Document:

EX-10(B)

 

EXHIBIT 10(b)

Performance Grant Terms and Conditions

     Your Performance Grant (the “Award”) is made by Applied Industrial Technologies, Inc., an
Ohio corporation (“Applied”). The Award is governed by Applied’s 1997 Long-Term Performance Plan
(the “Plan”), including the policies adopted by the Executive Organization & Compensation Committee
of the Board of Directors (the “Committee”) under the Plan, and is subject to the following terms
and conditions:

     1. Eligibility. Only key senior officers that have broad policy-making functions that directly
contribute to Applied’s long-term success and profitability are eligible to receive Performance
Award grants.

     2. Vesting; Payment. Your Award will vest, in whole or in part, three years following the
effective grant date of your Award (the “Performance Period”) upon the achievement of the
performance goals set forth in the Performance Grant Summary enclosed with these Terms and
Conditions. Your Award will be payable, at the Committee’s discretion, in cash or shares
(“Shares”) of Applied’s common stock (or both). The Committee may determine the form of payment of
your Award at any time during or at the conclusion of the Performance Period. Shares used in
payment of the Award shall be valued at their Fair Market Value (as defined in the Plan) as of the
last day of the Performance Period. Applied shall make payment of any amount due to you under the
Award promptly following the availability of audited financial statements for the final year of the
Performance Period. Applied may withhold from the amount payable to you under your Award any
amounts it deems necessary pursuant to federal, state or local tax laws, including withholding
requirements.

     3. Termination of Employment or Executive Officer Status. If, during the Performance Period, your
employment with Applied is terminated due to death, permanent disability, or retirement in
accordance with an established retirement policy of Applied, then, at the end of the Performance
Period, you (or your beneficiary whom you have designated to Applied in writing) shall be entitled
to receive a pro rata payment under the Award equal to (i) a fraction the numerator of which is the
number of fiscal quarters (including a portion of a quarter) elapsed in the Performance Period
prior to the date of your termination and the denominator of which is twelve, multiplied by (ii)
what would have been your actual Award based on the achievement of the performance goals set forth
in the Performance Grant Summary. If, during the Performance Period, you cease to be an employee
of Applied for any reason other than those specifically set forth above or in section 4 hereof,
then your Award will be forfeited and no amount shall be due or payable to you pursuant to the
Award. Also, if, during the Performance Period, you cease to be a Board-elected executive officer
of Applied (but remain an employee), then your Award will be forfeited and no amount shall be due
or payable to you pursuant to the Award.

     Notwithstanding anything in these terms and conditions, the Committee may terminate the Award
and no amount shall be due or payable to you pursuant to the Award, if the Committee determines, in
its sole discretion, that you have committed an act inimical to Applied’s interests, including,
without limitation, your unauthorized disclosure of proprietary or confidential information of
Applied, your competition with Applied, or your solicitation of Applied associates. The
Committee’s determination shall be effective as of the time of your act.

 

 

     4. Change in Control. Upon a Change in Control (as defined in the Plan), your Award shall vest and
you shall be entitled to receive in full satisfaction of all amounts due or which may become due
under the Award, a pro rata payment under the Award equal to (i) a fraction the numerator of which
is the number of fiscal quarters (including a portion of a quarter) elapsed in the Performance
Period prior to the date of the Change in Control and the denominator of which is twelve,
multiplied by (ii) your target award amount.

     5. Limitation on Rights. The Award shall not confer upon you any rights whatsoever other than
those expressly set forth herein, in the Plan or in policies adopted by the Committee, including
without limitation any right to continued employment with Applied (or its affiliates) or any rights
as a shareholder in respect of any of the Shares that may become issuable pursuant to the Award
until and unless Applied has issued a certificate or certificates for the Shares.

     6. Restrictions on Shares. Applied may require, as a condition to its issuance and delivery of
certificates for Shares issuable under the Award, the delivery to Applied of a commitment in
writing by you that (i) at the time of issuance, it is your intention to acquire the Shares for
your own account for investment only and not with a view to, or for resale in connection with, the
distribution thereof; (ii) you understand that the Shares may be “restricted securities” as defined
in Rule 144 issued under the Securities Act of 1933, as amended (the “Act”); and (iii) any resale,
transfer or other disposition of the Shares will be accomplished only in compliance with Rule 144,
the Act, or other or subsequent rules and regulations thereunder. Applied may place on the
certificates a legend reflecting that commitment and Applied may refuse to permit transfer of the
certificates until it has been furnished evidence satisfactory to it that no violation of the Act
or the rules and regulations thereunder would be involved in the transfer.

     7. Discretionary Adjustment Following Merger, Sale of Assets; Stock Issuance, Etc. In the event
that, during the Performance Period, Applied merges, consolidates, sells or acquires a substantial
amount of assets, issues a substantial amount of its capital stock, reorganizes, or engages in any
other transaction or series of transactions, the Committee, in its sole discretion, may change the
performance goals upon which the vesting of your Award is conditioned, in order to prevent
diminution or enlargement of the benefits intended to be conferred by the Award in such manner as
the Committee may determine is equitably required by the changes or events.

     8. Nonassignability. The Award and the rights granted thereunder are not assignable or
transferable, in whole or in part, and may not be otherwise disposed of by you, other than by will
or by the laws of descent and distribution.

     9. Committee Authority. The Committee shall have authority, subject to the Plan’s express
provisions, to construe these terms and conditions and the Plan, to establish, amend and rescind
rules and regulations relating to the Plan, and to make all other determinations in the Committee’s
judgment necessary or desirable for the Plan’s administration. The Committee may correct any
defect or supply any omission or reconcile any inconsistency in the Plan or these terms and
conditions in the manner and to the extent it shall deem expedient to carry the Plan into effect.
All Committee action under this Section’s provisions shall be conclusive for all purposes.

     10. Relationship to the Plan. In the event of any inconsistency between these terms and conditions
and the Plan or the Committee’s policies, the Plan or the policies shall govern. Terms not
otherwise defined in these terms and conditions have the meaning ascribed them in the Plan.

 

 

Notwithstanding any provisions hereof, these terms and conditions and the Award shall be subject to
all of the Plan’s provisions in effect from time to time, which are incorporated herein by
reference.

(January 2002)EX-10.1

 

Exhibit 10.1

EPC Agreement No. 1001

between

Allegheny Energy Supply Company, LLC

and

The Babcock & Wilcox Company

covering

Flue Gas Desulfurization Project

at

Hatfield’s Ferry Units 1, 2 and 3

 

 

TABLE OF CONTENTS

Principal Document

	 	 	 	 	 	 	 
	ARTICLE	 	TITLE	 	PAGE	 
	 
	ARTICLE 1 -
	 	AGREEMENT SCOPE	 	 	1	 
	ARTICLE 2 -
	 	TERM AND SURVIVORSHIP	 	 	1	 
	ARTICLE 3 -
	 	DEFINITIONS	 	 	1	 
	ARTICLE 4 -
	 	CONTRATOR’S GENERAL OBLIGATIONS	 	 	3	 
	ARTICLE 5 -
	 	COST AND SCHEDULE PERFORMANCE	 	 	4	 
	ARTICLE 6 -
	 	WARRANTIES	 	 	4	 
	ARTICLE 7 -
	 	PROCUREMENT AND SUBCONTRACTING	 	 	6	 
	ARTICLE 8 -
	 	ALLEGHENY	 	 	6	 
	ARTICLE 9 -
	 	CHANGE ORDER	 	 	8	 
	ARTICLE 10 -
	 	INDEPENDENT CONTRACTOR	 	 	9	 
	ARTICLE 11 -
	 	PAYMENT AND INVOICING	 	 	9	 
	ARTICLE 12 -
	 	CLAIMS AND LIENS	 	 	11	 
	ARTICLE 13
	 	TAXES AND DUTIES	 	 	12	 
	ARTICLE 14 -
	 	INSPECTION OF WORK	 	 	14	 
	ARTICLE 15 -
	 	DEFICIENT WORK	 	 	14	 
	ARTICLE 16 -
	 	SUSPENSION	 	 	15	 
	ARTICLE 17 -
	 	TERMINATION	 	 	15	 
	ARTICLE 18 -
	 	MECHANICAL COMPLETION AND FINAL ACCEPTANCE	 	 	16	 
	ARTICLE 19 -
	 	TITLE	 	 	16	 
	ARTICLE 20 -
	 	DISTRIBUTION OF RISK, RELEASE AND INDEMNITY	 	 	16	 
	ARTICLE 21 -
	 	INSURANCE	 	 	17	 
	ARTICLE 22 -
	 	TOOLS AND EQUIPMENT	 	 	19	 
	ARTICLE 23 -
	 	RESPONSIBILITY FOR CONSEQUENTIAL DAMAGES, LIMITATION OF LIABILITY	 	 	19	 
	ARTICLE 24 -
	 	GOVERNING LAW AND DISPUTE RESOLUTION	 	 	20	 
	ARTICLE 25 -
	 	OWNERSHIP OF INVENTIONS AND DOCUMENTS	 	 	20	 
	ARTICLE 26 -
	 	CONFIDENTIAL INFORMATION	 	 	22	 
	ARTICLE 27 -
	 	USE OF TRADEMARK AND PUBLICITY	 	 	22	 
	ARTICLE 28 -
	 	AUDIT	 	 	23	 
	ARTICLE 29 -
	 	BUSINESS STANDARDS	 	 	23	 
	ARTICLE 30 -
	 	NO INFORMATION BROKERING	 	 	24	 
	ARTICLE 31 -
	 	MANAGEMENT OF WASTE AND HAZARDOUS MATERIALS	 	 	25	 
	ARTICLE 32 -
	 	ASSIGNMENT OF AGREEMENT	 	 	25	 
	ARTICLE 33 -
	 	DESIGNATED REPRESENTATIVE AND NOTICES	 	 	26	 
	ARTICLE 34 -
	 	ALCOHOL AND DRUGS	 	 	26	 
	ARTICLE 35 -
	 	HEALTH AND SAFETY	 	 	26	 
	ARTICLE 36 -
	 	RIGHT OF REMOVAL	 	 	26	 
	ARTICLE 37 -
	 	FORCE MAJEURE	 	 	27	 
	ARTICLE 38 -
	 	AMENDMENTS	 	 	27	 
	ARTICLE 39 -
	 	PRECEDENCE	 	 	27	 
	ARTICLE 40 -
	 	MISCELLANEOUS	 	 	28	 
	ARTICLE 41 -
	 	SURVIVING OBLIGATIONS	 	 	28	 
	ARTICLE 42 -
	 	ENTIRE AGREEMENT	 	 	28	 

	 	 	 
	EXHIBIT	 	 
	A
	 	REIMBURSABLE COSTS
	B
	 	FIXED RATES
	C
	 	FEE
	D
	 	CONTRACTOR’S PERSONNEL POLICIES
	E
	 	FORM LETTER OF CREDIT

 

 

	 	 	 
	EXHIBIT	 	 
	F
	 	(not used)
	G
	 	OWNER’S CONTROLLED INSURANCE PROGRAM (OCIP)
	G-1
	 	EXCEPTIONS TO EXHIBIT G
	H
	 	DISPUTE RESOLUTION PROCEDURE
	I
	 	PERFORMANCE GUARANTEES
	J
	 	MINIMUM DATA FIELD REQUIREMENTS FOR AUDIT PURPOSES

 

 

This Agreement is effective as of July 12, 2006, and made between Allegheny Energy Supply
Company, LLC, a limited liability company organized under the laws of Delaware with offices at 800
Cabin Hill Drive, Greensburg, Pennsylvania 15601-1689 (hereinafter Allegheny) and The Babcock &
Wilcox Company, a company organized under the laws of Delaware with its principal place of
business, at 20 South Van Buren Avenue, Barberton, Ohio 44203 (hereinafter Contractor).

Allegheny and Contractor, each in consideration of the undertakings, promises and agreements of the
other as set forth herein, hereby agree as follows:

ARTICLE 1 — AGREEMENT SCOPE

The purpose of this Agreement is to define the terms and conditions for the provision
of the Work as specifically set out in the Job Specification. Work is generally
described as the engineering, procurement and construction of the flue gas
desulfurization systems at the Hatfield’s Ferry Units 1, 2 and 3 in Masontown,
Pennsylvania. Prior to the effective date of this Agreement, Contractor performed Work
under Allegheny purchase order C-06-06858, issued on April 13, 2006, and change orders
thereto. This Agreement supercedes said purchase order in all respects and any Work
performed thereunder shall be deemed to have been performed under this Agreement.

ARTICLE 2 — TERM AND SURVIVORSHIP

	2.1	 	Term. The Term of this Agreement begins and is effective from the date first written
above and shall terminate upon final acceptance pursuant to Article 18, unless terminated
earlier as permitted by this Agreement.

	2.2	 	Survivorship. The provisions of this Agreement as stipulated in Article 41 shall survive
any expiration or termination of this Agreement.

ARTICLE 3 — DEFINITIONS

For the purpose of this Agreement, the following words and phrases shall have the
meaning stated below:

	3.1	 	“Agreement” means Principal Document, Job Specification, and the Exhibits listed in the Table
of Contents.

	 	a)	 	“Principal Document” means this document, executed by Allegheny and Contractor
and comprising Articles 1 through 42.
	 
	 	b)	 	“Job Specification” means the documents issued by Allegheny to Contractor, which
contain the detailed description of the Work including technical and other requirements
pertaining thereto. The Parties agree that the following documents are for information
only in the Job Specification and are not part of this Agreement: Flue Gas
Desulfurization (FGD) Phase I Study Report, dated December 2005, prepared by Black &
Veatch; Hatfield’s Ferry Coal Trace Analysis; Hatfield’s Ferry Units 1, 2 and 3 FGD
Process Design Operating Conditions and Parameters (Fuel); Result of Limestone Analysis
and Its Reactivity, dated March 2006, prepared by Mitsubishi Heavy Industries,
Ltd.;Technical Specification for Wet Flue Gas Desulfurization System prepared

 

 

	 	 	 	by Sargent & Lundy; Hatfield Power Station Bid for Continuous Emissions Monitoring
Systems; Water Analysis for Hatfield FGD Project; Fort Martin Lagoon Relocation
Specification; Geotechnical Report Revision 0, dated December 16, 2005, prepared by Black
& Veatch; Hatfield’s Ferry & Ft Martin — Site Fire Protection Flow Diagrams; Balance
Draft Conversion Boiler Reinforcement Design Conditions; Route 21 Rebuild and Bridge
Replacement Drawings; and Permitting Lists (including Phase 1 Permitting Schedule, Phase
1 Summary Permitting Schedule, Environmental Permit Action List (4-10-2006)). The
parties may mutually agree that other portions of the Job Specification may not apply or
may be adjusted.

	3.2	 	“Agreement Price” means the total of Costs and Fee relating to compensation as specified in
Exhibits A, B &C to be paid by Allegheny to Contractor.

	 	(a)	 	“Costs” means the sum of Reimbursable Costs and costs resulting from application
of Fixed Rates.
	 
	 	(b)	 	“Reimbursable Costs” means costs set forth in Exhibit A for which Contractor is
compensated at actual costs incurred and paid.
	 
	 	(c)	 	“Fixed Rates” means unit prices listed in Exhibit B.
	 
	 	(d)	 	“Fee” means the part of Agreement Price as provided in Exhibit C by which
Contractor is compensated for: (i) its profit related to the Work; and (ii) expenses not
recovered by Contractor in Costs.

	3.3	 	“Agreement Price Budget” means the budget for the Work prepared by Contractor and approved by
Allegheny, which may be modified or adjusted by Change Orders. The Agreement Price Budget
shall be agreed to by the parties within four (4) months of the effective date of this
Agreement.

	3.4	 	“Change Order” means the document issued by Allegheny, which sets forth adjustments to the
Agreement Price Budget and/or the Scheduled Mechanical Completion Dates.

	3.5	 	“Competence” means the expertise, experience, capability and specialized knowledge to perform
the Work in a good and workmanlike manner and within all accepted standards for the utility
industry.

	3.6	 	“Consequential Damages” means any loss or anticipated loss of profit, loss or anticipated
loss of revenue, business interruption, loss of use of any equipment, loss of any Agreement or
other business opportunity and any other indirect damage of a similar nature as further
defined in Article 23.

	3.7	 	“Contractor” means: (1) the legal entity identified in the Principal Document and, where the
context so permits; (2) any company in which that legal entity now or hereafter (a) owns
directly or indirectly or (b) controls, directly or indirectly, more than fifty percent (50%)
of the stock having the right to vote or appoint its directors; and (3) Contractor’s
representatives that are responsible for supplying services or performing the Work in
accordance with the terms of this Agreement.

	3.8	 	“Facility” means the property at Hatfield’s Ferry in Monongahela Township, Greene County,
Pennsylvania.

 

 

	3.9	 	“Final Acceptance Notice” means the document issued by Allegheny upon agreeing that
Contractor has substantially met the criteria set forth in this Agreement pursuant to
Sub-Article 18.2 for final acceptance of the Facility or any part thereof.
	 
	3.10	 	“Hazardous Substance” means any substance defined as hazardous by Law.
	 
	3.11	 	“Hazardous Waste” means any waste defined as hazardous by Law.

	3.12	 	“Industry Standards” means those practices, methods, acts, techniques and standards as may be
followed or employed by Contractor and other power plant owners and contractors at the time of
performance of the Work and which: (i) are generally accepted in the United States for use in
the electric power generation industry in connection with power stations of the same or
similar size and type and related construction work; (ii) are commonly utilized by Contractor
and other power plant owners and contractors in related retrofit design, engineering,
construction, testing, project management and operation and; (iii) are expected for Work
performed consistent with reliability and safety objectives.

	3.13	 	“Law” means all applicable laws of the jurisdiction in its broadest sense including without
limitation the following: constitutional law, civil law, common law, international law,
equity, treaties, statutes, decrees, edicts, codes, orders, rules, ordinances and regulations
of any federal, state, local, municipal, or any other duly constituted governmental authority
or agency.

	3.14	 	“Mechanical Completion” means, in general, the Work is substantially completed so that the
systems are ready to receive flue gas and as further detailed in the Job Specification.

	3.15	 	“Mechanical Completion Notice” means the document issued by Allegheny upon agreeing that
Contractor has substantially met the criteria set forth in the Job Specification for
Mechanical Completion of the Facility or any part thereof.

	3.16	 	“Safety and Health Manual” means the documents issued by Allegheny to Contractor detailing
the minimum safety and health policies and procedures to be adopted by Contractor,
Subcontractors and Vendors at the Work Site.

	3.17	 	” Scheduled Mechanical Completion Date” means the date or dates set forth in the Job
Specification for Mechanical Completion of the Work, which may be modified or adjusted by
Change Orders. The Scheduled Mechanical Completion Date shall be finalized within four (4)
months of the effective date of this Agreement.

	3.18	 	“Subcontractor” means any subcontractor, supplier, agent or materialman providing services or
work to Contractor for the purpose of performing the Work under this Agreement.

	3.19	 	“Vendor” means any supplier, agent or materialman providing equipment, materials, and/or
specialty services to Contractor pursuant to the Work under this Agreement.

	3.20	 	“Work” means the engineering, procurement and construction of the flue gas desulfurization
system, by Contractor, under this Agreement, including providing as necessary therefor
supervision, construction work, consultations, any specified materials, labor, construction
tools, equipment, and supplies at the Work Site.

	3.21	 	“Work Site” means the site indicated in the Job Specification at the Hatfield’s Ferry
facility in Monongahela Township, Greene County, Pennsylvania, and at the

 

 

	 	 	    field fabrication and lay down area at the Ft. Martin facility in Maidsville, West Virginia.

 

 

ARTICLE 4 — CONTRACTOR’S GENERAL OBLIGATIONS

	4.1	 	Contractor shall engineer, procure and construct flue gas desulfurization systems and
shall perform the Work in accordance with the terms and conditions of this Agreement.

	4.2	 	No documentation, including Contractor’s proposal and bid clarification correspondence, shall
constitute a part of this Agreement unless included in Exhibit E — Supplemental Documentation.
	 
	4.3	 	Contractor represents that it knows:

	 	(a)	 	the nature, requirements and scope of the Work,
	 
	 	(b)	 	the location and peculiarities of the Work Site,
	 
	 	(c)	 	the type and magnitude of detailed engineering, procurement, construction, and
construction management services and labor required,
	 
	 	(d)	 	the character of equipment, materials and facilities required, and
	 
	 	(e)	 	the general and local conditions and other matters which could affect the Work.

Contractor’s failure to become knowledgeable about or to discover matters, which affect the
Work, shall not relieve Contractor from its obligations under this Agreement.

Contractor accepts the Work Site as found subject to modifications set forth in the Job
Specification. If subsurface conditions differ materially from those indicated in the
Job Specification, Contractor shall not disturb said conditions but shall promptly
notify Allegheny and proceed with the Work affected only upon Allegheny’s written
authorization. If such conditions materially differ from those indicated in the Job
Specification, and such difference causes an increase or decrease in the cost or time of
performance, Allegheny shall issue a Change Order with respect thereto if appropriate
under the criteria of Sub-Article 9.2. If Contractor proceeds with the Work affected
without Allegheny’s authorization, any additional costs incurred shall not be allowed as
Costs and no Change Order shall be allowed therefor.

	4.4	 	After entering into this Agreement, Contractor shall commence the Work promptly upon being
notified by Allegheny, and shall perform the Work in a professional manner to the satisfaction
of Allegheny: (i) with diligence until its obligations pursuant to this Agreement have been
completed; and (ii) meet, at a minimum, the Industry Standards pertaining to such work
including standards of the appropriate construction code and revisions thereto applicable to
the jurisdiction where the Facility is to be constructed, as well as such other requirements
as set forth in this Agreement.

	4.5	 	Contractor shall provide sufficient supervisory and other personnel to perform the Work and
shall continuously furnish such personnel and control the progress of the Work until
Contractor’s performance under this Agreement has been completed. Contractor’s project
manager and other key personnel as approved by Allegheny and identified in the Job
Specification, shall not be reassigned or removed from the

 

 

	     	 	Work by Contractor without the approval of Allegheny. Contractor shall not use third party
agency personnel for any position without Allegheny’s prior approval.

	4.6	 	Contractor shall perform the Work under the National Maintenance Agreement, providing for a
wage modifier at ninety percent (90%) and one hundred percent (100%) of the fringe benefits
found in the local collective bargaining agreement. Contractor shall take all necessary steps
to minimize and/or eliminate labor disputes with respect to this Agreement.

	4.7	 	Contractor represents that all engineering work requiring certification by applicable Law
shall be certified by professional engineers properly licensed and qualified to perform such
engineering services in all appropriate jurisdictions and will remain solely responsible for
the contents of such drawings.

	4.8	 	Contractor shall develop with governmental authorities customs procedures for: (i) importing
to the Work Site equipment, materials, supplies and construction tools required for the Work;
and (ii) exporting Contractor-owned or rented construction tools and construction equipment.
Contractor shall be responsible for obtaining and maintaining all licenses, visas, clearances,
certifications and governmental or administrative authorizations, necessary for the
performance of its obligations hereunder, including entry visas, residence and work permits
and any applicable licenses for its employees, agents and representatives. Allegheny shall
have no liability whatsoever in respect thereof.

	4.9	 	To the extent required to perform the Work under this Agreement, Contractor shall procure all
necessary permits (where required to be in Contractor’s name), licenses, including licenses or
registrations issued by any professional boards pursuant to Law, observe and abide by all
applicable Law relating to the Work and support Allegheny’s efforts to secure approval of
plans and specifications. Without releasing Contractor from its obligation hereunder, if any
drawings or specifications are known by Contractor to be at variance with any applicable Law,
Contractor shall give notice to Allegheny thereof before performing such Work. Applications
for such permits, licenses or approvals shall be submitted to Allegheny for approval prior to
being filed with any relevant authority involved. Contractor shall give a copy of each permit
to Allegheny promptly after receipt thereof by Contractor.

	4.10	 	Contractor shall have custody and control of: equipment, materials and supplies for
performing the Work furnished by it or delivered to it by Allegheny; parts of the Facility
under construction or completed; temporary structures; and construction facilities, except
for: (i) partially completed parts of the Facility for which Allegheny has taken temporary
possession by Change Order, (ii) parts (units, systems or areas of equipment) of the Facility
as to which Allegheny has accepted custody and control pursuant to Mechanical Completion
Notices, and (iii) parts of the Facility included in any part of the Work which has been
terminated pursuant to Article 17. Contractor shall protect and care for items and parts of
the Facility in its custody and control until Mechanical Completion, after which time
Allegheny shall bear the risk of loss or damage to the Work.

	4.11	 	Contractor’s proposed working hours schedule shall be submitted to Allegheny for its approval
prior to Contractor beginning any Work at the Work Site. Once approved, such working hours
schedule shall not be revised without further approval by Allegheny. Contractor shall not
permit its employees or

 

 

	       	 	Subcontractors’ employees to work more than the approved working hours schedule, unless
approved in advance by Allegheny.

	4.12	 	Contractor shall schedule, report, forecast and control progress of the Work, and shall
undertake best efforts to achieve Mechanical Completion on or before the Scheduled Mechanical
Completion Dates as set forth in the Job Specification, and Final Acceptance. The Scheduled
Mechanical Completion Dates are non-guaranteed target dates.

	4.13	 	Contractor shall furnish to Allegheny for its review and comment, copies required by the Job
Specification of working drawings, specifications, engineering calculations, purchase orders,
subcontracts and other documents prepared by Contractor, Subcontractors or Vendors in the
course of performing the Work, and shall give Allegheny access at reasonable times, at
Contractor’s and Subcontractor’s facilities, to Contractor’s detail drawings, design and
engineering methods, calculations, and data used in performing the Work. Notwithstanding the
foregoing, this provision shall not require Contractor to disclose its identified proprietary
methods, software, calculations and data, provided, however, Contractor shall cooperate with
Allegheny in its understanding of the methodology or derivation of any calculation or design
developed by Contractor for the Work short of Contractor disclosing its proprietary methods.

	4.14	 	Contractor shall maintain all Work records and financial records requested by Allegheny in
accordance with the requirements of this Agreement and of the federal and state agencies in
the state where the work is being performed, and upon request, shall provide Allegheny with
sufficient information relating to prices of materials and services to similarly enable
Allegheny to meet its asset management accounting, compliance and reporting requirements.

	4.15	 	Contractor shall comply with all applicable Federal, State and local Laws, rules and
regulations including but not limited to: Fair Labor Standards Act, Occupational Safety and
Health Act, Equal Opportunity, Vietnam Era Veterans Readjustment Assistance Act of 1974,
Rehabilitation Act of 1973, Minority Business Enterprise and Americans With Disabilities Act
of 1990. Contractor further shall make certifications and periodic reports stipulated by
such Laws, rules and regulations, the Laws and Executive Orders implemented by those
regulations, and as otherwise requested by Allegheny. Contractor also shall provide
information for Allegheny to report upon its obligations under the Small Business and Small
Disadvantaged Business Concerns of the Federal Acquisition Regulations System (FAR).

	4.16	 	Contractor’s project manager named in the Job Specification shall have the authority to act
for Contractor with respect to all matters pertaining to the Work and Contractor’s
performance. Communications concerning these matters received by Contractor’s project manager
from Allegheny shall be deemed to have been received by Contractor.

	4.17	 	Contractor shall respond promptly to Allegheny’s request for assurances concerning the
financial condition of Contractor and any Subcontractor or Vendor and their respective ability
to perform all of their respective obligations under this Agreement. Upon the request of
Allegheny, Contractor shall submit financial
statements for its most recent fiscal quarter, as well as the most recent three years

 

 

	 	 	and will
submit such other documents as are permitted by Law and, in Allegheny’s discretion, necessary
to substantiate Contractor’s financial ability to complete the Work in accordance with the
terms hereof. In the event that Contractor fails to provide such financial information, then
a deficiency will be deemed to have occurred under Sub-Article 15.1. Contractor shall use
best efforts to include in all subcontracts and purchase orders a similar provision requiring
all Subcontractors and Vendors to provide such financial information upon request of either
Allegheny or Contractor.

	4.18	 	Without diminishing the importance of other portions of the Job Specification, Contractor
shall ensure satisfactory pursuance of the requirements in the following portions of that
document:

	 	(a)	 	furnishing and maintaining, in an up-to-date condition, the project control
documents and giving notice to Allegheny, if any condition exists that might prevent
Contractor from obtaining results that are in full compliance with this Agreement;
	 
	 	(b)	 	operating a quality assurance system that complies with Allegheny’s requirements
and allows Allegheny full access to audit the system, and further undertakes to make
such modifications to the system as may be required for the applicable quality assurance
standards to be met; and
	 
	 	(c)	 	during the course of manufacture and fabrication of equipment and materials, the
making of inspections and tests required by the Job Specification, including Allegheny’s
right to attend such inspections and tests and Contractor’s giving Allegheny proper
notice therefor.

	4.19	 	Contractor shall provide as specified in the Job Specification, office space, furnishings,
clerical and secretarial assistance, communication services and other facilities and services
required for Allegheny’s use at Contractor’s home and branch offices, subject to Allegheny and
its consultants executing mutually agreeable confidentiality agreements relating to
information of Contractor clients other than Allegheny and liability waivers.

ARTICLE 5 — COST AND SCHEDULE PERFORMANCE

	5.1	 	Contractor shall estimate, budget, report, forecast and control Costs, and shall schedule,
report, forecast and control progress of the Work.

	5.2	 	Contractor shall use its best efforts to: (i) keep the forecasted Agreement Price for all
phases of the Work within the Agreement Price Budget; (ii) complete elements of the Work by
the time specified in the agreed upon detailed work schedule, and (iii) achieve completion of
the Facility, and other deliverables to be provided as part of the Work, on or before the
Scheduled Mechanical Completion Dates.

	5.3	 	Contractor shall use its best efforts to achieve completion of each part of the Facility and
other deliverables in the time sequence specified in the Job Specification. If the time
sequence is revised by Allegheny, a Change Order shall
be issued if appropriate pursuant to the criteria of Sub-Article 9.2. If such revision is
required because of Contractor’s deficient performance, no adjustment to Fee

 

 

	     	 	shall be allowed
and no adjustment to the Scheduled Mechanical Completion Dates shall be allowed.

	5.4	 	After issuance of the Final Acceptance Notice, Contractor shall prepare and provide to
Allegheny a final cost report.

ARTICLE 6 — WARRANTIES

	6.1	 	Representations and Warranties

Contractor represents and warrants that it:

	 	(a)	 	has the Competence to perform the Work;
	 
	 	(b)	 	has or shall obtain and maintain the necessary personnel and supervision
possessing appropriate skills to perform the Work in an efficient and timely manner, and
as otherwise subject to Contractor’s general obligations under Sub-Article 4.4;
	 
	 	(c)	 	shall obtain, maintain and use all tools and equipment in accordance with
manufacturer’s specifications and recommendations and good engineering and operational
practices;
	 
	 	(d)	 	has or shall obtain, at its expense, before performing any work connected with
the Work, all the necessary registrations, certificates, permits, licenses and
authorizations to conduct business and perform the Work, and as otherwise subject to
Contractor’s general obligations under Sub-Article 4.9;
	 
	 	(e)	 	shall perform all Work in accordance with Law, and as otherwise subject to
Contractor’s general obligations under Sub-Article 4.15;
	 
	 	(f)	 	shall perform all Work promptly, with due diligence and Competence, and as
otherwise subject to Contractor’s general obligations under Sub-Article 4.4;
	 
	 	(g)	 	shall conduct itself with the highest degree of ethical and professional
standards and as otherwise subject to Contractor’s obligations under Article 29; and
	 
	 	(h)	 	fully comprehends the requirements and contingencies for performing the Work and
that it has examined the Work Site for any additional or special requirements and
contingencies, and as otherwise subject to Contractor’s general obligations under
Sub-Article 4.3.

	6.2	 	Contractor’s Duty for Compliance while Performing Work under this Agreement

Contractor represents and warrants that it shall not perform any aspect of the Work that it
knows cannot be performed in conformity with the provisions of this Agreement. If Contractor
determines that it cannot perform the Work in conformity with this Agreement, Contractor
shall immediately advise Allegheny and consult with Allegheny to develop a mutually
satisfactory resolution. Contractor further represents and warrants that it shall advise
Allegheny if it knows that any drawings and specifications applicable to the Work are at
variance with Law or with good engineering and operational practices before beginning any
work connected with
the Work. Contractor shall immediately notify Allegheny in writing of any such variance and
consult with Allegheny to develop a mutually satisfactory resolution

 

 

such that the necessary
changes are made before proceeding with the part of the Work affected.

	6.3	 	Warranty

Contractor warrants that all work performed and any equipment and materials provided in
connection with the Work shall be supplied in accordance with the requirements set forth in
the Job Specification and shall be free from defects in design, workmanship and materials for
a period of eighteen (18) months from the introduction of first flue gas into each
desulfurization unit at the Facility or thirty six (36) months after delivery to the Work
Site, whichever first occurs. In no event shall such thirty six (36) month period be deemed
to have started more than eighteen (18) months prior to the introduction of first flue gas
into each desulfurization unit at the Facility. If Allegheny discovers any defect during
this warranty period, and Allegheny has promptly notified Contractor of the defect either
during the warranty period or within a reasonable period of time after the end of this
warranty period (provided the defect occurred during the warranty period), Contractor shall,
at its option, promptly modify, adjust, repair or replace the defect (including the provision
of all labor, on a straight time basis, associated with the removal and reinstallation of
such defective equipment, materials and other incidental work to effect this correction of
the defect). Such warranty Work shall not constitute deficient work under Article 15.

Contractor agrees to discuss with Allegheny alternatives to the warranty remedy chosen by
Contractor and, if Allegheny requests that the Contractor pursue the alternate remedy, all
costs and expenses, if any, in excess of those that would have arisen out of Contractor’s
chosen remedy shall be paid by Allegheny to Contractor.

Upon notification to Contractor, Allegheny may continue to use any defective equipment or
material discovered during the warranty period until such time as Allegheny elects to have
Contractor proceed with modification, adjustment, repair or replacement of the defective
equipment or material. In the event such continued use by Allegheny causes Contractor
additional warranty repair cost or expense, all such additional cost and expense shall be
paid by Allegheny to Contractor as a Change Order. In addition, Allegheny shall indemnify
Contractor for and assume liability for all loss or damage to such equipment or Work, and any
personal injury, death or property damages arising out of Allegheny’s continued use of such
defective equipment or Work. In no event shall such continued use be deemed to extend the
warranty period applicable to such defective equipment or material.

Any work performed under this Sub-Article to correct any defect shall be warranted on the
same basis as provided in this Sub-Article for the longer of: (i) the balance of the eighteen
(18) month warranty period; or (ii) twelve (12) months from the date of completion of the
repair or replacement. Notwithstanding the foregoing expiration of the warranty period, if a
chronic failure of components (two or more failures of the same component) occurs during the
warranty period, Contractor shall be responsible to determine the root cause of the chronic
failure and shall
make the necessary repair or replacement of the Work, in accordance with this Sub-Article, to
correct the root cause.

 

 

	6.4	 	Warranties of Others

Contractor shall undertake its best efforts to enter into subcontracts and purchase orders
under which all warranties provided by Subcontractors and/or Vendors are for the benefit of,
and assignable to, Allegheny. If any warranty extending beyond the warranty period under
Sub-Article 6.3 is not assignable, Contractor shall enforce that warranty for Allegheny’s
benefit and at Allegheny’s expense. Contractor shall deliver a copy of each written warranty
provided by Subcontractors and/or Vendors to Allegheny.

	6.5	 	Conditions, Limitations and Disclaimers

This Article 6 does not cover the effects of normal wear, tear, deterioration or abuse of
the equipment; or the effects of normal abrasion, erosion, or corrosion; or operation or
maintenance not in accordance with Contractor’s operating instructions and other conditions
of service specified, and in accordance with generally accepted utility practice.

Contractor shall be responsible for equipment or parts furnished by others or repairs or
work done by others, if the same is authorized, ordered or performed by Contractor.

The sole liability of Contractor and the exclusive remedy of Allegheny arising out of this
warranty, whether arising under contract, tort (including negligence), strict liability, or
otherwise, shall be the modification, adjustment, repair or replacement as set forth above.

CONTRACTOR AND ALLEGHENY AGREE THAT, IN CONSIDERATION OF THE ABOVE EXPRESS WARRANTY AND
THE PERFORMANCE GUARANTEE(S), ALL OTHER WARRANTIES AND GUARANTEES, OTHER THAN TITLE, EITHER
EXPRESSED OR IMPLIED, WHETHER ARISING UNDER LAW OR EQUITY OR CUSTOM OF THE TRADE, INCLUDING
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, ARE EXCLUDED FROM THIS
AGREEMENT.

ARTICLE 7 — PROCUREMENT AND SUBCONTRACTING

	7.1	 	Contractor shall obtain Allegheny’s agreement with (i) procurement procedure, (ii)
subcontract procedure, (iii) purchase order and subcontract documents and (iv) Subcontractor
and Vendor selection.
	 
	7.2	 	No home, branch office or construction management services shall be performed by
Subcontractor(s) or Vendor(s) without Allegheny’s prior approval.
	 
	7.3	 	Contractor shall make its best efforts to include in all purchase orders and subcontracts
terms, conditions, provisions, obligations, warranties, and guaranties no less stringent than
those imposed on Contractor under this Agreement.

 

 

	7.4	   	In purchase orders and subcontracts involving the supply of equipment, supplies, structures
and/or materials, whether permanent or temporary, Contractor shall:

	 	7.4.1	 	specify that the equipment, supplies, structures and/or materials are being
procured on behalf of Allegheny, and that Allegheny is the legal and equitable owner
thereof at the time of payment, and
	 
	 	7.4.2	 	require that Allegheny be a recipient of manufacturer’s notices related to
the equipment and/or materials to be supplied including, but not limited to, any and
all health and safety advisories and notices.

In these purchase orders and subcontracts, Contractor shall similarly make its best efforts
to obligate Subcontractors and Vendors to comply with Sub-Articles 7.4.1 through 7.4.2
above with respect to all lower tier purchase orders and subcontracts. For any
Subcontractors and/or Vendors who refuse to accept this provision, Contractor shall
promptly notify Allegheny.

	7.5	 	At regular intervals and as requested by Allegheny, Contractor shall review with Allegheny
each Subcontractor’s progress and performance. Subcontract administration matters of a
non-routine nature including, but not limited to, claims or potential claims (exclusive of
warranty claims) shall be reviewed with Allegheny prior to any action or response by
Contractor.

	7.6	 	Contractor shall be responsible to Allegheny for work performed by Subcontractors to the same
extent it is for work performed by Contractor’s employees.

	7.7	 	Reviews or approvals of purchase orders, subcontracts, Subcontractors or Vendors by Allegheny
shall not create any Contractual relation between Allegheny and any Subcontractor or Vendor.

	7.8	 	Regarding Public Law 95-507, the Small Business Investment Act, 15 U.S.C. 637(d), Allegheny
recognizes that much of Contractor’s Work under this Agreement requires the duplication of
Contractor’s work on a prior project. Contractor will report on a quarterly basis the goals
identified in Contractor’s subcontracting plan and will pursue these goals on a commercially
reasonable basis. Contractor agrees to perform so that small business concerns and those
concerns owned and controlled by socially and economically disadvantaged individuals, as
defined in the Act, have the opportunity to compete for purchase orders and subcontracts
consistent with the efficient performance under this Agreement.

ARTICLE 8 — ALLEGHENY

	8.1	 	Specific Obligations

 

 

	 	8.1.1	 	Allegheny shall provide Contractor with the Job Specification, revisions
thereto, and upon request, copies of specifications, drawings, instructions and other
documents referred to in the Job Specification and not readily available to
Contractor.

	 	(a)	 	Job Specification will be identified by its Table of Contents
date.
	 
	 	(b)	 	At any time, Allegheny may issue revision(s) to the Job
Specification and shall issue Change Order(s) thereto.

	 	8.1.2	 	Allegheny shall obtain from governmental authorities the licenses and
permits that it must possess to locate, construct, maintain and operate the Facility.
	 
	 	8.1.3	 	Allegheny shall fulfill its obligations under Sub-Articles 8.1.1 through
8.1.2 above, and shall provide those items specified in the Job Specification as being
provided by Allegheny in time to avoid delaying Contractor in the performance of the
Work.
	 
	 	8.1.4	 	Allegheny shall coordinate activities conducted by Allegheny or by other
Contractors employed by Allegheny on or contiguous to the Work Site with the
activities of Contractor.
	 
	 	8.1.5	 	Allegheny shall use its best efforts to provide certificates, upon
reasonable and timely request, as it is empowered to issue in support of Contractor.

	8.2	 	Allegheny’s Project Manager

Allegheny’s project manager named in the Job Specification shall have the authority to act
for Allegheny with respect to all matters pertaining to the Work, Contractor’s performance
and the Job Specification. Communications concerning these matters received by Allegheny’s
project manager from Contractor shall be deemed to have been received by Allegheny.

	8.3	 	Access to and Use of Premises

	 	8.3.1	 	Allegheny may use any portion of its property for its own purpose and may
employ workers or other contractors of its own choosing for constructing other
facilities or maintaining or changing any of the existing facilities.
	 
	 	8.3.2	 	Allegheny may refuse any person admission to the Facility and Contractor
shall cooperate with Allegheny with respect thereto.
	 
	 	8.3.3	 	Allegheny may take temporary possession of and use partially completed parts
of the Facility by notifying Contractor thereof.

	 	(a)	 	Such possession by Allegheny shall not be deemed an
acknowledgement of completion of said parts of the Facility and shall
not limit Contractor’s responsibility for custody and control of said parts of
the Facility pursuant to Sub-Article 4.8, after possession is

 

 

	 	 	 	returned to
Contractor. For that portion of the Work under Allegheny’s temporary
possession, Allegheny shall be responsible for risk of loss or damage to the
Work and for safety and health pursuant to Article 35.
	 
	 	(b)	 	A Change Order shall be issued with respect to such temporary
possession.

	 	8.3.4	 	Contractor is responsible for ensuring that its employees, Subcontractors,
Vendors and all others permitted by Contractor to enter the Facility and other sites
made available by Allegheny for construction-related activities shall comply with
Allegheny’s regulations and requirements. Contractor also shall require said persons
to go to and from the Work Site and within such sites via a route prescribed by
Allegheny and not to deviate therefrom.

	8.4	 	Approvals, Authorizations, Agreements and Reviews

All Allegheny approvals, authorizations and agreements shall be in writing. Allegheny’s
approvals, authorizations, agreements and reviews shall not relieve Contractor of its
obligations under this Agreement.

	8.5	 	Bonus Offers

Allegheny shall offer to Contractor: a schedule completion bonus following establishment of
the Scheduled Mechanical Completion Date; and a target price bonus following establishment
of the Agreement Price Budget. The terms of such bonus offers shall be evidenced in a
separate agreement between the parties.

ARTICLE 9 — CHANGE ORDER

	9.1	 	Changes

Allegheny shall have the right, without additional consent from Contractor, to revise
the Job Specification within the general scope of Work set forth therein, including but
not limited to: (i) requiring additional work of Contractor and directing omission of
part of the Work previously authorized; and (ii) making final decisions on the
interpretation of any specifications, drawings, and documents included in the Job
Specification or otherwise furnished by Allegheny to Contractor and on matters where
such documents permit alternatives or are not specific. Upon notification of such
revision, Contractor shall promptly revise the Work accordingly.

	9.2	 	Change Orders

	 	(a)	 	Unless this Agreement provides otherwise, Allegheny shall issue a Change Order
when it revises the Job Specification or elements of the Work already completed or being
performed in accordance with the Job Specification, requires additional Work of
Contractor or directs omission of part of the Work
previously authorized, provided that any of the following Change Order criteria is
satisfied: (i) Contractor’s costs for performing the Work are affected

 

 

	 	 	 	thereby; or (ii)
the time required for performing the Work is affected thereby; or (iii) the scope of the
Work or execution approach is affected thereby. If any of the foregoing criteria is
satisfied, Allegheny shall authorize Contractor to prepare and Contractor shall prepare
an estimate of the effects on costs and/or completion of the Work. Contractor shall
proceed with the additional Work and after Contractor and Allegheny agree on the
effects, Allegheny shall issue a Change Order which may adjust the schedule or Agreement
Price Budget.
	 
	 	(b)	 	A Change Order shall not be issued, when: (i) revisions in the Work already
performed by Contractor are required to achieve compliance with the Job Specification;
or (ii) to correct errors, omissions or work not in accordance with the requirements of
Sub-Articles 4.3 and 4.5; or (iii) Contractor has not complied with a requirement of
this Agreement.

ARTICLE 10 — INDEPENDENT CONTRACTOR

In performing the Work and other obligations under this Agreement, Contractor shall be an
independent Contractor and not the agent or employee of Allegheny. The relationship of employer and
employee shall not exist between Allegheny and Contractor or any of Contractor’s employees or
Subcontractor’s employees. Contractor acknowledges and agrees that, with respect to any Work
performed under this Agreement, neither Contractor nor any of its employees, nor any of
Subcontractor’s employees is eligible to participate in and will not receive any benefits from any
employee benefit plan sponsored by Allegheny. The Work shall be performed under the supervision
and control of Contractor, and Allegheny shall have no authority to supervise Contractor’s
employees, representatives or Subcontractors. Contractor shall have no authority to make
statements, representations or commitments of any kind or take any other action binding on
Allegheny, except as specifically provided in this Agreement. It is expressly agreed that it is
not the purpose or intention of this Agreement to create, nor shall the same be construed as
creating, any partnership or joint operation between Allegheny and Contractor.

ARTICLE 11 —  PAYMENT AND INVOICING

	11.1	 	Payment

Allegheny shall make electronic payments to Contractor for Costs and Fee for Work
accomplished pursuant to Exhibits A through C. The procedure for making such payments is
delineated as follows:

	 	11.1.1	 	On or about the twentieth day of each month, Contractor shall render to Allegheny an
invoice for the actual, payable portion of the Agreement Price incurred for the Work
performed by Contractor during those days of the current month for which actual Costs
are available and an estimate of the payable portion of the Costs forecasted to be
earned for Work performed by Contractor during the balance of the month. The invoice
shall specify, document and be adjusted for the difference between the estimate paid to
Contractor during the prior month and the actual Costs incurred by
Contractor in the prior month. Undisputed payments shall be made by

 

 

	 	 	 	Allegheny, and
received by Contractor, on the first of the month following the date of the invoice.
	 
	 	11.1.2	 	Invoices under Sub-Article 11.1.1 shall include supporting documentation detailing:

	 	(a)	 	the payable portion of actual and forecasted Costs
(including applicable SG&A).
	 
	 	(b)	 	the payable portion of Fee earned based upon the
percentage of project completion actually earned at the end of the previous
month.
	 
	 	(c)	 	a reconciliation of amounts forecasted in the prior month
versus amounts actually incurred for that month, together with an update of
forecasted amounts for the current month and the following six (6) months.

	 	11.1.3	 	On or before the tenth and twentieth day of each month, Contractor shall render to
Allegheny an invoice for the actual Costs paid by Contractor to its Subcontractors and
Vendors for the Work. In support of each invoice, Contractor shall provide full
supporting documentation required by the Job Specification, together with copies of
Subcontractor and Vendor invoices and Contractor reports detailing the actual payments
made thereunder. Undisputed payments shall be made by Allegheny, and received by
Contractor, within five (5) business days following the receipt of each invoice from
Contractor.

These invoices shall include:

(a) the Payable portion of actual Costs,

(b) Contractor SG&A addition to Costs

	 	11.1.4	 	Payable amounts of Costs and Fee earned and eligible for invoicing in accordance with
Sub-Articles 11.1.1 and 11.1.3 above, shall be:

	 	(a)	 	ninety-five percent (95%) of Costs,
	 
	 	(b)	 	one hundred percent (100%) of Reimbursable Costs for those
Subcontractors already subject to a retention of five percent or more under
agreement with Contractor, unless otherwise agreed by Allegheny and
Contractor, and
	 
	 	(c)	 	ninety-five percent (95%) of Fee earned.

 

 

	 	11.1.5	 	Costs and Fee shall be certified by Contractor as being allowable under this Agreement
before payment by Allegheny shall be made hereunder.
	 
	 	11.1.6	 	After receipt of a correct and valid invoice with full supporting documentation from
Contractor, Allegheny shall promptly advise Contractor of any disputed amount, together
with the reason for the dispute. Allegheny shall have the right to withhold the
disputed amount from payment of future invoices. Any disputed amount will be paid or
credited upon resolution.
	 
	 	11.1.7	 	Invoicing for Costs shall be kept current and Allegheny shall reserve the right to not
pay five percent (5%) of undisputed Costs (up to a total, cumulative amount of $100,000)
incurred in excess of sixty days from the date such Costs should have been invoiced by
Contractor to Allegheny.
	 
	 	11.1.8	 	Each invoice shall be specified net of taxes, with applicable taxes (e.g., sales tax)
identified separately.
	 
	 	11.1.9	 	Contractor shall have no legal or equitable right, title or interest in or to any
amounts which may otherwise be due under this Agreement, and any such amounts shall not
have been earned by Contractor, unless and until Allegheny receives satisfactory
Contractor reports evidencing that Subcontractors and Vendors who have supplied any
materials, labor or equipment or performed any of the Work with respect to such amounts
have been fully paid therefore. Receipt of such Contractor’s reports evidencing
payments shall be a condition precedent to Contractor’s right to receive any further
payment, and a condition precedent to Allegheny’s release of any amount retained by
Allegheny pursuant to this Article.
	 
	 	11.1.10	 	Nothing in this Agreement shall create any obligation on the part of Allegheny to pay
to or see to the payment of any sums to any Subcontractor or Vendor or to any other
person or entity furnishing labor, equipment or materials to Contractor.
	 
	 	11.1.11	 	The retention of five percent (5%) held by Allegheny shall be released to Contractor
upon: the earlier of successful completion of the performance tests demonstrating
satisfaction of the Performance Guarantees under Exhibit I or failure of Allegheny to
test the entire flue gas desulfurization system within ninety (90) days after Contractor
provides notice that the system is ready for testing; and the posting by Contractor of
an irrevocable, on demand, stand-by letter of credit, in form and substance as the
letter of credit attached hereto as Exhibit E, with a financial institution approved by
Allegheny (“Letter of Credit”), equal to fifty percent (50%) of the amount of retention
to be released. The Letter of Credit shall terminate upon expiration of the warranty
period set forth in Sub-Article 6.3. The Letter of Credit is to cover the warranty
claims not honored by Contractor and, after providing Contractor with seven days notice
to cure such warranty claim, and if Contractor has not diligently pursued such cure, may
be partially or wholly drawn upon with notification by Allegheny to the financial institution.

 

 

	 	 	 	The costs incurred by Contractor for such Letter of Credit will be a Reimbursable Cost.
	 
	 	11.1.12	 	Upon Mechanical Completion, Contractor shall have the option of posting a Letter of
Credit, at Contractor’s expense, up to the amount of the retention held by Allegheny, at
which time Allegheny shall release such retention to Contractor. Such Letter of Credit
shall terminate: upon the earlier of successful completion of the performance tests
demonstrating satisfaction of the Performance Guarantees under Exhibit I or failure of
Allegheny to test the entire flue gas desulfurization system within ninety (90) days
after Contractor provides notice that the system is ready for testing; and posting of
the Letter of Credit referenced in Sub-Article 11.1.11 above.

	11.2	 	Waiver under Payment Act

Contractor hereby waives all disclosures, notices, rights, claims, privileges and benefits
under Act 7 of 1994 of the General Assembly of the Commonwealth of Pennsylvania known as the
“Contractor and Subcontractor Payment Act” and Allegheny and Contractor agree that none of
the terms and provisions of said Act shall apply to this Agreement or the Work, payment or
any claims related thereto.

ARTICLE 12 — CLAIMS AND LIENS

	12.1	 	Contractor agrees to waive all rights to mechanics’, materialmen’s or similar liens with
respect to every aspect of this Agreement. Immediately upon execution of this Agreement,
Contractor will execute and provide to Allegheny, and Allegheny will be responsible for
properly filing and indexing a Mechanics’ Lien Waiver and/or Stipulation against Liens in the
appropriate county office. Such Waiver and/or Stipulation shall be provided to Allegheny for
filing at least ten (10) days prior to Contractor or any Subcontractor or Vendor performing
any physical Work at the Work Site. Contractor shall include enforceable language waiving all
rights to any mechanics’ lien, materialmen’s lien or similar lien in all Subcontract and
Vendor agreements related to Work under this Agreement, and will require that all
Subcontractors, Vendors, or other persons supplying labor, material, services or any other
potentially lienable product for the Work will include such language in all Agreements with
any lower tier Subcontractor or Vendor of such products.

	12.2	 	Contractor agrees that it will indemnify, defend and hold Allegheny harmless from any fines,
penalties, assessments, attorneys fees, expenses or costs of any kind incurred by Allegheny or
assessed against Allegheny in connection with any violation or alleged violation by Contractor
or any Subcontractor or Vendor of any Occupational Safety and Health statutes, regulations or
requirements.

	12.3	 	In the event any Subcontractor, Vendor or third party asserts any claim that would, if
successful, cause an increase in the Agreement Price, become a cost, or cause
an extension of the Scheduled Mechanical Completion Date, Contractor shall immediately notify
Allegheny of the receipt of such claim, and shall immediately provide to Allegheny all claim
documentation received from such claimant.

 

 

	 	 	Allegheny shall have the right to monitor the
progress and handling of such claim in every respect, and may, at Allegheny’s sole option,
undertake the handling and defense of any such claim with counsel of its own choosing.
Contractor agrees to fully cooperate with Allegheny in the negotiation, handling and/or
defense of any such claim, including but not limited to the provision of documentary and
witness support, and shall not settle or make payment on any such claim without the written
consent of Allegheny.
	 
	12.4	 	Contractor agrees that it will continue performance under this Agreement and Allegheny agrees
to continue to pay undisputed amounts during the pendency of any dispute or claim.

ARTICLE 13 — TAXES AND DUTIES

	13.1	 	Contractor shall pay when due:

	 	13.1.1	 	Taxes and fees imposed by reason of the performance of the Work by Contractor
including, but not limited to, sales, excise, storage, consumption and use taxes;
licenses, permit and registration fees; and income, profit, franchise, and personal
property taxes, but excluding fees for licenses and permits obtained by Allegheny
pursuant to Sub-Article 8.1.2.
	 
	 	13.1.2	 	Employment taxes and contributions imposed by applicable Law, or trade union
agreements or regulations, with respect to or measured by compensation (wages,
salaries or other) paid to employees of Contractor including, but not limited to taxes
and contributions for unemployment compensation insurance, old age benefits, welfare
funds, pensions and annuities, and disability insurance, and
	 
	 	13.1.3	 	Import/export license fees and import/export taxes and duties on services, equipment
and materials, and construction tools, equipment and supplies imported or exported by
Contractor.

	13.2	 	Contractor shall defend, indemnify and hold Allegheny harmless from liability resulting from
Contractor’s or Subcontractors’ or Vendors’ failure to (i) make timely payment of or to pay
any of the items in Sub-Article 13.1 above, or (ii) comply with the reporting, filing or other
procedural requirements with respect to their payment. Interest, penalties or other
liabilities arising from such failures shall not be allowed as Costs and shall be for
Contractor’s account.

	13.3	 	In accordance with Sub-Article 13.7.1, equipment for this Agreement will be purchased as
permanent equipment under Pennsylvania tax law and Contractor will pay sales tax and/or accrue
and pay use tax. In addition, in accordance with Sub-Article 13.7.2, Contractor shall pay
applicable sales or use tax on: (i) equipment, materials and supplies (including but not
limited to consumable supplies and small tools) that will not become a permanent part of the
Work; (ii) third party rentals
including construction equipment; and (iii) permanent equipment and materials purchased by
Contractor.

 

 

	13.4	 	If Allegheny believes that Contractor is entitled to immunity or exemption from taxes or
duties associated with the purchase of goods or services under this contract, Allegheny shall
provide Contractor or Subcontractor with appropriate citation to said immunity or exemption
and assist Contractor or Subcontractor with obtaining such benefit from the appropriate
governmental authority. If as a result of such actions Contractor or Subcontractor have any
additional taxes, penalties or interest imposed upon them, then Allegheny shall reimburse
Contractor or Subcontractor for such costs.

	13.5	 	Contractor shall promptly notify Allegheny of matters pertaining to nonpayment or payment
under protest of, claim for immunity or exemption from, or claim for refund of or credit
against any taxes or duties.

	13.6	 	Contractor shall provide Allegheny with a completed Federal form W-9. If Contractor fails to
provide such a form then Allegheny shall withhold income and other taxes from payments due to
Contractor under this Agreement to the extent that such withholding is required by Law.
Payment by Allegheny to the appropriate governmental office of the amount of money so withheld
will be deemed to have been made on behalf of Contractor hereunder for the amount of such
payment as if the payment had been made to Contractor and will relieve Allegheny of any
further obligation to Contractor with respect to the amount so withheld. The receipt for any
such withholding tax will be given to the Contractor.
	 
	13.7	 	Sales and Use Tax Responsibilities

	 	13.7.1	 	Except as expressly provided in Sub-Article 13.7.2 below, all permanent equipment
and materials purchased by Contractor for incorporation as a permanent part of the
Work shall be purchased by Contractor. Contractor shall pay sales and/or accrue and
pay use tax as appropriate.
	 
	 	13.7.2	 	Contractor shall pay applicable sales or use tax on: (i) equipment, materials and
supplies (including but not limited to consumable supplies and small tools) that will
not become a permanent part of the Work; (ii) third party rentals including
construction equipment; and (iii) permanent equipment and materials purchased by
Contractor.
	 
	 	13.7.3	 	Contractor shall, in its accounting of the Agreement Price Budget, distinguish
between (i) permanent equipment and materials purchased for incorporation as a
permanent part of the Work and (ii) those equipment, materials and supplies which
Contractor shall have paid sales and use tax in accordance with Sub-Article 13.7.2
above.
	 
	 	13.7.4	 	The Contractor agrees to assign and transfer to Allegheny all its rights to sales
and use tax which may be refunded as a result of a claim for refund for materials
purchased in connection with this Agreement. The
Contractor further agrees that it will not file a claim for refund for any sales or
use tax which is the subject of this assignment.

 

 

ARTICLE
14 — INSPECTION OF WORK

	14.1	 	Allegheny or its representative shall at all times have access to the Work whether it is in
preparation or in progress and Contractor shall provide proper facilities for such access and
for inspection. If the Job Specification, Allegheny’s advance instructions, any Law or any
public authority require any Work to be specifically inspected, tested or approved, Contractor
shall give Allegheny timely notice of: (i) readiness for inspection; and (ii) the date fixed
for any inspection to be performed by a public authority.

	14.2	 	Inspections by Allegheny shall be promptly made. If Allegheny timely requests an inspection
of, or witness to, any part of the Work, but Contractor proceeds to close or cover it before
such inspection or witnessing has been performed, Allegheny may require said Work to be opened
or uncovered for inspection or witnessing and reclosed or recovered. Costs associated
therewith shall not be allowed as Reimbursable Costs.

ARTICLE
15 — DEFICIENT WORK

	15.1	 	Any or all of the following, at Allegheny’s option, shall be deemed deficient during
performance of Work hereunder: (i) any Work performed or equipment and/or materials furnished
by Contractor or Subcontractors that does not conform with requirements as set forth in this
Agreement, or (ii) Contractor has failed to remedy any defects in the Work, or (iii)
Contractor has failed to supply a sufficient number of properly skilled workmen or
construction equipment and/or materials, provided they are available, or (iv) Contractor, or
any Subcontractor or Vendor, fails upon request to demonstrate financial ability to complete
the Work in accordance with the terms of this Agreement, or (v) Contractor has failed to
execute the Work with promptness and diligence, or (vi) Contractor has failed to comply with
any of the material provisions of this Agreement. Upon receipt of written notice from
Allegheny that any such deficiency to the satisfaction of Allegheny exists, Contractor shall
immediately undertake and proceed with due diligence to remedy such deficiency to the
satisfaction of Allegheny.

	15.2	 	For Contractor’s remediation pursuant to the foregoing Sub-Article, Allegheny shall pay
Contractor in accordance with Exhibit A and Exhibit B, costs incurred by Contractor in
correcting deficiencies in the Work, except for amounts recoverable from Subcontractors,
Vendors or others.

	15.3	 	If Contractor does not immediately, upon receipt of such notice, undertake and proceed with
due diligence to remedy such deficiencies, Allegheny may declare Contractor in material breach
of this Agreement, and by written notice setting forth the effective date of removal, may
remove Contractor from all or any part of the Work and use or dispose of all materials,
supplies, tools and equipment in connection therewith. Allegheny may then complete all or any
part of the Work from which Contractor has been removed.

	15.4	 	In the event that Allegheny does remove Contractor and take possession as aforesaid, then
notwithstanding Article 11, Contractor shall only be entitled to payment for the part of the
Work performed by it and acceptable to Allegheny under the terms and conditions of this
Agreement up to the effective date of such removal, reduced by: (i) costs recoverable under
Subcontractors’ or Vendors’ guarantees; (ii)

 

 

	 	 	any costs recoverable by Contractor under
insurance policies; and (iii) Allegheny’s retainage out of moneys owing to Contractor of an
amount sufficient to indemnify Allegheny against extra costs incurred by Allegheny to remedy
deficiencies. The rights and remedies of Allegheny provided by this Article are in addition
to any other rights and remedies provided by this Agreement.

	15.5	 	Failure of Contractor to meet the Mechanical Completion Dates or other schedule or completion
dates does not constitute a material breach of this Agreement, if Contractor’s Work is not
otherwise deficient under this Article.

ARTICLE 16 — SUSPENSION

	16.1	 	Suspension of Work

Allegheny may suspend at any time and for any reason any part of the Work by giving notice to
Contractor specifying the part of the Work to be suspended and the effective date of
suspension. Suspension under this Article cannot last more than three months. Contractor
shall cease work on said part of the Work on the effective date of suspension, but shall
continue to perform any part of the Work not suspended.

	16.2	 	Compensation

For the part of the Work suspended, compensation to Contractor during the period of
suspension shall be in accordance with Exhibits A and B, limited however to:

	 	(a)	 	Contractor’s employees whose retention on the Work during the suspension has been
authorized in advance by Allegheny; and
	 
	 	(b)	 	Other items directly related to the suspension of the Work,
	 
	 	(c)	 	Other items directly related to the suspended part of the Work if authorized in
advance by Allegheny,

	16.3	 	Resumption

Allegheny may, at any time, authorize resumption of the suspended part of the Work by
notifying Contractor of the part of the Work to be resumed and the effective date of
suspension withdrawal. Work shall be promptly resumed by Contractor after receipt of such
notice. A Change Order shall be issued to reflect the difference in Contractor’s costs for
performing the Work, or the time required to perform the Work, or both.

	16.4	 	Liability

For the part of the Work suspended in accordance with this Article, except as
otherwise provided in Sub-Article 16.2, Allegheny shall not be liable for any additional
costs, claims, damages or liabilities of Contractor, Subcontractors or Vendors.

ARTICLE 17 — TERMINATION

	17.1	 	Termination for Convenience

 

 

Allegheny may terminate this Agreement and any part of the Work at any time and for any
reason by giving notice to Contractor specifying the part of the Work to be terminated and
the effective date of termination. Contractor shall promptly prepare for Allegheny’s
approval a plan for terminating that part of the Work and shall cease work on said part of
the Work on the effective date of termination. Contractor shall continue to perform any part
of the Work not terminated, and upon Allegheny’s approval shall implement the plan for
termination.

	17.2	 	Termination for Material Breach

In the case of Contractor’s material breach pursuant to Article 15, Allegheny may terminate
this Agreement and any part of the Work at any time, by giving prompt notice to Contractor
specifying the part of the Work to be terminated and the effective date of termination.
Contractor shall cease work on said part of the Work on the termination effective date, but
shall continue to perform any part of the Work not terminated.

In the event it is subsequently determined that any such termination by Allegheny for
material breach is without substance or foundation, such termination shall be considered and
administered as a termination for convenience pursuant to Sub-Article 17.1.

	17.3	 	Termination by Contractor

In the event that all of the Work was suspended pursuant to Sub-Article 16.1 and Allegheny
has not authorized resumption within three months of such suspension, Contractor may give
notice to Allegheny of its intention to terminate this Agreement. If, within thirty (30)
days of said notice Allegheny does not authorize resumption of the Work, or any part thereof,
Contractor may terminate this Agreement with immediate effect, and Allegheny will compensate
Contractor pursuant to Sub-Article 17.5 below.

	17.4	 	Termination for Force Majeure

If a party invokes force majeure pursuant to Article 37, the other party shall not have a
right to terminate the Work due to the invocation of force majeure, unless force majeure has
continued for a three (3) month period from the date it was first invoked and the other party
provides twenty (20) days notice of termination thereafter.

	17.5	 	Compensation

If this Agreement or any part of the Work is terminated, in accordance with Sub-Articles
17.1, 17.3, or 17.4 Allegheny with respect to such Work will pay Contractor, only for the
part of the Work performed in accordance with this Agreement and obligations incurred prior
to the effective date of termination and for such additional amounts directly related to the
Work performed by Contractor in
terminating, provided that said Work was authorized in advance by Allegheny. Such payment
will be made to Contractor pursuant to Exhibits A, B and C:

	 	(a)	 	for the Work; and

 

 

	 	(b)	 	for direct costs that Contractor incurs in terminating the Work under this
Agreement, including unpaid legally enforceable obligations to Subcontractors and
Vendors and others as well as transportation costs for return of employees, construction
tools and equipment, provided those costs incurred after termination are authorized in
advance by Allegheny and properly supported by time sheets, invoices and the like.

Allegheny shall have audit rights pursuant to Article 28 to verify the actual costs of the
Work performed by Contractor in terminating.

	17.6	 	No Compensation

In the event Work is terminated under this Agreement by reason of Contractor’s failure to
perform in accordance with Sub-Article 17.2, Allegheny shall have no obligation to further
compensate Contractor under this Agreement.

	17.7	 	Liability

For any part of the Work terminated in accordance with Sub-Articles 17.1, 17.3, or
17.4, except as otherwise provided in Sub-Article 17.5, Allegheny shall not be liable
for any additional costs, claims, damages or liabilities of Contractor, Subcontractors
or Vendors.

ARTICLE 18 — MECHANICAL COMPLETION AND FINAL ACCEPTANCE

	18.1	 	Mechanical Completion

Contractor shall promptly notify Allegheny when Contractor considers it has substantially met
the criteria set forth in the Job Specification for Mechanical Completion of the Facility or
any part thereof. Within ten (10) calendar days after receipt of said notice, Allegheny
shall issue a Mechanical Completion Notice with respect to the Facility or part thereof, or
alternatively, notify Contractor of deficiencies to be remedied before a Mechanical
Completion Notice will be issued. Contractor shall promptly correct such deficiencies and
notify Allegheny when they are remedied.

	18.2	 	Final Acceptance

When Contractor considers that: (i) satisfactory completion of performance testing in
accordance with the Job Specification has occurred (ii) the entire Facility has been
completed in accordance with the Job Specification; (iii) Contractor has corrected known
deficiencies; and (iv) Contractor has furnished to Allegheny those documents required
under this Agreement, it shall notify Allegheny thereof. Within fourteen (14) calendar
days, Allegheny shall: (i) issue Final Acceptance Notice certifying its agreement that
said criteria have been satisfied; or (ii) notify Contractor of the deficiencies still
to be remedied or activities to be completed before a Final Acceptance Notice will be
issued.

ARTICLE 19 — TITLE

 

 

Title to all parts of the Facility supplied by Allegheny shall remain in Allegheny at all times.
Title to all equipment, materials, supplies and structures procured by Contractor from third
parties and intended, at the time of such procurement or supply, to be incorporated into, or
used in the construction of the Facility (excluding Contractor’s and Subcontractors’
construction tools, construction equipment and rented items) shall pass to Allegheny upon
payment therefor by Allegheny or upon delivery to the Work Site, whichever occurs earlier.
Delivery of equipment, materials, supplies and structures to the Work Site shall not relieve
Allegheny of its obligations of payment for such items in accordance with the terms of this
Agreement. Title to all equipment, materials, supplies and structures procured by Contractor
from third parties with funds supplied by Allegheny through a joint check payable to
Contractor and to any such third party jointly, or through a trust account to be established
by Allegheny in its sole discretion, shall vest in Allegheny at the moment of payment by
Contractor, and shall not vest in Contractor. Contractor shall act as bailee for Allegheny
with regard to all equipment, materials, supplies and structures supplied by Allegheny or
procured by Contractor from third parties with funds supplied by Allegheny.

ARTICLE 20 — Distribution of Risk, Release and Indemnity

	20.1	 	Contractor’s Responsibilities

	 	20.1.1	 	Contractor agrees, to the extent not prohibited by Law, to defend, indemnify and
hold Allegheny and its agents, officers and employees harmless from (i) all third
party claims, obligations and liabilities (and all costs and expenses including
attorneys’ fees incurred in connection therewith) to the extent arising out of or
related to any negligence, gross negligence, recklessness or willful misconduct of
Contractor and (ii) all claims for death, disease, bodily injury and/or property
damage including, without limitation, claims from Contractor’s employees,
Subcontractors’ employees and/or Vendors’ employees (other than property damage to the
Work itself) that may arise in connection with the Work or that occur during
Contractor’s performance of the Work, including all costs and expenses including
attorneys’ fees incurred in connection therewith.
	 
	 	20.1.2	 	Contractor shall also cause any Subcontractor working at the Site, and use best
efforts to cause other Subcontractors, to the extent not prohibited by Law, to
indemnify, defend and hold Allegheny and Contractor and their respective principals,
officers, partners, agents and employees harmless from all third party claims for
death, disease, bodily injury and/or property damage (other than property damage to
the Work itself) that may arise in connection with Subcontractor’s performance of the
Work including, but not limited to, claims from any Subcontractor employees.
	 
	 	20.1.3	 	Contractor’s and all Subcontractor’s obligations to indemnify and hold Allegheny
harmless shall not be limited by a limitation on the amount or type of damages,
compensation or benefits payable by or for the Contractor or Subcontractor under
workers’ compensation acts, disability
benefit acts or other employee benefit acts. Where personal injury, death, disease
or loss of or damage to property arises from a cause or causes attributable jointly
to the negligence of one or more of Allegheny, Contractor and/or any Subcontractor,
each indemnitor’s duty of

 

 

	 	 	 	indemnification shall be in proportion to its allocable
share of such negligence.
	 
	 	20.1.4	 	(a) Allegheny and Contractor hereby waive all rights of subrogation against each
other, and against all Contractors and Subcontractors enrolled in the OCIP, in
connection with any and all events, occurrences, claims, losses and/or payments
arising from or in connection with the performance of the Work.
	 
	 	 	 	(b) Contractor shall cause each of its Subcontractors, in their respective
subcontracts, to waive all rights of subrogation against Allegheny, and against all
Contractors and Subcontractors enrolled in the OCIP, in connection with any and all
events, occurrences, claims, losses and/or payments arising from or in connection
with the performance of the Work.
	 
	 	 	 	(c) All insurance provided by Contractors and/or Subcontractors shall be endorsed
to waive the insurer’s rights of subrogation against Allegheny. All insurance
provided by Contractors and/or Subcontractors enrolled in the OCIP shall be
endorsed to waive the insurer’s rights of subrogation against all other Contractors
and Subcontractors enrolled in the OCIP.

	20.2	 	Allegheny’s Responsibilities

	 	20.2.1	 	Allegheny shall be responsible for and hold Contractor harmless for loss of or damage
howsoever caused to Allegheny’s property intended to be incorporated into or used in the
Work and located at the Work Site, even if the loss or damage results from Contractor’s
negligence, except that Contractor shall be responsible for the first $5,000 of any such
loss.
	 
	 	20.2.2	 	Allegheny will indemnify Contractor for loss of or damage howsoever caused to
Contractor’s property intended to be incorporated into the Work and located at the Work
Site, even if the loss or damage results from Contractor’s negligence, except that
Contractor shall be responsible for the first $5,000 of any such loss.
	 
	 	20.2.3	 	Notwithstanding the provisions of Sub-Articles 20.2.1 and 20.2.2, Contractor shall
also be responsible, and not compensated by Allegheny, for:

	 	(a)	 	any loss of money or securities in the care, custody or control
of Contractor, which are used or intended for use in paying for or performing
the Work;
	 
	 	(b)	 	unexplained or mysterious disappearance of any property in
Contractor’s care, custody or control, or shortage of any property disclosed on
taking inventory; or
	 
	 	(c)	 	theft of property on the part of Contractor, Subcontractors or
their employees.

ARTICLE 21 — INSURANCE

 

 

	21.1	 	Contractor shall participate in Allegheny’s Controlled Insurance Program (OCIP) pursuant to
Exhibit G, and require Subcontractors to meet the insurance coverage requirements set forth in
Exhibit G.

	21.2	 	Upon Allegheny’s request, Contractor agrees to participate in a project-wide bonding program
(recognizing that Contractor does not currently have surety bonding capacity), subguard,
primeguard or other insurance programs, and Allegheny may request that Contractor require
Subcontractors to provide bonding.

ARTICLE 22 — TOOLS AND EQUIPMENT

Allegheny may loan or furnish tools or equipment to Contractor as an accommodation for use at a
Work Site. Any tools and equipment are loaned or furnished on an “as is, where is” basis.
Contractor agrees:

	22.1	 	to inspect the tools and equipment and make its own determination, before commencing the
Work, that they are adequate for the safe and efficient performance of the Work by Contractor.

	22.2	 	that the tools and equipment will be loaned or furnished by Allegheny and accepted by
Contractor without warranty or representation by Allegheny as to their condition or fitness
for Contractor purpose.

	22.3	 	to return the tools and equipment to Allegheny at the conclusion of use in good condition as
when received, ordinary wear and tear excepted.

ARTICLE 23 — RESPONSIBILITY FOR CONSEQUENTIAL DAMAGES, LIMITATION OF LIABILITY

	23.1	 	NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, NEITHER CONTRACTOR, NOR
SUBCONTRACTORS, SHALL BE LIABLE, WHETHER BASED ON CONTRACT OR TORT (INCLUDING NEGLIGENCE AND
STRICT LIABILITY), UNDER ANY WARRANTY OR OTHERWISE, RELATING TO THIS AGREEMENT, FOR ANY
CONSEQUENTIAL, INDIRECT, SPECIAL, OR INCIDENTAL LOSS OR DAMAGE, INCLUDING, BUT NOT LIMITED TO,
ANY DAMAGE TO, OR ANY LOSS OF USE OF PROPERTY, LOSS BY REASON OF PLANT SHUTDOWN OR SERVICE
INTERRUPTION, COSTS OF CAPITAL OR EXPENSES THEREOF, LOSS OF PROFITS OR REVENUES OR THE LOSS OF
USE THEREOF, NON-OPERATION OR INCREASED EXPENSE OF OPERATION, FINES OR PENALTIES ASSESSED OR
LEVIED BY ANY GOVERNMENTAL AGENCY BASED ON THE OPERATION, NON-OPERATION, OR USE OF THE
EQUIPMENT, OR COST OF PURCHASED OR REPLACEMENT POWER (INCLUDING ADDITIONAL EXPENSES INCURRED
IN USING EXISTING POWER FACILITIES).
	 
	 	 	The parties agree that the above disclaimer shall not apply to the liquidated damages set
forth in Exhibit I in the event of Contractor’s failure to achieve the performance
guarantees therein.
	 
	 	 	NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, ALLEGHENY SHALL NOT BE LIABLE TO
CONTRACTOR, WHETHER BASED

 

 

	      	 	ON CONTRACT OR TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY),
UNDER ANY WARRANTY OR OTHERWISE, RELATING TO THIS AGREEMENT, FOR ANY CONSEQUENTIAL,
INDIRECT, SPECIAL OR INCIDENTAL LOSS OR DAMAGE, INCLUDING, BUT NOT LIMITED TO, COSTS OF
CAPITAL OR EXPENSES THEREOF, LOSS OF OTHER BUSINESS OPPORTUNITIES INCLUDING ANTICIPATED
REVENUES FROM OTHER PROJECTS FOREGONE TO UNDERTAKE THIS AGREEMENT, CONTRACTOR’S INCREASED
FINANCE COSTS, OR ANY LOSS OR DAMAGE THAT IS SPECULATIVE IN NATURE.

	23.2	 	The total liability of the Contractor under this Agreement, whether arising out of contract,
tort (including negligence, but excluding fraud or willful misconduct), strict liability, or
any other cause of or form of action, shall not exceed Fifty Million Dollars, which liability
shall be excess of any valid and collectible insurance provided by Allegheny under Exhibit G.
	 
	 	 	This Sub-Article 23.2 shall apply notwithstanding any other provision of this Agreement.

ARTICLE 24 — Governing Law and Dispute Resolution

	24.1	 	Governing Law

The validity, interpretation and construction of this Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania.

	24.2	 	Dispute Resolution

All disputes between Allegheny and Contractor arising under this Agreement shall be resolved
in accordance with the Dispute Resolution Procedure attached hereto as Exhibit H. Contractor
shall make best efforts to enter into purchase orders and subcontracts that require the
Subcontractor or Vendor to agree to resolve all disputes in accordance with said Dispute
Resolution Procedure. Subcontractors or Vendors consent to be joined in any dispute
resolution proceeding, at Allegheny’s option, if the Subcontractor’s or Vendor’s Work is
related to such proceeding.

ARTICLE 25 — INTELLECTUAL PROPERTY AND INFRINGEMENT

	25.1	 	Contractor will prepare drawings, specifications and documents in connection with the Work
furnished by Contractor under this Agreement. All such drawings and documents, regardless of
the form in which they may have been created or thereafter exist, and all intellectual
property rights pertaining thereto including but not limited to copyright, shall remain the
sole and exclusive property of the Contractor. Contractor agrees to provide drawings,
specifications and documents to Allegheny to permit Allegheny to construct, operate, maintain,
and use the Work furnished by Contractor under this Agreement. Contractor grants to Allegheny
a paid up, royalty free, nonexclusive license to reproduce those
drawings, specifications or documents provided by Contractor to Allegheny for the Work
furnished by Contractor under this Agreement for the limited purposes

 

 

	       	 	of constructing,
operating, maintaining, and using the Work furnished by Contractor under this Agreement,
provided that Allegheny complies with all obligations, including payment of all undisputed
sums due under this Agreement and, subject to the obligations of confidentiality set forth
in this Agreement, Contractor also grants to Allegheny a paid up, royalty free,
nonexclusive license to create and use photographs, drawings, sketches, artistic
representations and other similar representations of the Work, with the understanding that
ownership of such derivative works shall remain with Contractor, for the same limited
purposes set forth above. Contractor further grants Allegheny a paid-up, royalty free,
nonexclusive license for all patents necessary to construct, operate, maintain and use the
Work furnished by Contractor under this Agreement for the remaining terms of all such
patents. Contractor and Allegheny agree that the references in this Sub-Article 25.1 to
drawings, specifications and documents provided to Allegheny shall apply equally to
drawings, specifications and documents that have been completed and provided to Allegheny
and to drawings, specifications and documents that are works-in-progress prior to their
delivery to Allegheny under this Agreement.

	25.2	 	Contractor shall use its best efforts to cause provisions substantially similar to
Sub-Article 25.1 to be included with all of Contractor’s agreements with its Subcontractors
and Vendors and cause such Subcontractors and Vendors to grant the licenses to Allegheny as
described in Sub-Article 25.1.

	25.3	 	For those drawings, specifications or documents provided by Contractor to Allegheny in
accordance with Sub-Article 25.1 for the Work furnished by Contractor under this Agreement,
Contractor agrees to provide electronic copies of same to Allegheny, in a medium (e.g., disk,
magnetic tape, network direct transfer, etc.) approved by Allegheny, including those which
were produced or created by Subcontractors or Vendors.

	25.4	 	The Contractor shall defend at its own expense and hold Allegheny harmless from any suit or
action brought against Allegheny based on a claim that anything furnished as part of the Work
hereunder, or any part thereof, or the designed use of same, constitutes infringement of any
patent of the United States, and the Contractor shall also pay all costs and damages awarded
therein against Allegheny. In case anything furnished as part of the Work hereunder, or any
part thereof, is in such suit held to constitute infringement and its use is enjoined, the
Contractor shall, at its option and own expense either: procure for Allegheny the right to
continue to use such thing furnished as part of the Work hereunder, or part thereof; or
replace it with something that is a non-infringing substantial equivalent; or modify it so it
becomes non-infringing. It shall be the responsibility of Allegheny to provide prompt written
notice of the assertion of any claim of infringement and to make available all other needed
information, assistance, and authority it possesses for the defense of any suit or proceeding
in which such claim is asserted. Any such replacement or modification shall be accomplished
in the same manner as repair or replacement of defects under the Warranty article of this
Agreement. However, Contractor’s obligations to defend, procure or replace anything furnished
as part of the Work hereunder shall not apply to
anything furnished as part of the Work hereunder, or any part thereof, manufactured to
Allegheny’s detailed design specifications or to any

 

 

	    	 	modifications to anything furnished as
part of the Work hereunder or part thereof made by Allegheny, and as to such thing
furnished as part of the Work hereunder or part Contractor assumes no obligation to defend
or any liability whatsoever for infringement. The foregoing sets forth the sole liability
of the Contractor and the exclusive remedy of Allegheny with respect to patent
infringement.

	25.5	 	Ownership of Inventions

Any inventions, whether patentable or unpatentable, discoveries or
improvements (collectively, “Inventions”), resulting from
Contractor’s Work hereunder, shall be the sole and exclusive property
of Contractor. Contractor does hereby grant to Allegheny an
irrevocable, paid up, royalty free, nonexclusive license on the
Inventions for the limited purposes of constructing, operating,
maintaining, and using the Work furnished by Contractor under this
Agreement.

	25.6	 	Infringement Notice and Indemnification

If either Contractor or Allegheny is made the subject of any claim or lawsuit based on the
alleged infringement or misappropriation of any third-party patent, copyright, trade secret
or other proprietary right by reason of any aspect of the Work provided hereunder, it shall
promptly notify the other party in writing. Allegheny shall defend and indemnify Contractor
against those claims or lawsuits based on the actual or alleged infringement or
misappropriation of any such third-party right by Contractor only to the extent that
Contractor’s allegedly infringing or misappropriating conduct is expressly required in
writing by Allegheny. This indemnity shall not extend to conduct of Contractor, which is
discretionary to Contractor. Contractor shall defend and indemnify Allegheny against all
other claims or lawsuits based on the actual or alleged infringement or misappropriation of
any third-party right. The indemnities set forth in this Sub-Article 25.3 shall include,
without limitation, all penalties, awards, and judgments; all court and arbitration costs;
legal costs, including attorneys’ fees; and other reasonable out-of-pocket costs incurred in
connection with such claims or lawsuits. The indemnifying party shall have the right to
control the defense of any litigation, and to settle or compromise all claims and lawsuits
subject to its indemnity. However, the indemnifying party may not settle or compromise such
claim or lawsuit without the written consent of the indemnified party if any settlement or
compromise: (i) requires the indemnified party to part with any property right or interest,
assume any obligation or make any payment not indemnified; or (ii) subjects the indemnified
party to any injunction. Subject to the foregoing, the indemnified party shall have the
right, at its option and expense, but not the obligation, to retain advisory counsel to
represent its interests in defending any such claim or lawsuit.

If any action results in an injunction against Allegheny with respect to the Work performed
under this Agreement, Contractor agrees that it shall, at its option and its sole expense,
either: (i) procure for Allegheny the right to continue using the infringing subject matter;
or (ii) replace or modify the same so that it becomes non-infringing.

 

 

ARTICLE
26 — CONFIDENTIAL INFORMATION

	26.1	 	Duty of Confidentiality

Each party shall hold in confidence all business and
technical information that is made available to the
other party, directly or indirectly, by either party
or developed or acquired by either party in
performing the Work under this Agreement
(collectively “Confidential Information”), except:

	(a)	 	information, which is or becomes, without fault of the receiving party, part of the public
domain;

	(b)	 	information, which the receiving party can show, was received by the receiving party from an
independent third party that is under no obligation to the disclosing party regarding the
information;

	(c)	 	information, which the receiving party can show was already in the receiving party’s
possession at the time the information, was made available to the receiving party, directly or
indirectly, from the disclosing party.
	 
	 	 	Additionally, if so required by Law or valid legal or regulatory process, the receiving
party may disclose Confidential Information, but only following notice by the receiving
party to the disclosing party of the requirement to disclose and reasonable cooperation
with any attempt by the disclosing party to maintain the confidentiality of such
Confidential Information. Provided, however, upon notice to the disclosing party, the
receiving party may disclose confidential information required by the Securities and
Exchange Commission or New York Stock Exchange.

	26.2	 	Use of Confidential Information

Each party shall not, without the prior written approval of the other
party, as appropriate, use the Confidential Information that the
receiving party is required to keep confidential hereunder for any
purpose other than the performance of the Work under this Agreement.

	26.3	 	Contractor’s Information

The existing Confidentiality Agreement between Allegheny and Contractor, dated March
14, 2006 shall apply to confidential information disclosed prior to the date of this
Agreement, but is superceded by the terms of this Article 26 from the date of this
Agreement forward. Except for the erection arrangement drawings, field weld schedules,
general arrangement drawings and piping & instrument diagrams which are herein
designated to be non-confidential by Contractor, the receiving party shall be
prohibited from the use or disclosure of any or all of the information contained in any
drawing, specification, record or other document to third parties without accounting to
the disclosing party therefor. Except for information designated by the disclosing
party as non-confidential in this Sub-Article, the disclosing party shall be free to
place any restrictive notices on any information, no
matter the form of its recording, that the disclosing party provides to the receiving party
hereunder. If the disclosing party places any such restrictive notices on any

 

 

non-confidential drawing, specification, record or other document, the receiving party is
hereby authorized to disregard those notices to the extent set forth in this Sub-Article
26.3. The prohibitions against use or disclosure set forth in this Sub-Article 26.3 are not
intended nor shall they be construed to limit Allegheny’s rights to disclosure and use to the
extent set forth in Sub-Article 25.1.

ARTICLE 27 — USE OF TRADEMARK AND PUBLICITY

Contractor shall not, without the prior written consent of Allegheny: (i) use the name or any
trade name or registered trademark of Allegheny in any advertising or communications to the public
in any format, except as necessary to perform the Work; (ii) make publicity releases or
announcements regarding this Agreement, the performance of the Work or any related activities; or
(iii) take any photographs, video or other recordings of Allegheny’s property, except as otherwise
provided in the Job Specification. Contractor shall cause Subcontractors and Vendors to comply
with these requirements.

ARTICLE 28 — AUDIT

	28.1	 	Contractor shall maintain and preserve, and shall cause Subcontractors (to the extent such
Subcontractors are employed on a reimbursable cost and/or fixed rate basis) to maintain and
preserve, in accordance with generally accepted accounting practices, full, complete and
accurate documentation and data (including but not limited to written and electronic records,
books of account, correspondence, plans, permits, licenses, drawings, craft payroll records,
memoranda, invoices , receipts, and documentation of related systems and controls) pertaining
to the Reimbursable Costs under this Agreement, as well as any gift or entertainment expenses
incurred by Contractor or Subcontractors pertaining to the Work under this Agreement.

	28.2	 	A listing of the minimum data field requirements for audit purposes to be maintained by
Contractor and Subcontractors with respect to the Work is attached hereto as Exhibit J.

	28.3	 	At reasonable times, Contractor shall permit and shall cause Subcontractors (to the extent
such Subcontractors are employed on a reimbursable cost and/or fixed rate basis) to permit
Allegheny or an independent third party auditor, selected by mutual agreement of Allegheny and
Contractor, and the OCIP insurers (to the extent required to verify relevant insurance
information) to have access to its and their offices and work locations to examine such
documentation and data and to interview Contractor’s and Subcontractors’ personnel in
connection therewith, as necessary to verify and monitor the accuracy and propriety of the
Reimbursable Costs under the terms of this Agreement.

	28.4	 	The Fixed Rates and Sales General and Administrative Expenses shall have been audited, by an
independent third party auditor selected by mutual agreement of Allegheny and Contractor, and,
upon agreement, the percentages for the Sales
General and Administrative Expenses shall be fixed for the term of this Agreement. At
reasonable times, Contractor shall permit an independent third party auditor,

 

 

	 	 	selected by
mutual agreement of Allegheny and Contractor, to have access to its offices to examine such
documentation and data and to interview Contractor’s personnel in connection therewith, as
necessary to verify and monitor the accuracy and propriety of the Fixed Rates, if they are
adjusted, under the terms of this Agreement. Where Work is compensated using Fixed Rates and
Sales General and Administrative Expenses, the independent auditors shall have sufficient
access to those rates and expenses to satisfy themselves that the Work provided thereunder has
not also been separately billed on some other basis (e.g., a reimbursable basis). Contractor’s
Fixed Rates and Sales General and Administrative Expenses shall be subject to additional
disclosure and independent audit only in the event Contractor seeks an adjustment thereto.
	 
	28.5	 	Any and all costs associated with audits under Article 28 shall be paid by Allegheny.

	28.6	 	The provisions of this Article shall be applicable during the term of this Agreement and for
a period of three (3) years thereafter. If errors or deficiencies are identified by an audit
or otherwise, the responsible party shall take prompt corrective action and advise the other
party thereof.

ARTICLE 29 — BUSINESS STANDARDS

29.1 Business Standards

Contractor, in performing its obligations under this Agreement, shall maintain in effect
appropriate business standards, procedures and controls, such as its Code of Business
Conduct, to avoid any real or apparent impropriety that might affect adversely or conflict
with the interests of Allegheny. Contractor shall exercise all reasonable care and diligence
to prevent any actions or conditions, which could result in a conflict with its Code of
Business Conduct . This obligation shall apply to the activities of the employees of
Contractor and Subcontractors in their relations with the employees of Allegheny and their
families and/or third parties arising from this Agreement. These efforts shall include, but
not be limited to, maintaining precautions to prevent their employees and Subcontractors from
making, receiving, providing or offering any substantial gifts, extravagant entertainment,
payments, loans, or other considerations.

	29.2	 	Accuracy of Records

Contractor agrees that all financial settlements, billings, and reports rendered to Allegheny
or its representative shall reflect properly the facts about all activities and transactions
handled for the account of Allegheny, which data may be relied upon as being complete and
accurate in any further recordings and reporting made by Allegheny or its representatives for
whatever purpose.

	29.3	 	Compliance With Law

Contractor agrees and will secure agreement by Subcontractors to comply with Law in
performance of the Work. Notwithstanding anything in this Agreement to the contrary, no
provision shall be interpreted or applied so as to require Allegheny
or Contractor to do, or refrain from doing, anything which would constitute a violation of,
or result in a loss of economic benefit under, United States anti-boycott

 

 

and other export
laws and regulations. Contractor represents that it shall not make any improper payments of
money or anything of value to a government official (whether appointed, elected, honorary, or
a career government employee) in connection with this Agreement, nor shall it make improper
payments to a third party knowing or suspecting that the third party will give the payment,
or a portion of it, to a government official.

	29.4	 	Notice of Non-Compliance

Contractor agrees to notify Allegheny promptly upon discovery of any instance where the
Contractor fails to comply with this Article. If Contractor discovers or is advised of any
errors or exceptions related to its invoicing for the Work, Contractor and Allegheny will
together review the nature of the errors or exceptions, and each party will, if appropriate,
promptly take corrective action and adjust the relevant invoice, correct underpayments or
refund overpayments.

ARTICLE 30 — NO INFORMATION BROKERING

	30.1	 	Warranty and Representation

A practice exists (referred to in this Article as “Information Brokering”) where certain
parties approach contractors, subcontractors, vendors, or others and offer confidential
information or illicit influence in order to obtain business through corruption of
competitive bidding processes. Contractor recognizes that the practice of Information
Brokering or any other corruption of the Agreement award process is not permitted by
Allegheny and Contractor agrees, warrants and represents that it has not and will not, and
use best efforts to cause its Subcontractors not to, utilize Information Brokering in
connection with this Agreement.

	30.2	 	Notification

Contractor agrees that it will promptly notify Allegheny’s General Counsel in writing if
anyone approaches Contractor for the purpose of Illegal Information Brokering related to
its relationship with Allegheny. Allegheny undertakes that such notice and any related
information provided by Contractor will be treated with the utmost discretion.

ARTICLE
31 — MANAGEMENT OF WASTE, HAZARDOUS SUBSTANCE AND HAZARDOUS WASTE

	31.1	 	Contractor and Subcontractors shall have the responsibility and liability for the proper
management of wastes resulting from their Work pursuant to the Job Specification. In
particular, but without limitation, Contractor and Subcontractors shall implement procedures
to minimize the generation of waste, other than Hazardous Waste. These procedures shall
include, at a minimum, process substitution, materials recovery, and continued product use.

	31.2	 	Contractor and Subcontractors shall, in performing the Work, have the responsibility for
proper handling according to Law of all Hazardous Substances and Hazardous Waste brought onto
or generated at the Work Site by Contractor

 

 

	       	 	and Subcontractors, and Allegheny shall be
responsible for the proper permitting, removal and disposal of all such Hazardous Waste
according to Law. Allegheny shall direct Contractor and Subcontractors as to where Hazardous
Waste shall be stored prior to removal and disposal. Contractor and Subcontractors shall
implement procedures to minimize the generation of Hazardous Waste resulting from their Work.
These procedures shall include, at a minimum, process substitution, materials recovery, and
continued product use. When possible, Contractor shall select less toxic alternatives to
minimize the generation of Hazardous Waste. Contractor shall maintain a log of all Hazardous
Substances and Hazardous Waste brought onto or generated at the Work Site by Contractor and
Subcontractors, including their quantity and locations, and provide copies of such log
regularly to Allegheny. Allegheny shall remove from the Work Site all Hazardous Waste brought
onto or generated at the Work Site by Contractor and Subcontractors. In the event asbestos or
asbestos containing materials are located at the Work Site, Contractor shall provide notice of
such location and Allegheny shall remove and dispose of such materials.

	31.3	 	Contractor shall defend, indemnify and hold harmless Allegheny, and Allegheny’s parents,
subsidiaries, affiliates and the officers, directors, employees, successors and assigns of
each of them, from and against all claims resulting from or related to: (i) any Hazardous
Substances and Hazardous Waste that has been brought onto the Work Site by Contractor or any
Subcontractors or any person acting on behalf of, or under the direction or supervision of
Contractor or Subcontractors; (ii) Contractor’s failure to timely notify Allegheny of the
release of any Hazardous Substances or Hazardous Waste brought onto the Work Site by
Contractor or any Subcontractor on or from, the Work Site, (iii) Contractor’s failure to
remove or properly dispose of any such Hazardous Substance; or (iv) Contractor’s or a
Subcontractor’s failure to comply with Law with respect to any such Hazardous Substance or
Hazardous Waste or other waste brought onto the Work Site by Contractor or any Subcontractor.
Contractor’s obligations hereunder shall not be limited by the provisions of any Workers’
Compensation act or similar statute or otherwise.

ARTICLE 32 — ASSIGNMENT OF AGREEMENT

Allegheny may assign this Agreement, including all its rights and obligations hereunder, without
the consent of Contractor. Allegheny also may add Monongahela Power Company as another owner party
to this Agreement without the consent of Contractor and Monongahela Power Company shall have all of
the rights and obligations together with Allegheny under this Agreement.

Contractor shall not assign this Agreement or any part hereof without Allegheny’s prior written
approval, unless such assignment is made to a parent or affiliate company or to a successor by way
of merger, consolidation or the acquisition of substantially all of the assets of Contractor.

In the event of assignment by either party, the assignee shall expressly assume the obligations of
the assignor in writing. The assignor shall not be relieved of any liability
under this Agreement until such time as the assignee provides the nonassigning party with
reasonable assurance that it can fully satisfy the obligations hereunder of the assignor.

 

 

Any assignment made by the parties not in accordance with this Article shall be void.

ARTICLE
33 — EXECUTIVE SPONSOR AND NOTICES

	33.1	 	Executive Sponsor

	 	33.1.1	 	Allegheny’s Executive Sponsor, Michael V. Herriott, or other such person as may be
subsequently designated in writing by Allegheny, shall be the primary contact with
Contractor’s corporate management and shall have authority to act for Allegheny with
respect to all matters pertaining to this Agreement.
	 
	 	33.1.2	 	Contractor’s Executive Sponsor, Walter Nischt, an officer or an executive of
Contractor or some other officer or executive as may be subsequently designated in
writing by Contractor, shall have authority to act for Contractor with respect to all
matters pertaining to this Agreement.
	 
	 	33.1.3	 	The Executive Sponsor of each party shall be available to the other party’s
representatives at any reasonable time, regarding among other things, communications
to the other party’s corporate management of its performance of the Work. It is
agreed that the Executive Sponsor shall maintain a detailed knowledge of the progress
of the Work and of significant or anticipated problems and shall ensure that each
party fulfils its obligations under this Agreement. In particular, the Executive
Sponsor shall attend regular project review meetings and shall receive copies of
Contractor’s regular progress reports and other significant correspondence. If
Contractor’s Project Manager and Allegheny’s Project Manager cannot reach agreement
on any material matter related to the Work, the matter will be decided by
Contractor’s Executive Sponsor and Allegheny’s Executive Sponsor.

	33.2	 	Notices

	 	33.2.1	 	Notices required by this Agreement shall be in writing and shall be sent by hand,
certified mail or overnight courier to Contractor or Allegheny at the respective party’s
office address set forth below, to the attention of the respective Designated
Representative:

	 	 	 	 	 	 
	 	Allegheny Energy Supply:	 	Contractor:
	 	ATTN:

	 	Michael V. Herriott
	 	ATTN:Walter Nischt
	 	 

	 	Allegheny Energy, Inc.
	 	The Babcock & Wilcox Company
	 	 

	 	800 Cabin Hill Drive
	 	20 South Van Buren Avenue
	 	 

	 	Greensburg, PA 15601
	 	Barberton, OH 44203
	 	With a copy to:	 	 
	 	Allegheny Energy Supply:	 	Contractor:
	 	ATTN:

	 	General Counsel
	 	ATTN: Assistant General Counsel
	 	 

	 	Allegheny Energy, Inc.
	 	The Babcock & Wilcox Company

 

 

	 	 	 	 	 
	 

	 	800 Cabin Hill Drive
	 	20 South Van Buren Avenue
	 

	 	Greensburg, PA 15601
	 	Barberton, OH 44203

	 	33.2.2	 	The effective date of notice shall be the date the notice is received by the addressee
or it reaches the office of the addressee, whichever is earlier.

ARTICLE 34 — ALCOHOL AND DRUGS

	34.1	 	Contractor warrants that none of its personnel or those of Subcontractors shall perform any
Work at the Work Site while under the influence of alcohol and/or drugs. Contractor’s and
Subcontractor’s personnel performing the Work at the Work Site shall be informed about its
alcohol and drug policy.

	34.2	 	Contractor’s and Subcontractors’ personnel shall neither abuse medications nor use, possess,
distribute or sell alcohol and/or drugs when performing the Work at the Work Site or on
premises owned or controlled by Allegheny. Upon reasonable suspicion of such conduct, and
after notice and discussion with Contractor, such personnel shall be removed from performing
Work.

	34.3	 	Contractor shall maintain a drug and alcohol policy that meets or exceeds the Safety and
Health Manual.

ARTICLE 35 — SAFETY AND HEALTH

Contractor shall maintain a safety and health program that meets or exceeds the requirements of the
Safety and Health Manual and the Job Specification.

ARTICLE 36 — RIGHT OF REMOVAL

Contractor shall, after notice by and discussion with Allegheny, promptly remove from Work Site any
employee or agent of Contractor, any Subcontractor or any employee or agent of Subcontractor
performing Work under this Agreement, or any Vendor or any employee or agent of Vendor
performing Work under this Agreement as Allegheny may for any reason designate.

ARTICLE 37 — FORCE MAJEURE

	37.1	 	No delay or failure of performance by either party shall constitute a material breach
hereunder or give rise to any claim for damages if, and to the extent, such delay or failure
is caused by force majeure. In the event of any delay arising by reason of force majeure, the
schedule shall be adjusted by a Change Order. Force majeure means an unforeseen occurrence
beyond the control and without the fault or negligence of the party affected and which said
party is unable to prevent or provide against by the exercise of reasonable diligence
including, but not limited
to: acts of God or the public enemy; expropriation or confiscation of facilities; war,
rebellion, sabotage or riot, floods, unusually severe weather that could not reasonably have
been anticipated; fires, explosions, or other catastrophes; strikes

 

 

	       	 	or any other concerted
acts of workers; inability to obtain fuel or labor; riots or acts of terrorism; other similar
occurrences, but lack of finances shall in no event be deemed to be a cause beyond a party’s
control.

	37.2	 	The following are specifically excluded as force majeure occurrences unless: (i) they were
caused by force majeure of the type set forth in the preceding clause; and (ii) an alternate
source of work or materials, acceptable to Contractor and Allegheny, is unavailable:

	 	(a)	 	late performance caused by a failure to employ sufficient supervisors or labor,
inefficiencies, or similar occurrences.
	 
	 	(b)	 	late delivery of equipment or materials caused by congestion at a manufacturer’s
plant or elsewhere, an oversold condition of the market, inefficiencies, or similar
occurrences.

	37.3	 	The party invoking the force majeure will: (i) immediately notify the other party; (ii) make
every effort to remedy the cause of non-performance; and (iii) perform the entirety of its
obligations as soon as this cause has gone, the other party being released from its
contractual obligations related to such cause until such time as the cause has gone.

	37.4	 	When the effect of said occurrence can be estimated, Allegheny may issue a Change Order.

ARTICLE 38 — AMENDMENTS

Any amendment to the terms of this Principal Document and Exhibits shall only be effective if made
in writing and signed by Allegheny and Contractor.

ARTICLE 39 — PRECEDENCE

In the event of a conflict between any provisions of this Agreement, the terms in this Principal
Document shall take precedence and govern over the Job Specification and the Exhibits.

ARTICLE 40 — MISCELLANEOUS

	40.1	 	Severability

If any provision or portion of this Agreement shall be adjudged invalid or unenforceable by a
court of competent jurisdiction or by operation of Law, that provision or portion of this
Agreement shall be deemed omitted and the remaining provisions shall remain in full force and
effect.

	40.2	 	Waiver

No waiver by a party of a right or default under this Agreement shall be effective unless in
writing. No such waiver shall be deemed a waiver of any subsequent right or default of a
similar nature or otherwise.

	40.3	 	Remedies Cumulative

With the exception of the warranty provisions in Article 6, the remedies provided for in this
Agreement are cumulative.

 

 

	40.4	 	Sole Benefit

This Agreement and all rights hereunder are intended for the sole benefit of the parties
hereto and shall not imply or create any rights on the part of, or obligations to, any other
person.

	40.5	 	Counter Parts

This Agreement may be executed in counterparts, which shall, in the aggregate, when
signed by all parties constitute one and the same instrument, and thereafter, each
counterpart shall be deemed an original instrument as against any party who has executed it.
Facsimile signatures shall be enforceable as original signatures.

ARTICLE 41 — SURVIVING OBLIGATIONS

Contractor’s obligations under this Agreement including, without limitation, the requirements of
Articles 6,12,13,15, 20, 21, 26, 28, 31, 40 and 41 shall survive any termination or suspension of
the Work, Final Acceptance of the Work, Acceptance or Allegheny’s making full payment of the
Agreement Price, anything in this Agreement to the contrary notwithstanding.

ARTICLE 42 — ENTIRE AGREEMENT

This Agreement constitutes the entire agreement between Allegheny and Contractor, and it supersedes
all prior negotiations, representations or agreements, either oral or written, related to the
subject matter hereof including, without limitation, Allegheny’s invitation for proposals and
Contractor’s proposal, except to the extent they are expressly incorporated herein.

IN WITNESS WHEREOF, the parties, intending to be legally bound, have duly executed this Agreement
in duplicate originals as of day and year first written above.

	 	 	 	 	 	 	 
	 

	 	The Babcock and Wilcox Company
	 	 	 	Allegheny Energy Supply Company, L.L.C.
	 
	 	 	 	 	 	 
	By:

	 	/s/ Walter Nischt	 	By:	 	/s/ Michael V. Herriott
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Name:

	 	Walter Nischt	 	Name:	 	Michael V. Herriott
	 

	 	 
	 	 	 	 
	 

	 	(Typed or Printed)
	 	 	 	(Typed or Printed)
	 
	 	 	 	 	 	 
	Title:

	 	V. P. Env. Products & Services	 	Title:	 	V. P. Construction & Engineering
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Date:

	 	July 12, 2006	 	Date:	 	July 12, 2006

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00108-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00108-of-00352.parquet"}]]