Contractor’s reasonable costs in preparing such proposed Change In Work
        Form.

       

      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, 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).  If the Parties cannot reach agreement on the matters listed
        in the Change In Work Form submitted pursuant to this Section 16.5, subject to the terms of
Section 16.7.2,
        then such matter
        shall be referred to dispute resolution under Article 32.

       

      
        
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      16.6           No
        Obligation or Payment Without Executed Change In Work Form.  IN NO
        EVENT SHALL CONTRACTOR 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
SECTION 16.7, 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 SECTION 16.6 SHALL BE DEEMED TO WAIVE CONTRACTOR’S OR
        OWNER’S RIGHT TO AVAIL ITSELF OF THE DISPUTE RESOLUTION PROCEDURES PURSUANT TO
        ARTICLE 32 WITH RESPECT TO
        DISPUTED CHANGE IN WORK FORMS.

       

      16.7           Owner
        Directives.  

       

      16.7.1                Non-Major
        Change In Work.  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 with respect to any Change In Work Form proposing an adjustment
        to the
        Contract Price equal to or less than Five Hundred Thousand Dollars ($500,000),
        whether such Change In Work Form was initiated by Contractor or by Owner,
        Contractor shall perform the Work as Owner so directs in writing, unless
        the
        performance of such a Change In Work affects the safe performance of the
        Work or
        violates Applicable Law.  

       

      16.7.2                Major
        Change In Work.  If Contractor and Owner are unable to agree on
        any Change In Work Form proposing an adjustment to Contract Price in excess
        of
        Five Hundred Thousand Dollars ($500,000) (such Change In Work as proposed,
        a
“Major Change In Work”), whether such Major Change In Work was
        initiated by Contractor or by Owner, Contractor and Owner shall engage in
        an
        open book review process in order to finalize the adjustment to Contract
        Price
        and the Milestone Summary Schedule, if any, associated with such Major Change
        In
        Work.  During such open book review process, Contractor shall make
        details of the estimate buildup, including estimated quantities and subtotals
        for the labor, subcontracts and Equipment and Materials costs available for
        Owner’s review relating to such Major Change In Work.  In addition,
        Contractor shall demonstrate the basis for the increase to Contract Price
        and
        the Milestone Summary Schedule included in such Major Change In
        Work.  If Owner and Contractor are unable to reach agreement on the
        Major Change In Work during such open book review process, Contractor shall
        perform the Work as Owner so directs in writing, unless the performance of
        such
        a Change In Work affects the safe performance of the Work or violates Applicable
        Law.  

       

      16.7.3                Prosecution
        of Owner Directive.  Notwithstanding the foregoing, in the event
        that Contractor reasonably believes that any Change In Work so directed in
        writing by Owner would result in a Defect, Contractor shall promptly provide
        Notice of same to Owner, which such Notice shall set forth a detailed
        explanation and basis for Contractor’s belief and Contractor shall not be
        required to perform such Change In Work except as Contractor and

       

      
        
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      Owner,
        negotiating in good faith, mutually agree.  Subject to the foregoing,
        notwithstanding any such Notice provided by Contractor, Contractor shall
        otherwise proceed with the Work.  

       

      16.7.4                Pricing
        of Changes In Work Related to Owner Directives.  In the event
        Contractor performs Work as directed by Owner pursuant to
Sections 16.7.1 or 16.7.2
        (each an “Owner
        Directive”), and such Owner Directive results (a) in an increase to the
        direct costs (without profit, overhead or contingency) expected to be incurred
        by Contractor because of such Owner Directive, Owner shall pay to Contractor
        the
        amount of actually incurred costs of labor and materials incurred by Contractor
        in connection with Work performed pursuant to such Owner Directive, plus
        ***
        (***) of such amount representing a reasonable interim amount for Contractor’s
        overhead and profit or (b) in savings to direct costs expected to be realized
        because of such Owner Directive, Contractor shall reduce the Contract Price
        by
        the amount of such savings, plus *** (***) of such amount representing a
        reasonable interim amount for Contractor’s overhead and profit.  Any
        disputes regarding the pricing of a Change In Work or Major Change In Work
        or
        that are otherwise related to an Owner Directive shall be subject to the
        dispute
        resolution provisions of Article 32, but if such Change In Work
        constitutes a
        Major Change In Work, disputes regarding such Major Change In Work shall
        be
        subject to such dispute resolution procedures only after following the open
        book
        review process described in Section 16.7.2.  

       

      16.7.5                True-Up.  If
        following resolution of a dispute pursuant to the provisions contained in
        Article 32 it is determined that
        the amounts paid to Contractor pursuant to Section 16.7.4:  (a) are less than the
        amounts that Owner should have paid based upon the Work performed pursuant
        to an
        Owner Directive, then Owner shall pay to Contractor such deficiency (with
        interest at the Contract Interest Rate from the date payment for such Work
        was
        due and not paid) within ten (10) days after Notice of such deficiency from
        Contractor; or (b) exceed the amounts that Owner should have paid based
        upon the Work performed pursuant to an Owner Directive, then Contractor shall
        refund to Owner such excess (with interest at the Contract Interest Rate
        from
        the date payment for such Work was due and not paid) within ten (10) days
        after
        Notice of such deficiency from Contractor.

       

      16.8           Express
        Waiver.  Contractor expressly waives any other compensation for
        any Change In Work executed pursuant to a Change in Work Form executed by
        Owner
        and Contractor pursuant to the provisions of this Article 16, including any other change
        in the Milestone
        Summary Schedule, the Project Guaranteed Dates or the Contract
        Price.  For the avoidance of doubt, to the extent there is a
        cumulative effect on the Contract Price or Project Schedule due to more than
        one
        Change in Work, Contractor shall include the impacts of the accumulation
        on the
        most current Change In Work Form and shall not be permitted to amend previously
        agreed upon Changes in Work Form.

       

      16.9           No
        Suspension.  Notwithstanding any dispute between Owner and
        Contractor regarding a proposed Change In Work, Owner Directive, Contractor’s
        claim regarding the impact of a change upon the 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 Section 20.7, and Owner shall continue
        to make payments
        to Contractor consistent with the Payment Schedule, pending resolution of
        such
        dispute.

       

      
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      16.10                      Evidence
        of Funds for Payment.  In the event that the cumulative value of
        prior Owner-Initiated Changes and Owner Directives, and any other mutually
        agreeable Changes In Work exceeds Five Million Dollars ($5,000,000), Owner
        shall
        at Contractor’s reasonable request obtain written confirmation from its
        Financing Entities or provide written confirmation itself in a form reasonably
        acceptable to Contractor that sufficient funds are available to permit payment
        for such Changes In Work.  Contractor shall not be obliged to effect
        any Change in Work pending receipt of such
        confirmation.  

       

      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 Major 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, which may be
        granted or withheld in Owner’s sole reasonable discretion, prior to undertaking
        such action.  Contractor shall not be entitled to any adjustment to
        the Contract Price, any Project Guaranteed Date, or any other term or condition
        of this Agreement in respect of any action undertaken pursuant to this
Section 16.11.

       

      16.12                      Audit
        Rights.  With respect to any Change In Work which adjusts the
        Contract Price, or with respect to Work performed pursuant to an Owner’s
        Directive, Contractor shall maintain, in accordance with generally accepted
        accounting principles consistently applied, records and books of
        account.  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
        Contract Price under Article 16,
        Contractor shall keep contemporary records of the cost of complying with
        the
        Change In Work and of time expended thereon.  Contractor shall retain
        all such records and books of account for a period of at least two (2) years
        after the Final Completion Date.  Contractor shall cause all
        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.  In the event of a dispute
        hereunder in which the cost of the Work relating to a Change In Work or Owner
        Directive is in issue and the parties had not previously agreed to a fixed
        price
        for such Change in Work, Contractor shall grant to Owner the right to conduct
        an
        audit with respect to all documentation pertaining to such dispute, except
        the
        compilation of standard costs for: (i) payroll additives for non-manual
        employees of Contractor; (ii) normal operating costs of Contractor’s office in
        Frederick, Maryland; (iii) costs of ordinary integrated solutions and
        technology; (iv) materials, supplies and reproduction supplies; (v) ordinary
        communication costs and (vi) non-manual ordinary employee
        benefits.  Audit data shall not be released by the auditor to parties
        other than Contractor, Owner, the Financing Entities, if any, and their
        respective directors, officers, employees, and agents in connection with
        any
        such audit.  Such records shall be open to inspection by Owner at all
        reasonable times.  Subject to agreement of the adjustment to Contract
        Price pursuant to a Change In Work Form or the determination of the adjustment
        pursuant to the dispute resolution procedures pursuant to Article 32, if, as a result of any audit
        conducted
        pursuant to this Section 16.12,
        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 unless an

       

      
        
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      overpayment
        of five percent (5%) is discovered, in which case Contractor shall be
        responsible for such costs and expenses.  

       

      17.           WARRANTIES
        CONCERNING THE WORK

       

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

       

      (a)           shall
        be Industry Grade;

       

      (b)           shall
        be free from Defects; and

       

      (c)           shall
        conform to all applicable requirements of this Agreement, the then current
        drawings and specifications as approved or accepted by Owner, Applicable
        Laws
        and the Applicable Permits; provided that Contractor’s obligation with
        respect to Applicable Laws or Applicable Permits governing emissions from
        the
        Project is limited to compliance with the Emissions Guarantees.

       

      17.2           Materials
        Warranty.  Contractor further warrants that all Equipment and
        Materials and other items furnished by Contractor and any Subcontractors
        hereunder (the “Materials Warranty”):

       

      (a)           shall
        be new and of good and suitable quality when installed;

       

      (b)           shall
        conform to the requirements of this Agreement, the then current drawings
        and
        specifications as approved or accepted by Owner, all Applicable Laws and
        the
        Applicable Permits, provided that Contractor’s obligation with respect to
        Applicable Laws or Applicable Permits governing emissions from the Project
        is
        limited to compliance with the Emissions Guarantees;

       

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

       

      (d)           shall
        be free of any Defects including Defects in design, materials or fabrication,
        or
        excessive wear and tear.

       

      Notwithstanding
        the foregoing, in the event Contractor proposes to incorporate any used
        Equipment and Materials into the Project, Contractor shall provide prior
        written
        request thereof to Owner, for Owner’s approval, which may be withheld in Owner’s
        sole discretion.  If reasonably requested by Owner 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
Section 17.1 or 17.2
        from and after the end of the twelve (12)
        month period commencing on the Substantial

       

      
        
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      Completion
        Date (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 a 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, subject to Section 17.7.5, the Warranty
        Period as extended for any
        Work, item or part shall not extend for more than twelve (12) months after
        the
        end of the initial Warranty Period. 

       

      17.4           Enforcement
        by Owner.  Commencing on the expiration of the applicable Warranty
        Period, Owner shall be entitled to enforce all representations, warranties,
        and
        guarantees with respect to the Project from Subcontractors, and Contractor
        shall
        provide reasonable assistance to Owner in enforcing such representations,
        warranties, and guarantees, when and as reasonably requested by
        Owner.  Owner shall reimburse Contractor for reasonable expenses
        incurred by Contractor in complying with such requests from 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)           Owner
        reasonably determines that Contractor has not enforced such warranty against
        the
        Subcontractor or Contractor has not performed the warranty work itself and
        is
        not diligently pursuing the satisfaction of such warranty claim, or

       

      (b)           a
        Contractor Event of Default exists and Owner has terminated the
        Agreement.

       

      17.5           Exclusions.  The
        Work Warranty and Materials Warranty set forth in Sections 17.1 and 17.2
        shall not apply to:

       

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

       

      (i)           a
        material failure by Owner 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, or with respect to failures prior to Substantial
        Completion such failures are due to the Gross Negligence or Willful Misconduct
        of Operating Personnel;

       

      (ii)           operation
        of such Equipment and Materials by Owner materially in excess of operating
        specifications for such Equipment and Materials as set forth in the Required
        Manuals but only if such failure occurs after Substantial Completion, or
        with
        respect to failures prior to Substantial Completion such failures are due
        to the
        Gross Negligence or Willful Misconduct of Operating Personnel;

       

      (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, or with respect to failures
        prior to Substantial

       

      
        
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      Completion
        such failures are due to the Gross Negligence or Willful Misconduct of Operating
        Personnel; or

       

      (iv)           an
        event of Force Majeure.

       

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

       

      Notwithstanding
        the foregoing, damage caused by Operating Personnel while under the direction
        of
        Contractor (except to the extent such damage results from actions of Operating
        Personnel constituting Gross Negligence or Willful Misconduct) shall be the
        responsibility of Contractor.

       

      17.6           Subcontractor
        Warranties.  Contractor shall use commercially reasonable efforts
        to obtain warranties for all Work performed by each Subcontractor on
        substantially the same terms as this Article 17.  Contractor shall assign all
        representations, warranties, guarantees, and obligations of all Subcontractors,
        at the request and direction of Owner, and without recourse to Contractor,
        to
        Owner or any Financing Entity upon termination or expiration of this Agreement;
        provided, however, that, notwithstanding such assignment,
        Contractor shall, subject to Section 17.4, 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 any
        rights to liquidated damages provided for in a subcontract or purchase order
        that have not been paid and that are the subject of a claim by Contractor
        against a Subcontractor or any other claims of Contractor against
        any  Subcontractor then currently in dispute.  Contractor
        shall deliver to Owner promptly following execution thereof applicable sections
        of purchase orders or subcontracts with Major Subcontractors containing such
        representations, warranties and indemnities.  

       

      
        17.7           Correction
          of Defects.

         

        17.7.1                Notice
          of Warranty Claim.  Subject to Section 17.7.5, 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), re-perform any necessary engineering and purchasing
          relating
          to such Work, and shall pay the cost of removing any 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
          Section 22.2), 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 Section 22.2, 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 a
          reasonable time not to exceed thirty (30) days after receipt by Contractor
          of a
          Notice from

         

        
          
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        Owner
          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”).  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 remedial work.  Notwithstanding the
          foregoing and subject to Section 17.7.2.2, 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.  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.  Owner may prepare and deliver an invoice to Contractor,
          accompanied by reasonable supporting documentation, setting forth the cost
          of
          such Work performed by Owner.  Upon receipt thereof, Contractor shall
          reimburse Owner for all costs and expenses incurred by Owner (including
          costs
          related to Owner’s personnel) to perform Contractor’s obligations with respect
          to such warranty claim within ten (10) 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 required to
          satisfy
          any warranty claim within the agreed time and Contractor is not diligently
          pursuing the satisfaction of such warranty claim, or if Contractor and
          Owner
          fail to reach such an agreement within the period as set forth in
Section 17.7.1, Owner shall have
          the right after further Notice to Contractor to perform the necessary remedy,
          or
          have third-parties perform the necessary remedy and Contractor shall reimburse
          Owner for the costs thereof upon delivery by Owner of a reasonably detailed
          invoice, accompanied by reasonable supporting documentation, setting forth
          such
          costs.  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.  For purposes of clarity, no warranty Work shall
          be re-warranted which is completed after the expiry of the Warranty Period
          and
          no claims for Warranty work shall be made after the expiry of the Warranty
          Period except in respect of warranty related work which has not been completed
          and of which Contractor was given notice within the Warranty
          Period.

         

        17.7.3                Equipment
          and Materials Testing and Demonstrations.  If, during the Warranty
          Period, Contractor changes, repairs or replaces any Equipment and Materials,
          Owner and Contractor shall establish performance criteria and any test
          or
          functional demonstration procedures to be performed by Contractor to demonstrate
          the proper functioning of such repaired or replaced Equipment and Materials
          to
          Owner’s reasonable satisfaction.  

         

        
          
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        17.7.4                Chronic
          Failure.  Should Contractor fail to correct any Defect in any
          Work, Equipment and Materials, items or parts, and such failure occurs
          more than
          twice during the Warranty Period, Contractor shall prepare a root cause
          analysis, reasonably acceptable to Owner, that defines the changes, repairs
          or
          replacements to the Work, Materials and Equipment, item or part necessary
          to
          avoid further failures of such Work, Materials and Equipment, items or
          part, and
          shall perform and complete all changes, repairs or replacements indicated
          in
          such root cause analysis, regardless of whether the Warranty Period, as
          extended
          pursuant to Section 17.3, shall
          have expired.  In each case, Contractor shall repeat such process on
          an iterative basis until the Defect 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.  Such impracticability may be due
          to, among other things, considerations concerning the length of time the
          Project
          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 to cause Contractor (so long as Contractor has
          not
          commenced the Work on the Project Site to fix such Defective Equipment
          and
          Materials) to pay to Owner, in lieu of re-performing such Work, an amount
          equal
          to an estimate mutually determined by Owner and Contractor of the 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, all
          as
          would be necessary to cause the Work and or the applicable Equipment and
          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 pay all such costs to Owner within ten (10) days
          after
          agreement upon costs (or resolution of any disputed costs) with
          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 SECTION 4.1, THIS ARTICLE 17
          AND SECTION 25.4, 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
ARTICLE 17 WITH RESPECT TO ANY
          WORK WHICH FAILS TO SATISFY THE WORK WARRANTY OR THE MATERIALS WARRANTY
          DURING
          THE WARRANTY PERIOD SHALL BE THE SOLE AND EXCLUSIVE REMEDIES FOR OWNER
          AS A
          RESULT OF SUCH FAILURE; PROVIDED THAT IF SUCH FAILURE CONSTITUTES A
          CONTRACTOR EVENT OF DEFAULT UNDER SECTION 19.1(F), THE REMEDIES PROVIDED
          FOR IN
SECTIONS 19.2(A) THROUGH (H)
          SHALL ALSO BE AVAILABLE.

         

        
          
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        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.  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.  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 purchased by Contractor for Owner to be used for the
          operation, maintenance, or repair of the Project or any part
          thereof.

         

        18.2.2                Transfer.  Title
          to all Equipment and Materials and other items shall pass to Owner, free
          and
          clear of all liens, claims, charges, security interests, and encumbrances
          whatsoever, upon the earlier of delivery of such Equipment and Materials
          or
          other items to the Project Site or incorporation of such Equipment and
          Materials
          or other items into the Project.

         

        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.  Contractor shall have care, custody, and control of all
          Equipment and Materials 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, and
          other items with respect to which title has passed to Owner pursuant to
          Section 18.2 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 earlier of the Substantial Completion Date or
          the termination of this Agreement, Owner shall take complete possession
          and
          control and assume responsibility for the daily operation and maintenance
          of the
          Project.

         

        19.           DEFAULTS
          AND REMEDIES 

         

        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 an assignment for
          the

         

        
          
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         benefit
          of creditors, or insolvency, receivership, reorganization, or bankruptcy
          or
          similar proceedings are commenced by Contractor;

         

        (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 sixty (60) 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 within one hundred twenty (120) 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
          fails to provide the Retainage Security in accordance with
Section 6.7.1, including
          adjustments thereto, or allows such Retainage Security to lapse, terminate
          or
          expire in contravention of the terms hereof;

         

        (e)           Contractor
          fails to provide the Performance Assurance in accordance with
Section 4.1.11 or allows such
          Performance Assurance to lapse, terminate or expire in contravention of
          the
          terms hereof;

         

        (f)           Contractor
          fails to satisfy all of its material obligations under Article 17 after having received Notice
          from Owner of
          such failure and such failure continuing for more than ten (10) days;
provided that this Section 19.1(f) shall constitute
          Owner’s sole right to
          terminate this Agreement based on a breach or violation of Contractor of
          its
          obligations under Article 17;

         

        (g)           Contractor
          assigns or transfers this Agreement or any right or interest herein, except
          in
          accordance with Article 26;

         

        (h)           Contractor
          fails to maintain any insurance coverages required of it in accordance
          with
Article 21 and Contractor fails
          to remedy such breach within ten (10) days after the Contractor first receives
          a
          Notice from Owner with respect thereto;

         

        (i)           Contractor
          fails to perform or observe in any respect any provision of this Agreement
          providing for the payment of undisputed amounts of money to Owner or any
          other
          material provision of this Agreement not otherwise addressed in this
Section 19.1, and such failure
          continues for ten (10) days after Notice from Owner in the case of an
          undisputed payment obligation and thirty (30) days after Notice from Owner
          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 one hundred twenty (120) days after
          the earlier of the date that Contractor first knew of such failure to perform
          or
          the date on which Contractor receives a Notice from Owner with respect
          thereto;

         

        
          
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        (j)           at
          any time prior to Substantial Completion, Contractor either fails to timely
          deliver an Acceleration Plan pursuant to Section 7.5 or following approval of
          an Acceleration
          Plan pursuant to Section 7.5,
          Contractor fails, other than due to an Excusable Event or an event of Force
          Majeure, to make demonstrable efforts to meet the schedule set forth in
          the
          Acceleration Plan (as determined from the revised Project Schedule established
          by the Acceleration Plan);

         

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

         

        (l)           except
          as a result of a Force Majeure event or during the pendency of a suspension
          under Section 19.5 herein,
          Contractor abandons the Work; or

         

        (m)           the
          Final Completion Date has not occurred by the four hundredth (400th) day
          after the
          Substantial Completion Date, or such later date to which such Final Completion
          Date may be extended pursuant to the provisions of this Agreement due to
          the
          failure of the Project to satisfy the conditions in Section 14.4.

         

        For
          the avoidance of doubt, Owner may not terminate this Agreement as a result
          of
          the failure of the Project to satisfy the Performance Guarantees or the
          Reliability Guarantee, unless Contractor fails to pay liquidated damages
          for
          which it is liable as provided in Articles 14 and 15,
          subject to the limits of liability set out in Article 31 or achieve any Project Schedule
          Milestone
          other than the Project Guaranteed Dates.

         

        19.2           Owner’s
          Rights and Remedies.  In the event of a Contractor Event of
          Default Owner or its assignees shall, subject to Section 31.2, have only the following
          rights and
          remedies and may elect to pursue any or all of them, and Contractor shall
          have
          the following obligations: 

         

        (a)           Owner,
          without prejudice to any of its other rights or remedies hereunder, 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 Section 19.1(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 hereunder,
          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;

         

        (c)           in
          the event Owner terminates this Agreement, Contractor shall withdraw from
          the
          Project 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,

         

        
          
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         and
          Owner may take possession of any or all Contractor Deliverables and Project
          Site
          facilities related to the Work (whether or not such Contractor Deliverables
          and
          Project Site facilities are complete) or leased equipment necessary for
          completion of the Work to the extent Owner has agreed to assume in writing
          any
          lease of Contractor related to such equipment necessary for completion
          of the
          Work (in which event Contractor shall cooperate with Owner to cause such
          obligations to be assigned by Contractor to and assumed by Owner);

         

        (d)           Owner
          without incurring any liability to Contractor, 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 enforce the provisions of this Agreement;

         

        (f)           Owner,
          without limiting Owner’s right to terminate this Agreement, may pursue the
          dispute resolution procedures set forth in Article 32 to enforce the provisions
          of this
          Agreement;

         

        (g)           Owner
          may make such payments or perform such obligations as are 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
Section 19.3, 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 Article 31, 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 accrued as of the date of termination, but excluding
          Reliability 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 determines the liability of
          Contractor, if any, under this Section 19.3.  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.  Contractor

         

        
          
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        acknowledges
          and agrees that if this Agreement is terminated due to a Contractor Event
          of
          Default, Owner shall have no obligation and shall not be required to mitigate
          any damages or costs it incurs in completing the Project.  If it is
          determined for any reason that Contractor was not in default or that its
          default
          was excusable or that Owner was not entitled to the remedy against Contractor
          provided above, the termination will be deemed to be a termination for
          convenience pursuant to Section 20.1, 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 Section 20.1.  Nothing in this paragraph
          shall be deemed to modify the provisions of Article 31.

         

        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 an assignment for the
          benefit of creditors, or insolvency, receivership, reorganization, or bankruptcy
          or similar proceedings are commenced by Owner;

         

        (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 sixty (60) 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 within such
          thirty (30) day period and diligently prosecutes such cure; and
          (iii) such cure is accomplished within one hundred twenty (120) days after
          the 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;

         

        (d)           Owner
          assigns or transfers this Agreement or any right or interest herein, except
          in
          accordance with Article 26;

         

        (e)           Owner
          fails to maintain any insurance coverages required of it in accordance
          with
Article 21 and Owner fails to
          remedy such breach within ten (10) days after the 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 undisputed amounts of money to Contractor
          or any
          other material provision of this Agreement not otherwise addressed in this
          Section 19.4, and such failure
          continues for ten (10) days after Notice from Contractor in the case of an
          undisputed 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

         

        
          
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        diligently
          prosecutes such cure; and (iii) such cure is accomplished within one
          hundred twenty (120) 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 Article 31, Contractor shall
          only have the following rights and remedies and may elect to pursue any
          or all
          of them:

         

        (a)           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
Section 20.7.3);

         

        (b)           to
          terminate this Agreement (in which event Contractor shall be compensated
          in the
          manner described in Section 20.1
          for termination by Owner for convenience);

         

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

         

        (d)           proceed
          against any bond, guarantee, letter of credit or other security given by
          or for
          the benefit of Owner for its performance under this Agreement; and

         

        (e)           to
          pursue the dispute resolution procedures set forth in Article 32 to enforce the provisions
          of this
          Agreement.

         

        20.           TERMINATION
          AND SUSPENSION

         

        20.1           Termination
          for Convenience; Payment.  Owner may in its sole discretion
          terminate the Work with or without cause at any time by giving prior Notice
          of
          termination to Contractor, to be effective upon the receipt of such Notice
          by
          Contractor or upon such later termination date specifically identified
          by Owner
          therein; provided, however, that Owner shall not terminate the
          Work for the sole purpose of substituting a replacement
          contractor.  Subject to the limitations of Section 31.4, if this Agreement is terminated
          pursuant
          to this Section 20.1 on or after
          the date hereof, 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 (a) portions of the
          Contract Price for the Work performed up to the effective date of termination
          (including any bonuses earned and payable to Contractor pursuant to
Section 5.5.1 or 5.5.2),
          and, to the extent not already
          incorporated in the Contract Price pursuant to an approved Change in Work
          Form,
          amounts associated with Exhibits B and I); plus (b) Contractor’s
          reasonable incurred out-of-pocket- costs of demobilization (as evidenced
          by
          reasonable supporting documentation); plus (c) an amount equal to the sum
          of the amount set forth on the Cancellation Cost Schedule corresponding
          to the
          month in which such termination occurs plus any taxes to be paid by Owner
          pursuant to this Agreement, to the extent any portion of such amount has
          not
          already been incorporated under subsection (a) above; less (d) any amounts
          previously paid to Contractor under this Agreement.  Owner shall make
          payments under this Section 20.1
          in accordance with Article 6.  Upon payment to Contractor,
          Owner
          and Contractor shall be released from further obligation or liability hereunder
          (except for those obligations and liabilities which expressly survive such
          termination).

         

        
          
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        20.2           Limitation
          on Payment.  Except as provided in Section 20.1, Contractor shall not
          be entitled to any
          lost profit or overhead upon any termination of this Agreement.

         

        20.3           Adjustment
          for Defects.  Notwithstanding the foregoing, the amount owed
          pursuant to Section 20.1 shall
          be subject to adjustment to the extent any Work contains Defects as of
          such
          termination date; provided that for purposes of clarity any incomplete
          Work on the date of termination shall not be deemed to contain any Defects
          due
          to it being incomplete.  

         

        20.4           Owner’s
          Right to Elect to Assume Obligations with Subcontractors.  In
          addition, upon termination, 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 Project Site.  If Owner elects to
          assume any obligation of Contractor as described in this Section 20.4, then (a) the amount paid pursuant
          to
Section 20.1 shall
          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
Section 20.4 shall
          be a condition precedent to Owner’s obligation to comply with its obligations
          under Section 20.1 (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.  

         

        20.5           Contractor
          Conduct.  Upon receipt of written notice from Owner of termination
          pursuant to Section 20.1,
          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,
          for
          Work that must necessarily be performed in order for Contractor to close
          out the
          Project in a prudent manner, 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.

         

        20.6           Nature
          of Termination Payments.  The payments described in
Section 20.1 include payment for
          all costs of Equipment and Materials, including breakage costs or termination
          fees incurred by Contractor upon termination of Equipment and Materials
          purchase
          agreements or purchase orders, 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.  Notwithstanding the termination of this Agreement,
          Owner shall remain obligated to pay such taxes as may become due that are
          otherwise payable by Owner pursuant to this Agreement.  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.  

         

        
          
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        20.7           Suspension
          by Owner.  Owner may suspend performance of the Work at any time
          by giving prior Notice thereof to Contractor.  Such suspension shall
          continue for the period specified in the suspension
          Notice.  

         

        20.7.1                Adjustments
          Due to Suspension.  The Contract Price shall be adjusted as
          provided in Section 20.7.3(b) to
          reflect any additional increased costs of Contractor resulting from any
          such
          suspension, as demonstrated by Contractor to Owner’s reasonable satisfaction;
provided, however, no adjustment shall be made to the Contract
          Price or any Project Guaranteed Date for a Suspension for Cause.  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.  Owner acknowledges that Contractor shall not in all cases be
          successful in obtaining agreement from the Vendors or Major Subcontractors
          supplying major pieces of Equipment to the Project to suspend the manufacture
          and delivery of such major Equipment and Materials and that a suspension
          by
          Owner under this Section 20.7
          may result in a delay in the Project Guaranteed Dates greater than the
          period
          equal to the relevant suspension period solely in the event Contractor
          is unable
          to obtain agreement to any such suspension from the Vendors or Major
          Subcontractors supplying major pieces of Equipment to the
          Project.  

         

        20.7.2                Contractor’s
          Termination Right.  Subject to Applicable Law, if, at the end of
          the suspension period specified pursuant to this Section 20.7, 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 three hundred sixty-five (365) days in the
          aggregate for all such suspensions, other than Suspensions for Cause) at
          Contractor’s option, Contractor may perform such Work as is necessary to close
          out the Project in a prudent manner and this Agreement shall be deemed
          terminated as of the date such Work is completed, but in no event more
          than ten
          (10) days after such suspension period has ended.  Owner shall pay
          Contractor for the Work performed pursuant to Section 20.1.  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 may
          extend.

         

        20.7.3                Extension
          of Time and Compensation Rights.  In the case of any suspension
          under this Section 20.7 or any
          suspension by Contractor under Section 19.5, other than a Suspension
          for
          Cause:

         

        (a)           the
          Project Guaranteed Dates shall be extended by a period equal to the suspension
          period, subject to Section 20.7.1, plus a reasonable period
          for
          demobilization and remobilization as approved by Owner;

         

        (b)           Owner
          shall pay Contractor within the periods provided in Article 6 after receipt of Contractor’s invoices (which
          invoices shall be submitted monthly during the applicable suspension period)
          for
          those costs (including a reasonable fee) 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 Project Site;

         

        
          
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        (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; or

         

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

         

        (v)           any
          other actual costs that can be reasonably demonstrated by Contractor and
          reasonably acceptable to Owner with respect to the Project; and

         

        (c)           the
          Project Schedule, the Critical Path Items on the Milestone Summary Schedule
          and
          the Payment Schedule shall be adjusted to account for same.

         

        20.7.4                          Claims
          for Payment.  All claims by Contractor for compensation or
          extension of time under Sections 7.8, 20.1
          and 20.7 must be made within
          forty-five (45) days after (i) the effective date of the termination
          of the Work, or (ii) the suspension period has ended, as
          applicable.  Owner shall pay Contractor within thirty (30) days
          following Notice of a claim by Contractor to Owner pursuant to this
Section 20.7.4 and
          delivery of the items described in subparagraphs (a) and (b) of Sections
6.8.

         

        21.           INSURANCE

         

        21.1           Contractor’s
          Insurance.  Contractor, at its expense, shall procure or cause to
          be procured and maintain or cause to be maintained in full force and effect
          at
          all times commencing no later than upon commencement of the Work at the
          Project
          Site and until the later of Final Completion or expiration of the Warranty
          Period, as it may be extended, except with respect to the builders' risk
          coverage which shall be maintained until the Turnover Date, all insurance
          coverages specified in Exhibit K-1 including, but not limited to,
          commercial general liability, workers’ compensation and employers’ liability and
          builders' risk insurance.  All insurance coverage shall be in
          accordance with the terms of this Article 21 and Exhibit K-1, using companies
          authorized to do business in the State of Texas with an A.M. Best financial
          strength rating of no less than “A-" and financial size rating no less than
          "XV”; provided, however,
          that an interim builders'
          risk policy shall
          be provided for the
          value of the work to be performed for a period of up to sixty (60)
          days from commencement of Work at
          the Project
          Site. The
          builders'
          risk policy
with
          a limit not less than the
replacement
cost
          of the Project will be provided
          within sixty (60)
          days of commencement of Work at the Project
          Site.

         

        21.2           Limits
          of Liability.  The insurance required by Section 21.1 shall be written for
          not less than limits
          of liability specified on Exhibit K-1 or required by law, whichever
          coverage is greater.  Completed operations coverage shall be
          maintained without interruption from date of commencement of the Work until
          ten
          (10) years after the Substantial Completion Date.

         

        21.3           General
          Requirements.  The insurance policies required to be obtained by
          Contractor under Section 21.1
          (except any builders' risk, marine cargo and workers' compensation and
          employers' liability policy) shall
          list Owner, and upon request of Owner, the

         

        
          
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         Financing
          Entities, if any, as
          additional insureds.  Upon
          request of Owner, Owner’s Engineer
          and Owner’s consultants shall also be included as additional insureds but only
          as required by their agreements with Owner and limited to their liability
          arising out of Contractor’s or its subcontractors’ negligent Project Site operations.  The
          builders' risk
          policy and the marine cargo policy shall identify Owner and the Financing
          Entities as a named insured thereof.  Any workers' compensation and
          employers' liability policy shall name Owner and its Affiliates and associated
          companies as an “alternate employer” and include a waiver of
          subrogation.  The policies provided by Contractor hereunder 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 filed with Owner prior to commencement
          of the Work.  A copy of the builders' risk form policy together with a
          cover note evidencing the coverage shall be provided to Owner prior to
          commencement of the Work at the Project Site.  A copy of the builders'
          risk policy shall be provided to Owner shortly after receipt of such policy
          by
          Contractor.  Copies of all other policies, together with any
          subsequent endorsements shall be furnished promptly to Owner upon Owner's
          reasonable request.  Any insurance policy 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 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 coverages are required to remain in force after Final Completion,
          additional certificates 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.

         

        21.4           Subcontractors’
          Insurance.  Contractor shall cause each of the Subcontractors to
          obtain the insurance coverage as set forth in Exhibit K-1 (other than
          builders' risk coverage or professional liability coverage as part of such
          Subcontractor's commercial general liability policy).  All policies
          obtained by Subcontractors shall satisfy the requirements of this
Article 21, including releases
          and waivers of all rights of subrogation and recovery as set forth in
Section 21.5.  Contractor may request lower
          limits of excess liability for certain Subcontractors, and each such
          Subcontractor shall provide the coverages set forth in Exhibit K-1 except
          with such excess liability limits as may be mutually agreed upon by Contractor
          and Owner.

         

        21.5           Subrogation
          Waivers.  All policies supplied by Contractor or any Subcontractor
          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 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.  Contractor hereby releases and waives, and shall cause the
          Subcontractors to release and waive, any and all rights of recovery against
          Owner, the Owner’s Engineer and the Financing Entities, if any, respectively,
          and all of their respective Affiliates, subsidiaries, employees, agents,
          successors, permitted assigns, insurers, and underwriters that Contractor
          may
          otherwise have or acquire in or from or in any way connected with any loss
          covered by policies of insurance maintained or required to be maintained
          by
          Contractor or the Subcontractors, respectively,

         

        
          
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        pursuant
          to this Agreement or because of deductible clauses in, or inadequacy of
          limits
          of, any such insurance policies.

         

        21.6           Insurance
          Coverages.  All amounts of insurance coverage specified in
Exhibits K-1 and K-2 are required minimums.  Owner,
          Contractor and Subcontractors shall each be solely responsible for determining
          the appropriate amount of insurance, if any, in excess thereof or in addition
          thereto.  The required minimum amounts of insurance shall not operate
          as limits on recoveries available under this Agreement.

         

        21.7           Failure
          to Maintain Insurance.  If at any time the insurance to be
          provided by Contractor or any Subcontractor hereunder 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.  In such event Owner may
          withhold the cost of insurance premiums expended for such replacement insurance
          from any payments to Contractor otherwise due to Contractor
          hereunder.

         

        21.8           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 builders' risk policy, all without increase
          to the
          Contract Price.  Owner shall cooperate with Contractor in preparing
          all such claims.

         

        21.9           Owner’s
          Insurance.  In addition to the insurance coverage required to be
          maintained by Owner pursuant to Section 21.10.2, Owner, at its expense,
          shall procure
          or cause to be procured and maintain or cause to be maintained in full
          force and
          effect at all times during the periods described in Exhibit K-2, all
          insurance coverages specified in Exhibit K-2.  All insurance
          coverages shall be in accordance with the terms of this Article 21 and Exhibit K-2 using companies
          authorized to do business in the State of Texas.

         

        21.10                      Operating
          Property Insurance.

         

        21.10.1                      Unit
          4 Property Insurance.  Owner shall cause TXU Generation to carry
          and maintain operating property insurance covering loss or damage to Unit
          4.

         

        21.10.2                      Project
          Property Insurance.  Owner shall, upon the Turnover Date, carry
          and maintain operating property insurance covering loss or damage to the
          Project, and, subject to Section 22.2, hereby waives any right
          of recovery,
          including any insurer’s right of subrogation, against Contractor and the
          Subcontractors for loss or damage covered by such insurance.

         

        22.           RISK
          OF LOSS OR DAMAGE 

         

        22.1           Contractor
          Assumption of Risk.  Until the earlier of the Substantial
          Completion Date or the date this Agreement is terminated (the “Turnover
          Date”), Contractor shall have care, custody and control of the
          Project.  

         

        22.1.1                Risk
          of Loss; Deductible.  Subject to Section 22.1.2, until the Turnover
          Date, Contractor
          assumes risk of loss for, and full responsibility for the cost of replacing
          or

         

        
          
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         repairing
          any damage to, the Work, the Project 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.  Without limiting the foregoing,
          Contractor shall pay the deductible with respect to any loss or damage
          to the
          Work or Project covered by any of the insurance coverage to be provided
          by
          Contractor or Owner hereunder, not to exceed Five Million Dollars ($5,000,000)
          per occurrence.

         

        22.1.2                Repair
          or Replacement.  Until the Turnover Date, if any portion of the
          Work or the Project is lost or damaged, Contractor shall replace or repair
          any
          such loss or damage and complete the Work in accordance with this Agreement;
          provided, however, in no event shall Contractor or any
          Subcontractor be liable for any loss or damage resulting from acts of
          terrorism.  

         

        22.2           Risk
          of Loss After the Turnover Date.  Subject to Contractor’s
          obligations hereunder to satisfy the Performance Guarantees, the Reliability
          Guarantee and the Emissions Guarantee and pursuant to Articles 15, 17
          and
Section 22.1, Owner shall bear
          the risk of loss for, and full responsibility for, the cost of replacing
          or
          repairing any damage to the Project from and after the Turnover
          Date.  Notwithstanding the foregoing, if any portion of the Project is
          lost or damaged after the Turnover Date due to any act or omission or negligence
          of Contractor, any Affiliate of Contractor or any Subcontractor, or anyone
          directly or indirectly employed by any of them, or anyone for whose acts
          such
          Person may be liable, Contractor shall bear all of the cost and expense
          of
          replacing or repairing such loss or damage; provided, however,
          that if such loss or damage is covered by the property insurance required
          to be
          maintained by Owner pursuant to Section 21.10.2, Contractor’s liability for replacing
          or repairing such loss or damage shall be limited in amount to an amount
          equal
          to Owner’s applicable insurance deductible not to exceed Five Million Dollars
          ($5,000,000) for each occurrence.  In no event shall Contractor or any
          Subcontractor be liable for any loss or damage resulting from acts of
          terrorism.  

         

        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 THEIR RESPECTIVE EMPLOYEES, AGENTS, PARTNERS, AFFILIATES,
          SHAREHOLDERS, DIRECTORS, OFFICERS, AND ASSIGNS (EACH AN “OWNER INDEMNITEE”),
          FROM AND AGAINST THE FOLLOWING: 

         

        (a)           SUBJECT
          TO SECTION 28.5, ALL LOSSES ARISING
          FROM THIRD-PARTY CLAIMS FOR PROPERTY DAMAGE (EXCLUDING THE PROJECT) OR
          PERSONAL
          INJURY (INCLUDING EMOTIONAL DISTRESS) THAT DIRECTLY OR INDIRECTLY ARISE
          OUT OF
          OR RESULT FROM ANY NEGLIGENT, WILLFUL, RECKLESS, OR OTHERWISE TORTIOUS
          ACT OR
          OMISSION (INCLUDING STRICT LIABILITY) DURING THE PERFORMANCE OF THE WORK,
          FROM
          PERFORMING OR FAILURE TO PERFORM ANY OBLIGATION UNDER THIS AGREEMENT, OR
          ANY
          CURATIVE ACTION UNDER ANY WARRANTY FOLLOWING PERFORMANCE OF THE WORK, BY
          CONTRACTOR, ANY SUBCONTRACTOR, OR ANY OF THEIR RESPECTIVE

         

        
          
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        AFFILIATES,
          OR ANYONE DIRECTLY OR INDIRECTLY EMPLOYED BY ANY OF THEM, OR ANYONE FOR
          WHOSE
          ACTS SUCH PERSON MAY BE LIABLE; PROVIDED, HOWEVER, THAT
          CONTRACTOR’S OBLIGATIONS PURSUANT TO THIS SECTION 23.1(a)
          DO
          NOT EXTEND TO ANY CLAIMS BY TXU GENERATION RELATING TO LOSSES THAT ARE
          INDIRECT,
          SPECIAL, INCIDENTAL OR CONSEQUENTIAL, AND CONTRACTOR’S OBLIGATIONS WITH RESPECT
          TO PROPERTY DAMAGE TO UNIT 4 WHICH IS COVERED BY PROCEEDS OF THE INSURANCE
          REQUIRED TO BE OBTAINED PURSUANT TO SECTION 21.10.1, SHALL BE LIMITED TO THE
          AMOUNT OF THE
          DEDUCTIBLE UNDER SUCH INSURANCE, NOT TO EXCEED AN AGGREGATE AMOUNT OF FIVE
          MILLION DOLLARS ($5,000,000) PER OCCURRENCE;

         

        (b)           ALL
          LOSSES THAT DIRECTLY ARISE OUT OF OR RESULT FROM:

         

        (i)           ALL
          CLAIMS FOR PAYMENT, 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; AND

         

        (ii)           EMPLOYERS’
          LIABILITY OR WORKERS’ COMPENSATION CLAIMS FILED BY ANY EMPLOYEES OR AGENTS OF
          CONTRACTOR OR ANY OF ITS SUBCONTRACTORS;

         

        (c)           ALL
          FINES, PENALTIES, OR ASSESSMENTS ISSUED BY ANY GOVERNMENTAL AUTHORITY THAT
          DIRECTLY ARISE OUT OF OR RESULT FROM THE FAILURE OF (I) CONTRACTOR OR ANY
          OF ITS
          SUBCONTRACTORS TO COMPLY WITH THE TERMS AND CONDITIONS OF APPLICABLE LAWS
          DURING
          PERFORMANCE OF THE WORK OR THE CONDITIONS OR PROVISIONS OF THE APPLICABLE
          PERMITS AND (II) OF THE PROJECT AS DESIGNED, ENGINEERED, CONSTRUCTED AND
          COMPLETED BY CONTRACTOR, TO BE CAPABLE OF OPERATING IN COMPLIANCE WITH
          ALL
          APPLICABLE LAWS OR APPLICABLE PERMITS; PROVIDED THAT NOTWITHSTANDING
          ANYTHING TO THE CONTRARY, CONTRACTOR’S OBLIGATIONS WITH RESPECT TO APPLICABLE
          LAWS OR APPLICABLE PERMITS DESCRIBED IN (I) AND (II) OF THIS
SUBSECTION (c) ABOVE GOVERNING
          EMISSIONS FROM THE PROJECT IS LIMITED TO COMPLIANCE WITH THE EMISSIONS
          GUARANTEES;

         

        (d)           CLAIMS
          BY ANY GOVERNMENTAL AUTHORITY THAT 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;

         

        
          
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        (e)           CLAIMS
          BY ANY GOVERNMENTAL AUTHORITY CLAIMING TAXES BASED ON GROSS RECEIPTS OR
          ON
          INCOME OF CONTRACTOR, ANY OF ITS SUBCONTRACTORS, OR ANY OF 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; AND

         

        (f)           ALL
          LOSSES, INCLUDING CLAIMS FOR PROPERTY DAMAGE, REMEDIAL ACTION OR PERSONAL
          INJURY
          (INCLUDING EMOTIONAL DISTRESS), WHETHER OR NOT INVOLVING DAMAGE TO THE
          PROJECT
          OR THE PROJECT SITE, THAT DIRECTLY OR INDIRECTLY ARISE OUT OF OR RESULT
          FROM:

         

        (i)           THE
          USE, STORAGE, TRANSPORTATION, MANUFACTURE, PROCESSING OR DISPOSAL WHETHER
          OR NOT
          IN COMPLIANCE WITH APPLICABLE LAWS, OF HAZARDOUS MATERIALS AT THE PROJECT
          SITE,
          THE COMMON FACILITIES OR THE SHARED SITE FACILITIES, BY CONTRACTOR, ANY
          SUBCONTRACTOR OR ANY THIRD PARTY ACTING ON BEHALF OF CONTRACTOR OR ANY
          SUBCONTRACTOR (EXCLUDING OWNER); AND

         

        (ii)           THE
          PRESENCE OR EXISTENCE OF OR CONTAMINATION OF THE PROJECT SITE, THE COMMON
          FACILITIES OR THE SHARED SITE FACILITIES, CAUSED BY THE SPILL OR RELEASE
          BY
          CONTRACTOR OR ANY SUBCONTRACTOR OF HAZARDOUS MATERIALS BROUGHT ONTO, OR
          HANDLED
          AT, THE PROJECT SITE, THE COMMON FACILITIES OR THE SHARED SITE FACILITIES,
          BY
          CONTRACTOR, ANY SUBCONTRACTOR OR ANY THIRD PARTY ACTING ON BEHALF OF EITHER
          CONTRACTOR OR ANY SUBCONTRACTOR (EXCLUDING OWNER).

         

        23.2           By
          Owner.  OWNER SHALL DEFEND, INDEMNIFY, AND HOLD HARMLESS
          CONTRACTOR 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 (EXCLUDING THE
          PROJECT) OR PERSONAL INJURY (INCLUDING EMOTIONAL DISTRESS) THAT DIRECTLY
          OR
          INDIRECTLY ARISE OUT OF OR RESULT FROM ANY NEGLIGENT, RECKLESS, OR OTHERWISE
          TORTIOUS ACT OR OMISSION (INCLUDING STRICT LIABILITY) BY OWNER (BUT NOT
          INCLUDING THE ACTIONS OF OPERATING PERSONNEL PRIOR TO SUBSTANTIAL COMPLETION
          UNLESS SUCH OPERATING PERSONNEL ENGAGE IN CONDUCT THAT CONSTITUTES GROSS
          NEGLIGENCE OR WILLFUL MISCONDUCT) DURING THE PERFORMANCE OF OWNER’S OBLIGATIONS
          UNDER THIS AGREEMENT OR ANY AFFILIATE THEREOF;

         

        (b)           ALL
          LOSSES ARISING FROM CLAIMS BY ANY GOVERNMENTAL AUTHORITY THAT DIRECTLY
          OR
          INDIRECTLY ARISE OUT OF OR RESULT FROM

         

        
          
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        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; AND

         

        (c)           ALL
          LOSSES, INCLUDING CLAIMS FOR PROPERTY DAMAGE, REMEDIAL ACTION OR PERSONAL
          INJURY
          (INCLUDING EMOTIONAL DISTRESS), WHETHER OR NOT INVOLVING DAMAGE TO THE
          PROJECT
          OR THE PROJECT SITE, THAT DIRECTLY OR INDIRECTLY ARISE OUT OF OR RESULT
          FROM:

         

        (i)           THE
          PRESENCE OR EXISTENCE OF HAZARDOUS MATERIALS AT THE PROJECT SITE, THE COMMON
          FACILITIES OR THE SHARED SITE FACILITIES: (A) BROUGHT ONTO OR GENERATED AT
          THE PROJECT SITE ON OR BEFORE THE DATE CONTRACTOR COMMENCES WORK AT THE
          PROJECT
          SITE, THE COMMON FACILITIES OR SHARED SITE FACILITIES; (B) BROUGHT ONTO OR
          GENERATED AT THE PROJECT SITE, THE COMMON FACILITIES OR SHARED SITE FACILITIES
          BY OWNER OR ANY THIRD PARTY (OTHER THAN HAZARDOUS MATERIALS THAT WERE DELIVERED
          TO CONTRACTOR OR ANY SUBCONTRACTOR TO BE HANDLED BY THE SAME DURING THE
          COURSE
          OF PERFORMING THE WORK); OR (C) WHICH MIGRATED ONTO THE PROJECT SITE, THE
          COMMON FACILITIES OR SHARED SITE FACILITIES FROM ANOTHER LOCATION (OTHER
          THAN
          SUCH HAZARDOUS MATERIALS THAT WERE PREVIOUSLY IN THE CARE, CUSTODY OR CONTROL
          OF
          CONTRACTOR OR ANY SUBCONTRACTOR), IN EACH CASE, UNLESS AND TO THE EXTENT,
          SUBJECT TO SECTION 28.5, SUCH
          LOSS IS THE RESULT OF CONTRACTOR’S OR ITS EMPLOYEE’S, ANY SUBCONTRACTOR’S OR ITS
          RESPECTIVE EMPLOYEE’S, OR THE OPERATING PERSONNEL’S (IF SUCH LOSS OCCURS WHILE
          THE OPERATING PERSONNEL ARE ACTING IN ACCORDANCE WITH THE INSTRUCTIONS
          OF
          CONTRACTOR PRIOR TO SUBSTANTIAL COMPLETION) GROSS NEGLIGENCE OR WILLFUL
          MISCONDUCT IN CAUSING SUCH LOSS; OR

         

        (ii)           THE
          UNLAWFUL RELEASE OR SPILL BY OWNER, ITS AFFILIATES OR ANY THIRD PARTY AFTER
          THE
          SUBSTANTIAL COMPLETION DATE OF HAZARDOUS MATERIALS INCLUDING, BUT NOT LIMITED
          TO, HAZARDOUS MATERIALS OTHERWISE BROUGHT ONTO THE PROJECT SITE, THE COMMON
          FACILITIES OR SHARED SITE FACILITIES BY CONTRACTOR OR ANY SUBCONTRACTOR
          IN
          ACCORDANCE WITH THE TERMS OF THIS AGREEMENT AND ALL APPLICABLE LAWS;
PROVIDED THAT OWNER SHALL HAVE NO OBLIGATION HEREUNDER WITH RESPECT TO
          ANY RELEASE, SPILL OR DISCHARGE OF HAZARDOUS MATERIALS CAUSED BY CONTRACTOR,
          ITS
          SUBCONTRACTORS OR ANY THIRD PARTY ACTING ON THEIR BEHALF.

         

        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

         

        
          
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        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 AT CONTRACTOR’S OPTION; (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           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 ARTICLE 23 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 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

         

        
          
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        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
SECTION 23.4, 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 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.  WITH RESPECT TO ANY
          CLAIM MADE PURSUANT TO SECTION 23.1(a), ANY OWNER INDEMNITEE PROVIDING
          A CLAIM
          NOTICE SHALL ALSO PROVIDE CONTRACTOR A COPY OF ANY CLAIM MADE BY SUCH OWNER
          INDEMNITEE UNDER THE RELEVANT INSURANCE POLICY.  SUBJECT TO ALL OF THE
          FOREGOING PROVISIONS OF THIS SECTION 23.4, (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 K-1 AND EXHIBIT K-2 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
          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

         

        
          
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         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.

         

        23.5           Survival
          of Indemnity Obligations.  WITHOUT LIMITING OR IN ANY WAY AGREEING
          TO WAIVE EITHER PARTY’S RIGHT TO MAKE A CLAIM AT COMMON LAW AS PERMITTED
          PURSUANT TO APPLICABLE LAW FOR CONTRIBUTION OR INDEMNIFICATION WITH RESPECT
          TO
          THIRD-PARTY CLAIMS, AND NOTWITHSTANDING ANY OTHER PROVISION IN THIS AGREEMENT
          TO
          THE CONTRARY, THE INDEMNITIES SET FORTH IN THIS ARTICLE 23 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
ARTICLE 32 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 (the
“Intended Purposes”) 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, (i) with
          respect to Confidential Information other than Proprietary Operating
          Information, for a period of five (5) years, and (ii) with  respect to
          Proprietary Operating Information, for a period of twenty (20) years, 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.  Each Party shall disclose only such
          Confidential Information to those of its Representatives (defined below)
          as is
          necessary to carry out the purposes of this Agreement and shall inform
          its
          Representatives of the confidential nature of the Confidential Information
          and
          cause each such Representative to abide by the terms and conditions relating
          to
          Confidential Information contained herein.  Subject to the last
          sentence of Section 24.4 with respect
          to Proprietary Operating Information, Owner and Contractor shall be responsible
          for any breach of this Agreement by any of their respective Representatives
          and
          each Party agrees, at its sole

         

        
          
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         expense,
          to take all reasonable measures (including but not limited to court proceedings)
          to restrain its Representatives from prohibited or unauthorized disclosure
          or
          use of any Confidential Information and each Party shall indemnify the
          other
          Party from any acts or omissions of its Representatives with respect to
          the
          Confidential Information delivered to such indemnifying Party.  For
          purposes of this Article 24,
“Representatives” means directors, officers,
          employees, contractors,
          subcontractors and their subcontractors and affiliates, agents or advisors
          (including, without limitation, attorneys, accountants, consultants, bankers,
          financial advisors, lenders, equity investors, potential bankers, potential
          lenders and potential equity investors).   

         

        24.2           Competitor
          Representative.  In the event any Representative of Owner is
          reasonably deemed by Contractor to be a direct competitor of Contractor
          (a
“Competitor Representative”), Owner, acting prudently and
          reasonably, shall only disclose Contractor Confidential Information to
          such
          Competitor Representative in the event that Owner determines that such
          party
          would be unable to perform its services for the Project without receipt
          of such
          information; provided that such Competitor Representative's access with
          respect to Contractor pricing information shall only include access to
          Contract
          Price reconciliations with respect to Provisional Items and the escalation
          program set forth in Exhibit I, and Contractor’s Invoices that are
          formatted on a percentage of the Contract Price and information relating
          to a
          proposed Change in Work; provided, further, that such Competitor
          Representative shall only have access to a redacted copy of this Agreement
          excluding pricing information.  Such Competitor Representative shall
          in no event be given access to any financial statements or other financial
          information relating to Contractor.  Owner shall cause each Competitor
          Representative to enter into a non-disclosure agreement directly with Contractor
          prior to disclosing any Contractor Confidential Information to such
          party.  In addition, Owner and each such Competitor Representative
          shall be responsible for ensuring that only those individual employees
          or agents
          of such Competitor Representative who are directly engaged in providing
          services
          to Owner for the Project (such individuals or agents, “Authorized
          Competitor Representative Recipients”) will have access to or receive
          any Contractor Confidential Information and that all such Authorized Competitor
          Representative Recipients acknowledge in writing receipt of a copy of this
          Article 24 and agree in writing
          to use the Contractor Confidential Information only for the Intended Purposes
          and to otherwise comply with the terms hereof to the same extent as if
          they were
          parties hereto. Owner shall provide Contractor with a list of the Authorized
          Competitor Representative Recipients and shall use commercially reasonable
          efforts to obtain such written acknowledgements from such
          individuals.  Owner shall take commercially reasonable steps to ensure
          that the Competitor Representative takes such action and maintains such
          processes as are necessary to ensure the confidentiality of all hard copies
          of
          the Contractor Confidential Information.  Similarly, with respect to
          Contractor Confidential Information received electronically, Owner and
          Contractor will jointly work on implementing an electronic access protocol
          that
          will be designed to track and verify authorized electronic access and usage
          in
          line with the foregoing principles.

         

        24.3           Excluded
          Information.  Confidential Information shall not include any
          information that:  (i) is already in the public knowledge or
          which becomes public knowledge absent any violation of the terms of this
          Agreement; (ii) was already in the possession of a Party prior to disclosure
          by
          the other Party; provided, however, that any Confidential
          Information previously provided by Owner and subsequently defined as Proprietary
          Operating Information shall thereafter be treated as Proprietary Operating
          Information; (iii) a Party obtains from another

         

        
          
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        Person
          which such Party reasonably believes was not under an obligation of
          confidentiality; or (iv) is or becomes generally available to, or is
          independently known to or has been or is developed by, any Party or any
          of its
          Affiliates other than materially as a result of any disclosure of confidential
          proprietary information by the transferor to the
          transferee.  

         

        24.4           Acknowledgments
          of Proprietary Operating Information.  In addition, with respect
          to any Confidential Information identified in writing in advance by Owner
          as
          Proprietary Operating Information, Contractor shall provide such Proprietary
          Operating Information only to such Subcontractors and its and their Affiliates
          that enter into a confidentiality agreement directly with Owner, and each
          individual who will have access to such Proprietary Operating Information
          must
          acknowledge in writing receipt of a copy of this Article 24 and agree in writing to
          use the Proprietary
          Operating Information only for the Intended Purposes and to otherwise comply
          with the terms hereof to the same extent as if they were parties hereto
          (any
          such confidentiality agreement or individual acknowledgment, a
“POI Acknowledgement”).  In the event that Owner
          identifies certain information as Proprietary Operating Information, and
          in
          order to accomplish the Intended Purposes it is necessary for Contractor
          to
          disclose such Proprietary Operating Information to any Subcontractor or
          Affiliate, Contractor may submit a Change in Work Form to Owner detailing
          (i) the proposed change, if any, to the Milestone Summary Schedule and the
          Project Guaranteed Dates associated with securing the necessary POI
          Acknowledgements, and (ii) the proposed cost involved in securing the
          necessary POI Acknowledgments as described on the Change in Work
          Form.  Contractor agrees to provide Owner a list of every Person that
          has been provided Proprietary Operating Information by Contractor or any
          of its
          Subcontractors or Affiliates and the Acknowledgements with respect to the
          Proprietary Operating Information signed by each of those
          Persons.  Contractor agrees to be responsible for the actions of each
          of its individual employees with respect to treatment of any Proprietary
          Operating Information.  Owner agrees to rely on the POI
          Acknowledgements executed by a Subcontractor or Subcontractor’s Affiliate with
          respect to actions of any such Subcontractor’s or Subcontractor’s Affiliates’
individual employees; provided, further, that Contractor agrees to
          provide reasonable assistance to Owner with respect to enforcement of the
          POI
          Acknowledgments.  

         

        24.5           Non-Disclosure.  Neither
          the transferee nor any consultant or other person to whom any confidential
          or
          proprietary information is provided in connection with the Project or
          performance of this Agreement shall publish or otherwise disclose such
          information to others or use such information for any purpose except as
          expressly provided above without the written approval of the transferor;
          provided, however, that 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 (in each case, excluding any Competitor Representative unless expressly
          permitted herein); or (b) the right of Owner to reproduce and use as many
          copies of any drawings and specifications 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 drawings and specifications or other documents.  

         

        
          
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        24.6           Applicable
          Law Disclosures.  In the event that a transferor 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 transferor shall provide the transferee with
          prompt written notice of any such request or requirement so that the transferee
          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 transferee,
          the transferor is nonetheless legally compelled to make any such disclosure
          of
          Confidential Information or else stand liable for contempt, the transferor
          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 transferor uses its reasonable efforts to
          assist the transferee in obtaining an appropriate protective order or other
          reliable assurance that confidential treatment will be accorded the Confidential
          Information.  

         

        24.7           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; Owner
          shall
          also deliver all Contractor’s Confidential Information to Contractor upon
          request; provided, however, in either case the receiving party may
          keep one copy for archival purposes only; provided, further, such
          copy shall remain subject to the obligations of this Article 24.

         

        24.8           Remedies.  Contractor
          and Owner each recognize and acknowledge the competitive and confidential
          nature
          of the Confidential Information and each agrees that irreparable damage
          will
          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
          Article 24.  Accordingly,
          the Parties agree that a Party whose Confidential Information is disclosed
          to a
          third party in breach of this Article 24 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 Article 24, and to specific performance
          of this
Article 24, 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 Article 24, but shall be in addition
          to all other
          remedies available at law or equity.

         

        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

         

        
          
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        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, (b) to any party
          to which the Project is sold or otherwise transferred, and (c) to any successor
          in interest to Owner’s rights hereunder), 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
          (x) the operation, maintenance, repair, or alteration of the Project or
          any
          subsystem or components thereof in connection with the Project or (y) to
          the
          extent such Inventions are related to any operational best practices, 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;
provided, however, that the use of Contractor’s Inventions
          pursuant to clause (y), above, shall be subject to the provisions of
Section 24.2 and in no event
          shall Contractor Deliverables be provided to any third party for purposes
          of any
          other Project.  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
Section 25.1; provided,
however, Contractor
          shall use commercially best efforts to insure that
          Owner shall have the ability to use Subcontractor’s Inventions pursuant to
          clause (y), above, which use shall be subject to the provisions of
Section 24.2; provided,
further, that any
          license to use any Subcontractor’s Inventions pursuant
          to clause (y) above shall not include an express or implied license to
          make,
          have made, or use component parts, or construct, create or reverse engineer
          equipment.  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 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 Section 25.1, 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; provided, however, Contractor shall be permitted to
          use such Contractor Deliverables as reference material for its internal
          use
          only.  Contractor shall deliver the Contractor Deliverables to Owner
          upon its request upon any termination of this Agreement (except to the
          extent of
          any payment default of Owner that is an Owner Event of Default) 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

         

        
          
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        Substantial
          Completion, Contractor shall provide Owner with latest upgrade of such
          software
          as of the Substantial Completion Date and shall register Owner as the licensee
          of such software with the applicable Vendor.

         

        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.

         

        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.  Any Financing Entity may, in
          connection with any default under any financing document related to the
          Project,
          assign any rights assigned to it hereunder to any Person without the consent
          of
          Contractor or Owner.  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 Other Persons.  In addition, Owner may assign all or part of
          its right, title, and interest in this Agreement to any other Person, including
          an Affiliate of Owner, with the prior written approval of Contractor, which
          approval shall not be unreasonably withheld.  As a condition to any
          such assignment, Contractor in its sole discretion may require that the
          prospective assignee provide performance security for Owner’s obligations
          hereunder as follows.  Contractor’s approval, notwithstanding anything
          to the contrary herein, shall not be withheld if all of the conditions
          in any of
subsections (a) through (d)
          below are
          satisfied.  

         

        (a)           Owner
          may assign this Agreement to a project entity created to develop the Project
          if
          that entity (i) has a Tangible Net Worth of at least One Hundred Fifty
          Million
          Dollars ($150,000,000) (the “Minimum Tangible Net Worth”) and a
          credit rating equal to or greater than the Threshold Rating, and (ii) (A)
          a
          Tangible Net Worth of at least the Minimum Tangible Net Worth plus at least
          Fifty Million Dollars ($50,000,000), or (B) a Tangible Net Worth of at
          least the
          Minimum Tangible Net Worth plus causes to be provided insurance coverage
          with
          minimum coverage of at least Fifty Million Dollars ($50,000,000) and in
          a
          mutually agreeable form, with deductibles payable by Owner, against potential
          environmental remediation costs or other environmental claims; provided,
however, should the insurance not be commercially available or
          Owner and
          Contractor are unable to agree to the form and substance of the policy,
          then TXU
          US Holdings Company or, to the extent any successor Owner has a Tangible
          Net
          Worth of at least the Minimum Tangible Net Worth plus at least Fifty Million
          Dollars ($50,000,000), such successor Owner, shall retain liability for
          all
          potential

         

        
          
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        environmental
          remediation costs or other environmental claims for which Owner would otherwise
          be liable hereunder.  If (i) and (ii) of the preceding sentence are
          satisfied, 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: (y) a letter of credit, bond
          or other
          form of security, securing assignee’s obligations hereunder in an amount equal
          to the Required LOC Amount as provided in subsection (c) below; or (z) a guaranty
          from an entity
          having a Tangible Net Worth of at least the Minimum Tangible Net Worth
          and an
          equivalent or higher credit rating than the Threshold Rating, guaranteeing
          assignee’s obligations hereunder in an amount equal to the Guaranteed Amount as
          provided in subsection (d)
          below.

         

        (b)           If
          any proposed assignee (i) has written commitments from lenders or equity
          investors (where the lead lender or investor has a Tangible Net Worth of
          at
          least the Minimum Tangible Net Worth and 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 Contract Price then remaining
          to be
          paid, and (ii) (A) a Tangible Net Worth of at least the Minimum Tangible
          Net
          Worth plus at least Fifty Million Dollars ($50,000,000), or (B) a Tangible
          Net
          Worth of at least the Minimum Tangible Net Worth plus causes to be provided
          insurance coverage with minimum coverage of at least Fifty Million Dollars
          ($50,000,000) and in a mutually agreeable form, against potential environmental
          remediation costs or other environmental claims, with deductibles payable
          by
          Owner; provided, however, should the insurance not be commercially
          available or Owner and Contractor are unable to agree to the form and substance
          of the policy, then TXU US Holdings Company or, to the extent any successor
          Owner has a Tangible Net Worth of at least the Minimum Tangible Net Worth
          plus
          at least Fifty Million Dollars ($50,000,000), such successor Owner, shall
          retain
          liability for all potential environmental remediation costs or other
          environmental claims for which Owner would otherwise be liable
          hereunder.  If (i) and (ii) of the preceding sentence are satisfied,
          Contractor may not require any performance security for Owner’s obligations from
          such prospective assignee upon such Person’s assumption of this
          Agreement.

         

        (c)           If
          any proposed assignee causes to be provided (i) a letter of credit in support
          of
          such assignee’s obligations hereunder 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: (x) names
          Contractor as the stated beneficiary, (w) has a stated amount at least
          equal to the sum of (the “Required LOC Amount”): (1) the
          next two (2) consecutive Monthly Payments to be made pursuant to the Payment
          Schedule; (2) breakage costs or termination fees that would be incurred by
          Contractor upon termination of Equipment and Materials purchase agreements
          or
          purchase orders; (3) amounts past due hereunder by Owner to Contractor as
          of such date; and (4) the positive or negative difference in the Contract
          Price based on Changes In Work during the last calendar quarter; and
          (x) provides that it will be adjusted quarterly to reflect changes to (1),
          (2), (3) and (4) during each calendar quarter within thirty (30) days following
          the end of such calendar quarter; and (ii) insurance coverage with minimum
          coverage of at least Fifty Million Dollars ($50,000,000) and in a mutually
          agreeable form, with deductibles payable by Owner, against potential
          environmental remediation costs or other environmental claims; provided,
however, should the insurance not be commercially available
          or

         

        
          
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        Owner
          and Contractor are unable to agree to the form and substance of the policy,
          then
          TXU US Holdings Company or, to the extent any successor Owner has a Tangible
          Net
          Worth of at least the Minimum Tangible Net Worth plus at least Fifty Million
          Dollars ($50,000,000), such successor Owner, shall retain liability for
          all
          potential environmental remediation costs or other environmental claims
          for
          which Owner would otherwise be liable hereunder.  If (i) and (ii) of
          the preceding sentence are satisfied, Contractor may not require further
          performance security from any prospective assignee.  The terms
          pertaining to draw rights on such letter of credit shall be substantially
          similar to those of the Retainage Security.  In
          the event Contractor draws under such
          letter of credit and it is subsequently determined that such drawdown was
          in
          excess of Contractor's rights hereunder, Contractor shall return such excess
          amount to such assignee within ten (10) Business Days of such final
          determination with interest at the Contract Interest Rate from such drawdown
          until return of such excess amount.

         

        (d)           Notwithstanding
          anything to the contrary in the foregoing, TXU US Holdings Company or,
          to the
          extent any successor Owner has a Tangible Net Worth of at least the Minimum
          Tangible Net Worth plus at least Fifty Million Dollars ($50,000,000), such
          successor Owner, may (i) assign its rights hereunder to any Person upon
          five (5) days prior Notice to Contractor but without Contractor’s consent;
provided, however, that Owner retains its payment obligations
          hereunder, including its obligations pursuant to Section 23.2, or (ii) assign its rights and
          obligations hereunder to any Person upon five (5) days prior Notice to
          Contractor but without Contractor’s consent; provided, however,
          that such Owner provides a guarantee of such assignee’s obligations hereunder,
          in form and substance reasonably acceptable to Contractor, and in an amount
          equal to the sum of (the “Guaranteed Amount”) (A) the next
          two (2) consecutive Monthly Payments to be made pursuant to the Payment
          Schedule, (B) breakage costs or termination fees that would be incurred by
          Contractor upon termination of Equipment and Materials purchase agreements
          or
          purchase orders, (C) amounts past due hereunder by Owner to Contractor as
          of such date, (D) the positive or negative difference in the Contract Price
          based on Changes In Work during the last calendar quarter, plus (E) (y)
          Fifty
          Million Dollars ($50,000,000), or (z) causes to be provided insurance coverage
          with minimum coverage of at least Fifty Million Dollars ($50,000,000) and
          in a
          mutually agreeable form, with deductibles payable by Owner, against potential
          environmental remediation costs or other environmental claims; provided,
however, should the insurance not be commercially available or
          Owner and
          Contractor are unable to agree to the form and substance of the policy,
          then
          Owner shall retain liability for all potential environmental remediation
          costs
          or other environmental claims for which Owner would otherwise be liable
          hereunder.  Contractor may terminate this Agreement in the event that
          the guaranty provided by Owner pursuant to this Section 26.1.2(d) lapses or terminates and
          assignee
          fails to provide, within twenty (20) days of Notice of same from Contractor,
          a
          substitute guaranty of assignee’s obligations hereunder in an amount equal to
          Guaranteed Amount from an entity having a Tangible Net Worth of no less
          than the
          Minimum Tangible Net Worth and an equivalent or higher credit rating than
          the
          Threshold Rating.

         

        (e)           Upon
          the assignment of Owner’s rights and obligations hereunder to any permitted
          assignee pursuant to subsections (a), (b)
          or
(c) or subsection (d)(ii)
          above, and such permitted assignee’s assumption in writing in of such rights and
          obligations, Owner shall be deemed released from and shall have no further
          rights, obligations, responsibilities or liabilities under this Agreement;
          provided that Owner shall remain responsible for all liabilities relating
          to matters occurring prior to such assignment, except to the extent such
          permitted assignee agrees

         

        
          
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        in
          writing to be responsible for such liabilities; provided, further,
          that Owner shall remain responsible for the Guaranteed Amount if Owner
          has
          provided a guarantee pursuant to subsection (d)(ii)
          above.

         

        (f)           Any
          attempted assignment or delegation in violation of this Section 26.1.2 shall be null and void and
          shall be
          ineffective to relieve Owner of its obligations hereunder.

         

        26.1.3                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 assignee under such assignment
          and each of their respective employees, agents, partners, Affiliates,
          shareholders, directors, officers and assigns.  

         

        26.2           Transfer
          of Work; Third-Party Beneficiaries.  Upon five (5) days prior
          Notice to Contractor, Owner may 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).  Subject to Section 31.2, each such Affiliate-assignee
          shall be
          deemed to be a third-party beneficiary of the following provisions of this
          Agreement:  Article 17, but only to the extent
          any portion of the
          Work is assigned, conveyed or transferred to such Affiliate assignee,
Section 23.1, but only to the
          extent any portion of the Work is assigned, conveyed or transferred to
          such
          Affiliate-assignee; and Article 29.  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
          or Disposal 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
          Project Site, and Contractor shall not and shall not permit any of its
          Subcontractors to release, discharge or otherwise dispose of any Hazardous
          Materials on the Project Site except, in each case, in compliance with
          Applicable Laws.  

         

        28.2           Remediation
          by Contractor.  Without limiting what may constitute a “Change In
          Law” hereunder, in the event of a release, discharge or presence of Hazardous
          Materials brought onto or generated at the Project Site by Contractor or
          any
          Subcontractor or any third-party acting

         

        
          
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        on
          behalf of Contractor (other than Owner or any of its other contractors
          or
          subcontractors) that is not in compliance with Applicable Laws, Contractor
          shall
          conduct and complete all investigations, studies, sampling, testing and
          remediation of the Project Site to the extent required by Applicable
          Laws.  Contractor shall promptly comply with all lawful orders and
          directives of all Governmental Authorities regarding compliance with Applicable
          Laws relating to such Hazardous Materials 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 or is notified of
          the existence of any spill or release of any Hazardous Materials at the
          Project
          Site:

         

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

         

        (b)           if
          Contractor or any Subcontractor has brought such Hazardous Materials onto
          the
          Project Site or has generated such Hazardous Materials as part of the Work,
          Contractor shall promptly remove such Hazardous Materials from the Project
          Site
          and remediate the Project Site in accordance with all Applicable Laws and
          Applicable Permits and at Contractor’s sole cost and expense;

         

        (c)           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 if Contractor or any Subcontractor
          is
          responsible for the spill or release of such Hazardous Materials;
          and

         

        (d)           if
          neither Contractor nor any Subcontractor has brought such Hazardous Materials
          on
          to the Project Site or generated such Hazardous Materials as part of the
          Work,
          Contractor shall suspend the Work if required by Owner or to the extent
          required
          by Applicable Law or reasonably necessary to protect the health and safety
          of
          persons and property.  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.  If such a suspension occurs, Contractor shall not
          be obligated to re-commence such suspended Work until Contractor in good
          faith
          believes that Owner has remedied or caused others to remedy the circumstances
          requiring such suspension.

         

        28.4           Hazardous
          Materials not brought on the Project Site by Contractor.  Any
          changes to the Work required to mitigate or remediate any contaminated
          materials
          or Hazardous Materials at the Project Site not brought on to the Project
          Site or
          generated as part of the Work by either Contractor or any Subcontractor,
          shall
          be deemed an Excusable Event and be subject to the provisions of
Section 8.6.2. 

         

        28.5           Losses
          related to Hazardous Materials.  NOTWITHSTANDING ANYTHING TO THE
          CONTRARY IN THIS AGREEMENT, CONTRACTOR SHALL NOT BE LIABLE FOR ANY LOSSES
          ARISING OUT OF OR RELATED TO HAZARDOUS MATERIALS PRESENT ON THE PROJECT
          SITE
          BEFORE CONTRACTOR COMMENCES THE WORK ON THE PROJECT SITE, BUT DISTURBED
          OR
          OTHERWISE HANDLED BY CONTRACTOR OR ANY SUBCONTRACTOR DURING PERFORMANCE
          OF THE
          WORK,

         

        
          
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        OR
          LOSSES ARISING OUT OF THE IMPROPER USE, HANDLING OR MAINTENANCE OF HAZARDOUS
          MATERIALS AT THE PROJECT SITE BY OWNER OR ANY OTHER PARTY FOR WHOM CONTRACTOR
          IS
          NOT RESPONSIBLE AFTER THE DATE OF THIS AGREEMENT.

         

        29.           NON-PAYMENT
          CLAIMS

         

        Subject
          to timely payment by Owner in accordance with Article 6, 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 to
          Contractor any right of retention, mortgage, pledge, assessment, security
          interest, lease, advance claim, levy, claim, lien, charge or encumbrance
          on the
          Work, the Project Site, the Common Facilities, the Shared Site Facilities,
          the
          Project or any part thereof or interest therein (each a “Contractor
          Lien”).  Subject to timely payment by Owner in accordance
          with Article 6, Contractor shall
          keep the Project Site, the Common Facilities, the Shared Site Facilities,
          the
          Work, the Equipment and Materials, and all Subcontractor equipment and
          materials
          free of Contractor Liens.  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
          immediately notify Owner 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 shall then: (a) satisfy
          and obtain the release of such Contractor Lien; or (b) defend Owner
          Indemnitees against any such Contractor Lien, provide assurances of payment
          as
          described in the last sentence of this Article 29 and obtain the release of
          such Contractor
          Lien.  If Contractor does not promptly, and in any event within
          ten (10) 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
Article 29, 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:  (x) draw on the Retainage Security in an amount equal to
          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, or (y) withhold from any payment otherwise
          due to Contractor hereunder an amount equal to 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 posts a bond or other assurances of
          payment as may be required to remove such lien from the Work or the Project
          Site, as applicable.

         

        30.           NOTICES
          AND COMMUNICATIONS

         

        30.1           Requirements.  Any
          Notice pursuant to the terms and conditions of this Agreement shall be
          in
          writing and deemed received and effective as follows:  (a) if
          delivered personally, upon delivery; (b) if sent by certified mail, return
          receipt requested, upon certified receipt; (c) if sent by a recognized
          overnight mail or courier service, with delivery receipt requested, upon
          receipt; or (d) if sent by confirmed facsimile transmission or electronic
          mail, when dispatched and acknowledged as received.  Notices shall be
          addressed to:

         

        
          
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                  If
                    to Contractor:

                	 	
                  Bechtel
                    Power Corporation

                  5275
                    Westview Drive

                  Frederick,
                    Maryland 21703-8306

                  Attn:
                    M. Richard Smith

                  Title:
                    President, Fossil Power

                  Fax:
                    (301) 698-4776

                
	
                  With
                    a copy to:

                	 	
                  Bechtel
                    Power Corporation

                  5275
                    Westview Drive

                  Frederick,
                    Maryland 21703-8306

                  Attn:
                    Kristin Meikle

                  Title:
                    Senior Counsel

                  Fax:
                    (301)  696-8526

                   

                
	
                  and
                    to:

                	 	
                  Bechtel
                    Power Corporation

                  5275
                    Westview Drive

                  Frederick,
                    Maryland 21703-8306

                  Attn:
                    Tom Jarboe

                  Title:
                    Project Manager

                  Fax:
                    (301) 698-4776

                   

                
	
                  If
                    to Owner:

                	 	
                  TXU
                    US Holdings Company

                  1601
                    Bryan Street, Suite 13020A

                  Dallas,
                    Texas 72501-3411

                  Attn:
                    Todd Kerschbaum

                  Title:
                    Vice President, Major Projects

                  Fax:
                    (214) 812-8322

                   

                
	
                  With
                    a copy to:

                	 	
                  TXU
                    Corp.

                  1601
                    Bryan Street

                  Dallas,
                    Texas 75201

                  Attn:
                    David P. Poole

                  Title:
                    Executive Vice President, Legal andGeneral Counsel

                  Fax:
                    (214) 812-6032

                
	 	 	 

        

        30.2           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 Manager
          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.

         

        
          
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        31.           LIMITATIONS
          OF LIABILITY AND REMEDIES

         

        31.1           Limitations
          on Damages.  Except to the extent damages claimed by third-parties
          for which Contractor or Owner has a duty to indemnify hereunder as expressly
          provided in Article 21 or
          express liquidated damages hereunder 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 the Project, losses
          or costs
          based on third party contracts, losses, costs or expenses of obtaining,
          maintaining or repaying finance or capital, or downtime costs, loss of
          opportunity or goodwill, cost of purchased or replacement power, claims
          of
          customers for such damages, any governmental fines or penalties or sanctions
          imposed (except as otherwise expressly provided in Article 23) or any loss, damage or
          other liability
          otherwise equivalent to any indirect 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.

         

        31.2           Limitations
          on Contractor’s Liability.  

         

        31.2.1               Maximum
          Liability Amount.  

         

        (a)           Prior
          to achievement of Minimum Stable Load, 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 shall in no event be greater
          in the
          aggregate than an amount equal to *** percent (***%) of the Contract Price
          (“Maximum Total Liability”).

         

        (b)           Upon
          the achievement of Minimum Stable Load, the Maximum Total Liability shall
          be
          reduced to *** Dollars ($***).

         

        (c)           Upon
          the achievement of Substantial Completion, the Maximum Total Liability
          shall be
          reduced to *** Dollars ($***); provided, that an additional ***Dollars
          ($***) shall be available to remedy any Defects that prevent the Project
          from
          achieving the stack test Emission Guarantees until such time as Contractor
          has
          achieved such Emissions Guarantees relating to the stack test; provided,
further, that Contractor shall, in addition to the Maximum Total
          Liability following Substantial Completion, remain liable for the undisputed
          amount of any Delay Liquidated Damages hereunder previously incurred and
          subject
          to the applicable cap in Section 31.2.2 below.

         

        

         

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

         

        
          
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        31.2.2               Maximum
          Liquidated Damages.  In no event shall Contractor’s aggregate
          liability (a) under Section 15.1 for Delay Liquidated Damages
          exceed ***
          percent (***%) of the Contract Price; (b) under Section 15.3 for Performance Liquidated
          Damages exceed
          *** percent (***%) of the Contract Price; (c) under Section 15.2 for Reliability Liquidated
          Damages exceed
          *** percent (***%) of the Contract Price; and (d) in the aggregate under
Sections 15.1, 15.2
          and 15.3, exceed *** percent (***%) of the
          Contract
          Price.  Notwithstanding any of the foregoing, the limitations of this
Section 31.2.2 shall not limit
          Owner’s remedies for any other breach of this Agreement other than a failure
          of
          the Project to achieve Substantial Completion on or before the Substantial
          Completion Guaranteed Date, the failure of the Project to satisfy the
          Performance Guarantees or the failure of the Project to satisfy the Reliability
          Guarantee.

         

        31.2.3               Calculation
          of Liability.  Notwithstanding anything to the contrary in the
          foregoing, nothing contained in this Section 31.2 shall be construed to limit
          Contractor’s
          liability (a) with respect to any of its indemnity obligations under
Article 21, or (b) with
          respect to any fraud of Contractor.  Notwithstanding anything herein
          to the contrary, for purposes of determining whether the maximum liability
          amounts provided in Section 31.2
          have been exceeded, the following items shall be excluded from the calculation
          of any such maximum liability amount: (a) liabilities of Contractor to
          Owner covered by insurance proceeds to the extent paid pursuant to
Article 21 of this Agreement
          (except deductibles paid by Contractor); and (b) amounts paid by Contractor
          to or on behalf of Owner in respect of any damages or third-party claims
          arising
          out of the fraud of Contractor.

         

        31.3           Specific
          Performance.  In addition to any other rights and remedies of
          Owner hereunder or at law, as a specific performance obligation, Contractor
          guarantees that the Project shall as a condition to Substantial Completion,
          achieve the Emissions Guarantees.  Contractor acknowledges that
          Contractor’s failure to achieve the Emissions Guarantees identified in Part I,
          Section 8.1.5 of the Scope Book 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 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 Section 31.4
          or in any other provision of this Agreement shall be construed to limit
          Owner’s
          liability for:  (a) its indemnity obligations pursuant to
Article 21; or (b) with
          respect to any fraud on the part of Owner.  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 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.

         

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

         

        
          
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        31.5           Releases,
          Indemnities and Limitations.  EXCEPT AS EXPRESSLY SET FORTH
          HEREIN, RELEASES, INDEMNITIES, ASSUMPTIONS OF AND LIMITATIONS ON LIABILITIES
          AND
          LIMITATIONS ON REMEDIES EXPRESSED IN THIS AGREEMENT AS WELL AS WAIVERS
          OF
          SUBROGATION RIGHTS 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, PARTNERS,
          OR
          ENTITIES OF SUCH PARTNERS SUCH AS PARTNERS AND RELATED ENTITIES.  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 if any
          provision of this Agreement states that the rights and remedies stated
          therein
          are the sole or exclusive (or words of similar import) rights or remedies
          for
          the failure to satisfy the applicable obligation arising thereunder, that
          such
          rights and remedies shall be the sole and exclusive remedies of the Parties
          for
          failure to satisfy such obligations, notwithstanding any remedy otherwise
          available at law or in equity.  To the extent the terms of this
          Agreement do not provide a remedy for the failure to satisfy an applicable
          obligation or do not otherwise state that an applicable remedy is a sole
          or
          exclusive (or words of similar import) remedy, then the Parties may avail
          themselves of any right or remedy available at law or in equity for such
          failure, provided that such right or remedy as may be available at law or
          in equity shall in any event be limited by the limitations, waivers and
          releases
          of liability set forth in this Agreement.  For purposes of clarity,
          except as specifically provided in Article 19, the foregoing shall not
          be construed to
          limit a Party’s right to exercise its dispute resolution rights under
Article 32 at any time during
          the term of this Agreement. 

         

        32.           DISPUTES

         

        32.1           Management
          Negotiations.  Any disputes arising under this Agreement that are
          not resolved between Owner and Contractor within ten (10) Business Days
          after
          receipt by each thereof of Notice (specifically referencing this
Section 32.1) of such dispute,
          shall be referred by either Owner or Contractor’s representatives to the
          executive officers of Owner and Contractor (who shall not be Owner’s Project
          Representative or the Project Manager) for resolution.  If such
          executive officers, negotiating in good faith, fail to reach an agreement
          within
          a reasonable period of time, not exceeding twenty (20) days after such
          referral,
          then either Owner or Contractor may bring a suit, claim or cause of action
          pursuant to the terms of Section 32.2 below.

         

        32.2           DISPUTE
          RESOLUTION; CONSENT TO JURISDICTION AND VENUE.  TO THE EXTENT
          FEDERAL COURTS HAVE JURISDICTION, OWNER AND CONTRACTOR AGREE THAT ALL ACTIONS
          OR
          PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT, SHALL BE TRIED AND
          LITIGATED ONLY IN THE FEDERAL

         

        
          
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        DISTRICT
          COURT LOCATED IN THE COUNTY OF DALLAS, STATE OF TEXAS.  OWNER AND
          CONTRACTOR, TO THE EXTENT THEY MAY LEGALLY DO SO, IRREVOCABLY WAIVE ANY
          RIGHT
          EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUMNONCONVENIENS
          (OR ANY SIMILAR LEGAL DOCTRINE) OR TO OBJECT TO VENUE TO THE EXTENT ANY
          PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION IN THE FEDERAL DISTRICT
          COURT LOCATED IN THE COUNTY OF DALLAS, STATE OF TEXAS, AND IRREVOCABLY
          STIPULATE
          THAT THE FEDERAL DISTRICT COURT 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.  OWNER AND CONTRACTOR EACH AGREE, TO
          THE FULLEST EXTENT PERMITTED BY FEDERAL LAW, NOT TO RAISE ANY OBJECTION
          TO THE
          REMOVAL OR TRANSFER TO THE FEDERAL DISTRICT COURT LOCATED IN THE COUNTY
          OF
          DALLAS, STATE OF TEXAS OF ANY SUCH PROCEEDING THAT IS INITIALLY BROUGHT
          IN ANY
          OTHER COURT.  OWNER AND CONTRACTOR ALSO EACH HEREBY KNOWINGLY,
          VOLUNTARILY AND INTENTIONALLY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
          PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
          ARISING OUT OF OR RELATING TO THIS AGREEMENT.  OWNER AND CONTRACTOR
          EACH AGREE THAT IT WILL NOT FILE ANY MOTION OR ASSERT ANY DEFENSE IN ANY
          SUCH
          PROCEEDING THAT IS INCONSISTENT WITH THE FOREGOING AGREEMENTS, WAIVERS,
          CONSENTS
          OR STIPULATIONS.  AS OF THE DATE OF THIS AGREEMENT, EACH PARTY
          BELIEVES THAT THE REQUIREMENT OF DIVERSITY OF CITIZENSHIP OF THE PARTIES
          (ONE OF
          THE REQUIREMENTS NEEDED FOR A FEDERAL COURT TO HAVE SUBJECT MATTER JURISDICTION
          OVER A DISPUTE BETWEEN THE PARTIES) IS MET. 

         

        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.  This Agreement shall be governed by the internal laws of the
          State of Texas, excluding its conflict of laws
          provisions.  

         

        
          
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        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.

         

        33.4           Amendments
          and Modifications.  No oral or written amendment or modification
          of this Agreement (including a Change In Work Form accepted under
Article 16) 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 Section 33.4.

         

        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 drawings and specifications, 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
          is of the Essence.  Subject to the terms and conditions of this
          Agreement, including the express provisions providing for adjustment of
          the
          Project Guaranteed Dates and the provisions limiting Contractor’s liability for
          its failure to timely achieve Substantial Completion by the Substantial
          Completion Guaranteed Date as set forth in Section 15.1, 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
          achieving Substantial Completion by the Substantial Completion Guaranteed
          Date.

         

        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

         

        
          
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        Financing
          Entities where expressly provided and assignees as contemplated by the
          terms of
Section 26.1.  

         

        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, any amendments and
          modifications hereto reasonably requested by the Financing Entities;
          (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, request and use commercially reasonable efforts
          to
          obtain certificates from Major Subcontractors regarding payments received
          by
          such Major Subcontractor to date and disputed payments, and provide 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 Section 33.16.  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 Project 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.  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
          ten (10) 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 or for such
          longer period of time as may be required pursuant to any applicable order
          or
          decree of any Governmental Authority, and to cause all 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; provided Contractor’s only obligation with respect to any order
          or decree of any Governmental Authority shall be to deliver documents (to
          the
          extent required by such order or decree) within its possession to Owner,
          and
          Owner agrees to maintain the confidentiality of all such documents pursuant
          to
Article 24.

         

        33.13                      Binding
          on Successors, Etc.  Subject to Articles 24 and 26,
          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, 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 including the Memorandum of Understanding dated
          January 25, 2006 (as subsequently amended, the “MOU”), between
          Owner and Contractor with respect to the Project and the related
          TSA.  The MOU and TSA shall terminate upon the mutual execution of
          this Agreement, except for any provision of such agreements that expressly
          survive the termination thereof, respectively.  Any Work completed by
          Contractor under such prior agreements shall be deemed part of the Work
          for all
          purposes hereunder.  This Agreement and Exhibits hereto 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.

         

        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

         

        
          
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        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.

         

        33.16                      Opinions
          of 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, from a law firm reasonably
          acceptable to Owner, that is reasonably acceptable to Owner opining as
          to the
          matters set forth in Sections 4.1.1, 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, 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.

         

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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:

                
	 
	
                  TXU
                    US HOLDINGS COMPANY

                  a
                    Texas corporation

                
	 
	
                  By:                                                                           

                  Name:

                  Its:

                
	 
	 
	 
	
                  CONTRACTOR:

                
	 
	
                  BECHTEL
                    POWER CORPORATION,

                  a
                    Nevada corporation

                   

                
	 
	
                  By:                                                                           

                  Name:

                  Its:

                
	 
	 
	 

        

         

        

        

        
          
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