Document:

Filed by Automated Filing Services Inc. (604) 609-0244 - U.S. Geothermal Inc. - Exhibit 10.31

REV A 

 

CONSTRUCTION CONTRACT 

Between 

Raft River Energy I LLC 

And 

Industrial Builders 

 

 

Dated as of May 22, 2006 

 

 

CONFIDENTIAL 

REV A 

CONTENTS 

	ARTICLE 1 	DEFINITIONS, INTERPRETATION AND CONTRACT DOCUMENTS 	1 
	         
               1.1 	Definitions 	1 
	             
           1.2 	Interpretation 	7 
	         
               1.3 	Documents Included 	8 
	ARTICLE 2 	CONTRACTOR RESPONSIBILITIES 	9 
	         
               2.1 	General Responsibilities 	9 
	             
           2.2 	Specific Responsibilities 	9 
	         
               2.3 	Contractor’s Personnel and Labor Relations 	10 
	             
           2.4 	Representations and Warranties of Contractor 	11 
	ARTICLE 3 	COMPANY RESPONSIBILITIES 	11 
	             
           3.1 	General Responsibilities 	11 
	         
               3.2 	Company’s Representative 	12 
	             
           3.3 	Representations and Warranties of Company 	12 
	ARTICLE 4 	COMMENCEMENT OF WORK 	13 
	             
           4.1 	Notice to Proceed 	13 
	         
               4.2 	Commencement 	13 
	             
           4.3 	Reserved 	13 
	         
               4.4 	Reserved 	13 
	             
           4.5 	Reserved 	13 
	         
               4.6 	Delay Liquidated Damages 	13 
	             
           4.7 	Final Completion 	14 
	         
               4.8 	Final Completion Certificate 	14 
	             
           4.9 	Punchlist 	15 
	ARTICLE 5 	COMPENSATION AND PAYMENT 	15 
	             
           5.1 	Contract Price 	15 
	         
               5.2 	Payment Schedule 	16 
	             
           5.3 	Payment 	16 
	         
               5.4 	Final Completion Payment for the Facility 	17 

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               5.5 	Payments Not Acceptance of Work 	17 
	             
           5.6 	Payment of Subcontractor 	17 
	         
               5.7 	Waiver of Liens 	17 
	             
           5.8 	Interest 	17 
	ARTICLE 6 	TESTING 	18 
	             
           6.1 	General 	18 
	         
               6.2 	Test Procedures 	18 
	             
           6.3 	Notice of Testing 	18 
	         
               6.4 	Deficiencies 	18 
	ARTICLE 7 	INTENTIONALLY OMITTED 	19 
	ARTICLE 8 	CONSTRUCTION SUSPENSION AND ACCELERATION; CHANGE ORDER 	 19 
	             
           8.1 	Construction Suspension and Acceleration 	19 
	         
               8.2 	Change Orders 	19 
	             
           8.3 	Procedure for Change Orders 	19 
	         
               8.4 	Change Orders Due to Contractor Error 	20 
	             
           8.5 	Change Orders Due to Changes in Law 	21 
	         
               8.6 	Effect of Force Majeure; Excused Performance 	21 
	             
           8.7 	Company-Caused Changes 	22 
	         
               8.8 	Price Change 	22 
	8.9 	Effectiveness; Continued Performance Pending Resolution
      of  Disputes 	27 
	         
               8.10 	Documentation 	27 
	             
           8.11 	Continue Work 	28 
	         
               8.12 	Critical Path Schedule Updates 	28 
	             
           8.13 	Change Order Constitutes Complete Relief 	28 
	         
               8.14 	Effect of Changes on Warranties and Safety 	28 
	ARTICLE 9 	DESIGN AND DOCUMENTATION 	29 
	         
               9.1 	Inspection of Work 	29 
	             
           9.2 	As-Built Drawings 	29 
	         
               9.3 	Equipment Manuals 	29 

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	ARTICLE 10 	WARRANTIES 	29 
	             
           10.1 	Warranty 	29 
	         
               10.2 	Warranty Period 	30 
	             
           10.3 	Defect Remedy Work 	30 
	         
               10.4 	Implementation of Warranty 	31 
	             
           10.5 	Disclaimer and Release 	31 
	ARTICLE 11 	INTENTIONALLY OMITTED 	32 
	ARTICLE 12 	TITLE; CARE OF THE WORK 	32 
	         
               12.1 	Passage of Title 	32 
	             
           12.2 	Risk of Loss 	32 
	ARTICLE 13 	INSURANCE AND BONDING 	32 
	             
           13.1 	Contractor Provided Insurance 	32 
	         
               13.2 	Company Provided Insurance 	33 
	             
           13.3 	Policies 	33 
	         
               13.4 	Payment of Deductibles 	35 
	             
           13.5 	Evidence of Insurance 	35 
	         
               13.6 	Performance Payment and Other Bonds 	35 
	ARTICLE 14 	DISPUTE RESOLUTION 	36 
	         
               14.1 	Settlement by Mutual Agreement 	36 
	             
           14.2 	Mediation 	36 
	         
               14.3 	Pending Disputes 	37 
	ARTICLE 15 	INDEMNIFICATION 	37 
	         
               15.1 	General 	37 
	             
           15.2 	Indemnification for Bodily Injury or Property Damage 	37 
	         
               15.3 	Indemnity from Liens 	38 
	             
           15.4 	Reserved 	38 
	         
               15.5 	Company’s Indemnity 	38 
	             
           15.6 	Notice and Settlement of Claims 	38 
	ARTICLE 16 	ASSIGNMENT 	39 
	             
           16.1 	Assignment by Company 	39 

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               16.2 	Assignment by Contractor 	39 
	             
           16.3 	Succession 	39 
	ARTICLE 17 	SUBCONTRACTORS 	39 
	             
           17.1 	Subcontracts 	39 
	         
               17.2 	Subcontract Provisions 	39 
	             
           17.3 	Vendors 	40 
	ARTICLE 18 	SUSPENSION 	40 
	             
           18.1 	Right of Company to Suspend Work 	40 
	         
               18.2 	Initial Payments to Contractor 	40 
	             
           18.3 	Extended Suspension 	40 
	         
               18.4 	Right of Contractor to Suspend 	40 
	             
           18.5 	Additional Changes Resulting From Suspensions 	40 
	         
               18.6 	Resumption of Work 	41 
	ARTICLE 19 	TERMINATION 	41 
	         
               19.1 	Termination by Company 	41 
	             
           19.2 	Termination by Contractor 	42 
	         
               19.3 	Due to Force Majeure 	42 
	             
           19.4 	Due to Company’s Convenience 	43 
	         
               19.5 	Exclusive Remedy 	43 
	             
           19.6 	Actions Required Following Termination 	43 
	         
               19.7 	Termination and Transfer of Subcontracts and Other Rights
      	44 
	             
           19.8 	Surviving Obligations 	44 
	ARTICLE 20 	INTENTIONALLY OMITTED 	44 
	ARTICLE 21 	CONFIDENTIALITY 	44 
	         
               21.1 	Both Parties to Keep Information Confidential 	44 
	             
           21.2 	Use of Information 	45 
	         
               21.3 	Exclusions 	45 
	             
           21.4 	Contractor Logos 	45 
	ARTICLE 22 	NOTICES 	45 
	             
           22.2 	  	46 

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	ARTICLE 23 	MISCELLANEOUS 	46 
	                 
       23.1 	Governing Law 	46 
	           
             23.2 	Construction 	46 
	                 
       23.3 	Nature of Agreement 	47 
	           
             23.4 	Severability 	47 
	                 
       23.5 	Amendments and Waivers 	47 
	           
             23.6 	Survival 	47 
	                 
       23.7 	Counterparts 	47 
	           
             23.8 	Entire Contract 	47 
	                 
       23.9 	Waivers 	48 
	           
             23.10 	Counterparts; Transmitted Copies 	48 
	                 
       23.11 	Further Assurances 	48 

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	 	LIST OF EXHIBITS: 
	 	 	 
	 	Exhibit A 	Contract Price and Payment Schedule 
	 	 	 
	 	Exhibit B 	Schedule (Gantt Chart) 
	 	 	 
	 	Exhibit C1 	Pipeline System Criteria and Project Scope
    
	 	 	 
	 	Exhibit C2 	Drawings and General Notes 
	 	 	 
	 	Exhibit D 	Performance Test Protocols 
	 	 	 
	 	Exhibit E 	Warranty Claim Procedures 
	 	 	 
	 	Exhibit F 	Approved Vendors List 
	 	 	 
	 	Exhibit G 	Permits 
	 	 	 
	 	Exhibit H 	Reserved 
	 	 	 
	 	Exhibit I 	Certificate of Final Completion 
	 	 	 
	 	Exhibit J 	Form of Final Lien Waiver 
	 	 	 
	 	Exhibit K 	Liquidated Damages 
	 	 	 
	 	Exhibit L 	Change Order Form 
	 	 	 
	 	Exhibit M 	Change Order Request Form 
	 	 	 
	 	Exhibit N 	Work Items Prior to Notice to Proceed 

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CONSTRUCTION CONTRACT 

     THIS CONSTRUCTION CONTRACT
(“Contract”) dated as of May 22, 2006, is made by and between: 

	(1) 	
      Raft River Energy I LLC, a Delaware Limited Liability
      Company with its principal place of business at 1509 Tyrell Lane, Suite B,
      Boise, Idaho 83706 (“Company”); and

	 	 
	(2) 	
      IBI DBA Industrial Builders, an Idaho corporation, with
      its principal place of business at 20394 Pinto Lane, Caldwell Idaho 83605
      (“Contractor”).

RECITALS 

     A. Company is developing a
nominal 13 MW geothermal power plant in the Raft River Known Geothermal Resource
Area in the State of Idaho and desires to retain Contractor to provide certain
procurement and construction related services to provide pipelines to connect
the geothermal power plant to production and injection wells. 

     B. Contractor desires to
be retained by Company to provide procurement and construction related services
to provide pipelines to connect the geothermal power plant to production and
injection wells.

AGREEMENT 

     THEREFORE, Company and Contractor
(each individually, a “Party” and together, the “Parties”) agree
as follows: 

ARTICLE
1      DEFINITIONS,
INTERPRETATION AND CONTRACT DOCUMENTS 

     1.1 Definitions

     In addition to the terms defined
elsewhere in this Contract, the definitions of certain terms used in this
Contract with initial letters capitalized are as set forth herein. 

     “Affiliate” means,
with respect to any person or entity, any other person or entity (including any
officer, director, shareholder, partner, employee, agent or representative of
such person or entity) that, directly or indirectly through one or more
intermediaries, controls, is controlled by or is under common control with such
first person or entity. For purposes of this definition, “control” shall
mean the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a person or entity, whether through
the ownership of voting securities, partnership or other ownership interests, by
contract, by Law or otherwise. 

     “As-Built Drawings” has
the meaning given to it in Section 9.3. 

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REV A 

      “Certificate of Final
Completion” means the certificate issued by Contractor to Company under this
Contract, pursuant to Section 4.8. 

     “Change in the Work” means
a change to the Work as provided in Article 8. 

     “Change of Law” means any
Law, official interpretation thereof or manner of interpretation thereof, that
is amended or modified, is enacted, adopted, promulgated or otherwise becomes
effective or is repealed, revoked, suspended or not renewed after the Effective
Date and which increases Contractor’s cost of performing the Work, delays
Contractor’s performance of the Work or otherwise adversely affects Contractor’s
performance of its obligations under this Contract.

     “Change Order” means a
written change order based on the form set forth in Exhibit L describing the
Change in the Work and its effect, if any, on the Contract Price, the Payment
Schedule, the Schedule and any other provision of this Contract that is
affected. 

     “Commencement Date” has
the meaning given to it in Section 4.2. 

     “Company” has the
meaning set forth in the introductory paragraph to this Contract. 

     “Company Default” means
the failure or delay of Company or its representatives, agents, subcontractors
or suppliers (other than Contractor and its Subcontractors and their agents and
employees) to meet Company’s material obligations under this Contract, including
the obligations identified in Section 3.1. 

     “Company Indemnified
Party” has the meaning set forth in Section 15.1. 

     “Company Permits”
means the Permits to be obtained by Company as described in Exhibit G and,
other than the Contractor Permits, any Permits otherwise necessary for the
construction, operation and maintenance of the Project. 

     “Company’s Representative”
has the meaning given to it in Section 3.2. 

     “Contract” means this
Construction Contract together with the Exhibits attached hereto, as the same
may be amended or otherwise modified from time-to-time as permitted herein. 

     “Contract Price” means the
total aggregate price payable to Contractor by Company as set forth in Exhibit
A, and as adjusted pursuant to the provisions of this Contract. 

     “Contractor” has the
meaning given to it in the Preamble. 

     “Contractor Default” means
the failure or delay of Contractor or its representatives, agents,
subcontractors or suppliers to meet Contractor’s material obligations under this
Contract, including obligations identified in Section 2.1. 

     “Contractor Hazardous
Materials” has the meaning given to it in Section 2.2(h) . 

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REV A 

     “Contractor Permits”
means the Permits to be obtained by Contractor as described in Exhibit G.

     “Contractor’s
Representative” has the meaning given to it in Section 2.3.2. 

     “Day” means a
twenty-four (24) hour period beginning and ending at 12:00 midnight. 

     “Defect” or
“Defective” means any Work, including any part or component thereof,
that: (i) contains improper or inferior workmanship; (ii) fails to conform in
any material respect with the relevant Drawings or Specifications, including any
Change in the Work; (iii) is not manufactured in any material respect with the
applicable Drawings and the Specifications; and (iv) is not free from defects in
material and workmanship. 

     “Defect Remedy Work” means
Contractor’s repair or replacement of any Defect or Work that is Defective. 

     “Delay Liquidated Damages”
has the meaning given to it in Section 4.6. 

     “Delayed Payment Rate”
means a per annum rate of interest equal to the lesser of (i) twelve percent
(12%) and (ii) the maximum rate permitted by applicable Law.

     “Documents” means any
design, drawing (including the Drawings), certificate, specification (including
the Specifications), report, studies, model, program, record, pattern, sample,
written information and data and other document of whatever nature (including a
record thereof in software form). 

     “Dollars” or
“$” means the lawful currency of the United States of America.

     “Drawings” means the
Facility drawings set forth in Exhibit C2 or otherwise provided by Contractor to
Company pursuant to Article 9 or other terms of this Contract, including the
As-Built Drawings. 

     “Effective Date” means the
date of this Contract. 

     “Facility” means the unit
number one geothermal power plant’s geothermal and injection pipelines to be
located in the Raft River Known Geothermal Resource Area in Cassia County in the
State of Idaho to be constructed as part of the development of the Project on
the Site, all as more particularly described in exhibits C1 and C2, but for
avoidance of doubt excludes the power plant, cooling tower make-up water wells
and their associated pipelines, wellhead equipment, transmission lines,
distribution lines and their associated transformers and disconnects. 

     “Final Completion” means
the satisfaction or deemed satisfaction of each of the following: (a)completion
of the work required in exhibits C1 and C2; (b) Contractor has delivered final
lien waivers and releases from Contractor and Contractor’s Subcontractors to
Company; (b) all Documents which are to be delivered to Company, by Contractor
on or before the Final Completion Date pursuant to this Contract have in-fact
been delivered to Company; (c) all of Contractor’s supplies, personnel, rubbish
and Contractor Hazardous Materials have been 

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REV A 

removed from the Site; and (d) all Work other than Punch List
Items have been completed in accordance with this Agreement. 

     “Final Completion Date”
means the date upon which the Certificate of Final Completion was issued by
Contractor to Company pursuant to Section 4.7 (provided that such Certificate of
Final Completion has been subsequently countersigned by Company pursuant to
Section 4.8) . 

     “Financing Parties” means
(a) any and all lenders providing senior or subordinated construction, interim
or long-term debt financing or refinancing; and (b) any and all equity investors
providing leveraged lease-financing or refinancing, and in each case any trustee
or agent acting on their behalf, for the Facility. Company shall provide written
notice to Contractor of the names of all of the Financing Parties.

     “Force Majeure” means any
war, declared or not, invasion, armed conflict or act of public enemy, blockage,
embargo, revolution, insurrection, riot, civil commotion, act of terrorism, or
sabotage provided that any such event occurs within or directly involving the
United States or any individual state, or any other country from which
machinery, equipment or material for the Facility are procured or transported
through, an act of God, including, but not limited to, lightning, fire,
earthquakes, volcanic activity, floods, storms or unusual weather conditions,
cyclones, typhoons, or tornadoes, labor disputes including strikes, or
slowdowns, or lockouts that extend beyond the Facility or are widespread or
nationwide, or any other event or circumstances or combination of event(s) or
circumstances beyond the reasonable control of a Party, that have a real,
quantifiable and adverse impact on cost or performance of the Work. 

      “Governmental
Authority” means any local, state, regional, central or national
government administrative, judicial or executive organs, but excluding any
similar foreign or multinational entity, that has or purports to have or asserts
or attempts to assert, jurisdiction to legislate, decree, adjudicate or enforce
any decision related to, or bearing on, the Facility or the Work. 

     “Guaranteed Final Completion
Date” means the Guaranteed Final Completion Date identified as on or before
January 15, 2007, as the same may be amended from time-to-time in accordance
with this Contract. 

      “Hazardous Materials”
means any hazardous or toxic substances, materials and wastes which are
regulated or are classified as hazardous or toxic by any Governmental Authority
having jurisdiction over the Site, including, but not limited to, those
substances included in the definitions of “Hazardous Substances,” “Hazardous
Materials,” “Toxic Substances,” “Hazardous Waste,” “Solid Waste,” “Pollutant,”
or “Contaminant"” in any federal, state, local or other Law
pertaining to public or worker health, welfare or safety or the environment,
including, but not limited to, the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, 42 U.S.C. § 9601 et seq., as
amended by the Superfund Amendments and Reauthorization Act of 1986; the
Resource Conservation and Recovery Act of 1976, as amended, 42 U.S.C. § 6901
et seq.; the Federal Clean Air Act, 42 U.S.C. § 7401-7626; the Federal
Water Pollution Control Act and Federal Clean Water Act of 1977, as amended, 33
U.S.C. § 1251 et seq.; the Federal Insecticide, Fungicide and Rodenticide
Act, 7 U.S.C. § 135 et seq.; the Federal 

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Environmental Pesticide Control Act, the Federal Toxic Substances Control Act, 15 U.S.C. § 2601 et seq.; the Federal Safe Drinking Water Act, 42 U.S.C. § 300(f) et seq.; the Emergency Planning and Community Right-To-Know Act
of 1986, 42 U.S.C. § 11001 et seq.; and the Occupational Safety and Health Act of 1970, 29 U.S.C. § 651 et seq. and in the regulations promulgated pursuant to those laws. 

     “Information” means any Drawings, Specifications or other information furnished directly or indirectly by the other Party hereto in connection with the Contract and the Facility and the Project whether
such Information has been furnished prior to, during or following termination of the Contract in connection with the performance of this Contract. 

     “Insolvency Event” means the bankruptcy, insolvency, liquidation, administration or other receivership or dissolution of a Party and any equivalent or analogous Proceedings by whatever name known and in
whatever jurisdiction and any step taken (including the presentation of a petition or the passing of a resolution) for or with a view to any of the foregoing. 

     “Law” means any federal, state, commonwealth, local or other constitution, charter, act statute, law, ordinance, treaty, resolution, directive (to the extent having the force of law), code, rule,
regulation, order, specified standards or objective criteria contained in any applicable permit or approval, which standards or criteria must be met in order for the Facility to be constructed and operated lawfully, and other legislative or
administrative action of any Governmental Authority, or a final decree, judgment or order of a court, or any applicable engineering, construction, safety or electrical generation code.

      “Liability” or “Liabilities” means any fine, penalty, damage, loss, cost, claim or expense or other liability (including any related fees, expenses and disbursements of a Party’s
counsel). 

     “Limited Notice to Proceed” means the notice issued by Company to Contractor authorizing Contractor to commence work under this Contract on items listed in Exhibit N.

      “Liquidated Damages”
  means Delay Liquidated Damages. 

     “Major Vendor” means any vendor engaged directly by Contractor to provide equipment for incorporation into the Work at the Site, who’s Work is valued in excess of that provided in Section 17.3. 

     “Materials” means all equipment, supplies, apparatus, instruments, machinery, parts, tools, components, appliances, spare parts and appurtenances thereto to be supplied under this Contract by Contractor
as described in or required by the Scope of Work. 

     “Month” means a period beginning at 12:00 midnight on the last Day of the preceding calendar month and ending at 12:00 midnight on the last Day of the calendar month. 

      “MW”
  means megawatts. 

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     “Notice to Proceed” means
the notice issued by Company to Contractor authorizing Contractor to commence
the Work under this Contract. 

     “Owner Supplied Materials”
means pipeline and other materials provided by the Owner for incorporation into
the Work, and more fully defined in Exhibit C1 

     “Party” and
“Parties” have the meanings given to them in the Preamble. 

     “Payment Schedule” means
the payment schedule for payment of the Contract Price as set forth in Exhibit
A.

     “Performance Tests” means
the tests as outlined in Article 6 to be carried out to determine whether the
Work satisfies the performance requirements set forth in this Contract.

     “Permits” means the
permits, approvals and licenses required from Governmental Authorities necessary
for the construction, operation and maintenance of the Facility and the
performance of the Work.

     “PPA” means the Firm
Energy Sales Agreement in effect between Idaho Power Company and US Geothermal
Inc. under which the output from the Facility would be delivered and bought.

     “Proceeding” means any
claim, suit, demand, allegation, arbitration, dispute or other action process,
or proceeding whether actual or threatened. 

     “Project” means the
geothermal power generation project unit number one to be constructed in the
Raft River Known Geothermal Resource Area in Cassia County in the State of
Idaho, including the Facility and the related power plant, geothermal production
and re-injection wells, and the gathering system pipelines. 

     “Prudent Industry
Practices” means those practices, methods, equipment, specifications and
standards of safety and performance, as the same may change from time-to-time,
as are commonly used in operations of privately-owned geothermal electric power
generation facilities similar to the Facility, which in the exercise of
reasonable judgment and in light of the facts known at the time the decision was
made, are considered good, safe and prudent practice in connection with the
operation and maintenance of geothermal electric power generation facilities
similar to the Facility. Prudent Industry Practices are not intended to be
limited to the optimal practices, methods, equipment, specifications and
standards, but rather to be the practices, methods, equipment, specifications
and standards generally accepted in the privately-owned geothermal electric
power industry. 

     “Punchlist Items”
means unfinished items of Work (such as Spare Parts, painting, fine-finish
grading or clean-up, updating of Drawings, manuals or other Documents) the lack
of which or the failure of which to complete (considered individually or in the
aggregate of all Punchlist Items) does not or will not adversely affect the,
safety or integrity of the Facility and does not impact the performance of the
Facility. 

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REV A 

     “Safety Plans” has the
meaning given to it in Section 2.3.4. 

     “Safety Report” has the
meaning given to it in Section 2.3.4. 

     “Schedule” means a Gantt
Chart as provided in Exhibit B, as it may be amended from time-to-time as set
forth in this Contract, which sets forth the Work performance milestone schedule
for the Facility. 

      “Scope of Work” means the
specific delineation of items of Work to be performed by Contractor as set forth
in exhibits C1 and C2, which may be modified pursuant to a Change Order pursuant
to Article 8, and which shall conform to the Drawings and the Specifications.

      “Site” means the area
encompassed by the Facility, together with spaces, roads, easements, privileges,
access rights, rights-of-way and other rights and interests in land that has
been acquired or will be acquired by Company to develop, engineer, build, own,
operate and maintain the Project and appurtenant facilities, including any
associated working and laydown areas for Contractor. 

      “Specifications” means
the Pipeline System Criteria and Project Scope (Exhibit C1), and the Drawings
and General Notes (Exhibit C2) for the Facility as set forth in the referenced
exhibits. 

      “Subcontract” means an
agreement between Contractor and a Subcontractor for the performance of any
portion of the Work. 

     “Subcontractor” means any
person or entity, other than Contractor’s employees, engaged by Contractor to
perform services relating to the Work. 

      “Tax” means any
present or future tax, charge, levy, impost or duty of any kind whatsoever, or
any amount payable on account of or as security for any of the foregoing,
imposed by any Governmental Authority together with any penalties, additions,
liens, surcharges and interest relating thereto. 

     “Warranty Period” has the
meaning given to it in Section 10.2. 

     “Work” means all of the
work, services and other duties, obligations and responsibilities that are to be
carried out by or under the direction of Contractor pursuant to this Contract,
including that work specifically described as Contractor liabilities in the
Scope of Work. 

     1.2 Interpretation

          1.2.1
Where the context requires, words importing the singular shall include the
plural and vice versa, and words importing persons shall include entities.

          1.2.2
A reference in this Contract to any Article, Section, Exhibit, Clause or
Paragraph is, except where it is expressly stated to the contrary, a reference
to such article, section, exhibit, clause or paragraph in this Contract.

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          1.2.3
Headings are for convenience of reference only. 

          1.2.4
Each reference to this Contract shall include a reference to each agreed
variation of or supplement to this Contract as may be amended, varied or
supplemented from time-to-time. 

          1.2.5
Where the context requires, any reference to a person, entity or Party shall
include such person’s, entity’s or Party’s successors and permitted assigns.

          1.2.6
References to the word “include” or “including” are to be construed without
limitation. 

     1.3 Documents Included

     This Contract shall consist of
this document and the following Exhibits, which are specifically incorporated
herein and made a part hereof by this reference. 

	 	Exhibit A 	Contract Price and Payment Schedule 
	 	Exhibit B 	Schedule (Gantt Chart) 
	 	Exhibit C1 	Pipeline System Criteria and Project Scope
  
	 	Exhibit C2 	Drawings and General Notes. 
	 	Exhibit D 	Performance Test Protocols 
	 	Exhibit E 	Warranty Claim Procedures 
	 	Exhibit F 	Approved Vendor List 
	 	Exhibit G 	Permits 
	 	Exhibit H 	Reserved 
	 	Exhibit I 	Certificate of Final Completion 
	 	Exhibit J 	Form of Final Lien Waiver 
	 	Exhibit K 	Liquidated Damages 
	 	Exhibit L 	Change Order Form 
	 	Exhibit M 	Change Order Request Form 
	 	Exhibit N 	Work Items Prior to Notice to Proceed
  

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ARTICLE
2      CONTRACTOR
RESPONSIBILITIES 

     2.1 General
Responsibilities 

          2.1.1
Except as otherwise expressly set forth in this Contract, Contractor, in
consideration of the Contract Price, shall provide, furnish and perform, or
cause to be provided, furnished or performed, Materials, supervision, labor and
services required for the development, procurement, manufacturing, transport to
Site, quality assurance, inspection, erection, construction, and commissioning
of the Facility as specified in the Scope of Work and in accordance with the
provisions of this Contract. The scope does not include design of the pipeline
system. 2.1.2 Contractor shall diligently prosecute the Work in a good and
workmanlike manner in accordance with the Schedule and in accordance with the
provisions of this Contract. 

     2.2 Specific
Responsibilities 

     Without limiting the generality
of Section 2.1.1 and subject to the terms and conditions set forth in this
Contract, Contractor shall at its own expense furnish, undertake, provide or
cause to be furnished, undertaken or provided the following: 

          (a)
obtain the Contractor Permits from the applicable Governmental Authorities as
shown in Exhibit G; 

          (b)
coordinate its activities pursuant to this Contract with those activities of
Company’s other contractors as requested by Company; provided, however, that
such coordination does not delay or otherwise unreasonably interfere with
Contractor’s performance of the Work in accordance with the Schedule;

          (c)
coordinate its activities with the Raft River Highway District for that part of
the Work that will involve crossing county roads. 

          (d)
clearing, excavation, backfilling, compaction, consolidation and removal or
importation of related materials required with respect to preparation of the
Site in accordance with the Scope of Work; 

          (e)
procurement, supply and transportation to the Site of all Materials, except
Owner Supplied Materials, necessary to complete the Facility; 

          (f)
supervision and direction of construction and other Work activities on the Site,
including construction by Subcontractors, and the coordination of the Work under
this Contract; 

          (g)
keep the Site from waste materials or rubbish caused by Contractor’s activities
and in a reasonably presentable condition given the nature of the Work.
Contractor may store all rubbish and construction debris in an authorized
disposal area furnished by Company as provided in Section 3.1(f) . Contractor
shall be responsible for the containment of any such material within such area.
All rubbish and construction debris caused by Contractor’s activities shall be
disposed through a licensed waste hauler, or in a licensed waste disposal site,
to be paid for by the Contractor. 

9 

REV A 

          (h)
remediate and dispose of in accordance with applicable Law any Hazardous
Materials generated, transported or released by Contractor or any Subcontractor
on or about the Site (“Contractor Hazardous Materials”); 

          (i)
provide periodic reports to Company, not less frequently than monthly, regarding
the progress of the Work, including a Gantt Chart in Microsoft Project format in
sufficient detail to allow a reasonably experienced engineer to evaluate the
progress of the Work;

          (j)
provide periodic reports to Company, not less frequently than monthly, regarding
the progress of the Work, including a Gantt Chart in MS Project format in
sufficient detail to allow a reasonably experienced engineer to evaluate the
progress of the Work; 

          (k)
test the Facility as detailed in Exhibit C1 using test protocols provided in
Exhibit D; and 

          (l)
clearance of the Site of temporary structures, surplus Materials and tools that
were delivered or created by Contractor through the course of the Work, upon
completion of field work; provided that Contractor shall offer to sell to
Company at cost any such temporary structures, surplus Materials and tools that
Contractor does not want to retain. 

          (m)
Contractor will coordinate with Owner regarding crops and field access.

     2.3 Contractor’s
Personnel and Labor Relations 

          2.3.1
Contractor shall provide qualified and experienced personnel to perform the Work
at the Site. 

          2.3.2
Contractor shall designate, by written notice to Company, a representative who
shall act as a single point of contact with Company in all matters relating to
the Work (“Contractor’s Representative”). Contractor’s Representative
shall have full authority to act on behalf of Contractor for all purposes in
connection with this Contract. 

          2.3.3
Company shall be entitled by written notice to Contractor to object to any
representative or person employed by Contractor (including Contractor’s
Representative) or any Subcontractor in the execution of the Work who, in the
reasonable opinion of Company, is incompetent or negligent, or engaged in
misconduct, and Contractor shall promptly remove such person from the Work and
appoint a suitable replacement, or ensure that the relevant Subcontractor does
so. 

          2.3.4
Contractor shall develop, present to Company and implement a safety plan for its
own construction activities on the Site and for emergency situations prior to
the commencement of Work at the Site (“Safety Plans”). During performance
of the Work, Contractor shall publish work safety rules for the Site in
compliance with the Safety Plan, which safety rules shall apply to any and all
visitors to the Site, including representatives of Company. Each week (or other
interval mutually agreeable to Company and Contractor), Contractor shall prepare
and provide to Company a written report (“Safety Report”) listing (i) any
breaches or violations of the Safety Plan, (ii) a description of any incidents
resulting therefrom, (iii) incidents 

10 

REV A 

related to safety issues at the Site, (iv) the cause of any
such incident, (v) the nature of such incident, (vi) the severity of such
incident, and (vii) the remedial actions planned to remedy such incident and
prevent such incident from occurring in the future. 

          2.3.5
Contractor shall be responsible for the security and protection (i) of its
equipment, supplies and tools used in connection with the Work through the Final
Completion Date, and (ii) for all of the other property owned or leased by
Contractor or any of its Subcontractors located at the Site at areas thereon
provided by Company or stored or warehoused off the Site through the Final
Completion Date. Contractor shall use due care to protect any of Company’s
property at any time in its possession or under its control while performing the
Work which shall not be less than the care exercised by Contractor with its own
property and Contractor shall be responsible for any damage to such property
resulting from its failure to use such care. 

          2.3.6
Contractor, its Subcontractors, agents and employees shall observe all pertinent
and reasonable regulations and rules issued by Company to Contractor which are
in effect at the Site, as the case may be, regarding passes, badges and proper
conduct on such Site. Company may issue reasonable modifications to such
regulations and rules from time-to-time. 

          2.3.7
Company and its agents, employees and other contractors shall observe all
pertinent and reasonable regulations and rules issued by Contractor, including
the Safety Plan, which are in effect at the Site, as the case may be, regarding
passes, badges and proper conduct on such Site. Contractor may issue reasonable
modifications to such regulations and rules from time-to-time. 

     2.4 Representations and
Warranties of Contractor 

     Contractor represents and
warrants to Company that: 

          (a)
Contractor is a corporation duly organized, validly existing and in good
standing under the Laws of the state of Idaho and has the requisite legal power
and authority to execute, deliver and perform this Contract; 

          (b)
the execution, delivery and performance by Contractor of this Contract has been
duly authorized by all requisite action of Contractor, and there is no provision
in its charter documents requiring further consent for such action by any other
person or entity; and 

          (c)
this Contract constitutes the legal, valid and binding obligation of Contractor,
enforceable against Contractor in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, reorganization,
moratorium or similar laws affecting or limiting creditors’ rights generally or
by equitable principles relating to enforceability. 

ARTICLE
3      COMPANY RESPONSIBILITIES

     3.1 General
Responsibilities 

     Company shall, at Company’s
expense, furnish, undertake, provide or cause to be furnished, undertaken or
provided the following: 

11 

REV A 

          (a)
make available to Contractor and its Subcontractors by the time specified in the
Schedule, and continuing until the end of the Warranty Period, the Site,
including space for all construction facilities, and laydown and storage
areas; 

          (b)
obtain and maintain in effect all Company Permits from the Governmental
Authorities in a timely manner as required to permit Contractor and its
Subcontractors to proceed with the Work in accordance with the Schedule;

          (c)
prepare and/or obtain all environmental impact assessments, studies and
statements and geotechnical reports required in connection with the ownership,
financing, construction, operation and maintenance of the Facility and the
performance of this Contract; 

          (d)
furnish to Contractor copies of any environmental impact assessment, studies and
statements and geotechnical reports prepared or obtained as provided in Section
3.1(c) and any information, a power of attorney (if required) and any other
items reasonably necessary for Contractor to obtain the Contractor Permits or
perform the Work in a timely manner as required to permit Contractor and its
Subcontractors to proceed with the Work in accordance with the Schedule;

          (e)
provide or make arrangements to provide electrical distribution lines and
electrical equipment (transformers, disconnects, etc.) to the tie-in point at
the geothermal wells and branch connection; 

          (f)
provide to Contractor a rubbish and construction debris (but not for Contractor
Hazardous Materials) storage area on or adjacent to the Site. Disposal of such
Contractor materials stored therein shall be the responsibility of the
Contractor, pursuant to Section 2.2 (g). 

          (g)
any removal or disposal of the existing transite pipe on the Site exposed during
the Work; and, 

          (h)
remediate and dispose of in accordance with applicable Law any Hazardous
Materials that are found or are uncovered on or about the Site other than
Contractor Hazardous Materials that are the responsibility of Contractor as
provided in Section 2.2(h) 

          (i)
provide to Contractor an area where cleared and grubbed materials can be
disposed. 

     3.2 Company’s
Representative 

     Company shall designate by
written notice to Contractor a representative who shall act as a single point of
contact with Contractor in all matters relating to the Work (“Company’s
Representative”). Company’s Representative shall have full authority to act
on behalf of Company for all purposes in connection with this Contract. 

     3.3 Representations and
Warranties of Company

     Company represents and warrants
that: 

12 

REV A 

          (a)
Company is a corporation duly organized and validly existing under the Laws of
the State of Idaho and has all requisite legal power and authority to execute,
deliver and perform this Contract; 

          (b)
the execution, delivery and performance by Company of this Contract have been
duly authorized by all requisite corporate action of Company and there is no
provision in its charter documents requiring further consent for such action by
any other person or entity; and 

          (c)
this Contract constitutes the legal, valid and binding obligation of Company,
enforceable against Company in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, reorganization,
moratorium or similar laws affecting or limiting creditors’ rights generally or
by equitable principles relating to enforceability. 

ARTICLE
4      COMMENCEMENT OF WORK

     4.1 Notice to Proceed

     Company shall issue a Notice to
Proceed to Contractor only at such time as Company has arranged financing for
Company to be able to meet its obligations under this Contract and to develop
the Project and pays to Contractor simultaneously with the issuance of such
Notice to Proceed the amount specified for the first payment milestone set forth
in the Schedule, if any. At the mutual agreement of the Parties, Company shall
have the option of issuing a Limited Notice to Proceed to allow the Contractor
to begin performing such work as agreed to between the Parties in advance of the
Notice to Proceed. The Company shall have the right to terminate or suspend work
prior to issuing a Notice to Proceed without financial obligations beyond the
amount agreed upon to cover the period up to the Notice to Proceed. 

     4.2 Commencement

     Subject to Section 4.1,
Contractor shall commence performance of the Work promptly upon receipt of a
Notice to Proceed from Company (“Commencement Date”). Contractor shall
thereafter proceed diligently to perform the Work and furnish sufficient forces
and construction equipment to perform the Work in accordance with the Schedule.
The contract amount and Guaranteed Completion Date are based upon the Contractor
receiving a Notice to Proceed on or before June 1, 2006. 

     4.3 Reserved

     4.4 Reserved

     4.5 Reserved

     4.6 Delay Liquidated
Damages

     The Parties agree that it would
be extremely difficult and impracticable under the presently known and
anticipated facts and circumstances to ascertain and fix the actual damages that
Company would incur should Contractor fail to achieve Final Completion by the
Guaranteed 

13 

REV A 

Final Completion Date, and accordingly, the Parties hereby
agree that if Contractor fails to so achieve Final Completion by the Guaranteed
Final Completion Date, then Company shall be entitled to recover from Contractor
as liquidated damages for such delay, and not as a penalty, the amounts set
forth in Exhibit K (“Delay Liquidated Damages”). The Delay Liquidated
Damages are, subject to Article 19, Company’s sole and exclusive remedy in the
event Contractor fails to achieve any of the milestones for the Facility,
including Final Completion, by the dates set forth in the Schedule. Company and
Contractor further agree that the Delay Liquidated Damages are a good faith
estimate of the damages Company would suffer. 

     4.7 Final Completion

     When all of the following
conditions have been met with respect to the Facility, Contractor shall issue to
Company a Certificate of Final Completion in substantially the same form as that
set forth in Exhibit I: 

          (a)
except for the Punchlist Items and As-Built Drawings, the Facility and Work has
been completed and complies with exhibits C1 and C2, referenced specifications,
and applicable Laws; 

          (b)
the Facility has satisfied the checks and tests outlined in Article 6 ; 

          (c)
any amount finally determined due for Delay Liquidated Damages has either been
paid or agreed and shall be deducted from the final payment of the Contract
Price; 

          (d)
the list of Punchlist Items (if any) for the Facility have been identified by
Contractor and provided to Company as provided in Section 4.9; 

          (e)
all other deliverables identified in this Contract with respect to the Facility
(except for the As-Built Drawings or deliverables appearing in the Punchlist
Items provided by Contractor), including documents and materials described in
Article 9, have been completed in accordance with the provisions hereof and have
been provided to Company.; and 

          (f)
all rubbish accumulated by Contractor in the Company-designated disposal area
has been removed and disposed in accordance with Section 2.2(g) . 

     4.8 Final Completion
Certificate 

     Within fifteen (15) Days
following the receipt of the Certificate of Final Completion, Company shall
inspect the Facility and review all Work and services performed by Contractor
with respect thereto, and shall either (i) deliver to Contractor the Certificate
of Final Completion countersigned and certifying that the Work requirements of
this Contract (other than the Punchlist Items identified by Contractor and the
As-Built Drawings) have been fully satisfied for the Facility and Final
Completion of the Facility has accordingly been achieved, or (ii) if reasonable
cause exists for doing so, notify Contractor in writing that Final Completion of
the Facility has not been achieved, stating in detail the reasons therefore. In
the event that Company determines that Final Completion has not been achieved
and Contractor has not disputed Company’s determination, Contractor shall
promptly take such corrective action or perform such 

14 

REV A 

additional Work or other services as shall be necessary to
achieve Final Completion of the Facility and shall issue to Company another
Certificate of Final Completion. Such procedure shall be repeated until Final
Completion of the Facility has been achieved; provided, however, that Company
shall respond to any such subsequent Certificate of Final Completion within ten
(10) Days following the receipt thereof. If Company fails to provide the
Certificate of Final Completion or as contemplated in (ii) above within the
aforementioned period, Final Completion of the Facility shall be deemed to have
been achieved. 

     4.9 Punchlist

     Contractor shall provide to
Company a list of all Punchlist Items and the estimated cost thereof prior to
the issuance of the Certificate of Final Completion. Within fifteen (15) Days
following the receipt of this list of Punchlist Items, Company shall notify
Contractor in writing whether Company has any objections to that list or the
estimates thereof. If Company has any objections, including additions, the
Parties shall use good faith efforts to resolve such objections. If no agreement
can be reached, the provisions of Article 14 shall be invoked to resolve the
dispute. Two hundred percent (200%) of the estimated value of such Work, as
reasonably decided by Company, shall be retained or deducted from the Contract
Price by Company or, at Contractor’s option, paid to Company by Contractor
pending satisfactory rectification and/or completion. Contractor shall rectify
or complete to the reasonable satisfaction of Company within the time stated in
the Certificate of Final Completion any such Punchlist Items listed. In the
event Contractor fails to rectify or complete any Punchlist Items listed,
Company may arrange for the outstanding work to be done and the cost thereof
shall be certified by Company and deducted from the Contract Price or, at
Contractor’s option, paid to Company by Contractor. Upon satisfactory
rectification and/or completion of such Work, the money retained, deducted or
paid under this Section 4.9 in relation thereto shall be reimbursed to
Contractor by Company. During the period after Final Completion, Contractor and
Company shall cooperate to ensure that the performance of the Work does not
unreasonably interfere with the commercial operation of the Facility and at the
same time allowing the remaining Work to be performed in a prompt and efficient
manner. As soon as practicable after the completion of all Punchlist Items,
Contractor shall remove all of its equipment and Materials and complete the
removal of all Work-related waste material and rubbish from and around the Site.

ARTICLE
5      COMPENSATION AND PAYMENT

     5.1 Contract Price

          5.1.1
As compensation for the performance of the Work, Company shall pay Contractor,
in the manner and at the times hereinafter specified, the Contract Price, which
amount may be subject to adjustment in accordance with the terms of this
Contract. 

          5.1.2
The Contract Price includes any and all Taxes imposed directly or indirectly by
any Governmental Authority including export taxes, importation duties and income
Taxes imposed on Contractor. 

15 

REV A 

          5.1.3
Contractor shall be responsible for paying all State of Idaho sales and use
taxes due as a result of the Work in the construction of the Facility to the
State of Idaho.

          5.1.4
Upon request of Company, Contractor shall:

          (a)
promptly provide to Company evidence of its remittance to the applicable
Governmental Authority of all state and local sales and use taxes that
Contractor collects from Company under this Contract; and 

          (b)
provide Company with sufficient level of detail such that Company is able to
claim any State of Idaho sales and use tax refund for geothermal energy projects
for which it may be eligible under State of Idaho law. 

     5.2 Payment Schedule

     Exhibit A sets forth the payment
installments payable by Company in respect of Work performed by Contractor. The
Schedule shall be used as the basis for preparation of invoices and for
payments. Any cumulative acceleration of the Payment Schedule of more than
fourteen (14) Days must reflect a reciprocal acceleration in the Guaranteed
Final Completion Date. 

     5.3 Payment 

          5.3.1
Contractor shall present monthly invoices based on progress completion and
completion of milestones as provided in the Payment Schedule. Except as provided
below in this Section 5.3, invoices that are presented for payment shall be paid
within thirty (30) Days of Company’s receipt of such invoice. 

          5.3.2
Within fifteen (15) Days of its receipt of an invoice and such Documents,
Company’s Representative shall give written notice to Contractor of any
objections that Company’s Representative has with regard to the accomplishment
of such progress amounts or milestones. If Company’s Representative fails to
provide such notice within such fifteen (15) Day period, the progress amount or
milestone shall be deemed accomplished and Contractor shall be entitled to
payment. If Company’s Representative provides written notice of objection to the
accomplishment of such progress amount or milestone and said Documentation
within the period described above, and the contents of Company’s
Representative’s notice is not in dispute, Contractor shall resubmit the
corrected invoice and/or Documentation, and the above-described approval process
shall reapply except that the response time shall be ten (10) Days rather than
fifteen (15) Days. 

          5.3.3
If pursuant to Section 5.3.2, Company’s Representative disputes any amounts
invoiced by Contractor within the specified time period, Company shall promptly
pay to Contractor the undisputed amount of such invoice in the manner provided
in Section 5.3.1, and any disputed amount that is ultimately determined to have
been payable shall be paid with interest from the date the item was payable to
and including the date of payment, in accordance with the provisions of Section
5.8. The Parties shall resolve their differences regarding the disputed amount
in accordance with the dispute resolution procedures set forth in Article 14.

16 

REV A 

          5.3.4
The Owner and Contractor will enter into a Joint Checking Agreement whereby
Subcontractors and suppliers will be issued joint checks from the Owner.
Contractor will be required to obtain and provide to Owner lien releases from
Subcontractors and suppliers for progress and final payment for materials and
services.

     5.4 Final Completion
Payment for the Facility 

     No later than thirty (30) Days
after the Final Completion Date, Contractor shall submit to Company a statement
summarizing and reconciling all previous invoices, payments and Changes in the
Work, with respect to the Work, and a waiver of liens as provided in Section 5.7
from Contractor for the Facility and such other data as Company may reasonably
request establishing payment of or surety for payment of such unpaid
Contractor obligations. Within thirty (30) Days of the receipt of such
statements and lien waiver, Company shall pay Contractor the remaining portion
of the Contract Price (except with respect to amounts remaining to be paid by
Company under the Contract for retainage and Punchlist Items less any unpaid
Liquidated Damages owing by Contractor). Any disputes regarding a final payment
shall be handled in accordance with the procedure set forth in Article 14.

     5.5 Payments Not
Acceptance of Work 

     No payment made by Company to
Contractor shall be considered or deemed to represent that Company has inspected
the Work or checked the quality or quantity of the Work and shall not be deemed
or construed as an approval or acceptance of any Work or as a waiver of any
claim or right Company may have hereunder. 

     5.6 Payment of
Subcontractor 

     Contractor shall promptly pay, in
accordance with the terms and conditions set forth in the respective
Subcontract, each Subcontractor the amount to which said Subcontractor is
entitled. Contractor shall, by an appropriate agreement with each Subcontractor,
require each Subcontractor to make timely payments to its laborers, suppliers
and subcontractors in a similar manner.

     5.7 Waiver of Liens

     As a condition precedent to the
making of the final Payment Schedule payment by Company hereunder, Contractor
shall be required, upon request by Company, to supply Company with a waiver and
release of liens and security interests to the extent of such payment in the
form attached as Exhibit J, duly executed by Contractor. 

     5.8 Interest

     Amounts not paid by either Party
to the other when due under any provision of this Contract, including the
provisions of this Article 5, shall bear interest, from the date payment was due
to and including the date of payment, at the Delayed Payment Rate. 

     5.9 Retainage

17 

REV A 

     Company shall make progress
payments on account of the Contract Price on the basis of the Payment Schedule
contained in Exhibit A as may be modified. 

     Prior to Final Completion, each
progress payment will be made in an amount equal to 90 percent of the Work
completed, with the balance being retainage, less such amounts Company may
withhold, including but not limited to liquidated damages. Upon payment of 50
percent of the Contract Price as amended due to Change Orders, and provided the
Owner is satisfied with the performance and progress of Work, the Owner may
reduce or eliminate further withholding of retainage.

     Upon completion to the
satisfaction of the Company’s Representative of all punchlist items per Section
4.9, Company shall within 30 days pay all amounts retained in accordance with
this section and Section 4.9. Reimbursement for retainage will include a payment
for interest on retained money that will be based on an annual interest rate of
4 percent. 

ARTICLE
6      TESTING 

     6.1 General 

     A general listing of the required
tests is provided in Exhibit C1. Development and implementation of test
procedures and protocols shall be the responsibility of Contractor. These
procedures and protocols, as developed by the Contractor, and agreed to by the
Company, shall be provided in Exhibit D prior to Contract signature. Contractor
shall be responsible for providing all supplies required for carrying out such
tests in accordance with this Contract. Company may, at its expense, require
independent calibration of any and all instruments used by Contractor and/or
supply Company’s own instruments to be used in addition to those of Contractor.

     6.2 Test Procedures

     The Performance Tests shall be
performed under normal operating conditions as described in Exhibit D hereto and
in accordance with all applicable Laws in effect on the date thereof.

     6.3 Notice of Testing

     Contractor shall notify Company
at least fourteen (14) Days in advance of the actual date that Contractor shall
start conducting tests. Company’s Representative shall be entitled to attend at
the time and place appointed in connection with the performance of the tests. If
Company’s Representative fails to attend at the time and place appointed for the
tests, Contractor shall be entitled to proceed with the tests in their absence.
The tests shall then be deemed to have been made in the presence of Company’s
Representative. 

     6.4 Deficiencies

     If deficiencies are found, the
Contractor shall take whatever actions are necessary to achieve compliance with
the Contract provisions, at no additional cost to the Owner.

18 

REV A 

Corrections shall be made within a reasonable period of time as
agreed to by both the Contractor and Owner, but under no circumstances shall
extend beyond sixty (60) days. 

ARTICLE
7      INTENTIONALLY OMITTED

ARTICLE
8      CONSTRUCTION SUSPENSION
AND ACCELERATION; CHANGE ORDER 

     8.1 Construction
Suspension and Acceleration 

     8.1.1 Company may order
Contractor to suspend the Work, or any part thereof, for such a time and in such
a manner as Company may consider necessary or desirable. Contractor, during such
a suspension, shall properly protect and secure the Work, or such part thereof,
so far as is necessary in the opinion of Company. In the event of such order to
suspend the Work, or any part thereof, and such suspension is not the result of
a Contractor default, Contractor shall be entitled to a Change Order for
adjustments pursuant to this Article 8 in the Contract Price and the Schedule
(including the Guaranteed Final Completion Date) as may be affected by such
suspension. 

     8.1.2 Company may order
Contractor to accelerate the progress of the Work, or any part thereof, for such
a time and in such a manner as Company may consider necessary or desirable
provided that such acceleration is reasonably practicable. In the event of such
order to accelerate the Work, or any part thereof, and such acceleration is not
the result of Contractor’s default, Contractor shall be entitled to a Change
Order for adjustments pursuant to this Article 8 in the Contract Price as may be
affected by such acceleration. 

     8.2 Change Orders

     Company, without invalidating
this Contract, may order Changes in the Work that are reasonably related to and
do not materially reduce or increase the Scope of Work, in which event one or
more of the Contract Price, the Schedule (including the Guaranteed Final
Completion Date) and other such parts of the Contract as may be affected by such
Change in the Work shall be adjusted as necessary. If Company decides not to
issue a Change Order after having requested a Change in the Work, unless such
Change Order request is issued in response to a Contractor Change Order notice
as set forth in Section 8.3.2, Contractor shall be entitled to reasonable
compensation for providing engineering services necessary to respond to
Company’s Change Order request. Such reasonable compensation is defined to mean
Contractor’s actual direct cost of providing such engineering services plus a
fifteen percent (15%) mark-up for overhead and profit. All Changes in the Work
shall be authorized by a Change Order and only Company or Company’s
Representative may issue Change Orders. 

     8.3 Procedure for Change
Orders. 

     8.3.1 As soon as reasonably
possible, but in no event later than fourteen (14) Days after Contractor becomes
aware, through the exercise of reasonable diligence, of any circumstances which
Contractor has reason to believe may constitute a Change in the Work, Contractor
shall issue to Company a Change Order notice using the Change Order Request form

19 

REV A 

set forth in Exhibit M. All Change Order notices shall include
preliminary documentation sufficient to enable Company to determine (i) the
factors necessitating the possibility of a Change Order; (ii) the impact which
the Change Order is likely to have on the Contract Price; and (iii) the impact
which the Change Order is likely to have on the Schedule (including the
Guaranteed Final Completion Date). Failure to give such proper and timely Change
Order notice shall, to the extent Company is prejudiced by such failure,
constitute a waiver of Contractors right to an adjustment.

          8.3.2
If Company desires to make a Change Order in response to a Change Order notice,
it shall submit a Change Order request to Contractor using the Change Order
Request form set forth in Exhibit M. Contractor shall promptly review the Change
Order request and notify Company promptly in writing of the options for
implementing the proposed Change Order (including, if possible, any option that
does not involve an extension of time) and the effect, if any, each such option
would have on the Contract Price, the Schedule (including the Guaranteed Final
Completion Date), or any other such part of the Contract as may be affected. The
preparation and provision of information to Company in response to a Change
Order request shall be at Contractor’s expense if such Change Order request is
issued in response to a Change Order notice issued by Contractor pursuant to
this Section 8.3.2 and otherwise Contractor shall be reimbursed for such expense
as provided in Section 8.2. 

          8.3.3
If Company agrees that a Change Order is in order and accepts Contractor’s
statement of the effect of such Change Order on any one or more of the Contract
Price, the Schedule (including the Guaranteed Final Completion Date), or any
other such part of the Contract as may be affected, Company shall issue a Change
Order. In the event Company disagrees with Contractor’s statement of the effect
of such Change Order on any one or more of the Contract Price, the Schedule
(including the Guaranteed Final Completion Date), or any other such part of the
Contract as may be affected, Company may proceed to issue the Change Order in
accordance with Section 8.8.

     8.4 Change Orders Due to
Contractor Error 

     Except as provided in Sections
8.5, 8.6 or 8.7, no Change Order shall be issued and no adjustment of any one or
more of the Contract Price or the Schedule (including the Guaranteed Final
Completion Date) shall be made to the extent resulting from any delay, failure
of performance, correction of errors, and flaws or errors in design, omissions,
deficiencies or improper or defective Work, machinery, equipment, materials,
systems, supplies or other items on the part of Contractor or any Subcontractor
in the performance of the Work or provisions of, or delay in provisions of
Materials or other items of the Work where such delay was within the reasonable
control of Contractor or any Subcontractor, or any failure of Contractor or any
Subcontractor to comply with the Contract. To the extent any delay or failure of
performance was concurrently caused by Company and Contractor, Contractor shall
be entitled to an adjustment of the Schedule (including the Guaranteed Final
Completion Date) for that portion of the delay or failure of performance that
was concurrently caused, but Contractor shall not be entitled to any adjustment
of Contract Price for such concurrent delay. 

20 

REV A 

     8.5 Change Orders Due to
Changes in Law 

     Any Change in the Work
necessitated by any Change of Law enacted after the Effective Date (excluding
therefrom any change in applicable Law relating to taxation of Contractor’s
income) shall be treated as a Change Order under Section 8.3. 

     8.6 Effect of Force
Majeure; Excused Performance 

     If Contractor’s performance
hereunder is wholly or partially prevented due to the occurrence of a Force
Majeure affecting Contractor and such Force Majeure has caused an extension of
the Guaranteed Final Completion Date or any other date under the Schedule,
Contractor shall provide to Company a written description of Contractor’s plan
to make-up Days lost under the Schedule due to the occurrence of such Force
Majeure, including an estimate of the costs of such plan. In the event of the
occurrence of a Force Majeure, Contractor shall be entitled to a Change Order
for adjustments pursuant to this Article 8 in the Schedule (including the
Guaranteed Final Completion Date) and other such parts of the Contract as may be
affected by such Force Majeure; provided, however, that there shall be no
adjustment in the Contract Price for events of Force Majeure declared by a
Party. To the extent that Company desires to pay for the costs of acceleration
of the Work or change to the Schedule (including the Guaranteed Final Completion
Date) set forth in Contractor’s proposal in order to compensate for delays in
the work caused by such Force Majeure, Company shall authorize a Change Order
increasing the Contract Price and adjusting the Schedule (in addition to any
automatic adjustments of the Guaranteed Final Completion Date). Except for the
obligations of either Party to make any required payment then due and owing
under this Contract, if either Party is rendered wholly or partially unable to
perform its obligations under this Contract because of a Force Majeure, then
such Party’s obligations that are so affected shall be excused and suspended to
the extent and during the continuance of the Force Majeure. If a Force Majeure
affecting the Contractor continues for two (2) consecutive months or more, or if
a Force Majeure affecting the Company continues for six (6) consecutive months
or more, this Contract may be terminated by either Party pursuant to Section
19.3. This Section 8.6 is subject to and conditioned upon the following:

          (a)
the non-performing Party, by exercise of due foresight, could not reasonably
have been expected to avoid, or that by the exercise of reasonable due diligence
could not have been able to overcome, such Force Majeure; 

          (b)
the non-performing Party gives the other Party notice describing the particulars
of the occurrence, with notice given promptly after the occurrence of the Force
Majeure, and in no event more than fifteen (15) Days after the affected Party
becomes aware of such occurrence; within fifteen (15) Days after such
occurrence, the non-performing Party shall give the other Party written notice
estimating the expected duration and probable impact on the performance of such
Party’s obligations hereunder, and continues to furnish timely regular reports
with respect thereto during the continuation of the Force Majeure; 

          (c)
the non-performing Party shall forecast the duration of its non-performance,
provided that it shall be no more than is reasonably required by the Force
Majeure; 

21 

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          (d)
the non-performing Party shall exercise all reasonable efforts to mitigate or
limit damages to the other Party; 

          (e)
the non-performing Party shall exercise all reasonable efforts to continue to
perform its obligations hereunder and to correct or cure the event or condition
excusing performance; and 

          (f)
when the non-performing Party is able to resume performance of its obligations
under this Contract, that Party shall give the other Party written notice to
that effect and shall promptly resume performance hereunder. 

     8.7 Company-Caused
Changes 

     In the event and to the extent
(a) a failure of Company to perform, or cause performance of, its obligations in
accordance with the Contract; or (b) damage to or destruction of any Work caused
by Company cause a delay in Contractor’s performance of the Work which impairs
Contractor’s ability to meet the Schedule, or impacts Contractor’s cost of
performance of the Work, an equitable adjustment in the Schedule (including the
Guaranteed Final Completion Date) or the Contract Price or any other such part
of this Contract as may be affected shall be made pursuant to this Article 8. To
the extent Contractor cannot reasonably redeploy labor or equipment, reasonable
standby and mobilization/remobilization costs incurred by Contractor resulting
from any such delay shall be reimbursed to Contractor monthly as such costs are
incurred. 

     8.8 Price Change

          8.8.1
An increase or decrease in Contract Price, if any, required pursuant to this
Article 8 as a result of a Change Order shall be determined by the mutual
agreement of the Parties, and shall be paid (or reimbursed) in one or more
payments in accordance with the following: 

               (a)
as a fixed price lump-sum, in an amount proposed by Contractor (properly
itemized and supported by sufficient substantiating data to permit evaluation)
and accepted by Company; or 

               (b)
by unit pricing; or 

               (c)
if neither of the methods set forth in Section 8.1(a) or 8.8(b) is agreed upon
by the Parties, after good faith negotiation by the Parties, Contractor shall
perform the Work on a time and material basis. 

          8.8.2
Change Order Pricing – Fixed Price. When the fixed price method is used
to determine the value of any Work covered by a Change Order, or of a request
for an equitable adjustment in the Contract Price, the following procedures
shall apply: 

     1.
Contractor’s Change Order proposal, or request for adjustment in the Contract
Price, shall be accompanied by a breakdown of the costs, including labor,
material, equipment, subcontractor costs, overhead and profit. The costs 

22 

REV A 

shall be itemized in the manner set
forth below, and shall be submitted on breakdown sheets in a form approved by
Company. 

     2. All
costs shall be calculated based upon appropriate industry standard methods of
calculating labor, material quantities and equipment costs. 

     3. If any
of Contractor’s pricing assumptions are contingent upon anticipated actions of
Company, Contractor shall clearly state them in the proposal or request for an
equitable adjustment. 

     4. The
cost of any additive or deductive changes in the Work shall be calculated as set
forth below, except that overhead and profit shall not be included on deductive
changes in the Work. Where a change in the Work involves additive and deductive
work by the same Contractor or Subcontractor, small tools, overhead, profit,
bond and insurance markups shall apply to the net difference. 

     5. If the
total cost of the change in the Work or request for equitable adjustment does
not exceed One Dollars ($1,000)], Contractor shall not be required to submit a
breakdown of the description of the change in the Work or request for equitable
adjustment, unless change in the Work is sufficiently definitive for Company to
determine fair value. 

     6. If the
total cost of the change in the Work or request for equitable adjustment is Ten
Thousand Dollars ($10,000) or more, Contractor shall submit a breakdown in the
following level of detail if the description of the change in the Work or if the
request for equitable adjustment is sufficiently definitive to permit the
Company to determine fair value: 

     a. lump
sum labor; 

     b. lump
sum equipment and material; 

     c. lump
sum equipment usage; 

     d.
overhead and profit as set forth below; 

     e.
insurance and bond costs as set forth below; and 

     f.
construction-related indirect costs and home office personnel tasks dedicated
specifically to the Facility. 

     7. Any
request for adjustment of Contract Price based upon the fixed price method shall
include only the following items: 

     a.
Craft Labor Costs: These are the labor costs determined by multiplying
the estimated additional number of craft hours needed to perform the change in
the Work by the hourly labor costs. Craft hours 

23 

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should cover all direct labor. The
hourly costs shall be based on the following: 

     (1)
Basic Wages and Benefits: Hourly rates and benefits (general foreman and
below) as set forth in Exhibit L.

     (2)
Worker’s Insurance: Direct contributions for industrial insurance. 

     (3)
Federal Insurance: Direct contributions required by the Federal Insurance
Compensation Act; Federal Unemployment Tax Act; and the State Unemployment
Compensation Act, if any. 

     (4)
Travel Allowance: Travel allowance and/or subsistence, if applicable, not
exceeding those allowances prevailing in the region, which are itemized and
identified separately. 

     b.
Equipment and Material Costs: This is an itemization of the quantity and
cost of equipment and materials needed to perform the change in the Work. Such
costs shall be developed from actual known costs, supplier quotations or
standard industry pricing guides. Equipment and material costs shall consider
all available discounts. Freight costs, express charges, or special delivery
charges, shall be itemized. 

     c.
Construction Equipment Costs: This is an itemization of the type of
equipment and the estimated or actual length of time the construction equipment
appropriate for the Work is or shall be used on the change in the Work. Costs
shall be allowed for construction equipment to the extent used for the changed
Work, or for additional rental costs and other costs (including but not limited
to fuel, oil, minor maintenance, service, cleaning and repair of construction
equipment) actually incurred by the Contractor. Equipment charges shall be
developed from Contractor’s rate sheet or actual invoice rental costs plus costs
for fuel and oil established by using the Data Quest Rental Rate (Blue Book).
The maximum rate for standby Contractor-owned equipment shall not exceed fifty
percent (50%) of the applicable rate. 

     d.
Allowance for Small Tools, Expendables and Consumable Supplies:
Small tools consist of tools which cost Seven Hundred Fifty Dollars ($750) or
less and are normally furnished by the performing contractor. The maximum rate
for small tools, expendables and consumables shall not exceed the following:

     (1) for
Contractor, eight percent (8%) of direct labor costs; and 

24 

REV A 

     (2) for
Subcontractors, eight percent (8%) of direct labor costs. 

     Expendables and consumable supplies
directly associated with the change in Work must be itemized. 

     e.
Subcontractor Costs: This is defined as payments Contractor makes to
Subcontractors for changed Work performed by Subcontractors of any tier. The
Subcontractors’ cost of Work shall be calculated and itemized in the same manner
as prescribed herein for Contractor. 

     f.
Indirect Costs: This is defined as costs of any kind attributable to
direct and indirect delay, acceleration, or impact, added to the total cost to
Company of any Change Order, or any request for additional Work or extra payment
of any kind on the Facility. This allowance shall compensate Contractor for all
non-craft labor, including field manager and superintendent, temporary
construction facilities, field engineering, schedule updating, as-built
drawings, home office cost, office engineering, estimating costs, additional
overhead because of extended time, and any other cost incidental to the change
in the Work. 

     g.
Contingency and Profits: The cost to which contingency and profit is to
be applied shall be determined in accordance with subparagraphs a-f above.
Contingency and profit shall be calculated as [fifteen percent (15%)] of the sum
of subparagraphs a-f above. 

     h.
Cost of Change in Insurance or Bond Premium: This is defined as: 

     (1)
Contractor’s Liability Insurance: The cost of any changes in Contractor’s
liability insurance arising directly from execution of the Change Order; and

     (2)
Performance Bond(s): The cost of the additional premium for Contractor’s
performance bond, if any, arising directly from the changed Work. 

     The
costs of any change in insurance or bond premium shall be added after
contingency and profit are calculated in accordance with subparagraph g above.

               8.8.3
Change Order Pricing – Unit Prices. 

     1.
Whenever Company authorizes Contractor to perform Work on a unit-price basis,
Company’s authorization shall clearly state: 

a. scope of work to be performed; 

25 

REV A 

b. type of reimbursement including pre-agreed rates for material
  quantities; and 

c. a maximum not-to-exceed limit. 

     2. Contractor
  shall: 

a. cooperate with Company and assist in monitoring the Work being
  performed; 

b. leave access as appropriate for quantity measurement; and 

c. not be required to perform unit-cost work past the established
  not to exceed limit without Company’s prior written approval. 

     3. Unit
prices shall include reimbursement for all direct and indirect costs of the
Work, plus contingency overhead and profit, and bond and insurance costs, and
quantities must be supported by field measurement statements signed by Company.

          8.8.4
Change Order Pricing – Time and Material Prices. 

     (a)
Whenever Company authorizes Contractor to perform Work contemplated under a
Change Order on a time and material basis, Company’s authorization shall clearly
state: 

          (i).
scope of Work to be performed; and 

          (ii).
type of reimbursement including pre-agreed rates, if any, for material
quantities or labor. 

     (b)
Contractor shall: 

          (i).
cooperate with Company and assist in monitoring the Work being performed. As
requested by Company, identify workers assigned to the Work and areas in which
they are working; 

          (ii).
identify on daily time sheets all labor, equipment and materials furnished in
accordance with this authorization. Submit copies of daily time sheets within
two (2) Days for Company’s review; 

          (iii).
leave access as appropriate for quantity measurement; 

          (iv).
efficiently perform all Work in accordance with this Section 8.8.2; 

26

REV A 

          (v).
  not be required to perform time and material work past the established not to
  exceed limit(s) without Company’s prior written approval. 

          (vi).
  Submit costs in accordance with Section 8.8.1, plus profit and overhead of fifteen
  percent (15%) on the sum of such costs and additional verification supported
  by: 

     (1)
labor priced at Contractor’s then current burdened direct labor rates, detailed
on daily time sheets; 

     (2)
invoices for equipment and material; and 

     (3)
invoices for construction equipment rental costs. 

     8.9 Effectiveness;
Continued Performance Pending Resolution of Disputes 

     If a Change in the Work is
initiated under this Article 8, then the Change Order and the modifications made
pursuant to such Change Order shall be effective upon Company’s issuance of a
Change Order with respect thereto. Notwithstanding a dispute regarding any
proposed or requested Change Order, or any adjustment of one or more of the
Contract Price, the Schedule (including the Guaranteed Final Completion Date),
or any other such part of this Contract as may be affected with respect to a
Change Order, Contractor shall proceed with the performance of such Change Order
promptly following Company’s execution of the corresponding Change Order. 

     8.10 Documentation

     All claims by Contractor for
adjustments pursuant to a Change Order to one or more of the Contract Price, the
Schedule (including the Guaranteed Final Completion Date), or any other such
part of this Contract as may be affected as a result of Change Orders under this
Article 8 shall be supported by such documentation as is reasonably sufficient
for Company to determine the accuracy thereof. Within thirty (30) Days of
Contractor’s knowledge of Contractor’s need to provide additional supporting
data for the Change Order notice, unless Company agrees in writing to allow an
additional period of time to ascertain more accurate data, Contractor shall
supplement the Change Order notice with additional supporting data. Such
additional data shall include, to the extent known, or through the exercise of
reasonable diligence should be known at the time, at a minimum (a) the amount of
compensation or delay claimed, itemized in accordance with procedures set forth
herein; (b) specific facts, circumstances; (c) analysis that confirms not only
that Contractor suffered the damages or delay claimed, but that the damages or
delay claimed were actually a result of the act, event, or condition complained
of, and that the Contract provides entitlement to an equitable adjustment in
Contract Price or Schedule (including the Guaranteed Final Completion Date) for
such act, event or condition; and (d) supporting documentation sufficiently
detailed to permit an informed analysis of the request by Company. Failure to
provide such additional information and documentation, to the extent such
information and documentation was reasonably available to Contractor, within the
time allowed or within the 

27 

REV A 

format required shall, to the extent Company’s interests are
prejudiced, constitute a waiver of Contractor’s right to an adjustment.

     8.11 Continue Work

     Pending final resolution of any
request in accordance with this Article 8, unless otherwise agreed in writing,
Contractor shall proceed diligently with performance of the Work. 

     8.12 Critical Path
Schedule Updates 

     If there is any change in the
Schedule covered by a Change Order, or based on a Change Order notice,
Contractor shall provide Company with an updated version of Contractor’s Exhibit
B Schedule showing the critical path schedule reflecting the change attributable
to the Change Order or event(s) giving rise to the request for adjustment.

     8.13 Change Order
Constitutes Complete Relief 

     Except for aggregate impacts
which are either unknown, or despite the exercise of reasonable diligence would
not be known at the time of execution of a Change Order, any Change Order signed
by Company and Contractor shall constitute full compensation to Contractor for
all claims for cost for direct, indirect, labor, temporary construction
failures, job site, or home office overhead, stacking of trades, inefficiencies,
impacts or any other cost of any kind or nature; and in the event the Change
Order adjusts the Schedule, the Change Order signed by Company and Contractor
constitutes complete relief to Contractor for schedule impacts for all events
giving rise to the Change Order. 

     8.14 Effect of Changes on
Warranties and Safety 

     8.14.1 If Contractor reasonably
believes that a proposed Change in the Work may negatively affect any warranty
or performance commitments with regard to any Work, Contractor shall serve
Company notice within fourteen (14) Days of Contractor’s receipt of such
proposal of its belief and the believed effect. If Company insists, despite
Contractor’s notice, upon requiring the execution of such proposal and
Contractor acquiesces to Company’s request and executes the proposal, the
affected warranties or performance commitments shall be adjusted to the extent
agreed between the Parties or as already determined in accordance with the
provisions of Article 14, but only to the extent related to or derived from
Company’s proposal. 

     8.14.2 If Contractor reasonably
believes that a proposed Change in the Work may negatively affect safety of the
Work or persons in its vicinity or would violate any applicable Laws, Contractor
shall serve Company notice within fourteen (14) Days of Contractor’s receipt of
such proposal of Contractor’s belief and the believed effect, and Contractor
shall not be required to perform such proposal. 

28 

REV A 

ARTICLE
9      DESIGN AND DOCUMENTATION

     9.1 Inspection of Work

     At Company’s sole expense,
Company and Company’s Representative shall have the right to inspect any
item of the Work to be provided hereunder. Company and Company’s Representative
shall have access to those portions of the Site then under Contractor’s control,
at all times and without notice. While at the Site, Company and the Company’s
Representative shall comply with all of Contractor’s safety rules and other job
site rules and regulations. 

     9.2 As-Built Drawings

     Within two (2) months following
the Final Completion Date, Contractor shall furnish to Company one set of
redline drawings of the Facility on which are marked any and all material
deviations from those Drawings that were issued for construction or updated by
change orders (“As-Built Drawings”).

     9.3 Equipment Manuals

     Contractor shall supply
operations and maintenance manuals in accordance with Section 10.1 of Exhibit
C1.

ARTICLE
10      WARRANTIES 

     10.1 Warranty

     Contractor warrants to Company
that: 

          (a)
the Work shall conform in all material respects to the Drawings, the
Specifications and the other requirements set forth in this Contract; 

          (b)
the Work shall be of good quality, free from any Defect and shall be performed
in a workmanlike and skilful manner; 

          (c)
the equipment and all Materials and other items incorporated in the Work shall:

     (i) be
new and shall be of a suitable grade of its respective kind for its intended
use, unless otherwise authorized in writing by the Company;

     (ii) be
free from any Defect in the case of new materials, and as warranted by the
supplier in the case of used materials; 

     (iii)
meet the requirements of this Contract; 

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

29 

REV A 

     (v)
comply with current applicable Laws. 

          (d)
title and ownership to the Work shall pass to and vest in Company, as described
in Section 12.1, free and clear of any and all liens, claims, charges, security
interests, encumbrances and rights of other persons arising as a result of any
actions or failure to act of Contractor, its Subcontractors, or their employees
or representatives; and 

          (e)
the Work has been and shall be designed and engineered with all the skill, care
and diligence to be expected of appropriately qualified and experienced
professional designers and engineers with experience in carrying out works of a
similar, type, nature and complexity to the Work. 

     10.2 Warranty
Period

     The warranties set forth in
Section 10.1 shall extend for a period of twelve (12) Months from the Final
Completion Date; provided, however, that such period with respect to any item of
the Work that is repaired, replaced, modified, or otherwise altered by
Contractor pursuant to Section 10.3 shall be extended for twelve (12) Months
from the date of completion of such repair, replacement, modification or
alteration (for such item, the “Warranty Period”). Upon the expiration of
the Warranty Period, Contractor will assign to Company, to the extent
assignable, the warranties relating to the Work from any Subcontractors or
vendors that extend beyond the Warranty Period, if any. 

     10.3 Defect Remedy Work

          10.3.1
Company shall notify Contractor promptly (but not longer than forty-eight (48)
hours) upon discovery of any Defect. A written “failure report,” which includes
available technical and logistic information to assist Contractor to assess the
damage to the equipment and to evaluate appropriate corrective action, shall be
provided to Contractor as soon as reasonably practicable upon discovery of the
Defect. 

          10.3.2
Contractor’s responsibility for any such warranty claim shall be limited to
Contractor’s performance of Defect Remedy Work on the Defect and Contractor
shall perform such Defect Remedy Work as soon as reasonably possible following
Contractor’s receipt of notice and the relevant failure report
from Company applicable to such Work. Only direct costs and expenses of
Defect Remedy Work shall be borne by Contractor. Contractor shall have the
obligation in connection with the performance of any Defect Remedy Work to
provide any special rigging, cranes or heavy equipment or any labor required in
connection with operating such equipment, except where such items or labor are
readily available at the Site, in which case such items or labor shall be
provided by Company or Company’s operator, at Contractor’s request, and
Contractor shall pay reasonable compensation therefore. 

          10.3.3
All costs associated with the performance of any repair and maintenance work
which is not Defect Remedy Work, including the costs of the replacement of any
parts or other portions of the Work which are not defective but which are
replaced in conjunction with Defect Remedy Work at the request of Company, shall
be the responsibility of Company. Company shall provide Contractor with access
to the Facility and to utilities, tools and 

30 

REV A 

equipment available at the Site for Contractor’s performance of
any Defect Remedy Work. If Contractor elects not to carry out such Defect Remedy
Work and requests Company to perform the same under this Article 10 instead of
Contractor, Company may cause the Defect Remedy Work to be effected and
Contractor shall reimburse Company the costs Company has reasonably incurred as
a result. 

          10.3.4
The warranty and the liabilities and obligations of Contractor under this
Contract shall not extend to replacement of normal consumables or apply to any
failure to comply with the warranty that has been caused by (i) any erosion or
de-erosion or normal wear and tear in operation of the subject Work; (ii) any
failure of Company or a third party, other than Contractor or Subcontractor, to
properly store, install, operate and/or maintain the subject Work in accordance
with good industry practices and the O&M Manual; (iii) any modifications
made to the subject Work by any person other than personnel of Contractor or
Subcontractor without Contractor’s express written consent prior to such
modifications; (iv) any neglect, abuse, malicious mischief, vandalism or event
of Force Majeure (other than a warranty failure) affecting the subject Work; (v)
any other negligent act of Company or Company’s operator; (vi) operation of the
Facilities under conditions (including composition of the geothermal fluid)
outside of the range specified in the Design Conditions; or (vii) operation of
the Facility, other than by personnel of Contractor or Subcontractor, without
Contractor’s prior express written consent, outside the Facility’s defined
operation range. 

     10.4 Implementation of
Warranty 

     The warranty claims and related
Work shall be implemented in accordance with the Warranty Claim Procedures in
Exhibit E.

     10.5 Disclaimer and
Release 

     THE WARRANTIES, CONDITIONS,
OBLIGATION AND LIABILITIES OF CONTRACTOR AND RIGHTS AND REMEDIES OF COMPANY SET
FORTH IN THIS CONTRACT ARE EXCLUSIVE AND IN SUBSTITUTION FOR, AND COMPANY HEREBY
WAIVES, RELEASES AND RENOUNCES, ALL OTHER PRESENT AND FUTURE WARRANTIES,
CONDITIONS, OBLIGATIONS, REPRESENTATIONS AND LIABILITIES OF CONTRACTOR, TOGETHER
WITH ALL OTHER RIGHTS, CLAIMS AND REMEDIES OF COMPANY AGAINST CONTRACTOR,
EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, INCLUDING, BUT NOT LIMITED TO,
(A) ANY IMPLIED WARRANTY OR CONDITION OF MERCHANTABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE; (B) ANY IMPLIED WARRANTY OR CONDITION ARISING FROM COURSE OF
PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE; (C) ANY OBLIGATION, LIABILITY,
RIGHT, CLAIM OR REMEDY IN TORT, WHETHER OR NOT ARISING FROM THE NEGLIGENCE OF
CONTRACTOR OR ITS SUBCONTRACTORS, ACTUAL, PASSIVE OR IMPUTED; OR (D) ANY
OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY FOR LOSS OF OR DAMAGE TO THE
FACILITY, WORK OR ANY PORTION THEREOF OR FOR ANY INCIDENTAL OR CONSEQUENTIAL
DAMAGES. 

31 

REV A 

ARTICLE
11      INTENTIONALLY
OMITTED

ARTICLE
12      TITLE; CARE OF THE WORK

     12.1 Passage of Title

     Legal title to and ownership of
all Work and Materials provided hereunder shall pass to and vest in the Raft
River Energy I LLC at the later of (i) delivery to the Site; or (ii) upon
payment of the respective payment pursuant to the Payment Schedule. 

     12.2 Risk of Loss

     Contractor shall be responsible
to assure safe delivery of all Materials to the Site. Except to the extent
caused by the negligence or willful misconduct of Company, Contractor shall bear
the risk of physical loss or destruction of or damage to the Materials and the
Work, whether or not incorporated in the Facility at the Site or located on or
off the Site, until the Final Completion Date. Notwithstanding the passage of
title as provided in Section 12.1, Contractor assumes the risk of loss with
respect to, and shall be obligated to replace, repair or reconstruct, any
portion or all of the Materials or the Work that is lost, damaged or destroyed
prior to turning over care, custody and control of such Material or Work to
Company as provided in this Contract, irrespective of how such loss, damage or
destruction shall have occurred. In the event of a termination of this Contract
in accordance with the provisions hereof prior to such turnover, the risk of
loss with respect to such Materials and Work shall pass to Company upon the
effective date of termination, whether by Company or by Contractor. 

ARTICLE
13      INSURANCE AND BONDING

     13.1 Contractor Provided
Insurance 

     Contractor shall: 

          (a)
obtain and maintain in full force and effect from the Commencement Date through
Final Completion, at its own cost, the following policies of insurance:

     (i)
Builders All Risk insurance in an amount equal to cover the replacement cost of
the Facility, including transit coverage for purchased pipe and materials; 

     (ii)
Public Liability insurance with bodily injury and property damage combined
single limits of at least One Million Dollars ($1,000,000) per occurrence and
Two Million Dollars ($2,000,000) in the aggregate. Such insurance shall cover
liability for bodily injury to third parties or damage to property to third
parties arising in connection with the performance of the Work; 

     (iii)
Excess Liability insurance with a single limit of at least Five Million Dollars
($5,000,000) per occurrence in excess of the limits of the insurance provided in
paragraph (ii) above;

32 

REV A 

     (iv)
Workers Compensation insurance providing statutory limits of liability, and
Employers Liability limits of One Million Dollars ($1,000,000) per
disease/accident/ employee, covering Contractor;

     (v)
Marine transit insurance for Materials and/or Equipment procured and to be
delivered pursuant to this Contract and to provide that Company is named as the
additional named insured; and 

           (b)
procure and maintain such further coverage’s as Contractor is required to have
by any applicable Law. 

In the event this insurance or any portion of it becomes
commercially unavailable, Company and Contractor shall cooperate to obtain such
replacement insurance as may be available and this Contract shall be modified
accordingly. 

     13.2 Company Provided
Insurance 

     Company shall: 

          (a)
obtain and maintain in full force and effect, at its own cost, the following
policies of insurance: 

     (i) All
risks property insurance with a limit in an amount not less than the replacement
cost of the Facility pipeline and equipment the care, custody and control of
which has been turned over to Company by Contractor pursuant to this Contract;

     (ii)
Public Liability insurance with bodily injury and property damage combined
single limits of at least One Million Dollars ($1,000,000) per occurrence and
Two Million Dollars ($2,000,000) in the aggregate. Such insurance shall cover
liability for bodily injury to third parties or damage to property to third
parties arising in connection with the Site or the Facility; and 

     (iii)
Excess Liability insurance with a single limit of at least Ten Million Dollars
($10,000,000) per occurrence in excess of the limits of the insurance provided
in paragraph (ii) above; and 

          (b)
procure and maintain such further coverages as Company is required to have by
any applicable Law. 

In the event this insurance or any portion of it becomes
commercially unavailable, Company and Contractor shall cooperate to obtain such
replacement insurance as may be available and this Contract shall be modified
accordingly. 

     13.3 Policies

          13.3.1
Contractor’s insurance shall: 

33 

REV A 

          (a)
name Company and its directors, officers, representatives, employees and agents
and any identified Financing Parties as additional insured’s;

          (b)
include the following cross-liability clause: 

                    “Where
more than one party comprises the “Insured,” each of the parties shall, for the
purpose of such insurance, be considered as a separate and distinct unit/entity,
and the words “the Insured” shall be considered as applying to each party in the
same manner as if a separate policy has been issued to each of the said parties.
The insurer shall provide indemnity to each in the same manner and to the same
extent as if a separate policy has been issued to each, provided that the total
amount payable in respect of compensation shall not exceed the limits of
indemnity”; 

          (c)
provide that such Contractor’s insurance may not be cancelled, non-renewed or
materially changed by the insurer without giving thirty (30) Days’ prior written
notice to Company; 

          (d)
waive any and all rights of subrogation against Company and its respective
directors, officers, representatives, agents and employees, and waive any other
right of the insurers to any offset or counterclaim or any other deduction,
whether by attachment or otherwise, in respect of any Liability of Company or
its directors, officers, representatives, agents and employees; and 

          (e)
provide that any other insurance maintained by Company and its respective
directors, officers, representatives, agents and employees is in excess of such
Contractor’s insurance and not contributory with it. 

          13.3.2
Company’s insurance shall: 

          (a)
name Contractor, Subcontractors and their respective directors, officers,
representatives, employees and agents and any identified Financing Parties as
additional insured’s; 

          (b)
include the following cross-liability clause: 

“Where more than one party comprises the “Insured,” each of the
parties shall, for the purpose of such insurance, be considered as a separate
and distinct unit/entity, and the words “the Insured” shall be considered as
applying to each party in the same manner as if a separate policy has been
issued to each of the said parties. The insurer shall provide indemnity to each
in the same manner and to the same extent as if a separate policy has been
issued to each, provided that the total amount payable in respect of
compensation shall not exceed the limits of indemnity”; 

          (c)
provide that such Company’s insurance may not be cancelled, non-renewed or
materially changed by the insurer without giving sixty (60) Days’ prior written
notice to the Contractor; 

          (d)
waive any and all rights of subrogation against Contractor, Subcontractors and
their respective directors, officers, representatives, agents and employees, and
waive any 

34 

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other right of the insurers to any offset or counterclaim or
any other deduction, whether by attachment or otherwise, in respect of any
Liability of Contractor, Subcontractors or their respective directors, officers,
representatives, agents and employees; and 

               (e)
provide that any other insurance maintained by Contractor, any Subcontractors
and their respective directors, officers, representatives, agents and employees
is in excess of such Company’s insurance and not contributory with it.

     13.4 Payment of
Deductibles 

     If any of the insurance described
above shall have any deductibles, the Party obligated to procure such insurance
shall be solely responsible for payment of all such deductible amounts
associated with such insurance. 

     13.5 Evidence of
Insurance 

     Within thirty (30) Days of the
Commencement Date (or with regard to the Builders All Risk coverage described in
Section 13.1(a)(i), prior to the commencement of Work at the Site), each Party
shall cause its insurers or agents to provide to the other Party for the other
Party’s review and approval certificates of insurance evidencing the policies
and terms specified in this Article 13. Notwithstanding the foregoing,
Contractor shall be entitled to cause its insurers or agents to provide to
Company the certificates of insurance evidencing its builders all risk policy
only when the relevant risk arises. Failure by a Party to obtain the insurance
coverage or certificates of insurance required by this Article 13 shall not in
any way relieve or limit such Party’s obligations and liabilities under this
Contract, nor shall the failure of any insurance company for any reason to pay
claims accruing with respect to such Party’s insurance, affect, negate or
release such Party from any of the provisions of this Contract, including such
Party’s indemnity obligations. The insurance coverage to be provided by each
Party pursuant to this Article 13 are not intended to, and shall not in any
manner, limit or modify such Party’s obligations under this Contract, except to
the extent any proceeds of such insurance are applied in satisfaction of such
Party’s obligations. If a Party shall fail to procure or maintain its
insurances, then the other Party shall have the right (but shall not be
obligated) to provide and maintain such insurance at the defaulting Party’s
expense and to deduct the cost thereof from any amount or amounts due to the
other Party or in the event there are no such amounts due and payable, the
defaulting Party shall reimburse the other Party for such costs on demand.

     13.6 Performance Payment
and Other Bonds 

     Contractor shall furnish bond(s)
for performance and payment in an amount at least equal to 50% of the Contract
Price, or as agreed to by both Parties, as security for the faithful performance
and payment of contractor’s obligations under the Contract Documents. These
bonds shall remain in effect until 30 days after the date when final payment
becomes due, except as provided otherwise by Laws or Regulations. 

     All bonds shall be in the form
prescribed herein, except as provided by Laws or Regulations, and shall be
executed by such sureties as are named in the current list of “Companies Holding
Certificates of Authority as Acceptable Sureties on Federal Bonds and as 

35 

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Acceptable Reinsuring Companies” as published in Circular 570
(amended) by the Financial Management Service, Surety Bond Branch, U.S.
Department of the Treasury. All bonds signed by an agent must be accompanied by
a certified copy of the agent’s authority to act. 

     If the surety on any bond
furnished by Contractor is declared bankrupt or becomes insolvent or its right
to do business is terminated in any state where any part of the Project is
located or it ceases to meet the requirements of this paragraph, Contractor
shall promptly notify Client and Client’s Representative and shall, within 20
days after the event giving rise to such notification, provide another bond and
surety, both of which shall comply with the requirements of this paragraph and
succeeding paragraph. 

     The Contractor will be required
to obtain performance and payment bonds for the insulation subcontractor for the
full amount of the insulation contract, which will be an amount of approximately
$400,000. 

ARTICLE
14      DISPUTE RESOLUTION

     14.1 Settlement by Mutual
Agreement 

     Company and Contractor desire
that this Contract operate between them fairly and reasonably. If during the
term of this Contract a dispute arises between Company and Contractor, or one
Party perceives the other as acting unfairly or unreasonably, or a question of
interpretation arises hereunder, then the Parties shall cause the Company’s
Representative and Contractor’s Representative to promptly confer and exert
their good faith efforts to reach a reasonable and equitable resolution of the
issue. If Company’s Representative and Contractor’s Representative are unable to
resolve the issue within fourteen (14) Days, the matter shall be referred within
five (5) Days of the lapse of such period to the Parties’ responsible officers
for resolution. Neither Party shall seek resolution by mediation or arbitration
of any dispute arising in connection with this Contract until both Parties’
responsible officers, who shall be identified by each Party from time-to-time,
have had at least fourteen (14) Days to resolve the dispute following referral
of the dispute to such responsible officers. If the Parties fail to settle such
dispute within such period (including a failure to identify their
respective responsible officers and make necessary referrals within such
period), the provisions of Section 14.2 shall apply unless the Parties agree
that the dispute is to be resolved according to the provisions of Section
14.3. 

     14.2 Mediation

     If a dispute under this Contract
is not resolved by the Parties pursuant to Section 14.1, upon the request of
either Party the Parties shall try in good faith to settle the dispute by
nonbinding mediation administered by the American Arbitration Association under
its Commercial Mediation Rules before resorting to arbitration. Unless otherwise
agreed upon by the Parties, the mediation shall be held in Ada County, Idaho.
Each Party shall bear the cost and expense of preparing and presenting its own
case (including, but not limited to, its own attorneys’ fees and costs of
witnesses). Payment of the mediator and other costs and expenses of the
mediation shall be divided equally among the Parties. 

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REV A 

     14.3 Pending Disputes

     Notwithstanding any provision of
this Article 14 to the contrary, either Party may commence litigation within
thirty (30) Days prior to the date after which the commencement of litigation
could be barred by any applicable statute of limitations or other law, rule,
regulation, or order of similar import or in order to request injunctive or
other equitable relief in connection with any bankruptcy or insolvency
proceeding or otherwise necessary to prevent irreparable harm. In such event,
the Parties shall (except as may be prohibited by judicial order) nevertheless
continue to follow the procedures set forth herein. While any disputes under
this Contract are pending, including the commencement and pendency of any of the
dispute resolution procedures set forth in this Article 14, the Parties shall
abide by all their obligations under this Contract without prejudice to a final
determination in accordance with the foregoing provisions of this Article 14.

ARTICLE
15      INDEMNIFICATION 

     15.1 General

     Contractor shall defend,
indemnify and hold harmless Company, the Financing Parties, each of their parent
company and affiliates, and the directors, officers, members, agents, employees,
successors and assigns of each of them (each, a “Company Indemnified
Party”), from and against any and all claims, demands, and causes of action
asserted by any Governmental Authority or other third party against any Company
Indemnified Party (other than as a result of a breach of this Contract by such
person) and any Liabilities, including reasonable attorneys’ fees, incurred by
such Company Indemnified Party in connection therewith to the extent and as a
result of Contractor’s performance (or that of its Subcontractors, agents,
employees or consultants) under this Contract, including, but not limited to (a)
on account of any violation of any Law or Permit to be complied with by
Contractor hereunder; and (b) in respect of any Taxes imposed on or attributable
to performance of Contractor other than to the extent caused by or arising from
the negligence or willful misconduct of such Company Indemnified Party not
attributable to Contractor or any affiliate or Subcontractor of Contractor. 

     15.2 Indemnification for
Bodily Injury or Property Damage 

     Company, as one Party, and
Contractor, as the other Party, shall defend, indemnify and hold each other, and
each other’s lenders, Financing Parties, parent company, affiliates, officers,
directors, members, agents and employees, owners of the real property comprising
the Site, harmless from and against any loss, damage or liability (including,
but not limited to, reasonable attorneys’ fees and other costs but excluding
consequential damages) on account of any claim by a third party for bodily
injury or property damage against the indemnified party caused by the negligent
act or omission of the indemnifying party or the indemnifying party’s employees,
contractors, subcontractors or agents, in connection with the performance of
their respective undertakings under this Contract. 

37 

REV A 

     15.3 Indemnity from Liens

     Contractor shall defend,
indemnify and hold each of the Company Indemnified Parties harmless from and
against (i) all liens arising from the performance of the Work by Contractor or
otherwise caused by any Subcontractor or any employee, agent or Affiliate of
Contractor or any of its Subcontractors or anyone else entitled to file a lien
under Law; and (ii) any loss, damage or liability (including, but not limited
to, reasonable attorneys’ fees and other costs) in connection with any and all
mechanics’ liens filed in connection with Contractor’s Work hereunder. This
Section 15.3 shall not apply to Liens of Contractor which result from
non-payment by Company. 

     15.4 Reserved

     15.5 Company’s Indemnity

     Company shall defend, indemnify
and hold harmless Contractor and its Subcontractors and their respective joint
venture partners, directors, officers, agents, employees, shareholders and
affiliates from any and all Liability or Proceedings arising out of: 

          (a)
any actual or alleged injury or death of persons or damage to property arising
out of the negligence, willful misconduct or default of Company (except only to
the extent that the same have been caused by the negligence or default of
Contractor or its Subcontractors); 

          (b)
any and all environmental related liability or cost arising from or related to
the Site, including any actual or alleged injury to persons or property related
thereto or any remedial activity (except to the extent the same was caused by
the negligence or default of Contractor or its Subcontractors in connection with
their performance of the Work); or 

          (c)
on account of any violation of any Law or Permit to be complied with by Company
hereunder. 

     15.6 Notice and
Settlement of Claims 

     A Party seeking the benefit of an
indemnity under this Article 15 shall give the other Party written notice of any
claim giving rise to the indemnity promptly after such Party learns of the same.
The indemnifying Party may, at its own cost, conduct negotiations for the
settlement of such claim and any litigation that may arise therefrom. The Party
claiming the benefit of the indemnity shall not make any admission that might be
prejudicial to the indemnifying Party unless the indemnifying Party fails to
take over the conduct of the negotiations or litigation within a reasonable time
after having been so requested. The indemnifying Party shall not settle any
indemnified claim without the indemnified Party’s prior written approval (not to
be unreasonably withheld or delayed). The Party claiming the benefit of the
indemnity shall, at the request of the other Party, provide reasonable
assistance for the purpose of contesting any such claim or action, and shall be
paid all reasonable costs incurred in doing so and shall have the right to have
its own counsel, at its expense, participate in the defense and negotiation of
the claim or action.

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REV A 

ARTICLE
16      ASSIGNMENT 

     16.1 Assignment by
Company 

     Company may not assign any or all
of its obligations, rights, title and/or interest in and to or arising out of or
in connection with the Contract without the prior written approval of
Contractor, which approval shall not be arbitrarily or unreasonably withheld or
delayed. Notwithstanding the foregoing, Company may, without written approval,
assign its obligations, rights, title and/or interest in and to or arising out
of or in connection with the Contract for the purpose of securing financing.

     16.2 Assignment by
Contractor 

     Contractor may not assign any or
all of its obligations, rights, title and/or interest in and to or arising out
of or in connection with the Contract without the prior written approval of
Company, which approval shall not be arbitrarily or unreasonably withheld or
delayed. No assignment of Contractor’s obligations, rights, title and/or
interest in and to or arising out of or in connection with the Contract shall
relieve Contractor of any obligation hereunder. 

     16.3 Succession

     This Contract shall inure to the
benefit of and be binding upon the successors and permitted assigns (as provided
for by Sections 16.1 and 16.2) of the Parties.

ARTICLE
17      SUBCONTRACTORS

     17.1 Subcontracts

     Subject to Section 17.2,
Contractor may enter into Subcontracts for the performance of the Work and shall
be solely responsible for the satisfactory performance of the Work and the acts,
defaults and omissions of any Subcontractor notwithstanding any review, approval
or other action taken by Company with regard to the selection of a Subcontractor
hereunder. Contractor shall be responsible for the actions of the Subcontractors
in their performance of the Work as if such actions were those of Contractor.
The issuance of any Subcontract shall not relieve Contractor of any of its
obligations under this Contract. All Subcontracts shall be consistent with and
in no way contrary to or inconsistent with any of the terms or provisions of
this Contract. No contractual relationship shall exist between Company and any
Subcontractor with respect to the Work to be performed hereunder, and no
Subcontractor is intended to be or shall be deemed a third-party beneficiary of
this Contract. Except as expressly set forth in Section 17.2, nothing contained
herein shall (a) create any contractual relationship between any Subcontractor
and Company or (b) obligate Company to pay or arrange for the payment of any
Subcontractor. 

     17.2 Subcontract
Provisions 

     Contractor shall ensure that
Subcontracts made with Subcontractors having a value of Two Hundred Thousand
Dollars or more are made in writing. Contractor shall make reasonable efforts to
require that each such Subcontract shall provide that the rights and obligations
of 

39 

REV A 

Contractor under each such Subcontract are assignable to
Company, its successors and assigns upon Company’s written request accompanied
by proof of source of payment to such Subcontractor’s satisfaction, following
any termination of this Contract. 

     17.3 Vendors

     Contractor shall not subcontract
the supply of any equipment for a price of in excess of Fifty Thousand Dollars
($50,000), except to vendors approved by Company, which approval shall not be
arbitrarily or unreasonably withheld.

ARTICLE
18      SUSPENSION 

     18.1 Right of Company to
Suspend Work 

     Company may suspend performance
of the Work by Contractor hereunder as provided in Section 8.1.1. 

     18.2 Initial Payments to
Contractor 

     Contractor shall be entitled to
payment for Work that has been completed as of the effective date of such
suspension or concerning which delivery has been suspended if such suspension
has not ceased within ten (10) Days of the effective date of such suspension
within thirty (30) Days of the issuance of an invoice therefore by
Contractor. 

     18.3 Extended Suspension

     In the event that the duration of
the suspensions by Company exceed ninety (90) Days in the aggregate, then
Contractor may give notice to the Company’s Representative requesting permission
to proceed. If permission is not granted within twenty (20) Days of the delivery
of such notice, Contractor may terminate its obligations under the Contract by
so notifying Company in writing, and Contractor shall be entitled to payments as
described in Section 19.2.2. 

     18.4 Right of Contractor
to Suspend 

     Contractor may suspend
performance of the Work hereunder, in whole or in part, upon thirty (30) Days’
prior written notice to Company of Contractor’s intention to suspend for
reasons of (i) the aggregate amount of the payments withheld by Company as a
result of a billing dispute(s) equals one hundred thousand dollars ($100,000);
or (ii) Company breaches or is in default under any financing obligations with
any Financing Parties. Such suspension shall continue for the period specified
in the suspension notice. 

     18.5 Additional Changes
Resulting From Suspensions 

     Provided that suspension is not
necessary by reason of a default on the part of Contractor that has not been
corrected, in the event of suspension pursuant to this Article 18 the Contract
Price shall be increased by the amount equal to the additional costs reasonably
incurred by Contractor as a result of the suspension (including costs for the
purpose of safeguarding, storage, personnel, Subcontractors or rented equipment
costs, demobilization and re-mobilization costs 

40 

REV A 

and increased costs or charges incurred for rescheduling) and
the scheduled dates specified in this Contract, the Schedule, and all other
dates and milestones herein by which Contractor’s responsibilities are measured
shall be adjusted to reflect any delays resulting from such suspension
(including a period equal to the suspension period, a period for demobilization
and re-mobilization plus any additional period required). If Contractor shall,
solely in consequence of such suspension, be required to perform any obligations
under its warranty at a time which exceeds the original schedule for warranty
obligations that would have been applied if there were no suspension, the
additional cost of complying with the warranty obligations shall be added to the
Contract Price. 

     18.6 Resumption of Work

     Upon receipt of notice to resume
the Work in accordance with this Contract, Contractor shall examine the Facility
and the Work affected by the suspension. Contractor shall make good any
deterioration or defect in or loss of such Facility or Work that may have
occurred during suspension, and costs incurred in making such examinations and
making good and resuming Work shall be added to the Contract Price, all of which
Work shall be at Company’s expense unless such suspension occurred by reason of
a default on the part of Contractor that was not corrected within the time
period specified in Section 19.1. 

ARTICLE
19      TERMINATION 

     19.1 Termination by
Company 

          19.1.1
Company may terminate the Work and this Contract after the occurrence of one or
more of the following events of default and if, following a written notice from
Company to cure such event of default, said event of default continues to exist
for ten (10) Days in the circumstances described in (a) below, and twenty (20)
Days in the circumstances described in (b) below: 

               (a)
the occurrence of an Insolvency Event involving Contractor; or 

               (b)
Contractor defaults in its performance under a material provision of this
Contract; provided, however, that Company may not terminate this Contract if,
after notice of such default and prior to expiration of the twenty (20) Day
period set forth above, Contractor has commenced and is diligently pursuing
efforts to cure such breach. 

          19.1.2
In the event of termination as provided in Section 19.1.1, Company shall
compensate Contractor for all payment amounts or milestones achieved plus a pro
rata portion of the payment amounts for Work partially achieved as of
termination, but Company shall not compensate Contractor for any other costs
associated with the termination of the Work. Upon termination and such payment,
Contractor shall deliver to Company possession of the Work in its then
condition, including Drawings and Specifications and contracts with
Subcontractors, and construction supplies dedicated solely to construction of
the Facility. 

          19.1.3
In the event of termination as provided in Section 19.1.1: (a) Company shall
have the right, at its sole option, to assume and become liable for any
reasonable written 

41 

REV A 

obligations and commitments that Contractor may have in good
faith undertaken with third parties in connection with the Work, which
obligations and commitments are by Law or by their terms assumable by Company
and are not covered by the payments made to Contractor under Section 19.1.2. If
Company elects to assume any obligation of Contractor as described in this
Section 19.1.3, then as a condition precedent to Company’s compliance with any
subsection of this Article 19, Contractor shall execute all papers and take all
other reasonable steps requested by Company that may be required to vest in
Company all rights, set-offs, benefits and titles necessary to such assumption
by Company of such obligations. Company agrees to indemnify and hold Contractor
harmless against any Liability under any obligations assumed by Company pursuant
hereto. 

     19.2 Termination by
Contractor 

          19.2.1
Contractor may terminate the Work and this Contract after the occurrence of one
or more of the following events of default and if, following a written notice
from Contractor to Company to cure such event of default, said event of default
continues to exist for ten (10) Days in the event of a payment default, and
thirty (30) Days in the event of any of the other defaults described below:

          (a)
the occurrence of an Insolvency Event involving Company; 

          (b)
Company defaults in its performance under a material provision of this Contract;
provided, however, that Contractor may not terminate this Contract if, for all
cases except for the obligation to make or complete any payment, after notice of
such default and prior to expiration of the thirty (30) Day period set forth
above, Company has commenced and is diligently pursuing efforts to cure such
breach; or 

          (c)
Company breaches or is in default under any financing obligations with any
Financing Parties and fails to cure such breach or default within the cure or
other period provided in the applicable agreement or instrument. 

          19.2.2
In the event of termination as provided in Section 19.2.1, Company shall pay to
Contractor the greater of (a) that portion of the Contract Price associated with
all payment amount or milestones achieved, including any amount in the Letter of
Credit which amount Contractor may draw down, plus a pro rata portion of the
payment amount or milestone amounts for partially achieved Work up to the date
of Contractor’s receipt of notice of termination plus any costs attributable to
and incurred in terminating the Work, including cancellation charges owed to
third parties, but in no event shall the total amount exceed the Contract
Price, or (b) the termination amount payable
by Company to Contractor as specified in Section 19.4. 

     19.3 Due to Force Majeure

     If (a) Company wholly suspends
the Work on the Facility for six (6) consecutive months due to the occurrence of
a Force Majeure suffered by Company; or (b) Contractor is prevented from
performing the Work for a period of six (6) consecutive months as a result of
the occurrence of a Force Majeure suffered by Contractor, then the affected
Party may terminate this Contract at no cost or penalty, other than the payment
of all accrued payment obligations due 

42 

REV A 

and payable pursuant to this Contract (excluding loss of
anticipated profits for the Work not yet performed by Contractor) upon not less
than fifteen (15) Days prior written notice to the other Party; provided,
however, that nothing in this Section 19.3 shall relieve or excuse either Party
from its obligations under Sections 19.5 and 19.6.

     19.4 Due to Company’s
Convenience 

     If Company determines it is in
its best interest to terminate this Contract for its convenience, then Company
may terminate this Contract at no cost or penalty if such notice is given prior
to Company issuing Contractor a Notice to Proceed pursuant to Section 4.1.
Company may also terminate this Contract for convenience after issuing
Contractor a Notice to Proceed at no cost or penalty, other than the payment by
Company to Contractor of the sum of (a) all accrued payment obligations due and
payable pursuant to this Contract plus a pro rata portion of the payment amounts
for partially achieved Work up to the date of Contractor’s receipt of notice of
termination (excluding loss of anticipated profits for the Work not yet
performed by Contractor), (b) any costs attributable to and incurred in
terminating the Work, including cancellation charges owed to third parties, and
(c) One Hundred Thousand Dollars ($100,000) for miscellaneous expenses and/or
loss of anticipated profit for the Work not yet performed by Contractor. Such
payment shall be made by Company to Contractor not less than fifteen (15) Days
after Contractor has provided Company written notice of the amounts due. Nothing
in this Section 19.4 shall relieve or excuse either Party from its obligations
under Sections 19.6 and 19.7. It is understood and agreed by the Parties that
Contractor shall be damaged by Company’s termination of this Contract for
convenience and that (i) it would be impracticable or extremely difficult to fix
the actual damages resulting therefrom; (ii) the termination fee described in
clause (c) above is in the nature of liquidated damages, and not a penalty, and
is fair and reasonable; and (iii) such payments represent a reasonable estimate
of fair compensation to Contractor for the losses that may reasonably be
anticipated from such termination. 

     19.5 Exclusive Remedy

     Company’s payment to Contractor
pursuant to either Section 19.3 or 19.4, shall be Contractor’s exclusive remedy
against Company in the event of such termination. 

     19.6 Actions Required
Following Termination 

     Upon early termination of the
Work, each Party shall be immediately released from any and all obligations to
the other Party (except for the obligation of each Party to pay any amount then
accrued or due hereunder, or otherwise due under this Article 19), Contractor
immediately shall discontinue the Work and remove its personnel and construction
equipment from the Site, and except for termination due to Company’s default
Company shall be entitled to take exclusive possession of the Materials and all
or any part of the Materials delivered or en route to the Site, to the extent
that Company has paid Contractor all undisputed amounts hereunder then due and
payable from Company to Contractor. Contractor shall immediately take such steps
as are reasonably necessary to preserve and protect Work completed and in
progress. 

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     19.7 Termination and
Transfer of Subcontracts and Other Rights 

     Upon the early termination of the
Work pursuant to this Article 19, including pursuant to Section 19.4, if
requested by the Company, Contractor shall make reasonable efforts to cancel
existing contracts with Subcontractors performing Work at the Site. If early
termination of the Work occurs due to the default by Contractor, Contractor
shall also, upon request by Company (a) deliver and assign to Company, pursuant
to a document produced by Contractor and reasonably acceptable to Company, any
and all Subcontracts, purchase orders, bonds and options made by Contractor for
Work to be performed at the Site (but in no event shall Company be liable for
any action or default of Contractor occurring prior to such delivery and
assignment (except to the extent such action or default was caused by Company)
and Contractor shall defend and hold harmless Company against any such
liability); and (b) deliver to Company originals of all Subcontracts and all
papers and documents relating to Contractor Permits, orders placed, bills and
invoices, lien releases related to the Work. All deliveries hereunder shall be
made free and clear of any liens, security interests or encumbrances, except as
may arise hereunder, be created by Company or may arise in favor of Contractor
due to non-payment by Company. Except as provided herein, no action taken by
Company or Contractor after the termination of the Work and/or this Contract
shall prejudice any other rights or remedies of Company or Contractor provided
by Law, this Contract or otherwise upon such termination. 

     19.8 Surviving
Obligations 

     Termination or expiration of this
Contract (a) shall not relieve either Party of its obligations with respect to
the confidentiality of the other Party’s information as set forth in Article 21;
(b) shall not relieve either Party of any obligations hereunder which expressly
or by implication survive termination hereof; and (c) except as otherwise
provided in any provision of this Contract expressly limiting the liability of
either Party, shall not relieve either Company or Contractor of any obligations
or liabilities for loss or damage to the other Party arising out of or caused by
acts or omissions of such Party prior to the effectiveness of such termination
or arising out of such termination, and shall not relieve Contractor of its
obligations as to portions of the Work or other services already performed or of
obligations assumed by Contractor prior to the date of termination. This Section
19.8 shall survive the termination or expiration of this Contract. 

ARTICLE
20      INTENTIONALLY OMITTED

ARTICLE
21      CONFIDENTIALITY 

     21.1 Both Parties to Keep
Information Confidential 

     Company and Contractor shall keep
confidential and shall not, without the written consent of the other Party,
divulge to any third party Information of the other Party. 

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REV A 

     21.2 Use of Information

     Contractor shall not use any
Information received from Company for any purpose other than the procurement and
construction of the Facility, or such other Work as required for the performance
of the Contract. 

     21.3 Exclusions

     The obligations of any Party
under Sections 21.1 and 21.2 shall not apply to Information of the other Party
that: 

          (a)
now or hereafter enters the public domain through no fault of the receiving
Party; 

          (b)
can be proved to have been in the possession of the receiving Party at the time
of disclosure and which was not previously obtained, directly or indirectly,
from the other Party hereto; 

          (c)
otherwise lawfully becomes available to the receiving Party from a third party
under no obligation of confidentiality; or 

          (d)
the receiving Party is required by law or any relevant stock exchange or other
competent regulatory authority to publish or otherwise disclose but only to the
extent that it is necessary to publish or disclose the same. 

     21.4 Contractor Logos

     Contractor shall apply no names,
logos, or other markings to the Facility without the written permission of the
Company. 

ARTICLE
22      NOTICES 

     22.1 All notices and other
communications required or permitted by this Contract shall be in writing and
delivered by hand (including by messenger or courier) or by airmail post or
special courier or by telecopier or facsimile (receipt confirmed), at the
addresses or numbers set forth below or at such other addresses or numbers as
the Party receiving notice shall subsequently designate by way of replacement by
giving ten (10) Days’ written notice to the other Party pursuant to this
Section: 

	 	If to Company: 	Raft River Energy I LLC 
	 	  	1509 Tyrell Lane, Suite B 
	 	  	Boise, Idaho 83706 
	 	  	Attention: Daniel Kunz 
	 	  	Fax: (208) 424-1030 
	 	  	  
	 	with a copy for 	  
	 	any notice of 	  
	 	claim or dispute 	  

45 

REV A 

	 	to: 	Stoel Rives LLP 
	 	  	600 University Street 
	 	  	Seattle, WA 98101 
	 	  	Attention: John F. Pierce 
	 	  	Fax: (206) 386-5700 
	 	  	  
	 	If to Contractor: 	Industrial Builders 
	 	  	20394 Pinto Lane 
	 	  	Caldwell, ID 83605 
	 	  	  
	 	  	Attention: Dave Erlebach 
	 	  	Fax: (541) 889-7755 

     22.2 Any notice sent by
telecopier or facsimile transmission shall be confirmed within two (2) Days
after dispatch by notice sent by airmail or special courier. 

     22.3 Any notice or
confirmation of notice sent by airmail or special courier shall be deemed (in
the absence of evidence of earlier receipt) to have been delivered ten (10) Days
after dispatch and in proving the fact of dispatch, it shall be sufficient to
show that the envelope containing such notice was properly addressed, stamped
and conveyed to the postal authorities or courier service for transmission by
airmail or special courier. 

     22.4 Any notice delivered
by hand, facsimile, telecopier or telegram shall be deemed to have been
delivered on the date of its dispatch. 

     22.5 In this Article 22,
notices shall include any approvals, consents, instructions, orders, and
certificates to be given under the Contract. 

ARTICLE
23      MISCELLANEOUS

     23.1 Governing Law

     This Contract and the Exhibits
hereto shall in all respects be governed by and construed under the laws of the
State of Idaho, without regard to the principles of conflict of laws. The
selection of Idaho law shall conclusively be presumed to be a significant,
material and reasonable relationship with the State of Idaho and shall be
enforced whether or not there are other relationships with the State of Idaho.
Any dispute arising under or related to this Agreement shall be resolved by a
court of competent jurisdiction in Ada County, Idaho, and each party hereby
irrevocably and unconditionally submits to such exclusive jurisdiction and
venue. 

     23.2 Construction

     This Contract and any documents
or instruments delivered pursuant hereto shall be construed without regard to
the identity of the person who drafted the various provisions of the same. Each
and every provision of this Contract and such other documents and instruments
shall be construed as though the parties participated equally in the drafting of
the same. Consequently, the parties acknowledge and agree that any rule of
construction that a document is 

46 

REV A 

to be construed against the drafting party shall not be
applicable to this Contract or such other documents or instruments. 

     23.3 Nature of Agreement

     Contractor and its Subcontractors
shall be independent contractors with respect to the Work, irrespective of
whether such Subcontractors are selected or approved by Company, and neither
Contractor nor its Subcontractors, nor the employees of either, shall be deemed
to be the servants, employees, representatives or agents of Company. This
Contract does not create any agency, partnership, joint venture or other joint
relationship between Company and Contractor. Nothing contained in this Contract
shall be construed (a) to authorize either Party hereto to act as agent for the
other Party or to permit a Party hereto to undertake any contract or other
obligation for the other Party or (b) to create any agency, partnership, joint
venture or other joint relationship between the Parties. 

     23.4 Severability

     In the event that any of the
provisions or portions, or applications thereof, of this Contract become
invalid, illegal or unenforceable in any respect under the Law of any
jurisdiction, Company and Contractor shall negotiate an equitable adjustment in
the provisions of this Contract with a view toward effecting the purpose of this
Contract, and the validity and enforceability of the remaining provisions or
portions, or applications thereof, shall not be affected thereby. 

     23.5 Amendments
and Waivers 

     This Contract may not be changed
or amended orally, and no waiver hereunder may be oral. Any change or amendment
or any waiver of any term or provision of, or consent granted under, this
Contract shall only be effective if given in writing and signed by the waiving
or consenting Party (or both Parties in the case of a change or amendment).

     23.6 Survival

     The provisions of Sections 2.4,
3.3, 5, 9.4, 9.5, , and all of Articles 5, 14, 15, 19, 21, 22 and 23 shall
survive termination or expiration of the Contract for whatever reason.

     23.7 Counterparts

     This Contract may be executed in
separate counterparts, each of which shall be deemed an original, but all of
which together shall constitute but one and the same instrument. 

     23.8 Entire Contract

     This Contract and the Exhibits
sets forth the full and complete understanding of the Parties relating to the
subject matter hereof as of the Effective Date and supersedes any and all
negotiations, agreements, understandings and representations made or dated prior
thereto with respect to such subject matter. Contractor shall not be bound by,
and specifically objects to, any term, condition or other provision that is
different from or in addition to the provisions of this 

47 

REV A 

Contract (whether or not it would materially alter this
Contract), which is proffered by Company in any purchase order, receipt,
acceptance, confirmation, correspondence or otherwise, unless Contractor
specifically agrees to such provision in a written instrument signed by
Contractor. 

     23.9 Waivers

     Subject to Section 23.5, no
relaxation, forbearance, delay, indulgence or failure by either Party to enforce
any of the terms, covenants, conditions or other provisions of this Contract at
any time shall in any way prejudice, affect, limit, modify or waive that Party’s
right thereafter to enforce or compel strict compliance with every term,
covenant, condition or other provision hereof, any course of dealing or custom
of the trade notwithstanding. No delay or omission on the part of a Party shall
operate as a waiver thereof, nor shall any waiver by either Party of any breach
of the Contract operate as a waiver of any subsequent or continuing breach of
the Contract. 

     23.10 Counterparts;
Transmitted Copies 

     This Contract may be executed in
any number of counterparts, each of which shall be deemed an original, but all
of which taken together shall constitute one and the same instrument. To
expedite the process of entering into this Contract, the parties acknowledge
that Transmitted Copies of this Contract shall be equivalent to original
documents until such time (if any) as original documents are completely executed
and delivered. “Transmitted Copies” mean copies that are reproduced or
transmitted via facsimile or another process of complete and accurate
reproduction and transmission. 

     23.11 Further Assurances

     Company and Contractor shall use
reasonable endeavors to implement the provisions of this Contract, and for such
purpose each, at the request and expense of the other, shall, without further
consideration, promptly execute and deliver or cause to be executed and
delivered to the other such, consents, documents or other instruments in
addition to those required by this Contract as the other may reasonably require
to implement any provision of this Contract. 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

48 

REV A 

IN WITNESS WHEREOF, the Parties have caused this
Contract to be executed on the date first above written. 

 

	 	 	 	 	 
	Company: 	  	 	Contractor: 	  
	 	 	 	 	 
	Raft River Energy I LLC 	 	IBI DBA Industrial Builders 
	 	 	 	 	 
	By: 	  	 	By: 	  
	 	 	 	 	 
	Name: 	Daniel Kunz 	 	Name: 	Dave Erlebach 
	 	 	 	 	 
	Title: 	President 	 	Title: 	Manager 

 

 

49 

REV A 

EXHIBIT A 

CONTRACT PRICE AND PAYMENT SCHEDULE 

Contract Price: 

  	  	Description 	Change Order 	Change Order 	Allowances 	Totals 
	  	  	Add ons 	Deductions 	  	  
	  	Base Bid 	 
    	 
    	 
    	$
      2,601,000.00 
	  	  	  	  	  	  
	  	Deductions:
      	 
    	 
    	 
    	 
    
	1 	Credit for removing
        End Caps on 	 
    	$
      12,312.00 	 
    	 
    
	  	10" and 12" Supports
      	 
    	 
    	 
    	 
    
	  	  	  	  	  	  
	2 	Credit for deleting
        Windows in 	 
    	$
      3,815.00 	 
    	 
    
	  	double Support 	 
    	 
    	 
    	 
    
	  	  	  	  	  	  
	3 	Credit for deleting
        third party 	 
    	$
      3,530.00 	 
    	 
    
	  	inspections 	 
    	 
    	 
    	 
    
	  	  	  	  	  	  
	4 	Credit to remove (1)
        window from 	 
    	$
      3,311.00 	 
    	 
    
	  	single support, (2)
        windows still 	 
    	 
    	 
    	 
    
	  	required 	 
    	 
    	 
    	 
    
	  	  	  	  	  	  
	  	Total for deductions
      	 
    	$
      22,968.00 	 
    	$
      2,578,032.00 
	  	  	  	  	  	  
	  	Additions:
      	 
    	 
    	 
    	 
    
	1 	Extra Cost to excavate
        double holes 	$
      37,188.00 	 
    	 
    	 
    
	  	in lieu of auger and
        add additional 	 
    	 
    	 
    	 
    
	  	concrete 	 
    	 
    	 
    	 
    
	  	  	  	  	  	  
	2 	Direct Reimbursable
        Cost for Bond 	Cost
      of Bond 	 
    	 
    	 
    
	  	  	  	  	  	  
	3 	Added cost for additional
        5 million 	$
      6,692.00 	 
    	 
    	 
    
	  	dollar umbrella 	 
    	 
    	 
    	 
    
	  	  	  	  	  	  
	4 	Added cost for Builders
        Risk 	$
      4,700.00 	 
    	 
    	 
    
	  	  	  	  	  	  
	5 	Added cost for drawing
        change to be 	 
    	 
    	 
    	 
    
	  	determined and added
        in per 	 
    	 
    	 
    	 
    
	  	change order 	 
    	 
    	 
    	 
    
	  	  	  	  	  	  
	  	Total for additions
      	$
      48,580.00 	 
    	 
    	$
      2,626,612.00 

50 

REV A 

Contract Allowances: 

  	 	 Description
      	Change
        Order 	Change
        Order 	Allowances 	Totals
      
	 	  	Add
        ons 	Deductions 	  	  
	 	 Allowances: 	  	  	  	  
	1 	Base Bid allowance
        for steel pipe 	  	  	3780
        lf 16" Pipe - $ 79,950.00 	  
	 	 any deviation
        from these allowances 	  	  	5781
        lf 12" Pipe - $124,291.00 	  
	 	 will become
        a deductive or additive 	  	  	7733
        lf 10" Pipe - $134,550.00 	  
	 	 change order
        will be given upon 	  	  	Total
        Allowance = $ 338,391.00 	  
	 	 purchase of
        pipe 	  	  	Formula: (Act.Cost - Base Bid) = Cost 	  
	 	  	  	  	or deduct
      	  
	 	  	  	  	  	  
	2 	Base Bid allows
        for 1 ft of insulation 	  	  	JT#
        = Joint Number 	  
	 	 on each end
        of 24" used pipe for a 	  	  	JTL
        = Joint length 	  
	 	 total of 2
        ft per joint. A deductive or 	  	  	Payment to be made using this 	  
	 	 additive change
        order will be issued 	  	  	formula: 	  
	 	 upon measurement
        of each joint. 	  	  	(JTL
        lf - 2ft) x $37.15/lf = Cost or deduct 	  
	 	  	  	  	  	  
	 	  	  	  	  	  
	3 	Base Bid allows
        for no repairs to 	  	  	Payment will be made using the 	  
	 	 insulation
        damages on the 24" used 	  	  	following formula: 	  
	 	 pipe. An additive
        change order will 	  	  	sq ft
        of repair x $10.51 = Cost 	  
	 	 be issued
        upon measurement 	  	  	  	  
	 	 of each repair
      	  	  	  	  
	 	  	  	  	  	  
	4 	Base Bid did not
        allow for any pipe 	  	  	Formulas: 	  
	 	 deviation
        from horizontal. Any 	  	  	24"
        mitered joints x $1,382.00 = Cost 	  
	 	 deviation
        from horizontal that 	  	  	16"
        mitered joints x $987.00 = Cost 	  
	 	 requires a
        mitered joint, will be paid 	  	  	12"
        mitered joints x $736.00 = Cost 	  
	 	 for on an
        as need basis. 	  	  	10"
        mitered joints x $680.00 = Cost 	  
	 	  	  	  	  	  
	5 	Base Bid allowed
        for 16" used pipe 	  	  	Possible Credit 	  
	 	 and assumed
        each joint would be 	  	  	$ 1,770.00
      	  
	 	 required to
        be beveled. If new pipe 	  	  	  	  
	 	 is purchased
        a credit will be given. 	  	  	  	  
	 	 (59 joints)
      	  	  	  	  
	 	  	  	  	  	  
	6 	Base Bid allowed
        for new 12" pipe. If 	  	  	Possible Add 	  
	 	 used pipe
        is purchased joints will 	  	  	$ 4,140.00
      	  
	 	 have to be
        beveled. (138 joints) 	  	  	  	  
	 	  	  	  	  	  
	7 	Base Bid allowed
        for new 10" pipe. 	  	  	Possible Add 	  
	 	 If used pipe
        is purchased joints will 	  	  	$ 5,910.00
      	  
	 	 have to be
        beveled. (197 joints). 	  	  	  	  
	 	  	  	  	  	  
	8 	Any value engineering
        ideas that result 	  	  	  	  
	 	 in savings
        will be split 50/50 between 	  	  	  	  
	 	 contractor
        and owner 	  	  	  	  

51 

REV A 

Payment Schedule: 

	   Raft River Geothermal
      Power Plant 	  	  	  	  	Date: 	  
	  	  	  	  	Industrial Builders 
	2611 	  	Billing Period: May 	  	  
	  	  	Application No 	  	  
	ITEM 
 NO. 	DESCRIPTION 
 OF WORK 	UNT 
	SCHEDULED 
 VALUE 	   WORK COMPLETED 	STORED
 MAT'L	TOTAL COMPLETED 	BALANCE 
 TO FINISH 	10% 
 RETAINAGE 
	PREV. APP. 	THIS APP. 	TO DATE 	% 
	  	Mobilization (NTP) 	1 	$50,000.00 	  	  	  	  	  	             
       - 	  
	  	  	  	  	  	  	  	  	  	  	  
	  	Limited Mobilization 	1 	$50,000.00 		$50,000.00 	  	$50,000.00	100% 	             
       - 	$5,000.00
	  	  	  	  	  	  	  	  	  	  	  
	  	Survey 	1 	$30,000.00 	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  
	  	Clear & Grub 	6 	$62,000.00 	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  
	  	Submittals 	1 	$10,000.00 	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  
	  	Bonds & Insurance 	1 	$24,612.00 	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  
	  	Supports - Fabricate 	576 	  	  	  	  	  	  	  	  
	  	 Purchase Materials 	1 	$100,000.00 	  	  	  	  	  	  	  
	  	 Prefabricate & Deliver 	576 	  	  	  	  	  	  	  	  
	  	     PP to Branch Connection 	  	  	  	  	  	  	  	  	  
	  	     Well 7 	97 	$60,000.00 	  	  	  	  	  	  	  
	  	     Well 6 	79 	$50,000.00 	  	  	  	  	  	  	  
	  	     Well 1 	44 	$20,000.00 	  	  	  	  	  	  	  
	  	     Well 2 	140 	$40,000.00 	  	  	  	  	  	  	  
	  	     Well 3 	178 	$120,000.00 	  	  	  	  	  	  	  
	  	     Well 4 	38 	$17,000.00 	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  
	  	Supports - Install 	  	  	  	  	  	  	  	  	  
	  	 PP to Branch Connection 	  	  	  	  	  	  	  	  	  
	  	 Well 7 	97 	$60,000.00 	  	  	  	  	  	  	  
	  	 Well 6 	79 	$50,000.00 	  	  	  	  	  	  	  
	  	 Well 1 	44 	$20,000.00 	  	  	  	  	  	  	  
	  	 Well 2 	140 	$50,000.00 	  	  	  	  	  	  	  
	  	 Well 3 	178 	$130,000.00 	  	  	  	  	  	  	  
	  	 Well 4 	38 	$17,000.00 	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  
	  	Shoes 	  	  	  	  	  	  	  	  	  
	  	 Purchase Material 	1 	$35,000.00 	  	  	  	  	  	  	  
	  	 Prefabricate & Deliver 	  	  	  	  	  	  	  	  	  
	  	   PP to Branch Connection 	  	  	  	  	  	  	  	  	  
	  	   Well 7 	97 	$25,000.00 	  	  	  	  	  	  	  
	  	   Well 6 	79 	$20,000.00 	  	  	  	  	  	  	  
	  	   Well 1 	44 	$10,000.00 	  	  	  	  	  	  	  
	  	   Well 2 	140 	$30,000.00 	  	  	  	  	  	  	  
	  	   Well 3 	178 	$45,000.00 	  	  	  	  	  	  	  
	  	   Well 4 	38 	$10,000.00 	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  
	  	Purchase Pipe 	1 	$340,000.00 	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  
	  	Purchase Valves & Fittings 	1 	$90,000.00 	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  
	  	Install Pipe, Shoes, Valves & Fittings 	  	  	  	  	  	  	  	  	  
	  	 PP to Branch Connection 	  	  	  	  	  	  	  	  	  
	  	 Well 7 24" 	7268 	$200,000.00 	  	  	  	  	  	  	  
	  	 Well 7 16" 	1288 	$50,000.00 	  	  	  	  	  	  	  
	  	 Well 6 	2460 	$80,000.00 	  	  	  	  	  	  	  
	  	 Well 1 	1676 	$35,000.00 	  	  	  	  	  	  	  
	  	 Well 2 	4880 	$60,000.00 	  	  	  	  	  	  	  
	  	 Well 3 	5726 	$100,000.00 	  	  	  	  	  	  	  
	  	 Well 4 	1009 	$30,000.00 	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  
	  	Construct Road Crossings 	6 	$50,000.00 	  	  	  	  	  	  	  
	  	  	  	  	  	  	  	  	  	  	  
	  	Construct Bridge & Set 	1 	$50,000.00 	  	  	  	  	  	  	  

52 

REV A 

Payment Schedule (Continued): 

	   Raft River Geothermal
      Power Plant 	  	  	  	  	Date: 	  
	  	  	  	  	Industrial Builders 
	2611 	  	Billing Period: May 	  	  
	  	  	Application No 	  	  
	ITEM 
 NO. 	DESCRIPTION 
 OF WORK 	UNT 
	SCHEDULED 
 VALUE 	   WORK COMPLETED 	STORED
 MAT'L	TOTAL COMPLETED 	BALANCE 
 TO FINISH 	10% 
 RETAINAGE 
	PREV. APP. 	THIS APP. 	TO DATE 	% 
	  	Mobilization (NTP) 	1 	$50,000.00 	  	  	  	  	  	             
       - 	  
	  	  	  	  	  	 	  	  	  	Date: 	  
	  	Insulate Pipe 	  	  	  	 	  	  	  	  	  
	  	 Well 7 24" 	  	$15,000.00 	  	 	  	  	  	  	  
	  	 Well 7 16" 	  	$21,000.00 	  	 	  	  	  	  	  
	  	 Well 6 	  	$40,000.00 	  	 	  	  	  	  	  
	  	 Well 1 	  	$35,000.00 	  	 	  	  	  	  	  
	  	 Well 2 	  	$100,000.00 	  	 	  	  	  	  	  
	  	 Well 3 	  	$135,000.00 	  	 	  	  	  	  	  
	  	 Well 4 	  	$21,000.00 	  	 	  	  	  	  	  
	  	  	  	  	  	 	  	  	  	  	  
	  	Insulate Joints 	 6 	  	  	 	  	  	  	  	  
	  	 PP to Branch Connection 	  	$5,000.00 	  	 	  	  	  	  	  
	  	  	  	  	  	 	  	  	  	  	  
	  	Hydro Test 	 6 	$20,000.00 	  	 	  	  	  	  	  
	  	  	  	  	  	 	  	  	  	  	  
	  	As- Builts 	  	$2,000.00 	  	 	  	  	  	  	  
	  	  	  	  	  	 	  	  	  	  	  
	  	O & M Information 	  	$2,000.00 	  	 	  	  	  	  	  
	  	  	  	  	  	 	  	  	  	  	  
	  	Demobilization 	  	$10,000.00 	  	 	  	  	  	  	  
	  	  	  	  	  	 	  	  	  	  	  
	  	  	  	  	  	 	  	  	  	  	  
	  	Total 	  	$2,626,612.00 	 	 	  	  	  	  	  

53 

REV A 

 EXHIBIT B 

GANTT CHART 

 

 54 

EXHIBIT C1 

PIPELINE SYSTEM CRITERIA AND PROJECT SCOPE 

	1.0 	INTRODUCTION 	57 
	 	 	 
	2.0 	BASIS OF PLANT OPERATION 	57 
	 	 	 
	3.0 	DESIGN CONDITIONS 	57 
	 	 	 
	4.0 	CODES AND STANDARDS 	59 
	 	 	 
	5.0 	GENERAL PROJECT SCOPE REQUIREMENTS 	61 
	 	 	 
	6.0 	MECHANICAL DESIGN AND CONSTRUCTION 	63 
	 	 	 
	7.0 	CIVIL AND STRUCTURAL DESIGN 	75 
	 	 	 
	8.0 	SUBMITTALS 	77 
	 	 	 
	9.0 	PERFORMANCE TESTING AND ACCEPTANCE 	78 
	 	 	 
	10.0 	PLANT OPERATIONS AND MAINTENANCE MANUALS 	79 

55 

1.0 INTRODUCTION 

	 	1.1 	
      This document provides the Project Scope and
      specifications to be used by the Contractor in performing the Work under
      the Contract.

	 	 	 	 
	 	1.2 	
      The Project Scope does not include design of pipeline
      systems, or guarantying the performance of the system related to the
      pipeline design.

	 	 	 	 
	 	1.3 	
      The Contractor shall furnish materials, equipment and
      services required to procure, construct, precommission and test a
      geothermal pipeline system with a 30 year design life (the Project
      Scope).

	 	 	 	 
	 	1.4 	
      The Project Scope is necessary to support a nominal 13.3
      MW power plant provided by others.

	 	 	 	 
	 	1.5 	
      The following definitions are applicable to this
      document.

	 	 	 	 
	 		•	Project Scope – the work of the Contractor
        described in this document, comprising the pipelines and equipment systems
        that together will deliver geothermal fluid from the production wellheads
        to the power plant and from the power plant to the injection wellheads.

	 	 	 	 
	 		
      •
	Supplier – refers to a vendor or manufacturer
        that supplies material to the project under contract to the Contractor
        or Company.

2.0 BASIS OF PLANT OPERATION 

	 	2.1 	
      The power plant will be designed for an annual average
      availability of 97% (8,497 hours per year). Scheduled overhauls shall
      occur once every 2-years for up to 7 days per occurrence. Unscheduled
      outages during the year are anticipated not exceed 15 days during each two
      year period. The Project Scope shall be constructed to exceed this
      reliability standard so as not to reduce the power plant
    availability.

3.0 DESIGN CONDITIONS 

	 	3.1 	
      The Raft River Geothermal Power Plant, Unit 1, is located
      approximately 40 miles southeast of Burley, Idaho, which is the county
      seat. Existing assets at the project location include geothermal
      production wells, injection wells, and monitoring wells. The project
      location involves an area of approximately two square miles, out of the
      six square miles of U.S. Geothermal owned and leased land. The entire
      project is located in Township 15 South, Range 26 East, Boise Meridian,
      Cassia County, Idaho. Facilities by section numbers are provided in the
      following table

56 

  	Facility
	Section 
	Standby well RRG-5
    	22 
	Production wells
      RRG-1, RRG-2 and RRG-4 	23 
	Power plant unit
      #1 	23 
	Production well RRG-3 
 
Injection wells RRG-6
      and RRG-7 	25

	 	3.2 	
      The elevation of the power plant and well sites vary from
      4818 to 4890 feet above mean sea level.

	 	 	 
	 	3.3 	
      The site is located in Seismic Zone C, as defined by the
      International Building Code. Seismic design for all new buildings and
      structures that are regularly occupied shall be in accordance with the IBC
      for earthquake with an importance factor of 1.0.

	 	 	 
	 	3.4 	
      Weather data is as follows:

	Ambient Weather Conditions – Based
      on Malta Agrimet data 	Drybulb Temperatures 
	Annual average temperature 	48oF 
	Average temperature, coldest month in year 	29oF 
	Minimum winter temperature 	-30oF 
	Temperature, warmest month in year 	  	  
	Average 	71oF 
	1st SD 	85oF 
	2nd SD
    	99oF 
	Maximum summer temperature 	111oF 
	Precipitation and Storms 	2.0 in. per 24 hours 
	Maximum monthly average rainfall 	1.64 in. (May) 
	Maximum rainfall in one hour 	1.0 in. 
	Design rainfall 	100 year storm event having a 24-hour duration (2.6
      inches) per NOAA data 

57 

	Lightning storms 	Common in summer 
	Average annual rainfall 	11 inches 
	Wind 	Approximately 10 mph 
	Maximum wind velocity (gusts) 	90 mph per IBC 
	Design wind pressure 	IBC, 90 mph, Exposure C, 
	Snow 	29 pounds per square foot per IBC 
	Frost Depth per IBC 	24 inches 
	Climate Zone per IBC 	14B 

4.0 CODES AND STANDARDS 

	 	4.1 	
      The design, manufacture and erection of pipeline and
      equipment systems shall be in accordance with governing Codes and
      Standards current at the time of contract award.

	 	 	 
	 	4.2 	
      The Contactor shall comply with all applicable local,
      state and federal requirements.

	 	 	 
	 	4.3 	
      The detailed design of each system and equipment
      specification shall contain reference to the specific code or standard to
      which the item is designed. In general, the following Codes and Standards
      should apply.

	 	 	 
	 	4.4 	
      Any conflict between codes shall be referred to Company’s
      Representative for resolution.

	 	Standard 	Description 
	 	  	  
	 	AASHTO 	American Association of State Highway and
      Transportation 
	 	  	Officials 
	 	  	American Concrete Institute 
	 	  	Building Code Requirements for Reinforced
      Concrete (ACI 
	 	ACI 	318) 
	 	  	Building Code Requirements for Concrete Masonry
      Structures 
	 	  	(ACI 531-79) 

58 

	 	  	American Institute of Steel Construction 
	 	AISC 	Specification for the design, fabrication and
      erection of 
	 	  	structural steel for buildings. 
	 	  	  
	 	ANSI 	American National Standards Institute 
	 	API 	American Petroleum Institute 
	 	ASCE 	American Society of Civil Engineers 
	 	  	American Society of Mechanical Engineers 
	 	  	Boiler and Pressure Vessel Code, Sections II,
      VIII, IX 
	 	ASME 	Power Test Codes, as applicable 
	 	  	Power Piping Code B31.1 
	 	  	American Society of Testing & Materials
  
	 	ASTM 	Material Specifications as applicable 
	 	  	Sampling and Testing Standards as applicable
  
	 	AWS 	American Welding Society 
	 	AWWA 	American Water Works Association 
	 	EPA 	Environmental Protection Agency 
	 	  	Factory Mutual System 
	 	FM 	Handbook of Industrial Loss Prevention 
	 	  	Factory Mutual Approval Guide 
	 	  	Loss Prevention Data 
	 	IBC 	International Building Code 
	 	MSS 	Manufacturers Standardization Society 
	 	OSHA 	Occupational Safety and Health Act, (Latest
      Edition) 
	 	SSPC 	Structural Steel Painting Council 
	 	TEMA 	Tubular Exchanger Manufacturers Association
  
	 	TIMA 	Thermal Institute Manufacturers Association
  
	 	UBC 	Uniform Building Code 
	 	  	NOTE: See also “IBC” 
	 	  	Underwriters Laboratories, Inc. 
	 	UL 	UL Product Lists (where not FM listed) 
	 	UMC 	Uniform Mechanical Code 

59 

	5.0	 GENERAL PROJECT SCOPE REQUIREMENTS 
	 	 	 
	 	5.1 	 Introduction

	 	 	 
	 		 The criteria presented herein shall apply to the Project
        Scope for a pipeline system having a design life of 30 years. The work
        shall include all labor, supervision, material and equipment necessary
        to provide and install a system of pipelines in accordance with this document
        and the Drawings and General Notes included in the Contract. Generally,
        the Project Scope consists of providing a complete pipeline system to
        deliver geothermal fluid from four production wells to the power plant,
        and to provide a complete pipeline system to deliver cooled geothermal
        water from the power plant to two injection wells.

	 	 	 
	 		 In general, Project Scope under this work shall include
        but not be limited to providing the following:

      	 Pipeline work;
          	Providing and installing all pipe supports, including surveying,
              earthwork, concrete, and support pipe and steel; 
	Hauling Company supplied pipe from Company’s onsite storage
              yard to the point of use along the pipeline routes; 
	Installing all Company supplied 24-inch insulated pipe, or in
              the event the 24- inch pipe is not supplied by Company, providing
              and installing all Contractor supplied 24-inch pipe; 
	Installing all Company provided 10 and 12-inch production pipe,
              or in the event the pipe is not supplied by Company, providing and
              installing Contractor supplied 10 and 12-inch production pipelines
              from wells RRG-1, RRG-2, RRG-3 and RRG-4 to the power plant site
            
	Installing all Company provided 16-inch injection pipe, or in
              the event the pipe is not supplied by Company, providing and installing
              Contractor supplied 16-inch injection pipes from the branch connection
              to injection wells RRG-6 and RRG-7; 
	Providing and installing all 10, 12, 16 and 24-inch diameter pipe
              fittings for both new and used pipe including elbows, Tee’s,
              reducers and other fittings as needed; 
	Providing and installing all insulation for all contractor supplied
              pipe and fittings; 
	Providing all insulation and materials needed to patch or repair
              Company supplied 24-inch pipe; 
	Providing all materials and constructing roadway crossings at
              all locations identified by the Company in the drawings, or thereafter;
            
	Providing materials and constructing a bridge structure crossing
              the Raft River; and, 
	Providing and installing drain pipes and valves 
	Providing and installing block valves 
	Providing and installing drain, vent and instrumentation isolation
              valves 

        

60 

	 	 	
	Proving and installing pressure relief valves and pipe 
	Providing and installing bypass piping and valves 
	Providing and installing all fittings to ensure a complete system
          

      
	 	 	 
	 	5.2 	 Work by Others

	 	 	 	 
	 		5.2.1 	 Preparation of “Drawings and General Notes”
        for the pipeline, and preparation of “Issued for Construction”
        pipeline drawings;

	 	 	 	 
	 		5.2.2 	 Topographic map of site with two foot contours;

	 	 	 	 
	 		5.2.3 	 Identification of buried transite pipeline routes

	 	 	 	 
	 		5.2.4 	 The design and construction of the power plant including
        the power plant substation;

	 	 	 	 
	 		5.2.5 	 Wellhead work, including flow control valves, instrumentation,
        wiring, lube oil system, seal/cooling water system, nitrogen bubbler system,
        electrical equipment and connections, well sheds, grounding system and
        freeze protection will be provided by Company.

	 	 	 	 
	 		5.2.6 	 Pipeline lowpoint drain ponds;

	 	 	 	 
	 		5.2.7 	 Operating and environmental permits;

	 	 	 	 
	 		5.2.8 	 Flushing, and cleaning of the pipeline after mechanical
        completion, per Owner specified procedures. Water for the hydrostatic
        testing will be provided by the Company, and is assumed to come from local
        irrigation wells;

	 	 	 	 
	 		5.2.9 	 Company will pay for or provide all construction and
        startup water;

	 	 	 	 
	 		5.2.10 	 Design and construction of the transmission line from
        Bridge Substation to the power plant, including work within the Bridge
        Substation;

	 	 	 	 
	 		5.2.11 	 Design and construction of the distribution line from
        the power plant to the well sites, including installation of pole mounted
        34.5/4.16 kV transformers and disconnects, and 34.5kV/240V/120V pole mounted
        transformers at well sites;

	 	 	 	 
	 		5.2.12 	 Installation of production pumps at wells RRG-1, RRG-2,
        RRG-3 and RRG-4;

	 	 	 	 
	 		5.2.13 	 Installation of fire water pipeline from DOE water tank
        to power plant; and,

61 

	 		5.2.14 	
      Installation of the raw water supply system.

	 	 	 	 	 
	 	5.3 	
      Project Scope Tie-In Points

	 	 	 	 	 
	 		5.3.1 	
      Production wells

	 	 	 	 	 
	 			5.3.1.1 	
      12-inch 400 series API flange on discharge of pump flow
      tee

	 	 	 	 	 
	 			5.3.1.2 	
      3-inch 2000 API valves

	 	 	 	 	 
	 		5.3.2 	
      Injection well and well pad tie-ins

	 	 	 	 	 
	 			5.3.2.1 	
      12-inch 400 series API flange at the top of the injection
      wellhead valve

	 	 	 	 	 
	 		5.3.3 	
      The power plant site

	 	 	 	 	 
	 			5.3.3.1 	
      Production pipeline to the power plant, ending with a
      blind flange.

	 	 	 	 	 
	 			5.3.3.2 	
      Injection pipeline from the power plant, beginning with a
      blind flange.

	6.0 	
      MECHANICAL DESIGN AND CONSTRUCTION

	 	 	 	 
		
      Reasonable provisions for performance of routine and
      nonscheduled maintenance and for expected upset conditions will be
      included in the design prepared by Owner’s Engineer. The design of the
      equipment and the pipeline system will anticipate and accommodate planned
      and unplanned shutdowns and trips of portions of the well and pipeline
      system, or of the entire system.

	 	 	 	 
		6.1 	
      Piping Design and Construction

	 	 	 	 
			6.1.1 	
      Design Standards

	 	 	 	 
				
      All brine piping design and construction will be
      conducted in accordance with the standards set forth in ASME
  B31.1

	 	 	 	 
				
      Other services shall be designed according to the
      appropriate code.

	 	 	 	 
				
      All brine piping shall be designed and constructed to
      minimize water hammer such as installing a minimum flow
      recirculation/startup bypass at each production pump discharge. Operating
      procedures, including startup, must address operating without creating
      water hammer.

	 	 	 	 
			6.1.2 	
      Design Conditions

	 	 	 	 
				
      The design conditions for the pipelines are provided in
      Table 6.1-1:

62 

 

	Description 	Normal 	Temperature 	Normal 	Design 	Pressure 
	  	Temperature 	Max 	Operating 	Pressure 	Max 
	  	  	(for <5% of 	Pressure 	 	(for <5% 
	  	  	operation life) 	  	 	of 
	  	  	 	  	 	operation 
	  	  	 	  	 	life) 
	 
    	  	 	  	 	  
	ANSI 600 	300oF 	310oF 	150 psig 	1000 psig 	1200 psig 
	 
    	  	 	  	 	  
	Wellhead to FCV 	  	 	  	 	  
	 
    	  	 	  	 	  
	ANSI 300 	300oF 	310oF 	150 psig 	120% of 	120% of 
	  	  	 	  	24” line 	des. Press 
	All other pipe except 	  	 	  	 	  
	24” injection line 	  	 	  	(420 psig) 	(500 psig) 
	 
    	  	 	  	 	  
	ANSI 300 	170oF 	310oF 	250 psig 	350 psig 	120% of 
	  	  	 	  	 	des. Press 
	24” injection line 	  	 	  	 	  
	  	  	 	  	 	(500 psig) 

	 	6.1.3 	
      Pressure Relief

	 	 	 
	 		
      Over-pressure protection shall be supplied by rupture
      discs and/or relief valves. Any relief valve in brine service must be
      installed with a rupture disk below the relief valve to protect the valve
      from scaling. A “witness” method, such as a 1⁄2” vent pipe with a ball
      valve, must be provided to allow a failed rupture disc to be detected.
      Pressure relief devices must be piped to a sump or a safe
  location.

	 	 	 
	 		
      All piping upstream of the power plant inlet valve shall
      be protected by relief valves on the individual production
    pipelines.

	 	 	 
	 		
      Piping downstream of the power plant shall be protected
      by relief valves set to the design pressure of the pipeline to be
      determined by the Owner’s Engineer. If the injection pumps are not
      operating, the production pipeline relief valves can be included in the
      pressure relief design of the injection pipeline.

	 	 	 
	 	6.1.4 	
      Pipeline sizes

	 	 	 
	 		
      Line sizes and wall thicknesses for the principal system
      piping is indicated Table 6.1-2.

63 

Table 6.1 -2: PipelineSize and SupportRequirements

	Pipe Class 
 and 

      Flanges 	Designation and Uses 	Design 
 Pressure
      
 
 (psig) 	Nominal Pipe Diameter &
      Grade 1 	B31.1 

      Minimum 

      Wall 

      Thickness 	Corrosion 

      Allowance 	Nominal Wall Thickness &
      Schedule 2 	Minimum Wall Thickness 3

      (pipe and fittings)
	ANSI 600 
 
	 Wellhead Pipe 

      	Pump to FCV 

        

	 1000 psig 	

        12.75” 

      A-106 Grade B, 

        Seamless 
	 0.4140” 	 1/16” 	 0.562” 
 

      Schedule 60	 0.492” 
	
 
	
 
	
 
	10.75”

       A-106 Grade B, 

        Seamless 
	 0.3490” 	1/16” 	0.500” 
 

      Schedule 60 	0.438” 
	
 
 
	
 
 
	 All 	3.00” 

      A-53 Grade B ERW, 

      
	 0.1331” 	 1/16” 
	 0.300” 
 

      Schedule 80 	 0.263” 
	ANSI 300 	Standard Line Pipe 

      	 FCV to power plant 

	42 

      0 psig 	24.00” 	0.3079” 	1/32” 	0.3750” 	 0.3392” 

  1 Where A-53 Grade B ERW is specified, A-106 Grade
    B may be substituted. 

  2 Nominal Wall Thickness based on a plus or minus
    12.5% mill tolerance. 

  3 Minimum Wall Thickness to be calculated after
    subtraction of mill tolerances (if any). 

  64 

  

  

		 • Injection line, except Special Thin
        Wall 24” 

      • Injection line supplied by Contractor in lieu of Company supplied
        pipe 
	(20% Occasional Load Case) 	API 5L B, DSAW 			Std. Wall 	
	 	
 
 
	Design 

      Case 
	18.00” 
 

      A-53 Grade B ERW 	0.2926” 
	1/32” 
	0.375” 
 

      Std. Wall 	0.328” 

	 	
 
	

      Design 
	16.00” 
 

      A-53 Grade B ERW 	

      0.2601” 
	

      1/16” 
	0.375” 
 

      Std. Wall 	

      0.328” 

	 	
 
	
 
	12.750” 
 

      A-53 Grade B ERW 	

      0.2073” 
	

      1/16” 
	0.375” 
 

      Std. Wall 	

      0.328” 

	 	
 
 
	
 
 
	10.750” 
 

      A-53 Grade B ERW 
	

      0.1748” 
 
	

      1/16” 
 
	0.365” 
 

      Std. Wall 
	

      0.319” 
 

	 	
 
 
 
	
 
 
 
	

      6.625” 
 

      A-53 Grade B ERW 
	
 

      0.1077” 
 
	
 

      1/16” 
 
	0.280” 
 

      (6” Nom. Pipe) 
 

      Std. Wall 	
 

      0.245” 
 

	 	
 
 
 
	
 
 
 
	

      4.500” 
 

      A-53 Grade B ERW 
	
 

      0.0732” 
 
	
 

      1/16” 
 
	0.237” 
 

      (4” Nom. Pipe) 
 

      Std. Wall 	
 

      0.207” 
 

	 	
 
 
	
 
 
	3.500” 
 

      A-53 Grade 

      B ERW 	

      0.0 

      569” 
	

      1/ 

      16” 
	0.216” 
 

      (3” Nom. Pipe) 
	

      0.189” 
 

65 

  

  

  

  	  	  	 	  	  	  	Std.
        Wall 	  
	
 
 
 
	
 
 
 
	 	2.375” 
 

        A-53 Grade B ERW 
 

        Seamless 	
 

        0.0386” 
 
	
 

        1/16” 
 
	0.218” 
 

        (2” Nom. Pipe) 
 

        Schedule 80 	

        0.191” 
 
 

	

        ANSI 300 
	Special Heavy Wall 
 • Stress reducer
        at key 

        fittings 	420 psig 	24.00” 

        A-53 Grade B ERW 
	

        0.438” 
	

        1/16” 
	0.500” 
 

        Extra Strong 	

        0.438” 

	
 
	
 
	 	18.00” 
 

        A-53 Grade B ERW 	

        0.438” 
	

        1/16” 
	0.500” 
 

        Extra Strong 	

        0.438” 

	
 
	
 
	 	16.00” 
 

        A-53 Grade B ERW 	

        0.438” 
	

        1/16” 
	0.500” 
 

        Extra Strong 	

        0.438” 

	
 
	
 
	 	12.75” 
 

        A-53 Grade B ERW 	

        0.438” 
	

        1/16” 
	0.500” 
 

        Extra Strong 	

        0.438” 

	
 
	
 
	 	10.75” 
 

        A-53 Grade B ERW 	

        0.438” 
	

        1/16” 
	0.500” 
 

        Extra Strong 	

        0.438” 

	
 
	
 
	 	6.625” 
 

        A-53 Grade B ERW 	

        0.3780” 
	

        1/16” 
	0.500” 
 

        Extra Strong 	

        0.3780” 

	
 
	
 
	 	4.500” 
 

        A-53 Grade B ERW 	

        0.337” 
	

        1/16” 
	0.337” 
 

        Extra Strong 	

        0.295” 

	  	  	 	3.500”
      	0.262”
      	1/16”
      	0.300”
      	0.262”
      

  

66 

  

  

  

  	  	  	  	A-53
          Grade B ERW 	  	  	Extra Strong 	  
				2.375” 

          A-53 Grade B ERW 
	0.0386” 	1/16” 	0.218” 

          (2” Nom. Pipe) 

          Schedule 80 	0.191” 
	ANSI 300 	Special Thin Wall provided by Company 	 350 psig 	24.00” 
 

          API 5L B, DSAW 	0.3079” 	1/32” 	0.3750” 
 

          Std. Wall 	0.3392” 

  

67 

  

 

	 	6.1.5	  Routing

      Routing of the principal piping is indicated in the drawings
        included in Exhibit C2 of the contract. Any deviation from the indicated
        route shall be submitted for approval to the Company. 

	 	 	 	 
	 	6.1.6	  Pipe Support 

      Any deviations from this requirement must be submitted
        to Company for approval prior to final design documents being issued for
        construction. 

	 	 	 	 
	 	 	6.1.6.1	 Above-ground pipe will be supported in pipe racks
        or “T” supports or other permanent support designs. “Sleeper”
        supports set on the ground shall not be used.

	 	 	 	

	 	 	6.1.6.2	 Pipe supports shall be designed and installed to
        prevent the accumulation of standing water that could lead to corrosion
        and thinning of the structural steel. This includes the accumulation of
        water inside pipe supports. 

	 	 	 	 
	 	 	6.1.6.3	 Pipe support designs are depicted in drawing 5021-33-01.
	 	 	 	 
	 	6.1.7	 Stress Analysis 

      Stress analysis shall be performed by the Owner’s
        Engineer per ASME B31.1. Stress will be reduced via horizontal expansion
        loops, offsets or expansion joints. Vertical expansion loops are not allowed.
        Use of expansion joints is allowed, upon approval of design and specification
        details by Company.

      It is not the Contractors responsibility to perform a
        stress analysis. 

	 	 	 	 
	 	6.1.8 	Insulation and Freeze Protection
	 	 	 	 
	 	 	6.1.8.1	 General: Contractor shall provide thermal insulation
        for all pipelines 4” and larger, and all valves installed in pipelines.
      

	 	 	 	

	 	 	6.1.8.2	 Production pipelines: The insulation system shall
        provide the equivalent insulation to the R-value provided by at least
        3 inches of fiberglass with an aluminum jacket. 

	 	 	 	

	 	 	6.1.8.3	 Injection pipeline: The insulation system shall
        provide the equivalent insulation to the R-value provided by at least
        1 inch of fiberglass with an aluminum jacket 

	 	 	 	

	 	 	6.1.8.4	 Pipeline Flanges: Fixed insulation shall be brought
        to within eighteen inches (18”) of any pipeline flange. A removable
        insulation jacket shall be provided for all flanged connections and/or
        in-line valves. 

68 

  

 

	 	6.1.8.5	 One inch of insulation shall be provided for all lines
        2" and under which are exposed to winter temperatures below freezing and
        which cannot be drained during shutdowns or are stagnant during normal
        operations. Exposed dead legs over 2” are not allowed.

	 	 	 
	 	6.1.8.6 	Materials of Construction for
        Insulation:

	Fiberglass, mineral wool, calcium silicate, polyurethane foam, and other
    materials suitable for the design temperatures are allowed. Asbestos shall
    not be used.
  
	Fiberglass and mineral wool shall be 4 lb/ft^3 density.
  
	Backing paper shall high temperature resistant, and shall be non-bleach,
    chloride free.
  
	Insulation shall be secured to the pipeline with galvanized or stainless
    steel wire, with a minimum of two sets of tie- down wires per insulation material
    width.
  
	All insulation from the production pump to 3’ downstream of the flow
    control valve shall be calcium silicate to prevent damage from maintenance
    and operation activities over the life of the project.
  
	Jacketing shall provide the necessary moisture and weather protection for
    the particular insulation. If no jacket is required for long-term protection
    of the insulation, then it is not required by this specification. Paint may
    be used if the only weather protection required is UV blocking.
  
	Alumimum jacketing shall be 0.016” min. thickness for 16” diameter
    and under piping.
  
	Aluminum jacketing shall be 0.020” min. thickness for piping greater
    than 16” diameter.
  
	Jacketing shall be secured with stainless steel screws and sealed with high
    temperature silicon chalking of insulation industry grade. All jacketing edges
    shall be sealed, including gores sections for fittings.
  
	Should banding be used over the jacketing, bands shall be 304L stainless
    steel, spaced on 18” centers, and shall be 1⁄2” in width. Bands
    shall match the external color of the jacketing. 

	 	6.1.9	 Isolation Requirements 
	 	 	 
	 	 	The piping system shall be designed by the Owner’s
        Engineer to be appropriately isolated for maintenance from all sources
        of energy such as the main geofluid line and the well. Acceptable isolation
        methods are double block and bleed or an isolation valve with a dropout
        spool. Drop out spools must be accessible from ground level or a working
        platform.

69 

  

  

	 	6.1.10 	 Metering runs

	 	 	 
	 		 Wherever a flow meter is required, the piping shall
          be laid out to meet ASME and ISA meter run requirements. Per these specifications,
          there shall be sufficient straight pipe upstream and downstream of the
          meter based on the elbow configuration at the inlet and outlet of the
          meter run.

	 	 	 
	 		 The inside diameter of the pipe shall be measured
          to 0.001 inches prior to construction of the meter run.

	 	 	 
	 	6.1.11 	 Materials of Construction

  

	 	6.1.11.1 	 General:

	 	 	 	 
	 		 Piping materials shall be suitable for geothermal
          service and conform to ASME B31.1. No copper or copper bearing alloys
          shall be allowed to contact geothermal fluids. Pipelines carrying geofluids
          shall have corrosion allowances as specified in Table 6.1-2 (Pipeline
          Size and Support Requirements).

	 	 	 	 
	 	6.1.11.2 	 Pipe:

	 	 	 	 
	 		 	

	 Pipe materials shall be as specified in Table 6.1-2
          (Pipeline Size and Support Requirements).

	 	 	 	 
	 		 	

	 Used pipe may be substituted for new pipe, upon written
          approval of Company.

	 	 	 	 
	 	6.1.11.3 	 Pipe Fittings: Carbon steel, ASTM
          A-234 Gr WPB butt welded. Miter joints are not allowed. 5D radius (minimum)
          bends are permitted. Small bore fittings shall be socket weld, 3000
          pound, ASTM A-105.

	 	 	 	 
	 	6.1.11.4 	 Gate Valves: Flanged, raised face,
          wedge, ASTM A-216 Gr WCB cast steel bodies, OS&Y and bolted bonnets.
          Valve trim shall have a proven 10 year service life in similar geothermal
          service, for example stellite or 316 sealing surfaces and 17-4 PH valve
          stem. Valve specifications shall be submitted to Company for approval
          and verification prior to order by Contractor.

	 	 	 	 
	 	6.1.11.5 	 Check Valves: Carbon steel, ASTM
          A-216 Gr WCB, swing type with bolted bonnet.

	 	 	 	 
	 	6.1.11.6 	 Pressure Relief Valves: Valve specifications
          shall be submitted to Company for approval and verification prior to
          order by Contractor.

	 	 	 	 
	 	6.1.11.7 	 Flanges: Raised faced, ASTM-105.
          Small bore flanges shall be socket weld.

	 	 	 	 
	 	6.1.11.8 	 Gaskets: Spiral wound, 304 stainless
          steel with grafoil filler.

	 	 	 	 
	 	6.1.11.9 	 Stud Bolts: ASTM A-193 Gr B7 with
          heavy hex nuts (ASTM A-194 Gr 2H).

70 

  

  

	 	6.1.11.10 	 Drain Valves: Shall be a minimum of 2 inches,
          unless otherwise specified.

	 	 	 
	 	6.1.11.11 	 Expansion Joints: If used shall be high-alloy
          or annealed austenitic stainless and designed to withstand or protected
          against infrequent water-hammer events.

	 	 	 
	 	6.1.11.12 	 Pipe Supports: New pipe or used pipe may be
          used. Pipe shall be ASTM A-53 Grade B or API 5L Grade B or equivalent
          as approved by Company.

  

	 	6.1.12 	 Preoperational System Cleaning

	 	 	 
	 		 Prior to placing in operation, the piping system shall
          be cleaned by the Company according to the Contractor’s specification.
          Contractor shall submit cleaning procedure to Company for approval prior
          to starting construction. Cleaning procedure shall use any of a combination
          of air, water, geothermal brine or geothermal steam. Cleaning energy
          shall be equivalent to a liquid flow velocity of 20 feet per second.
          The pipeline flush will be conducted by the Company as described in
          Section 9.2.

  

	 	6.2 	 Layout Requirements

	 	 	 	 
			6.2.1	  All pipe shall be sloped to drain to the following
        locations:

      	Unit 1 power plant drain sump
        
	Crook well drain sump 

      The pipeline will be installed with a nominal top of pipe
        support elevation to be between 18” and 36” in height. Pipe
        support height can vary to provide a constant slope between horizontal
        changes in direction (PI’s) and avoid vertical breaks (VPI’s)
        in the slope as much as practical. Pipeline PI’s are shown on the
        drawings. VPI’s will be determined in the following sequence: 

	 	1. 	 Contractor to provide surveyed elevation of ground
          profile at 200-foot intervals and at grade breaks

	 	 	 
	 	2. 	 Owner’s Engineer will determine vertical alignment
          using contractor data.

  field Pipe support heights taller than
    48” must be submitted to the owner for engineering review related to
    the piping loads on these supports prior to installation. 

  Drain sumps will be provided by the
    Company at the Unit 1 power plant site, Crook well drain sumps located along
    the northern edge of Section 26 on each side of the Raft River, and along
    the production pipe from RRG-2 south of the county road crossing.

  71 

  

  

	 		 Except as otherwise noted on the drawings,
        all drain pipes and valves shall be 2-inch.

	 	 	 	 	 
	 	6.2.2	 Maintenance and operation access
        must be maintained to the wellhead pipeline valves, instruments, and the
        wellhead sheds. Maintenance access includes:

	 	 	 	 	 
	 		•	 The ability to drive a service vehicle next
        to the equipment

	 		•	  Ability to remove any at grade pump or control
        valve with a 5-ton crane.

	 	 	 	 	 
	 	6.3 	 Not used

	 	 	 	 	 
	 	6.4 	 Not used

	 	 	 	 	 
	 	6.5 	 Utility Systems

	 	 	 	 	 
	 		6.5.1 	 Waste Disposal

	 	 	 	 	 
	 			 Toxic or hazardous waste discovered at the
        site must be immediately reported to the Company so that it may arrange
        for proper removal and disposal. Contractor shall handle all toxic or
        hazardous wastes generated in the course of construction in accordance
        with applicable laws and regulations. There is existing buried transite
        pipe in the well field. To facilitate the Contractor’s work under
        this Work, prior to the start of construction, the Company shall located
        transite pipe crossing locations.

	 	 	 	 	 
	 		6.5.2 	 Painting and Coatings

	 	 	 	 	 
	 			 Manufactured equipment and valves supplied
        under this contract shall be painted in accordance with Supplier's standard
        practice with due consideration for the operating environment and temperature.
        Factory applied painting is required with repair of construction damage
        prior to mechanical completion.

	 	 	 	 	 
	 			 A two coat paint system (one prime and one
        finish coat) per Company approved paint supplier shall be applied to pipe
        supports in irrigated fields and adjacent to roads. Surface preparation
        prior to primer application shall be to near white blast per SSPC.

  

  	7.0 	 CIVIL AND STRUCTURAL DESIGN 

        7.1         Geotechnical
          Report

  72 

  

  

  	 		 A geotechnical soils investigation and analysis
          has been conducted to establish foundation design parameters. The report,
          prepared by CH2M Hill, dated October 2005, and entitled Geotechnical
          Report, consists of summary information from drill 17 borings. Twelve
          of the borings were along the pipeline routes and five were in the power
          plant area.

	 	 	 	 
	 	7.2 	 Civil Work Criteria

	 	 	 	 
	 		7.2.1 	 Clearing and Grubbing

	 	 	 	 
	 			 Areas through sagebrush shall be cleared and grubbed
          only as necessary for the performance of work and subsequent operation
          and maintenance. Removed organic materials shall be removed from the
          work area.

	 	 	 	 
	 		7.2.2 	 Earthwork

	 	 	 	 
	 			 Excavation along pipeline routes shall be to the dimensions
          and limits as indicated on the Drawings and General Notes. Excavation
          for all other work shall conform to good engineering and construction
          practice.

	 	 	 	 
	 			 Backfill shall be compacted in accordance with good
          engineering and construction practices. Compaction under or adjacent
          to load bearing structures shall be to a minimum of 95% of the maximum
          laboratory dry density. All other areas shall be compacted to a minimum
          of 90% dry density.

	 	 	 	 
	 		7.2.3 	 Site Preparation

	 	 	 	 
	 			 Areas not required for plant operation and construction
          shall remain natural. Efforts shall be made to minimize damage to natural
          areas and especially farmland. Excessive or unnecessary damage to farmland
          may be charged to Contractor at applicable lease rates. Erosion control
          for storm drainage during the construction phase shall be implemented
          in accordance with the Storm Water Pollution Prevention Plan. An area
          within the project site will be provided for construction trailers and
          activities. After completion, these areas shall be regraded, and made
          free and clear of debris and unused construction material.

	 	 	 	 
	 			 Buried irrigation pipelines shall be identified and
          protected. The direct and indirect costs to repair damages to such pipelines
          shall be the responsibility of the Contractor.

	 	 	 	 
	 		7.2.4 	 Roads

	 	 	 	 
	 			 The Contractor shall provide permanent access roads
          along pipeline routes in sagebrush areas. The roads shall be graded
          after construction and

  73 

  

  

	 		  
	cleared of debris to 10’ from edge of pipeline supports.
      Surfacing of the roads is not required.
	 	 	 	 	 
	 		  
	Access roads through farmland are for construction
        only and shall be graded to conform with farm contours in order for the
        land to be returned to farm use at the end of construction.

	 	 	 	 	 
	 		  
	Loading over culverts and pipes shall be in accordance with
      AASHTO- HS20-44.
	 	 	 	 	 
	 		7.2.5 	 Storm Water Control

	 	 	 	 	 
	 			 Runoff control from storm water shall conform
        to the approved Storm Water Pollution Prevention Plan, which shall be
        the responsibility of the Contractor to obtain, if required.

	 	 	 	 	 
	 	7.3 	 Civil/Structural Materials and Design

	 	 	 	 	 
	 		7.3.1 	 Concrete

	 	 	 	 	 
	 			•	 Unless specified to the contrary in the Drawings, concrete
        design compressive strengths shall be as follows:

  

	 	Use 	f’c 
	 	All structural concrete 	4,000 psi 
	 	Pipe support concrete 	2,900 psi 
	 	Electrical duct encasement and 	2,000 psi 
	 	lean concrete backfill 	 

  

	 		•	 Compressive strength (f’c) refers to strength at
        3 days.

	 	 	 	 
	 	7.3.2 	 Reinforcing Steel

	 	 	 	 
	 		 Bar sizes No. 3 through No. 18 shall be
        deformed billet steel, conforming to ASTM Designation A615, Grade 60.

	 	 	 	 
	 		 Spirals shall be deformed bars conforming
        to ASTM A82. Welded wire fabric shall conform to ASTM A185.

	 	 	 	 
	 	7.3.3 	 Anchor Bolts

  74 

  

  

  	 		 Anchor bolt steel, washers, and nuts, shall conform
          to ASTM A307, A-36 or A-193. Allowable stress on anchor bolts shall
          be 20,000 psi based on net tensile stress area of bolts. Headed stud
          anchor bolts shall conform to ASTM A-108.

	 	 	 
	 	7.3.4 	 Structural Steel

	 	 	 
	 		 Structural steel shall be designed in accordance with
          latest edition of AISC and IBC. All bolted connections shall have a
          minimum of two 3/4 inch diameter high strength bolts. All high strength
          bolt connections shall be bearing type connections.

	 	 	 
	 		 Structural steel shapes and plates shall conform to
          ASTM A36 or A572, Grade 50.

	 	 	 
	 		 Structural pipe members shall conform to ASTM A53,
          Types E or S, Grade B or ASTM A106, Grade A.

	 	 	 
	 		 Allowable stresses in structural steel shall be determined
          in accordance with the AISC code, 9th Edition.

	 	 	 
	 		 All high strength bolts, nuts and washers shall conform
          to ASTM A325. All other bolts and nuts shall conform to ASTM A307, Grade
          B. All filler metal shall conform to AWS D1.1.

	8.0	 SUBMITTALS 

The Contractor shall submit to the
    Company and the Company's Engineer information describing the equipment and
    pipeline materials in a timely manner, such that the schedule for design and
    construction of the facility shall not be delayed. The Contractor shall, as
    a minimum, submit to the Company the following information: 

	 	8.1 	 The Company shall have the right to review
        and comment on the following documents in addition to those referenced
        in other parts of the contract.

	 	 	 	 
	 		 	

	 Contractor Quality Control Procedures

	 		 	

	 Contractor's Site Safety and Security Program

	 		 	

	 Mechanical Completion, Inspection and Test Procedures
        and Results

	 		 	

	 Operation and Maintenance Manuals

	 	 	 	 
	 	8.2 	 The Company shall be provided with the following:

	 	 	 	 
	 		 	

	 Vendor Submittals including Shop Drawings, Catalog Cuts,
        Construction Procedures and Scheduling Information

	 		 	

	 Vendor Guarantees

  75 

  

  

	 			

	System Test and Start-up Procedures, Test Packages
	 	 	 	 
	 	8.3 	 The sequence of submission of all submittals
        shall be such that all information is available for checking each submittal
        when it is received. Within seven (7) days after receipt, unless as otherwise
        agreed upon for critical items, the Company will return two copies of
        the submittals with comments.

	 	 	 	 
	 	8.4 	 The submittals shall be accompanied by a letter
        of transmittal identifying the documents submitted.

	 	 	 	 
	 	8.5 	 Drawings.

	 	 	 	 
	 		8.5.1 	 General

	 	 	 	 
	 			 All drawings, and Instruction Books shall be in the
        English language and all dimensions and units of measurements shall be
        in the United States standard units.

	 	 	 	 
	 		8.5.2 	 Drawing Quality

	 	 	 	 
	 			 The submittal shall have every line, character, and
        letter or symbol clearly legible.

	 	 	 	 
	 		8.5.3 	 Scale Required

	 	 	 	 
	 			 All drawings shall be drawn accurately to a scale sufficiently
        large to show all pertinent features. Dimensions shown on all drawings
        shall be in feet and inches.

  

	9.0 	 PERFORMANCE TESTING AND ACCEPTANCE

	 	 	 	 
		9.1 	 General

	 	 	 	 
			 Prior to final acceptance, the pipeline
        system shall be inspected and tested for completion, conformance to the
        contract, specifications and design documents. This testing shall be conducted
        per governing codes and by protocols and procedures described in this
        document or agreed to between the Parties. Completion is achieved when
        all pipelines and support systems have been installed, all insulation
        has been installed, and the Contractor tests outlined below have been
        successfully completed, and the system is ready for operations.

	 	 	 	 
			 Contractor Tests - As a minimum the following
        tests shall be successfully completed by the Contractor:

	 	 	 	 
				

	 Pipeline hydrostatic test

  76 

  

  

	 		 	

	 Visual weld inspection by a Certified Weld Inspector
        (CWI) of all pressure containing welds as required by ASME B31.1 visual
        inspection requirements.

	 		 	

	 Pipeline radiography will be provided by the Contractor
        whenever radiographic results of tests paid for by the Owner fail. For
        each failed test the Contractor shall pay for two additional tests of
        welds from the same welder.

	 	 	 	 
	 		 Owner Tests – The Owner shall have the
        right to check any Contractor welds using radiography to be paid for by
        the Owner. Owner testing will be limited to no more than 10% of all Contractor
        circumferential butt welds. Tests will include:

	 	 	 	 
	 		 	

	 Each welder shall have their first (4) welds radiographed.
        These will be included as part of the 10% radiography requirement.

	 		 	

	 Interpretation of the radiography will be per ASME B31.1,
        by a CWI.

	 	 	 	 
	 	9.2 	 Company’s Scope for Completion

	 	 	 	 
	 		 The following work will be conducted by the
        Company:

	 	 	 	 
	 		 	

	 Pipeline flush and cleaning

	 		 	 
	10.0	 PLANT OPERATIONS AND MAINTENANCE MANUALS
	 		 	 
	 	10.1	 Operations and Maintenance
        Manuals 

      Contractor shall provide detailed system and equipment
        instructions from the Contractor’s equipment suppliers.

      The contractor shall supply five (5) copies of the instruction
        books for all equipment incorporated in the work specified herein to the
        Company. These shall give complete and detailed installation and operation
        instructions, with particular emphasis on sequence and methods to be used
        in future maintenance, disassembly, and reassembly. Special precautions,
        sequence of work, recommendations on methods of assembly, and adjustment
        of all parts requiring adjustment shall be covered in detail. Parts catalogs
        and other data shall be included for easy identification of parts for
        ordering replacements. 

      The above requirements shall be assembled together with
        three sets of all major drawings reduced to or copied onto 11 inch by
        17 inches paper and bound in a permanent, strong, and serviceable cover
        without folding the drawings. 

      Instruction books as a minimum shall include as required
        the following: 

77 

  

  

	 	10.1.1 	 Recommended methods for assembly and adjustment of
          all parts requiring assembly or adjustment, including bearings.

	 	 	 
	 	10.1.2 	 Recommendation on equipment installation, including
          special precautions and sequences of work.

	 	 	 
	 	10.1.3 	 Detailed operating instructions consistent with the
          operation and maintenance provisions provided or required by the various
          equipment suppliers as a condition of their warranty obligations.

	 	 	 
	 	10.1.4 	 Recommended maintenance procedures including required
          test and calibration intervals.

	 	 	 
	 	10.1.5 	 Test and calibration procedures for all devices including
          test equipment connection drawings.

	 	 	 
	 	10.1.6 	 Equipment storage and hydrostatic testing details
          shall be provided by the Contractor.

	 	 	 
	 	10.1.7 	 Complete weld maps for the project depicting:

  

	 	 	

	 Welder/Fitter ID for fit up.

	 	 	 	 
			 	

	 Supervisor ID for fit up approval.

			 	

	 Date for fit up of the joint.

	 	 	 	 
	 	 	

	 Welder ID for hot and root pass.

	 	 	 	 
			 	

	 Supervisor ID and Inspector ID for approval.

			 	

	 Weld procedure employed.

			 	

	 NDE methods and approval.

			 	

	 Date for root and hot pass.

	 	 	 	 
	 	 	

	 Welder ID for fill and cap.

	 	 	 	 
			 	

	 Supervisor ID and Inspector ID for approval.

			 	

	 Weld procedure employed.

			 	

	 NDE methods and approval.

			 	

	 Date for root and hot pass.

			 	 
		The above can be submitted in notebook
        form. The above data must refer to the specific weld ID as shown on the
        weld map drawings submitted by the Contractor. 

78 

  

  

 EXHIBIT C2 

 DRAWINGS AND GENERAL NOTES 

 Drawings and general notes provided as separate documents.

 79 

  

  

 EXHIBIT D 

 PERFORMANCE TEST PROTOCOLS 

 Protocols to be agreed to between Parties prior to hydrostatic
  testing. 

 80 

  

  

EXHIBIT E 

WARRANTY CLAIM PROCEDURES 

       1. Where Company has agreed in
    accordance with the terms of the Contract to take corrective action, and upon
    notifying Contractor as set forth in Section 10.3.1 of the Contract, Company
    may undertake corrective action, but Contractor reserves the right to investigate
    and determine the eligibility of such warranty claim. 

       2. Company shall notify Contractor
    in accordance with Section 10.3.1 of the Contract and provide documents per
    paragraph 3 below together with a written cost estimate of the corrective
    action required. As soon as reasonably possible following the receipt of said
    documents and cost estimate, Contractor shall investigate the defect and shall
    issue written instructions to Company on the corrective action to be undertaken,
    or Contractor shall undertake corrective action by its own employees or agents.
  

       3. The following procedures shall
    be observed in all Contractor warranty claims for the Facility in connection
    with which Company taken corrective action at Contractor’s request as
    identified in paragraph 1 above: 

            (a)
    A failure report, which shall contain technical and logistic information sufficiently
    detailed to enable Contractor to assess the damage to the Work and to evaluate
    appropriate corrective action in the form as agreed to by Company and Contractor,
    shall be provided by Company as soon as reasonably practicable after the occurrence
    of any event giving rise to a warranty claim. 

            (b)
    Warranty claims shall be submitted in accordance with paragraph (d) below,
    and shall include, as a required minimum, the following documents: 

       (i) Applicable
    failure report; 

       (ii)
    List of equipment and materials purchased or used in accomplishing the repair,
    schedule of operations and subcontractors hours applicable to each claim,
    and a copy of any internal work orders or purchase orders prepared in connection
    with each such claim; 

       (iii)
    Company’s maintenance and repair records with respect to the equipment
    for which the claim is being made (Company shall include with such maintenance
    and repair records the manufacturer/vendor part number and serial number and
    the identification by part number and serial number of the next major assembly
    call-out (such as, but not limited to, turbine, generator, electrical cabinet));
    and 

       (iv)
    copies of invoices received or prepared for costs and expenses claimed. 

  The documentation to be provided pursuant to paragraphs (b)(ii)
    and (b)(iii) above, shall be in a form reasonably acceptable to Contractor.
  

81 

  

  
            (c)
    All warranty claims pertaining to failure of the equipment for which Company
    has independently undertaken corrective action during any calendar month shall
    be submitted to Contractor on or before the last day of the following calendar
    month. Claims shall be paid by Contractor on a net 30 basis. Work performed
    by Company under a warranty claim shall be billed on a “time and material”
    basis as defined below: 

            (d)
    “Time and Material” in connection with a warranty claim is defined
    as follows: 

            (i)
    With respect to “Time”, the product of one hundred fifteen percent
    (115%) of the normal hourly wage (including fringe benefits, insurance and
    taxes) Company pays with respect to its particular employee (not including
    overhead) multiplied by the number of hours each employee performed the particular
    Work. 

            (ii)
    With respect to “Material”, one hundred ten percent (110%) of the
    actual purchase price paid by Company or an affiliate to a third party for
    the materials incorporated or consumed in connection with the Work; and 

            (iii)
    With respect to Work performed by a subcontractor (other than an entity which
    directly or indirectly controls, is controlled by, or is under common control
    with, Company, Work done by any such entity being deemed Work done by Company
    through its own employees for purposes of this definition), one hundred ten
    percent (110%) of the actual amount paid by Company to the subcontractor for
    such Work. 

            (e)
    Accounting settlement between Company and Contractor due to warranty claims
    shall occur on a quarterly basis. 

            (f)
    Company shall maintain adequate records to support all warranty claims and
    allow Contractor to audit warranty claims upon no less than ten (10) Days
    period notice. 

  82 

  

  
  EXHIBIT F 

  APPROVED VENDOR LIST 

  
    	Equipment Item
        	Name of Supplier/Vendor 
	Geothermal Pipe (Used or Limited Service) 	Mill Man Steel, Inc 
		  
	 	 
	 	 
	 	 
	 	 
	 	 
		  

  

  83 

  

  
  EXHIBIT G 

  PERMITS 

       This Exhibit G defines the current
    scope and allocation of permitting and contracting work for the Project. Contractor
    is responsible for only the permits expressly designated below as being the
    responsibility of Contractor; Company is responsible for obtaining all other
    Project related permits. 

  
    	PERMITS & CONTRACTS 	Prepare by and 
 responsibility
          party 
	Conditional Use
          Permit 	Company 
	  	  
	Pipeline road
          crossing easements (from highway district) 	Company/RRREC 
	Private land lease
          & easements 	Company 
	County Building
          Permit 	Contractor 
	Storm Water Pollution Prevention Plan 

          (containment plan during construction) 	Contractor 

	Storm Water Pollution Prevention Plan 

          (containment plan during operation) 	Company 

	Idaho Power Certifications
        	Company 

  

84 

  

  
  EXHIBIT I 

  CERTIFICATE OF FINAL COMPLETION 

  US Geothermal, Inc. 

    1509 Tyrell Lane, Suite B 

    Boise, ID 83706 

    Attn: Daniel Kunz 

  

            With
    reference to the CONSTRUCTION CONTRACT (the “Contract”) dated as
    of _________________between RAFT RIVER ENERGY I LLC (“Company”),
    and _____________________________(“Contractor”) for construction
    of the unit number one Raft River Geothermal Project pipeline and equipment
    in Cassia County, Idaho, Company hereby confirms and certifies that the requirements
    of the Contract for Final Completion set forth in the Section 4.7 of the Contract
    have been achieved as of _____________, 200_. Attached hereto is a list of
    the Punchlist Items submitted by Contractor for approval by Company pursuant
    to Section 4.9 of the Contract. 

            Terms
    defined in the Contract shall have the same meaning when used herein. 

          Executed
  this ____ day of ________________, 200__. 

_____________

By: _________________________________ 

  Name: ______________________________ 

  Title: _______________________________ 

	AGREED: 
	  
	US Geothermal, Inc. 
	  
	By: ______________________
	Name: ______________________
	Title: ______________________
	  
	Date Signed: ______________________

85 

  

  
  EXHIBIT J 

  FORM OF FINAL LIEN WAIVER 

  WAIVER OF LIENS/RELEASE 

    AND CERTIFICATE OF FINAL PAYMENT 

       With reference to the Construction
    Contract (“Contract”) dated as of ________________between the undersigned,
    ____________________________, (“Contractor”) and RAFT RIVER ENERGY
    I LLC. (“Company”) for construction of the unit number one Raft
    River Geothermal Power Project pipelines and equipment in Cassia County, Idaho,
    Contractor hereby certifies and represents that it has made, or will make,
    when due, full payment of all costs, charges and expenses incurred by it or
    on its behalf for work, labor, services, materials and equipment supplied
    to the foregoing premises and/or used in connection with its work under the
    Contract with respect to the Facility, other than any thereof for which payment
    has been requested in the invoice of even date herewith.

       Contractor hereby covenants that
    it will require each of its subcontractors and material suppliers to make
    full payment of all costs, charges and expenses incurred by them or on their
    behalf for work, labor, services, materials and equipment supplied to the
    foregoing premises and/or used by them in connection with the undersigned’s
    work under the Contract with respect to the Facility, other than any thereof
    for which payment has been requested in the invoice of even date herewith.

       In consideration of ____________________Dollars
    ($__________) as final payment under the Contract for work performed by Contractor
    as of _________, 200_, Contractor, upon receipt of such final payment hereby
    unconditionally releases and forever discharges Company and Company’s
    premises and property from all claims, liens and obligations of every nature
    arising out of or in connection with the payment of the aforesaid final payment
    except as set forth below: 

       (Note: If none, write “NONE”
    in space above. Any claims excepted must be described and the specific amount
    claimed must be set forth.) 

       As additional consideration for
    the aforesaid final payment, Contractor, upon receipt of such payment agrees
    to indemnify and hold harmless Company from and against all costs, losses,
    claims, causes of action, judgments and expenses, including attorney’s
    fees arising out of or in connection with claims against Company, which claims
    arise out of the performance of the work under the Contract with respect to
    the Facility and which may be asserted by Contractor or any of its Subcontractors
    or any of their representatives, officers, agents or employees except for
    those claims listed above. 

  86 

  

  
       The foregoing shall not relieve
    Contractor of its obligations under the provisions of the Contract, which
    by their nature survive completion of the work including, without limitation,
    warranties, guarantees and indemnities. 

  Executed this __________________day of ________________________,
    _____. 

  _________________ 

By: ______________________________

  NAME: ___________________________

  TITLE: ___________________________

  87 

  

  
  EXHIBIT K 

  LIQUIDATED DAMAGES

  Delay Liquidated Damages 

       Delay Liquidated Damages shall
    be paid by Contractor to Company, based on the number of days between the
    Final Completion Date and the Guaranteed Final Completion Date, as set forth
    in the following table.

       .If the Final Completion Date
    does not occur on or before the Guaranteed Final Completion Date, then Contractor
    shall pay to Company liquidated damages calculated as the sum of the amount
    set forth below for each Day that the Final Completion Date is after the Guaranteed
    Final Completion Date during the period between the Guaranteed Final
    Completion Date and the Final Completion Date: 

  

  	DESCRIPTION 	DELAY LIQUIDATED DAMAGES 
	Final Completion Date prior to Guaranteed 

        Final Completion Date 	No Delay Liquidated Damages 
	Final Completion Date

        0 to 15 Days 

        after Guaranteed Final Completion Date 	Delay Liquidated Damages payment waived by
        Company 
	Final Completion Date 

        16 to 45 Days 

        after Guaranteed Final Completion Date 	$1000 per day 
	Final Completion Date

        from 46 days 

        after Guaranteed Final Completion Date 

        until April 30, 2007 	The total damages from above plus $1,200
        per day after day 45. 
	Final Completion Date from 

        May 1, 2007 to September 30, 2007 	The total damages from above plus $4,300
        per day after May 1, 2007 
	Final Completion Date after

        October 1, 2007 	The total damages from above plus $7,100
        per day after October 1, 2007 

  

  The cap on liquidated damages shall be limited to One Million
    Dollars ($1,000,000). 

  88 

  

  

  EXHIBIT L 

CHANGE ORDER FORM

 

 89 

  

  

 Change Order Log

 

 90 

  

  
  Contract Labor Rates: 

	  	  	  		
	  	  		  
	  	  			
	  		  	  	
	Description 	Craft	Craft Overtime	Laborer	Laborer Overtime
	  	  	  		
	  	  	  	  	  
	Hourly rate 	$25.00 	$37.50 	$14.00 	$21.00 
	Benefits 	$6.25 	$5.50 	$3.50 	$3.50 
	Subsistance and travel 	$5.00 	$5.00 	$5.00 	$5.00 
	                                Subtotal
      	$36.25 	$48.00 	$22.50 	$29.50 
	  	  	  	  	  
	Workmans Comp 	$1.52 	$2.01 	$0.94 	$1.23 
	Liability Insurance 	$0.53 	$0.70 	$0.33 	$0.43 
	                                Subtotal
      	$2.04 	$2.71 	$1.27 	$1.66 
	  	  	  	  	  
	                                    Total
      	$38.29 	$50.71 	$23.77 	$31.16 
	  	  	  	  	  
	Small tools and consumables 	$2.00 	$3.00 	$1.12 	$1.68 
	  	  	  	  	  
	  	  	  	  	  
	Total Hourly Cost 	$40.29 	$53.71 	$24.89 	$32.84 
	  	  	  	  	  
	Labor Markup at 15% 	$6.04 	$8.06 	$3.73 	$4.93 
	  	  	  	  	  
	Total Hourly Rate 	$46.34 	$61.76 	$28.62 	$37.77 

91 

  

  

 EXHIBIT M 

 CHANGE ORDER REQUEST FORM 

 

 92 

  

  
  EXHIBIT N 

  WORK ITEMS PRIOR TO NOTICE TO PROCEED 

       Initiation of following list
    of contractor work items was requested by the Contractor to be commenced upon
    signing the contract. The purpose is to allow the Contractor to get started
    with work prior to issuance of the Notice to Proceed, which is anticipated
    on or before June 1, 2006. As agreed by the Parties, commencement of the following
    items of work is allowed per issuance of a Limited Notice to Proceed. As further
    agreed, funding in the amount of $50,000 will be made available for work under
    this exhibit to compensate Contractor for expenses from the Limited Notice
    to Proceed until issuance of the Notice to Proceed. 

  	 	1. 	 We need CAD files for our surveyor. Can we get from
          the Engineer so he can begin his layout?

	 	 	 
	 	2. 	 Get surveyor started. Write P. O. and get time slot.
          He is currently 2 to 3 weeks behind. We can forward elevations to Engineers
          to establish elevations of supports.

	 	 	 
	 	3. 	 Get storm water prevention permit started and applied
          for.

	 	 	 
	 	4. 	 According to Thorton if we can get the line staked
          he will start clearing and grubbing in his spare time and then be ready
          when we get on site

	 	 	 
	 	5. 	 Industrial Builders to Mobilize on site. Set up trailers
          and utilities as needed. Set up laydown area where we will not interfere
          with future construction of Plant.

	 	 	 
	 	6. 	 Set up living accommodations. Try to get set up with
          motel in Malta or trailer spaces for RV’s.

	 	 	 
	 	7. 	 Establish and finalize schedule- Sequence of pipe
          line construction

	 	 	 
	 	8. 	 Put down payment on production auger to hold.

	 	 	 
	 	9. 	 Set up jig and mock up supports and mock up shoes
          etc.

	 	 	 
	 	10. 	 Paint color for supports- (Tan-?)

	 	 	 
	 	11. 	 Set up weld charts for project and establish Q.C.
          procedures with MTI

	 	 	 
	 	12. 	 Establish Safety procedures

	 	 	 
	 	13. 	 Establish RFI procedures

	 	 	 
	 	14. 	 Establish monthly meeting dates

	 	 	 
	 	15. 	 Establish schedule of values

93Filed by Automated Filing Services Inc. (604) 609-0244 - Sterling Group Ventures, Inc. - Exhibit 10.1

EXHIBIT 10.1 2006 NON-QUALIFIED STOCK COMPENSATION
PLAN

2006 NON-QUALIFIED STOCK PLAN

	1. 	
      PURPOSE OF PLAN

	 	 	 
		1.1 	
      This 2006 NON-QUALIFIED STOCK COMPENSATION PLAN (the
      "Plan") of Sterling Group Ventures, Inc., a Nevada corporation (the
      "Company") for employees, directors and other persons associated with the
      Company, is intended to advance the best interests of the Company by
      providing those persons who have a substantial responsibility for its
      management and growth with additional incentive and by increasing their
      proprietary interest in the success of the Company, thereby encouraging
      them to maintain their relationships with the Company. Further, the
      availability and offering of common stock under the Plan supports and
      increases the Company's ability to attract and retain individuals of
      exceptional talent upon whom, in large measure, the sustained progress,
      growth and profitability of the Company depends.

	 	 	 
	2. 	
      DEFINITIONS

	 	 	 
		2.1 	
      For Plan purposes, except where the context might clearly
      indicate otherwise, the following terms shall have the meanings set forth
      below:

	 	 	 
			
      "Board" shall mean the Board of Directors of the
      Company.

	 	 	 
			
      "Committee" shall mean the Compensation Committee, or
      such other committee appointed by the Board, which shall be designated by
      the Board to administer the Plan, or the Board if no committees have been
      established. The Committee shall be composed of three or more persons as
      from time to time are appointed to serve by the Board. Each member of the
      Committee, while serving as such, shall be a disinterested person with the
      meaning of Rule 16b-3 promulgated under the Securities Exchange Act of
      1934.

	 	 	 
			
      "Common Shares" shall mean the Company's Common Shares,
      $.001 par value per share, or, in the event that the outstanding Common
      Shares are hereafter changed into or exchanged for different shares of
      securities of the Company, such other shares or securities.

	 	 	 
			
      "Company" shall mean Sterling Group Ventures, Inc., a
      Nevada corporation, and any parent or subsidiary corporation of Sterling
      Group Ventures, Inc., as such terms are defined in Sections 425(e) and
      425(f), respectively, of the Code.

	 	 	 
			
      "Common Stock" shall mean shares of common stock which
      are issued by the Company pursuant to Section 5,
below.

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	"Common Stockholder" means the employee of, consultant to, or director
      of the Company or other person to whom shares of Common Stock are issued
      pursuant to this Plan.
	 	 	 
		  
	"Common Stock Agreement" means an agreement executed by a Common Stockholder
      and the Company as contemplated by Section 5, below, which imposes on the
      shares of Common Stock held by the Common Stockholder such restrictions
      as the Board or Committee deem appropriate.
	 	 	 
	3. 	 ADMINISTRATION OF THE PLAN

	 	 	 
		3.1 	 The Committee shall administer the Plan and accordingly,
        it shall have full power to grant Common Stock, construe and interpret
        the Plan, establish rules and regulations and perform all other acts,
        including the delegation of administrative responsibilities, it believes
        reasonable and proper.

	 	 	 
		3.2 	 The determination of those eligible to receive Common
        Stock, and the amount, type and timing of each grant and the terms and
        conditions of the Common stock agreements shall rest in the sole discretion
        of the Committee, subject to the provisions of the Plan.

	 	 	 
		3.3 	 The Board, or the Committee, may correct any defect,
        supply any omission or reconcile any inconsistency in the Plan in the
        manner and to the extent it shall deem necessary to carry it into effect.

	 	 	 
		3.4 	 Any decision made, or action taken, by the Committee
        or the Board arising out of or in connection with the interpretation and
        administration of the Plan shall be final and conclusive.

	 	 	 
		3.5 	 Meetings of the Committee shall be held at such times
        and places as shall be determined by the Committee. A majority of the
        members of the Committee shall constitute a quorum for the transaction
        of business, and the vote of a majority of those members present at any
        meeting shall decide any question brought before that meeting. In addition,
        the Committee may take any action otherwise proper under the Plan by the
        affirmative vote, taken without a meeting, of a majority of its members.

	 	 	 
		3.6 	 No member of the Committee shall be liable for any act
        or omission of any other member of the Committee or for any act or omission
        on his own part, including, but not limited to, the exercise of any power
        or discretion given to him under the Plan, except those resulting from
        his own gross negligence or willful misconduct.

	 	 	 
		3.7 	 The Company shall furnish the Committee with such clerical
        and other assistance as is necessary in the performance of its duties
        hereunder and such other pertinent information as the Committee may require.

2

	4. 	
      SHARES SUBJECT TO THE PLAN

	 	 	 
		4.1 	
      The total number of shares of the Company available for
      grants of Common Stock under the Plan shall be three million (3,000,000)
      Common Shares, subject to adjustment in accordance with Article 7 of the
      Plan, which shares may be either authorized but unissued or reacquired
      Common Shares of the Company.

	 	 	 
	5. 	
      AWARD OF COMMON STOCK

	 	 	 
		5.1 	
      The Board or Committee from time to time, in its absolute
      discretion, may award Common Stock to employees of, consultants to, and
      directors of the Company, and such other persons as the Board or Committee
      may select. The owner of such Common Stock shall hold such stock subject
      to such vesting schedule as the Board or Committee may impose, as
      determined in the discretion of the Board or Committee.

	 	 	 
		5.2 	
      Common Stock shall be issued only pursuant to a Common
      Stock Agreement, which shall be executed by the Common Stockholder and the
      Company and which shall contain such terms and conditions as the Board or
      Committee shall determine consistent with this Plan, including such
      restrictions on transfer as are imposed by the Common Stock
    Agreement.

	 	 	 
		5.3 	
      Upon delivery of the shares of Common Stock to the Common
      Stockholder, below, the Common Stockholder shall have, unless otherwise
      provided by the Board or Committee, all the rights of a stockholder with
      respect to said shares, subject to the restrictions in the Common Stock
      Agreement, including the right to receive all dividends and other
      distributions paid or made with respect to the Common Stock.

	 	 	 
		5.4. 	
      Notwithstanding anything in this Plan or any Common Stock
      Agreement to the contrary, no Common Stockholders may sell or otherwise
      transfer, whether or not for value, any of the Common Stock prior to the
      date on which the Common Stockholder is vested therein.

	 	 	 
		5.5 	
      All shares of Common Stock issued under this Plan
      (including any shares of Common Stock and other securities issued with
      respect to the shares of Common Stock as a result of stock dividends,
      stock splits or similar changes in the capital structure of the Company)
      shall be subject to such restrictions as the Board or Committee shall
      provide, which restrictions may include, without limitation, restrictions
      concerning voting rights, transferability of the Common Stock and
      restrictions based on duration of employment with the Company, Company
      performance and individual performance; provided that the Board or
      Committee may, on such terms and conditions as it may determine to be
      appropriate, remove any or all of such restrictions. Common Stock may not
      be sold or encumbered until all applicable restrictions have terminated or
      expire. The restrictions, if any, imposed by the Board or Committee or the
      Board under this Section 5 need not be identical for all Common Stock and
      the imposition of any restrictions with respect to
any

3

			
      Common Stock shall not require the imposition of the same
      or any other restrictions with respect to any other Common
Stock.

	 	 	 
		5.6 	
      In the discretion of the Board or Committee, the Common
      Stock Agreement may provide that the Company shall have the a right of
      first refusal with respect to the Common Stock and a right to repurchase
      the vested Common Stock upon a termination of the Common Stockholder's
      employment with the Company, the termination of the Common Stockholder's
      consulting arrangement with the Company, the termination of the Common
      Stockholder's service on the Company's Board, or such other events as the
      Board or Committee may deem appropriate.

	 	 	 
		5.7 	
      The Board or Committee shall cause a legend or legends to
      be placed on certificates representing shares of Common Stock that are
      subject to restrictions under Common Stock Agreements, which legend or
      legends shall make appropriate reference to the applicable
      restrictions.

	 	 	 
	6. 	
      AMENDMENT AND TERMINATION OF PLAN

	 	 	 
		6.1 	
      The Board may at any time, and from time to time, suspend
      or terminate the Plan in whole or in part or amend it from time to time in
      such respects as the Board may deem appropriate and in the best interest
      of the Company.

	 	 	 
	7. 	
      MISCELLANEOUS PROVISIONS

	 	 	 
		7.1 	
      No person shall have any claim or right to be granted
      Common Stock under the Plan, and the grant of Common Stock under the Plan
      shall not be construed as giving a Common Stockholder the right to be
      retained by the Company.

	 	 	 
		7.2 	
      Any expenses of administering this Plan shall be borne by
      the Company.

	 	 	 
		7.3 	
      Without amending the Plan, grants may be made to persons
      who are foreign nationals or employed outside the United States, or both,
      on such terms and conditions, consistent with the Plan's purpose,
      different from those specified in the Plan as may, in the judgment of the
      Committee, be necessary or desirable to create equitable opportunities
      given differences in tax laws in other countries.

	 	 	 
		7.4 	
      In addition to such other rights of indemnification as
      they may have as members of the Board or the Committee, the members of the
      Committee shall be indemnified by the Company against all costs and
      expenses reasonably incurred by them in connection with any action, suit
      or proceeding to which they or any of them may be party by reason of any
      action taken or failure to act under or in connection with the Plan
      thereunder, and against all amounts paid by them in settlement thereof
      (provided such settlement is approved by independent legal counsel
      selected by the Company) or paid by them in satisfaction of a judgment in
      any such action, suit or proceeding, except a judgment based upon a
      finding of bad faith; provided that upon the institution of any such
      action, suit or proceeding a Committee member shall,
in

4

writing, give the Company notice
thereof and an opportunity, at its own expense, to handle and defend the same,
before such Committee member undertakes to handle and defend it on his own
behalf.

	Number of Shares:__________________ 	Date of Grant:____________________
  

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