EXHIBIT 10.10.5
OPERATION AND MAINTENANCE AGREEMENT
BY AND BETWEEN
NECO-BELLINGHAM, INC.
AS LESSEE
AND
WESTINGHOUSE OPERATING SERVICES COMPANY, INC.
AS OPERATOR
FOR THE
BELLINGHAM PROJECT
CARBON DIOXIDE RECOVERY FACILITY
DATED AS OF
MAY 1, 1995
TABLE OF CONTENTS
1.0 DEFINITIONS..................................................... 1
2.0 STATUS OF OPERATOR.............................................. 6
3.0 OPERATOR'S RESPONSIBILITIES..................................... 7
4.0 LESSEE'S RESPONSIBILITIES....................................... 12
5.0 PAYMENTS BY LESSEE.............................................. 13
6.0 TERM OF AGREEMENT............................................... 15
7.0 TERMINATION..................................................... 16
8.0 OPERATOR'S INDEMNITY............................................ 18
9.0 LESSEE'S INDEMNITY.............................................. 18
10.0 REPRESENTATIONS AND WARRANTIES................................. 19
11.0 FORCE MAJEURE.................................................. 20
13.0 DISPUTE RESOLUTION............................................. 22
14.0 LIMITATIONS OF LIABILITY....................................... 23
16.0 HAZARDOUS MATERIALS............................................ 25
17.0 PROPRIETARY INFORMATION........................................ 26
18.0 MISCELLANEOUS.................................................. 27
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EXHIBITS
Exhibit A Description of the Facility
Exhibit B Facility Work Force
Exhibit C Existing Inventory
Exhibit D Termination Payments
Exhibit E O&M Recordkeeping Requirements
Exhibit F Monthly Sum Breakdown
Exhibit G Daily Reports Provided to Lessee
Exhibit H Site Layout and Description
Exhibit I Sample of Monthly Report
Exhibit J Inspection Scheduling Guidelines
Exhibit K Escalation Formula
Exhibit L Carbon Dioxide Quality Specifications
Exhibit M Price List 1720
Exhibit N Westinghouse Electric Corporation Guaranty
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OPERATION AND MAINTENANCE AGREEMENT
THIS OPERATION AND MAINTENANCE AGREEMENT, dated as of May 1, 1995 (the
"Effective Date"), is by and between NECO-BELLINGHAM, INC. ("Lessee"), having a
place of business at 00000 Xxxx Xxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxx
00000, and WESTINGHOUSE OPERATING SERVICES COMPANY, INC., a Delaware corporation
("Operator"), having a place of business at 0000 Xxxxxxx Xxxxx, Xxxxxxx, Xxxxxxx
00000-0000.
W I T N E S S E T H
WHEREAS, the Facility (as hereinafter defined), located in Bellingham,
Massachusetts, is owned by Northeast Energy Associates, A Limited Partnership, a
Massachusetts limited partnership ("Owner");
WHEREAS, Lessee leases the Facility from Owner and operates the
Facility;
WHEREAS, Operator, by itself and through suppliers and subcontractors,
desires to provide certain operation and maintenance services for the Facility
to Lessee;
WHEREAS, Operator has experience in performing services required for
the operation and maintenance of the Facility; and
WHEREAS, Lessee and Operator now desire to set forth the terms
pursuant to which Operator shall provide services for the operation and
maintenance of the Facility.
NOW, THEREFORE, in consideration of the premises and the mutual
promises and agreements herein expressed, Lessee and Operator, intending to be
legally bound, hereby agree to the following:
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1.0 DEFINITIONS
1.1 CERTAIN DEFINED TERMS. As used herein and unless otherwise
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expressly indicated, the following terms shall have the following meanings (such
meanings to be equally applicable to both the singular and the plural forms of
the terms defined):
AFFILIATE shall mean any corporation or other entity that, directly or
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indirectly, controls or is controlled by or under common control with a Party.
AGREEMENT shall mean this Operation and Maintenance Agreement
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(including all Exhibits attached hereto), as it may be amended from time to time
in accordance with its terms.
BUDGET shall have the meaning specified in Article 3.9.
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CARBON DIOXIDE PURCHASE AGREEMENTS shall mean those certain agreements
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for the sale of carbon dioxide produced by the Facility (a) between Lessee and
Airco Carbon Dioxide Division of The BOC Group, Inc., dated as of December 21,
1990, and (b) between Lessee and Liquid Carbonic Carbon Dioxide Corporation,
dated as of December 21, 1990, each as the same may be amended or substituted
for from time to time.
CONTRACT PURCHASERS shall mean Airco Carbon Dioxide Division of The
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BOC Group, Inc., Liquid Carbonic Carbon Dioxide Corporation and such other
parties as may from time to time purchase carbon dioxide produced by the
Facility.
CHANGE ORDER shall have the meaning specified in Article 16.
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CONTRACT YEAR shall mean each of:
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1. the period from the Operation Date until December 31 of the same
calendar year; and
2. each consecutive full or partial calendar year thereafter ending
on or prior to the last Day of the Term.
Any calculation in this Agreement determined by reference to a
Contract Year shall be prorated with respect to a Contract Year of less than
three hundred sixty five (365) Days.
CONSUMABLES shall mean all items consumed or needing regular periodic
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replacement during the operation and maintenance of the Facility, including all
gaskets, seals, small tools, lubricants, rags, oils, filter media, greases,
chemicals, fluids, additives, anti-corrosion devices and other expendable
materials.
DAY shall mean a calendar day, unless otherwise specified. In the
---
event that a payment or regular reporting obligation or an optional notice
deadline falls or occurs due on a Saturday, Sunday or legal holiday in the
locality where the Work is being performed, the obligation or deadline shall be
deemed due or to occur on the next business Day thereafter.
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EFFICIENCY GUARANTEE shall mean consumption and makeup of MEA and
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copper, and costs for reclaimer sump waste disposal, in each case based on
quantities for which charges are incurred from third parties, in the operation
of the Facility at a rate per ton of aggregate Product output as hereinafter
adjusted not in excess of 3.75 pounds (undiluted equivalent)per ton, 17.5 pounds
(undiluted equivalent) per 1,000 tons, and 1.03 gallons per ton, respectively.
Aggregate Product output shall be adjusted for purposes of determining
compliance with the Efficiency Guarantee in respect of each Contract Year by
increasing the aggregate Product Output (computed as provided for in the Minimum
Product Output Guarantee) for such Contract Year by the number of tons of
Product extracted from flue gas but not placed in storage due to (i)
unavailability of contemporaneous storage for Product, (ii) events of Force
Majeure or (iii) Scheduled or Unscheduled Services on the liquefaction portion
(back end) of the Facility, or (iv) Lessee's direction.
FACILITY shall mean the Carbon Dioxide Recovery Facility located on
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the Site adjacent to the Power Plant, including raw material, product and
byproduct loading, unloading and storage facilities, and all auxiliary systems
and Facility Equipment necessary for the operation and maintenance of the same.
FACILITY CONTRACTS shall mean collectively the Carbon Dioxide Purchase
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Agreements, the Lease Agreement and the Steam Sales Agreement.
FACILITY EQUIPMENT shall mean collectively all equipment, machinery,
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apparatus, structures and other similar items required for the operation and
maintenance of the Facility.
FACILITY OPERATING PROCEDURES shall mean the procedures for the
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operation of the Facility production process included as part of the Site
Procedures, including any such procedures specified in the operation and
maintenance manuals and standard operating procedures for the Facility provided
by the contractor and any equipment supplier therefor and the most recent
revision of the MEA solution operating guidelines.
FACILITY TOOLS shall mean collectively all tools required for the
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operation and maintenance of the Facility.
FACILITY WORK FORCE shall mean the individuals required for the
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operation and maintenance of the Facility and performance of all services and
other obligations of Operator under this Agreement, whether provided directly or
through Subcontractors. Operator's proposed organizational structure of the
Facility Work Force that will operate the Facility and provide Routine Services
(all of whom shall be employees of Operator) are set forth in Exhibit B,
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provided, however, that Exhibit B shall not have the effect of limiting in any
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respect the scope of Operator's obligation to provide services to carry out the
Work, including operation and Routine Services.
FINANCING ENTITY shall mean any bank, financial institution or other
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person or entity providing development, construction or permanent financing or
refinancing for the development, construction or operation of the Facility or
the Power Plant or matters related thereto. The term Financing Entity shall
include entities providing financing to Owner and entities providing financing
in connection with a lease of the Facility.
FINANCING AGREEMENTS shall mean the promissory notes, loan agreements,
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guarantees, assignments, security agreements, mortgages, and other agreements
among Lessee and/or Owner and any Financing Entity.
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FORCE MAJEURE shall have the meaning specified in Article 11.1.
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GOVERNMENTAL REQUIREMENTS shall mean all applicable federal, state,
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county, municipal and administrative laws and regulations and any rulings,
interpretations, orders, codes and standards promulgated thereunder.
HAZARDOUS MATERIALS shall mean (a) asbestos, (b) any "hazardous
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substance" as defined in the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended (42 U.S.C. Sections 9601, et seq.), or the
Hazardous Materials Transportation Act, as amended (49 U.S.C. Sections 1801, et
seq.), (c) "hazardous wastes" as defined in the Resource Conservation and
Recovery Act, as amended (42 U.S.C. Sections 9601, et seq.), and (d) "toxic
substances" as defined in the Toxic Substance Control Act as amended (15 U.S.C.
Section 2601 et seq.), in the regulations adopted and publications promulgated
pursuant thereto or in any other federal, state or local environmental
Governmental Requirements.
INTEREST RATE shall mean the lesser of:
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(a) the reference rate of The Chase Manhattan Bank, N.A. in effect on
the date payment is due plus one percent (1%); or
(b) the maximum non-usurious interest rate under applicable law.
LEASE AGREEMENT shall mean that certain agreement for the lease of the
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Facility between Owner and Lessee, dated as of June 28, 1989, as the same may be
amended or substituted for from time to time.
LESSEE shall mean NECO-Bellingham, Inc. and its successors and
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assigns.
MAJOR MAINTENANCE BUDGET shall mean that portion of the Budget
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contemplated by Article 3.9(b).
MEA shall mean Monoethanolamine
MINIMUM PRODUCT OUTPUT GUARANTEE for any Contract Year shall mean
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production in such Contract Year of a number of tons of Product equal to (a) one
hundred twelve thousand five hundred (112,500) reduced by (b) tons of Product
not produced during such Contract Year (as hereafter determined) because of any
complete or partial interruption in the Facility's production due exclusively to
(i) unavailability of electricity, steam and flue gas from at least one
combustion turbine operating on natural gas in the Power Plant, (ii)
unavailability of contemporaneous storage for Product, (iii) events of Force
Majeure or, (iv)Lessee's direction.
Production in any Contract Year shall be deemed to equal the sum of
the Product output for each Day of the Contract Year, calculated for each such
Day as follows:
Product output = (CI - OI) + S
Where:
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CI = Total Product inventory in all storage tanks as of 24:00 hrs
(end of Day).
OI = Total Product inventory in all storage tanks as of 00:00 hrs
(beginning of Day).
S = Total of Product shipped for the Day.
Tons of Product not produced in any Contract Year shall be deemed to
equal the sum of the tons of Product not produced for each Day in such Contract
Year on which any such interruption occurs, calculated for each such Day as
follows:
Product not produced = (AP / D) - DP
Where:
AP = Aggregate Product output for all Days in such Contract Year on
which no interruption occurs.
D = The number of Days in such Contract Year on which no interruption
occurs.
DP = Daily Product output for such Day.
MONTHLY SUM shall have the meaning specified in Article 5.2.
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OPERATION DATE shall mean July 1, 1995.
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OPERATOR shall mean Westinghouse Operating Services Company, Inc. and
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its permitted successors hereunder.
OWNER shall mean Northeast Energy Associates, A Limited Partnership,
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and its successors and assigns.
PARTY and PARTIES shall mean Operator and/or Lessee, as applicable.
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PAYMENT REQUEST shall mean the periodic written requests for payment
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to be submitted by Operator to Lessee in accordance with Article 5.
PERMIT shall mean any approval, certificate, permit, license or the
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like required for the relevant matter under applicable Governmental
Requirements.
PLAN OF OPERATIONS shall mean Lessee's written instructions to
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Operator issued pursuant to Article 4.1.
PLANT MANAGER shall mean the individual from time to time designated
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by Operator, and approved by Lessee, pursuant to Article 3.11.
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POWER PLANT shall mean the Bellingham Cogeneration Facility owned by
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Owner and located adjacent to the Facility.
PRODUCT shall mean liquid carbon dioxide meeting the minimum purity
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requirements set forth on Exhibit L.
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PROJECT ADMINISTRATOR shall mean the person or persons designated by
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Lessee pursuant to Article 4.2.
PRUDENT PRACTICES shall mean those, operating, maintenance,
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engineering and other practices and methods, as such may be changed from time to
time, that will result in the operation and maintenance of the Facility as
efficiently, safely, economically and reliably as is prudent under prevailing
industry practices and in compliance with the Agreement.
QUALIFYING FACILITY OBJECTIVE shall mean the use by the Facility in
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the production of Product of not less than five percent (5%) of the "total
energy output" of the Power Plant as defined by [18 C.F.R. Section 292.202(i)]
for the entire Contract Year. The total energy output for a Contract Year shall
be determined by means of actual measured flows, temperatures and pressures by
the steam and condensate return custody meters and instrumentation at the Power
Plant.
ROUTINE SERVICES shall mean services that can reasonably be expected
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to be performed in the course of performance of Operator's operation and
maintenance duties identified in Article 3, including services of a regular or
minor nature that should be performed routinely to keep the Facility in good
working order, such as lubrication, repacking of valves, minor leak repair,
adjustments, calibrations and preventive and corrective services and regular
maintenance not requiring a complete or partial interruption in the Facility's
production for the performance thereof, and managerial oversight for Unscheduled
Services and the implementation of the Major Maintenance Budget, all to the
extent required by and in accordance with the standards provided in Article
3.32(a) through (f).
SAFETY AND SECURITY PROGRAM shall mean Operator's safety and security
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program contemplated by Article 3.13.
SCHEDULED OUTAGE shall mean a planned complete or partial interruption
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in the Facility's production that:
(a) has been coordinated in advance with Lessee and the Power Plant
with a mutually agreed upon start time and date and expected duration; and
(b) is required for Scheduled Services.
SCHEDULED SERVICES shall mean the planned periodic inspection,
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testing, preventive and corrective servicing and maintenance, overhaul and
repair of the Facility requiring a complete or partial interruption in the
Facility's production for the performance thereof, all to the extent required by
and in accordance with the standards provided in Article 3.3(a) through (f).
Replacement of pumps, parts, compressors, motors, vessels and other major
Facility components, in each case having a component capital or repair cost in
excess of $25,000, shall not constitute Scheduled Services.
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SCOPE CHANGE shall mean all work, including those matters contemplated
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by Article 3.7, falling outside the scope of Work described in this Agreement,
as authorized by a Change Order.
SITE shall mean the site where the Facility is located as described in
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Exhibit H.
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SITE PROCEDURES shall mean the procedures established pursuant to
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Article 3.23 that prescribe the manner in which Work will be performed at the
Site.
SPARE PARTS shall mean all necessary or appropriate spare parts for
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the Facility.
STEAM SALES AGREEMENT shall mean that certain agreement for the sale
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of steam produced by the Power Plant between Owner and Lessee, dated as of June
28, 1989, as the same may be amended or substituted for from time to time.
SUBCONTRACTOR shall mean any party with whom Operator enters into a
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subcontract or otherwise arranges for the performance of any portion of the
Work.
TERM shall have the meaning provided in Article 6.1.
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TRAINING PROGRAM shall mean Operator's training program for its
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personnel responsible for operation and maintenance of the Facility as
contemplated by Article 3.24.
UNSCHEDULED OUTAGE shall mean a complete or partial interruption in
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the Facility's production that is required for Unscheduled Services.
UNSCHEDULED SERVICES shall mean those services not defined as Routine
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Services or Scheduled Services or included under Article 3.9(b). Replacement of
pumps, parts, compressors, motors, vessels and other major Facility components,
in each case having a component capital or repair cost less than $25,000, shall
not constitute Unscheduled Services.
WORK shall mean all of Operator's obligations and responsibilities
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under this Agreement.
1.2 ACCOUNTING TERMS. All accounting terms not specifically defined
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herein shall be construed in accordance with generally accepted accounting
principles consistently applied, except as otherwise stated herein. References
to quantities of Product shall be deemed to be expressed in tons (2,000 pounds)
unless otherwise specified.
1.3 GENERAL REFERENCES. The words "hereof," "herein," "hereto" and
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"hereunder" and words of similar import when used in this Agreement shall,
unless otherwise specified, refer to this Agreement as a whole and not to any
particular provision of this Agreement.
2.0 STATUS OF OPERATOR
2.1 INDEPENDENT CONTRACTOR. Operator shall perform and execute its
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obligations under this Agreement as an independent contractor to Lessee, and
shall, as between Operator and Lessee, be responsible for all employment
relations, including payroll and other taxes and other costs associated with,
all individuals performing any portion of the Work (including any such
individuals employed by or
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otherwise engaged by any Subcontractor). No such individual shall be deemed to
be an employee or agent of Lessee.
3.0 OPERATOR'S RESPONSIBILITIES
3.1 GENERAL SCOPE. Operator shall commence operation and maintenance
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of the Facility on the Operation Date, and on such date shall assume full
responsibility for the scope of the Work as provided herein. The intent of the
foregoing is to require the provision by Operator, in exchange for the fixed and
variable payments provided for in Article 5, of a full complement of equipment,
materials, supplies and services, such that no other equipment, materials,
supplies or services will be required for the proper functioning of the
Facility, and to include within the Work both those matters that are
specifically addressed herein and also those that would reasonably be expected
to be performed or provided in order to achieve the foregoing. By way of
illustration, the obligation to "operate" the Facility shall be deemed also to
include the obligation to provide any equipment, materials, supplies or services
necessary for the startup and shutdown of the Facility.
3.2 OPERATION. Without limiting the generality of the foregoing,
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Operator shall operate the Facility so as to achieve the Minimum Product Output
Guarantee while meeting the limits of the Efficiency Guarantee and complying
with Governmental Requirements, the Site Procedures, Prudent Practices,
applicable operating requirements of the Facility Contracts, the Plan of
Operations and Lessee's reasonable directions that are consistent with the
foregoing. Operator shall also maintain metering equipment and records with
respect to all process chemicals and Consumables usage, all process emissions
and discharges and all Product deliveries. The Facility shall be staffed for
continuous operation twenty four (24) hours per Day, three hundred sixty five
(365) Days per Contract Year.
3.3 MAINTENANCE AND REPAIR SERVICES. Operator shall perform all Routine
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Services, Scheduled Services and Unscheduled Services, and implement all items
contemplated by the Major Maintenance Budget, each in accordance with the
standards provided in Article 3.3 (a) through (f), and shall provide all
equipment, materials, supplies and services necessary to accomplish the same,
either directly or through Subcontractors. Without limiting the generality of
the foregoing,
(a) Operator shall utilize and maintain a formal predictive,
preventive and corrective maintenance management system capable of documenting
all maintenance that is required, planned and completed. The system shall
utilize work orders and provide and maintain a list of Spare Parts availability,
Facility Equipment history and other details customarily collected with respect
to facilities similar to the Facility;
(b) Operator shall implement and periodically update a plan of
Scheduled Services for the Facility, including outage planning, execution and
coordination, technical supervision, labor, tooling and equipment, and
inspection reports and recommendations, subject to Lessee's approval, which
approval shall not be unreasonably withheld. The plan of Scheduled Services
shall include an inspection, not less than annually, of the interiors of all
major Facility vessels. The Parties shall mutually develop the plan of Scheduled
Services consistent with the scheduling requirements of the Power Plant and the
Contract Purchasers;
(c) Operator shall maintain a set of marked-up As-built drawings at
the Site showing any modifications made to the Facility (which modifications in
all cases shall be subject to Lessee's and Owner's approval as provided in
Article 15). Operator will update drawings at the Site as requested by Owner in
accordance with a Change Order;
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(d) Corrosion probe measurements shall be obtained daily.
Abnormalities shall be reported promptly to Lessee and resolved expeditiously. A
quarterly report containing a graphical representation of the corrosion probe
data and the calculated corrosion rate in mils/yr. for each test point will be
provided to Lessee by Operator;
(e) Operator shall provide reasonable home office project support,
including personnel management and administration, engineering, technical,
environmental, regulatory and training and other support, required for the
performance of the Work; and
(f) Operator shall provide accounting services as necessary to
formulate, monitor and report on the Budget.
Unscheduled Services requiring replacement of pumps, parts,
compressors, motors, vessels and other major Facility components, in each case
having a component capital or repair cost in excess of $25,000, shall (unless
and to the extent attributable to negligence of Operator) be performed pursuant
to a Change Order. The Facility shall be returned to Lessee at the end of the
Term in good working condition.
3.4 PROCUREMENT. Operator shall procure all equipment, materials,
supplies and services required for the operation and maintenance, including
Routine Services, Scheduled Services and Unscheduled Services, of the Facility
or otherwise for the performance of the Work. Operator shall make appropriate
provisions for inspection, acceptance and/or return of goods and services
delivered or provided, and shall be responsible for settling any quality
disputes with vendors.
Operator shall purchase MEA from a vendor designated by Lessee,
provided it is available at arms length fair market pricing and markups and
commissions not in excess of historical practices at the Facility.
3.5 SUBCONTRACTORS. Operator shall be responsible for the acts and
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omissions of all Subcontractors, if any, used by Operator in the performance of
the Work and, as between Operator and Lessee, any act or omission of any
Subcontractor shall be deemed to be an act or omission of Operator. Operator
shall be responsible for the implementation and coordination of the work of each
Subcontractor consistent with the standards provided in Article 3.3(a) through
(f). Operator will use reasonable efforts to include in subcontracts entered
into by Operator provisions permitting simultaneous termination without accrual
of subsequent charges in the event that this Agreement is terminated or expires
pursuant to its terms.
3.6 INVENTORY. Operator shall maintain on Site an inventory of Facility
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Equipment, Spare Parts, Facility Tools and Consumables adequate to support
continuous and successful operation of the Facility. A current inventory of
Facility Equipment, Spare Parts, Facility Tools and Consumables shall be
supplied by Lessee to Operator thirty (30) Days prior to the Operation Date. A
periodic inventory report shall be provided by Operator to Lessee in accordance
with the Site Procedures. At the end of the Term Operator shall return to Lessee
an inventory of Facility Equipment, Spare Parts, Facility Tools and Consumables
substantially equivalent to that contained in the inventory made available to
Operator on the Operation Date.
3.7 CHANGES. Operator shall periodically identify and make
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recommendations to Lessee and Owner with regard to changes, capital
improvements, modifications and upgrades to enhance the operation
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of the Facility. Any such change, improvement, modification or upgrade shall be
implemented pursuant to the Change Order procedures provided in Article 15.
3.8 COORDINATION. Operator shall be responsible for routine coordination
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and interface with the parties to the Facility Contracts and local agencies,
such as fire and police departments, as required for the operation and
maintenance of the Facility, subject to any direction with respect to the same
by Lessee. Operator shall arrange for loading of Product by contract purchaser's
driver into the Contract Purchasers' trucks. Operator shall maintain a
Production, Shipping and Inventory log and transmit a copy to Lessee and each
Contract Purchaser by 7:30 A.M. each Day. Operator will notify the Contract
Purchasers of any circumstances that would limit Product availability over the
following seventy two (72) hours within two (2) hours of the time that such
circumstances occur.
3.9 BUDGET. On or before May 15, 1995, and on or before each September 30
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thereafter, Operator shall submit to Lessee a detailed budget for the next
Contract Year (the "Budget") and a general budget projection for the next five
calendar years, in each case setting forth, the following:
(a) the proposed amounts to be spent annually as delineated in
Exhibit F;
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(b) the proposed amount to be spent annually for servicing, overhaul
and repair of the Facility required as a result of the exhaustion of the useful
life of pumps, compressors, motors, vessels and other major Facility components,
in each case having a component capital or repair cost in excess of $25,000, all
to the extent required by and in accordance with the standards provided in
Article 3.3(a) through (f). Such amount shall not include the cost of Routine
Services and Scheduled Services to be performed during such Contract Year,
and
(c) an allowance of $75,000 for Unscheduled Services to be performed
during such Contract Year; provided however that the foregoing allowance shall
be subject to annual prospective adjustment in the event that the operating
experience demonstrates that such allowance is insufficient or excessive.
The Budget and the five year general budget projection shall be subject to the
reasonable review and approval by Lessee. Any dispute as to the approval of the
same shall be subject to resolution pursuant to the binding arbitration
provisions of Article 13, notwithstanding the dollar limits otherwise applicable
to disputes under that Article. During the pendency of any such arbitration,
Lessee shall provide funding under Article 5 on the basis provided in the
general budget projection previously approved for the applicable Contract Year,
subject to retroactive adjustment to the Budget determined through such
arbitration.
3.10 REPORTS BY OPERATOR. Operator shall provide summary reports to
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Lessee on a daily basis in accordance with Exhibit G. Within five (5) Days
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after the end of each calendar month of operations, Operator shall deliver a
report summarizing the Facility production for the previous month. Within
fifteen (15) Days after the end of each calendar month of operations, Operator
shall deliver a report, substantially in the form provided in Exhibit I,
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summarizing in detail the Work performed during such month. Operator shall
advise Lessee of any Unscheduled Outage as soon as possible and in no event
later than two (2) hours after commencement. Any material modification or
repair to the Facility necessitated by or required to conclude an Unscheduled
Outage shall be reported to Lessee. Within fifteen (15) Days after the
conclusion of any Unscheduled Outage, Operator shall deliver a report to Lessee
describing the nature of the Unscheduled Outage and detailing any remedial
measures undertaken to correct such Unscheduled Outage. Further, within ninety
(90) Days after the conclusion of any Unscheduled Outage Operator shall deliver
a report to Lessee detailing the most probable cause or causes of any
Unscheduled Outage, any remedial
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measures recommended to minimize future Unscheduled Outages and the incremental
cost of such remedial actions, if not of a nature (such as proper training of
the Facility Work Force or modification of Site procedures) within the scope of
operation and Routine Services and Scheduled Services hereunder. Operator shall
provide such additional information and prepare such additional reports, notices
and other communications with respect to Operator's performance of Work
hereunder as Lessee may reasonably request.
3.11 PLANT MANAGER. Operator shall designate a Plant Manager to supervise
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the performance of the Work, represent and act on behalf of Operator and receive
communications from Lessee. The designation and replacement of the Plant Manager
shall be subject to the reasonable approval of Lessee and Owner, and the Plant
Manager shall be removed and replaced by Operator if requested for reasonable
cause by Lessee or Owner. The Plant Manager shall act on behalf of Operator as
the principal interface with Lessee and Owner.
3.12 TAXES AND EMPLOYEE COSTS. Operator shall pay all income, payroll,
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employment, unemployment, ERISA and other taxes, benefits, insurance, sick
leave, holidays, vacation, pensions and other costs or expenses associated with
or relating to its personnel and all sales and use taxes, if any, related to the
Work. As between Operator and Lessee, Operator shall be responsible for the
payment of all of the foregoing with respect to employees of Subcontractors.
3.13 SAFETY. Operator shall execute the Work and conduct its operations
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at the Site, and limit access and maintain Site and Facility security in
compliance with the safety requirements of all Governmental Requirements, the
Site Procedures and Prudent Practices. Operator shall review and modify the
existing Safety and Security Program on an ongoing basis as part of Routine
Services, so as to maintain it at all times in accordance with the standards
provided in Article 3.3(a) through (f). In the event it becomes necessary to
amend or modify the Safety and Security Program, Operator shall prepare and
deliver to Lessee any amendment or modification to the Safety and Security
Program promptly after making such amendment or modification. Operator shall be
responsible for implementing and managing the Safety and Security Program.
Operator shall designate a qualified safety and security representative to
implement all activities outlined in the Safety and Security Program and direct
its personnel to take all precautions necessary or appropriate to protect
against and prevent injury or damage to personnel and property. Operator shall
provide Lessee with notice (including a copy of any accident report) within
twenty four (24) hours after the occurrence, of any material accident or injury
on Site, including any as to which notice is required to any governmental entity
under Governmental requirements or to the insurance carrier under any insurance
coverage maintained by either party under Article 12.
3.14 EMERGENCIES. In the event of any emergency that involves the
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Facility and endangers human safety or property, Operator shall take such action
as may be reasonable and necessary to prevent, avoid, or mitigate injury, damage
or loss and shall as soon as practicable:
(a) report any such incidents, including Operator's response thereto,
to Lessee;
(b) contact Lessee if further action is required; and
(c) provide a written report of the incident and Operator's response
to Lessee within forty eight (48) hours after the end of the emergency.
10
3.15 GOVERNMENT REQUIREMENTS. Operator shall operate and maintain the
------------------------
Facility and perform all of its other obligations hereunder in accordance with
all applicable Governmental Requirements. Operator shall promptly notify Lessee
of any deficiencies or compliance requirements relating to Governmental
Requirements necessary for the continuous operation of the Facility in
accordance herewith. Further, as changes take effect, or when Operator becomes
aware of changes or potential changes in such Governmental Requirements,
Operator shall advise Lessee thereof. Lessee shall provide Operator with copies
of all permits held as of the Operation Date, and all modifications or
replacements of the same promptly after issuance thereof.
3.16 PERMITS. Operator shall obtain and maintain all Permits, including
--------
those relating to engineering, crafts, safety and health, to enable it to
perform the Work in accordance with all Governmental Requirements, with the
exception of Permits, such as building Permits, certificates of occupancy and
environmental emission and discharge Permits, required by the fundamental nature
of the Facility rather than the operation thereof. Each Party shall provide
reasonable assistance to the other in obtaining and maintaining in effect all
Permits required to be obtained and maintained by the other hereunder.
3.17 LESSEE'S ACCESS. To the extent such access does not have a material
----------------
adverse effect on Operator's ability to execute the Work, Operator shall provide
unrestricted access to the Facility and to the Site to:
(a) Lessee and Owner and their respective designees, and, upon
Owner's request, Financing Entity and its designees; and
(b) parties providing goods and services to the Facility on behalf of
Lessee or Owner, including for purposes of Unscheduled Services and changes
contemplated by Article 3.7 to the extent not to be performed by Operator
hereunder.
Lessee, Owner and Financing Entity, or their respective designees, shall have
the right during regular business hours on reasonable advance notice to examine
and audit the books and records of or relating to Facility operations and
maintenance maintained at the Site. Lessee shall also at it's expense be
entitled to conduct an audit of all payment adjustments as contemplated under
Article 5.3, Budget Adjustments, and payments made to Operator hereunder on a
time and materials basis.
3.18 RECORDS. Operator shall maintain records relating to the operation
--------
and maintenance of the Facility consistent with the requirements of Exhibit E,
---------
all Governmental Requirements and the requirements related to records contained
in the Facility Contracts, and retain such records at the Site, or such off-Site
location as may be mutually agreed upon by the Parties, for a minimum period of
five (5) years and otherwise as required by applicable Governmental
Requirements, provided that Operator shall not dispose of or destroy any such
records even after said five (5) years without first providing Lessee ninety
(90) Days notice. Where Lessee is required by the Facility Contracts or by
applicable Governmental Requirements to retain records for a longer period of
time, or where records relate to disputes, appeals, arbitration, litigation or
the settlement of claims arising out of the performance of this Agreement, such
records shall be maintained by Operator for the time period requested in a
written notification from Lessee which states the amount of time needed over and
above the normal five (5) year retention period for the resolution of the matter
giving rise to the longer retention requirement. Lessee, Owner and their
respective designees shall be provided with reasonable access to such records.
11
3.19 INSURANCE. Operator shall provide and maintain the insurance
----------
coverage and limits described in Article 12.1. In addition, Operator shall make
reasonable efforts to assist Lessee in procuring the insurance coverages and
limits described in Article 12.2 of this Agreement.
3.20 HAZARDOUS MATERIALS. Any Hazardous Materials shall be handled and
--------------------
disposed of in accordance with Article 16.
3.21 TITLE. Operator shall retain title to any equipment, materials,
------
supplies, and services purchased by Operator and not installed in the Facility;
provided, however, title to any equipment, materials, supplies and services that
are purchased for performance of Work by Operator under a Change Order shall
pass directly to Lessee upon payment by Lessee, and Operator shall indemnify
Lessee and Owner against any mechanics or other liens imposed with respect to
equipment, materials, supplies or services provided to the Facility as part of
the performance of the Work.
3.22 FACILITY OPERATING PROCEDURES. Operator shall review and modify
------------------------------
the existing Facility Operating Procedures on an ongoing basis as part of
Routine Services, so as to maintain them at all times in accordance with the
standards provided in Article 3.23(a) through (f). Operator shall be
responsible for implementing and managing the Facility Operating Procedures. In
the event it becomes necessary to amend or modify the Facility Operating
Procedures, Operator shall prepare and deliver to Lessee any amendment or
modification to the Facility Operating Procedures promptly after making such
amendment or modification.
3.23 SITE PROCEDURES. Operator shall review and modify the existing
----------------
Site Procedures on an ongoing basis as part of Routine Services, so as to
maintain them at all times in accordance with the standards provided in Article
3.23(a) through (f). Operator shall be responsible for implementing and
managing the Site Procedures. In the event it becomes necessary to amend or
modify the Site Procedures, Operator shall prepare and deliver to Lessee any
amendment or modification to the Site Procedures promptly after making such
amendment or modification.
3.24 PERSONNEL TRAINING. Operator shall review and modify the existing
-------------------
Training Plan on an ongoing basis as part of Routine Services, so as to maintain
it at all times in accordance with the standards provided in Article 3.3(a)
through (f). Operator shall be responsible for implementing and managing the
Training Plan. In the event it becomes necessary to amend or modify the Training
Plan, Operator shall prepare and deliver to Lessee any amendment or modification
to the Training Plan promptly after making such amendment or modification. The
Facility Work Force shall be trained pursuant to such Training Program.
3.25 FACILITY AND SITE UPKEEP. Operator shall perform all touch-up and
-------------------------
other incidental painting, cleaning and other cosmetic maintenance of Facility
structures and equipment, and all Site snow removal, landscaping and other
grounds maintenance.
4.0 LESSEE'S RESPONSIBILITIES
4.1 DIRECTION AND CONTROL. Lessee shall formulate a Plan of Operations
---------------------
for the Facility from time to time, specifying Lessee's requirements for the
operation schedule and other operating objectives, within the limits of the
terms of this Agreement, the Facility Contracts, Prudent Practices, Governmental
Requirements and the technical capability of the Facility.
12
4.2 LESSEE'S REPRESENTATIVE. Lessee shall designate a Project
------------------------
Administrator to represent and act on behalf of Lessee and receive
communications from Operator. Notification of changes in the Project
Administrator shall be provided to Operator in a timely manner. The Project
Administrator shall be responsible for representing Lessee's interests in the
day-to-day operations and maintenance affairs of the Facility. The
Project Administrator shall also be responsible for specifying to Operator
Lessee's requirements as to the operating schedule and other operating
objectives in accordance with Article 4.1. The Project Administrator shall act
on behalf of Lessee as the principal interface with Operator.
4.3 PAYMENT. Lessee shall make timely payments of sums due and payable to
--------
Operator pursuant to Article 5 of this Agreement.
4.4 COPIES OF EXISTING PROCEDURES AND PROGRAMS. At least sixty (60) Days
-------------------------------------------
before the Operation Date, Lessee shall give Operator copies of the existing
Safety and Security Program, Site Procedures, Facility Operating Procedures and
Training Program. Lessee makes no representation as to the adequacy or
comprehensiveness of any of the foregoing.
4.5 AVAILABILITY OF INFORMATION. Lessee shall make available to Operator
----------------------------
such operation and maintenance manuals, as-built drawings, specifications,
warranties, diagrams, test results and all other documents and information as
are available to Lessee relating to the operation and maintenance of the
Facility. To the extent such information is designated as confidential, Operator
shall maintain it in accordance with the terms of Article 19.
4.6 PERMITS. Lessee (directly or through Owner) shall obtain and maintain
--------
all Permits, such as building Permits, certificates of occupancy and
environmental emission and discharge Permits, required by the fundamental nature
of the Facility rather than the operation thereof.
4.7 TAXES. Lessee shall pay any duty or tax, other than taxes for which
------
Operator is responsible under Article 3.12, as may arise out of or relate to the
operation of the Facility.
4.8 INSURANCE. Lessee shall provide and maintain the insurance coverages
----------
and limits described in Article 12.2 of this Agreement.
4.9 COPIES OF FACILITY CONTRACTS. Lessee shall provide true, correct
-----------------------------
and complete copies of the Facility Contracts to Operator on or before the
Effective Date and any amendments to such agreements promptly after execution.
4.10 MISCELLANEOUS FACILITIES. Lessee shall provide and make available to
-------------------------
Operator the existing Facility, including offices, storage facilities, unloading
docks, maintenance facilities, restrooms, space for food vending machines,
kitchen facilities, computers and other office equipment and other
accommodations for Operator's use in performing the Work.
4.11 UTILITIES. Lessee shall, without charge, provide Operator with
----------
electricity within the limits provided in the Lease Agreement, steam within the
limits provided in the Steam Sales Agreement, demineralized water and flue gas
from the Power Plant. Operator shall use its best efforts to minimize the use
of these items in accordance with the standards provided in Article 3.3(a)
through (f).
5.0 PAYMENTS BY LESSEE
13
5.1 GENERAL. In full satisfaction of its obligations to Operator in
--------
consideration of Operator's performance of the Work, Lessee shall make the
payments to Operator provided in this Article 5, with such periodic adjustments
to be made between the Parties as is provided herein.
5.2 MONTHLY SUM. Lessee shall pay the Operator a fixed monthly fee,
------------
accruing commencing on the Operation Date, of $250,000, prorated in respect of
any partial month and escalated during the Term in accordance with the
escalation formula contained in Exhibit K (each such monthly payment shall be
---------
referred to as the "Monthly Sum"). Each Monthly Sum shall be paid by Lessee
within thirty (30) Days after receipt of a Payment Request therefor submitted by
Operator to Lessee following the month in respect of which payment is sought.
The Monthly Sum is in consideration of all goods and services to be provided
hereunder except as expressly set forth herein.
5.3 BUDGET ADJUSTMENTS. The Monthly Sum includes an estimated allocable
-------------------
portion of the cost of process chemicals and waste disposal for the applicable
Contract Year based on the Budget for such Contract Year. To the extent that the
Facility meets the Minimum Product Output Guarantee in any Contract Year, and
the actual aggregate cost of chemicals and waste disposal for such Contract
Year:
(a) exceeds one hundred ten percent (110%) of the aggregate Budget
amount for the same, Lessee shall reimburse Operator for the amount in excess of
one hundred ten percent (110%), which reimbursement request shall be included as
part of the Payment Request in respect of the first month of the following
Contract Year; or
(b) is less than ninety percent (90%) of the aggregate Budget amount
for the same, Operator shall refund to Lessee fifty percent (50%) of the amount
under ninety percent (90%), which refund shall be offset against Payment
Requests next coming due, or paid by Operator to Lessee concurrently with any
termination of this Agreement.
For purposes of the foregoing, the actual aggregate cost of chemicals and waste
disposal for any Contract Year shall exclude the cost associated with usage
rates per ton of Product of produced in excess of the Efficiency Guarantee for
the items covered thereby, but shall give effect to any cost increases during
such Contract Year in the unit rate for such items over that assumed in the
Budget.
5.4 MAJOR MAINTENANCE EXPENDITURES. Lessee shall reimburse the Operator
-------------------------------
for expenditures made in the prior month in accordance with the Major
Maintenance Budget, which reimbursement request shall be included as part of the
Payment Request in respect of such month. Payment Requests under this Article
5.4 shall include such expenditure documentation and backup as may be reasonably
requested by Lessee. Omissions, additions and other deviations from the Major
Maintenance Budget shall require a Change Order pursuant to Article 15.
5.5 CHANGE ORDERS. Lessee shall pay Operator with respect to Change
--------------
Orders on a lump sum or periodic basis as specified in the particular Change
Order. For Change Orders, if any, performed on a time and materials basis, the
Payment Request shall be accompanied by an itemization of the expenditures
covered by the Payment Request and the dollar amount of each item. Payment
Requests under this Article 5.5 shall include such expenditure documentation and
backup as may be reasonably requested by Lessee. All Change Orders shall be
handled in accordance with Article 15.1.
5.6 BONUS. Operator shall be entitled to a bonus payment (the "Bonus") in
------
respect of each Contract Year determined on the following basis:
14
(a) The maximum Bonus in respect of each Contract Year shall be
$300,000, escalated during the Term in accordance with the escalation formula
contained in Exhibit K and prorated for any Contract Year of less than three
---------
hundred and sixty five (365) Days.
(b) No portion of the Bonus shall be earned in respect of any
Contract Year unless the Qualifying Facility Objective is achieved for such
Contract Year.
(c) Fifty percent (50%) of the maximum Bonus in respect of any
Contract Year shall be earned in the event that the Qualifying Facility
Objective is achieved for such Contract Year.
(d) The remaining fifty percent (50%) of the maximum Bonus in respect
of any Contract Year shall be earned in the event that the Minimum Product
Output Guarantee is achieved for such Contract Year.
(e) Notwithstanding the foregoing, the aggregate amount of Bonus
earned pursuant to Article 5.6(c) and (d) in respect of any Contract Year shall
be reduced, by not more than fifty percent (50%) of such aggregate amount, on a
dollar for dollar basis, by the amount, if any, payable by Lessee to Operator in
excess of amounts provided in Article 3.9(b) and 3.9(c) for such Contract Year.
The Bonus shall be payable within thirty (30) Days after the end of the
applicable Contract Year.
5.7 INTEREST ON LATE PAYMENTS. Any amounts not disputed in good faith and
--------------------------
not timely paid to Operator in accordance with this Article 5 shall accrue
interest from the fifth (5th) Day following the Day on which such amounts become
due and owing to the Day on which such amounts and the interest thereon are paid
to Operator at the Interest Rate.
5.8 INSURANCE. Operator shall be responsible for the payment of premiums
----------
on insurance obtained pursuant to Article 12.1. Lessee shall be responsible for
the payment of premiums on insurance obtained pursuant to Article 12.2.
6.0 TERM OF AGREEMENT
6.1 TERM. This Agreement shall become effective as of the Effective Date.
-----
The term of this Agreement shall begin on the Effective Date and continue until
the last Day of the fifth (5th) full calendar year after the Operation Date,
subject to earlier termination as provided herein (the "Term").
Notwithstanding the foregoing, Lessee shall be entitled, with the consent of
Owner, to terminate this Agreement, effective May 31, 1995, in the event
that, on or before such date, Operator has failed to satisfy the following
conditions:
(a) notifying Lessee and Owner of any Permits to be obtained by
Operator under the terms of this Agreement, making application for the same
(with copies to Lessee and Owner) and providing reasonable assurance to Lessee
and Owner that such Permits will be obtained on or before the Operation Date.
(b) developing a detailed written plan for transition of operation
and maintenance of the Facility from the current operator, including provision
for transfer of operation, maintenance, inventory, purchasing, personnel,
accounting, and other Facility historical data.
15
(c) contacting the regular vendors supplying goods and services to
the Facility and arranging for the transfer of supply arrangements effective
upon the Operation Date.
(d) offering employment, commencing on the Operation Date, to persons
currently employed in the operation and maintenance of the Facility by the
current operator on terms comparable to the terms of employment provided for
persons employed in the operation and maintenance of the Power Plant (and at a
total compensation package comparable to the predecessor employer) and obtaining
acceptance of such offers by a majority of the persons currently employed but in
no event fewer than 66% of the operating staff.
(e) coming to agreement with Lessee on the initial Budget and general
budget projections contemplated by Article 3.9.
(f) providing a guaranty by Westinghouse Electric Corporation in the
form set forth in Exhibit N.
---------
In the event Lessee terminates this Agreement in accordance with this Article
6.1, this Agreement shall be terminated and the Parties shall have no further
obligations to each other except those Articles which survive termination
in accordance with Article 18.12.
7.0 TERMINATION
7.1 INSOLVENCY. If (a) either Party sells or transfers all or
-----------
substantially all of its assets, makes a general assignment for the benefit of
its creditors or institutes a proceeding in bankruptcy, or (b) an involuntary
bankruptcy proceeding is commenced against, or a receiver is appointed on
account of, such Party's insolvency, and in the case of (b) such proceeding or
receivership is not stayed or dismissed within sixty (60) Days, this Agreement
shall automatically terminate.
7.2 TERMINATION FOR MATERIAL BREACH. Either Party may terminate this
--------------------------------
Agreement effective upon notice of termination given to the other Party, if, at
any time, the other Party materially breaches this Agreement and such breach is
not cured within forty-five (45) Days after notice specifying such breach is
given to the other Party.
7.3 TERMINATION FOR CONVENIENCE. Lessee may, with the consent of Owner,
----------------------------
terminate this Agreement at any time effective upon ninety (90) Days notice
given to Operator. In the event of such termination, Lessee shall pay to
Operator the termination charges set forth in Exhibit D hereto.
---------
7.4 LESSEE'S RIGHTS. In the event that Lessee elects to terminate this
----------------
Agreement pursuant to this Article 7, or pursuant to Article 11.3, Operator
shall provide Lessee with the right without charge to continue to use any of
Operator's patented, copyrighted and/or proprietary information that has been
developed specifically for the Work , subject to the provisions of any Operator
software licensing agreements (excluding payment of license fees thereunder). In
such event, Lessee shall also have the right to take possession of all Facility
Equipment, Spare Parts, Facility Tools and Consumables and may employ any other
person to perform the Work by whatever method Lessee may deem expedient. Lessee
shall be free to make offers of employment to Operator's employees upon
expiration or termination of this Agreement or if such expiration or termination
is imminent, provided, however, that the start date for such employees shall not
be earlier than the date of termination of the Work, or the expiration of the
Term pursuant to Article 6, as applicable. In connection with any such
termination, Operator shall also deliver to Lessee all Facility records in the
possession of Operator, including any of the same that are contained in
16
computer media, which records shall be downloaded in useable form by Operator.
Lessee shall attempt to mitigate the cost for the continued performance of the
Work, but may undertake such reasonable expenditures as in Lessee's sole
judgment will best support effective performance of the Facility (including,
where necessary, the entry into contracts without prior solicitation of
proposals). Operator shall not be entitled to receive any further payments under
this Agreement, except for payments for the Work performed prior to such
termination, reduced by any damages due from Operator to the extent that the
termination is pursuant to Article 7.2 due to a breach by Operator.
7.5 GENERAL OBLIGATIONS OF OPERATOR. If this Agreement terminates
--------------------------------
pursuant to Article 7.1 by reason of Lessee's insolvency, pursuant to Article
7.2 by reason of a breach by Lessee or if Lessee elects to terminate this
Agreement pursuant to Article 7.3 or Article 11.3, Operator shall, at Lessee's
request and expense, which expense Operator shall use its reasonable efforts to
minimize, assist in an orderly turnover of the Facility, and, without limiting
the generality of the foregoing, shall perform the following relative to the
Work so affected:
(a) assist Lessee in preparing an inventory of all Facility
Equipment, Spare Parts, Facility Tools and Consumables in use or in storage at
the Site;
(b) assign to Lessee all subcontracts and other contractual
agreements as may be designated by Lessee to the extent Operator is not
contractually prohibited from making such assignment;
(c) assist Lessee in training Operator's successor, if any; and
(d) to the extent specified and requested by Lessee, remove from the
Site all such Facility Equipment, Spare Parts, Facility Tools and Consumables,
and all Hazardous Materials introduced to or produced at the Site by Operator
and all rubbish.
If this Agreement terminates pursuant to Article 7.1 by reason of Operator's
insolvency or pursuant to Article 7.2 by reason of a breach by Operator,
Operator shall perform the same turnover services without charge to Lessee.
7.6 OPERATOR RIGHTS. Operator shall receive compensation for Work
----------------
performed prior to any termination in accordance with Article 7.1, 7.2, 7.3 or
11.3, reduced by any damages due from Operator to the extent that the
termination is pursuant to Article 7.1 by reason of Operator's insolvency or
Article 7.2 due to a breach by Operator. In addition, Operator shall, except in
the case of a termination pursuant to Article 7.1 by reason of Operator's
insolvency or Article 7.2 due to a breach by Operator, receive termination
charges that are specifically limited to compensation, including reasonable
profit, for Work performed after the notice of termination that is reasonably
required by Operator to bring the Work to an orderly conclusion and termination
charges as set forth in Exhibit D hereto. Payments of such termination
---------
charges shall be made by Lessee within thirty (30) Days after the date of
Operator's invoice.
7.7 OWNER RIGHTS, ETC. Notwithstanding anything herein to the contrary,
------------------
Operator shall not terminate this Agreement pursuant to Article 7.2 by reason of
a breach by Lessee without first giving Owner and Financing Entity a concurrent
notice of termination, and forty-five (45) Days opportunity to cure the breach.
In connection with any such cure, the curing third party shall have the further
right to assume this Agreement, with the effect that it shall be reinstated and
shall remain in effect with such third party in accordance with its terms.
17
8.0 OPERATOR'S INDEMNITY
8.1 GENERAL. In addition to its indemnification obligations provided
--------
in Articles 3.21 (Title) and 16.4 (Hazardous Materials) herein, Operator shall
defend, indemnify and hold harmless Lessee, Owner, Financing Entity and their
respective officers, partners, directors, and employees from and against:
(a) claims, damages, losses, and expenses arising out of or resulting
from personal injury to or death of any person (including under indemnities of
Operator's employees) and for damage to or destruction of third party property
to the extent caused by any negligent act or omission or intentional misconduct
during the performance of the Work at the Site by Operator or any Subcontractor.
[Note: For purposes of this indemnity, the term "third party" shall not include
Lessee, Owner, Financing Entity and their successors and assigns, or any party
or person with an equity interest in Lessee, Owner or Financing Entity which
party or person also claims or seeks to claim any of the rights, powers or
privileges of Lessee, Owner of Financing Entity under this Agreement, or claims
that it is a third party beneficiary under this Agreement]; and
(b) fines and penalties which arise during the performance of the
Work for alleged violation of any applicable Governmental Requirements by
Operator or any Subcontractor; and
(c) claims by a governmental or taxing authority claiming taxes based
on gross receipts or on income of Operator or any Subcontractor with respect to
any payment for the Work made to or earned by Operator or any Subcontractor
under this Agreement.
8.2 WORKERS COMPENSATION, ETC. In any and all claims against Lessee, by
--------------------------
or on behalf of any employee of Operator or any Subcontractor, or any other
party for whose acts Operator or any Subcontractor may be liable, the
indemnification obligation stated above shall not be limited in any way by any
compensation or benefits payable by or for Operator under any applicable
workers' compensation act, disability act or other act providing employee
benefits or limiting the direct liability of Operator with respect to the same.
8.3 EXPENSES. The Operator's indemnification obligations under Article
---------
3.21 and Article 16.4 and this Article 8 shall include and extend to reasonable
legal fees and expenses incurred by the indemnified party in defense of any
claim for which indemnification is due hereunder and all cost incurred in
enforcement of the aforesaid indemnification obligation.
8.4 SURVIVAL. The Operator's indemnification obligations under Article
---------
3.21 and Article 16.4 and this Article 8 shall survive the expiration or any
earlier termination of this Agreement and shall extend as to any claim for which
indemnification is sought through the applicable statute of limitations period
for such claim.
8.5 NOTICE. Operator's indemnity obligations under this Agreement are
-------
conditioned upon Lessee furnishing to Operator prompt written notice of any
claim for which indemnification is sought.
9.0 LESSEE'S INDEMNITY
9.1 GENERAL. In addition to its indemnification obligations provided in
--------
Article 16.1 (Hazardous Materials) herein, Lessee shall defend, indemnify and
hold harmless Operator and its officers, directors and employees from and
against:
18
(a) claims, damages, losses, and expenses arising out of or resulting
from personal injury to or death of any person (including under indemnities of
Lessee's employees) and for damage to or destruction of third party property to
the extent caused by any negligent act or omission or intentional misconduct at
the Site by Lessee or any party for whose acts Lessee may be liable. [Note: For
purposes of this indemnity, the term "third party" shall not include Contractor
and its successors and assigns or any party or person with an equity interest in
Contractor which party or person also claims or seeks to claim any of the
rights, powers or privileges of Contractor under this Agreement, or claims that
it is a third party beneficiary under this Agreement]; and
(b) fines and penalties which arise during the performance of the
Work for alleged violation of any applicable Governmental Requirements by Lessee
or any party for whose acts Lessee may be liable (other than Operator and its
Subcontractors); and
(c) claims by a governmental or taxing authority claiming taxes for
which Lessee is responsible under Article 4.7.
9.2 WORKERS COMPENSATION, ETC. In any and all claims against Operator, by
--------------------------
or on behalf of any employee of Lessee or any party for whose acts Lessee may be
liable, the indemnification obligation stated above shall not be limited in any
way by any compensation or benefits payable by or for Lessee under any
applicable workers' compensation act, disability act or other act providing
employee benefits or limiting the direct liability of Lessee with respect to the
same.
9.3 EXPENSES. The Lessee's indemnification obligations under Article 16.1
---------
and this Article 9 shall include and extend to reasonable legal fees and
expenses incurred by the indemnified party in defense of any claim for which
indemnification is due hereunder and all cost incurred in enforcement of the
aforesaid indemnification obligation.
9.4 SURVIVAL. The Lessee's indemnification obligations under Article 16.1
---------
and this Article 9 shall survive the expiration or any earlier termination of
this Agreement and shall extend as to any claim for which indemnification is
sought through the applicable statute of limitations period for such claim.
9.5 NOTICE. Lessee's indemnity obligations under this Agreement are
-------
conditioned upon Operator furnishing to Lessee prompt written notice of any
claim for which indemnification is sought.
10.0 REPRESENTATIONS AND WARRANTIES
10.1 BY OPERATOR. Operator represents and warrants to Lessee as follows as
------------
of the Effective Date:
(a) CORPORATE STANDING. Operator is, and during the Term will
-------------------
remain, a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and is and will remain in good standing
as a foreign corporation qualified to do business in the Commonwealth of
Massachusetts, with all necessary corporate power and authority to perform its
obligations hereunder. The execution, delivery and performance of this Agreement
have been duly authorized by all requisite corporate action and do not and will
not violate any provision of Operator's charter or by-laws or any indenture,
agreement or instrument to which Operator is a party, or by which Operator or
its property may be bound or affected, non-compliance of which could reasonably
be expected
19
to have a materially adverse affect on Operator or its ability to perform its
obligations under this Agreement.
(b) PERMITS. Operator will obtain on or before the Operation Date and will
--------
thereafter maintain through the Term the Permits required under Article 3.16.
10.2 BY LESSEE. Lessee represents and warrants to Operator as follows as
----------
of the Effective Date:
(a) CORPORATE STANDING. Lessee is, and during the Term will remain,
a corporation duly organized, validly existing and in good standing under the
laws of the Commonwealth of Massachusetts, with all necessary corporate power
and authority to perform its obligations hereunder. The execution, delivery and
performance of this Agreement have been duly authorized by all requisite
corporate action and do not and will not violate any provision of Lessee's
charter or by-laws or any indenture, agreement or instrument to which Lessee is
a party, or by which Lessee or its property may be bound or affected, non-
compliance of which could reasonably be expected to have a materially adverse
affect on Lessee or its ability to perform its obligations under this Agreement.
(b) PERMITS. Lessee or Owner has and will maintain through the Term
--------
the Permits required under Article 4.6.
11.0 FORCE MAJEURE
11.1 FORCE MAJEURE. The term "Force Majeure" as used herein shall
--------------
include the following and any other causes beyond the reasonable control of and
occurring without the fault or negligence of the Party claiming Force Majeure:
acts of God, earthquakes, fires, floods, riots, unusually severe weather
conditions at the Site, insurrections, acts of war (whether declared or
otherwise), tornadoes, hurricanes, cyclones, strikes, work stoppages or other
labor difficulties ( excluding difficulties with the Facility Work Force at the
Site), unavailability of fuel or energy shortages, acts or failures to act by
federal, state or local, governmental, regulatory or judicial bodies, and acts
or failures to act by Lessee within the scope of Lessee's obligations hereunder,
Owner or Financing Entity (within the scope of their obligations hereunder) with
respect to the Facility or this Agreement. Notwithstanding the foregoing, no
failure of performance by Operator (or any Affiliate of Operator) as operator of
the Power Plant shall constitute an event of Force Majeure or otherwise excuse
performance by Operator hereunder.
11.2 EFFECT AND LIMITATIONS. If either Party because of Force
-----------------------
Majeure is rendered wholly or partly unable to perform its obligations under
this Agreement, except for the obligation to make payments, that Party shall be
excused from whatever performance is affected by the Force Majeure to the extent
so affected, provided that:
(a) The non-performing Party shall, as soon as practicable but in any
event within twenty four (24) hours after it becomes aware that it will be
unable to perform, give the other Party oral notice of such inability. Not later
than five Days after such oral notice, the non-performing Party shall furnish
written notice to the other Party describing the particulars of the occurrence
and the expected duration of the Force Majeure and thereafter provide periodic
supplemental updates;
(b) The suspension of performance is of no greater scope and of no
longer duration than is required by the Force Majeure; and
20
(c) No obligations of either Party which arose before the
occurrence causing the suspension of performance are excused as a result of the
occurrence.
When the non-performing Party is able to resume performance of its obligations
under this Agreement, that Party shall give the other Party prompt notice to
that effect.
11.3 TERM. In no event will any condition of Force Majeure extend
-----
the Term. In the event that Operator's performance is suspended under this
Article 11 for a period in excess of three (3) months, Lessee shall be entitled
to terminate this Agreement upon thirty (30) Days advance notice, in connection
with which the Parties rights and obligations shall be as provided in Article 7.
11.4 REMOVAL OF FORCE MAJEURE. The affected Party shall use reasonable
-------------------------
best efforts to remedy any inability to perform due to Force Majeure provided
that Operator shall not be required to perform additional work or take special
measures that cannot be performed with the Facility Work Force unless Lessee
directs that it be done pursuant to a Change Order.
11.5 LESSEE OBLIGATION TO PAY. Lessee's obligation to make payments
-------------------------
to Operator and provide funds applicable to the Budget hereunder shall not be
excused due to Force Majeure, provided that Operator shall use reasonable
efforts to mitigate costs hereunder during any suspension of performance due to
an event of Force Majeure. Payments to Operator, including payments for special
measures undertaken by Operator pursuant to a Change Order under Article 11.4
shall be reduced to the extent of any such cost reductions.
12.0 INSURANCE
12.1 OPERATOR'S INSURANCE. Operator, and all Subcontractors performing
---------------------
any on-Site services in connection with the operation and maintenance of the
Facility, shall procure and maintain in effect during the period for which they
perform services pursuant to this Agreement the following insurance coverage:
(a) Worker's Compensation subject to statutory limits;
(b) Employer's liability with limits of liability of $1,000,000 per
accident; and
(c) Vehicle liability insurance covering all owned, non-owned and
hired automobiles, trucks, trailers, and other vehicles. Such insurance shall
provide coverage not less than that of the standard comprehensive automobile
policy in limits no less than $1,000,000 combined single limit each occurrence
for bodily injury and property damage.
12.2 LESSEE'S INSURANCE. Lessee, directly or through Owner (whose
-------------------
coverage may be obtained directly or through Operator or an affiliate in
connection with the operation and maintenance agreement for the Power Plant)
shall procure and maintain in effect during the Term at its expense the
following minimum insurance coverage:
(a) Liability insurance in a form providing coverage not less than
that of the ISO Commercial General Liability 1988 Occurrence Form, covering
operations of the Facility, including coverage for independent contractors,
products and completed operations broad form property damage
21
coverage (for any written or oral contracts related to the Facility) and
personal injury liability coverage for claims arising out of the operations of
the Facility with policy limits not less than $1,000,000 aggregate;
(b) Excess, or umbrella liability, insurance to provide limits of
insurance in excess of the general liability coverage of not less than
$4,000,000 combined single limit for personal injury and property damage; and
(c) Property Insurance and Business Interruption in such levels
as may be required by Financing Entity.
(d) Deductibles applicable to any loss for which coverage applies
under any of the foregoing policies shall be borne by Owner, except for losses
for which coverage applies under the property insurance policy to the extent
such loss is caused by the negligence of Operator. In such case the deductible,
or portion thereof, shall be borne by Operator, up to a maximum of the lesser of
the deductible amount or $100,000 plus 50% of the deductible amount greater than
$100,000 but in no event shall Operator pay more than $200,000 per
occurrence, and $400,000 during any Contract Year.
12.3 POLICY TERMS. Each policy of insurance required to be carried
-------------
hereunder shall name Lessee, Operator (and Westinghouse Electric Corporation),
Owner and Financing Entities as additional insureds as their respective
interests may appear, and shall be placed with such insurers as may be accepted,
and shall include such deductibles and exclusions as may be permitted, by
Financing Entity.
12.4 CERTIFICATES. Within sixty (60) Days after the Effective Date
------------
each Party shall provide to the other Party, pursuant to the notice provisions
of Article 18.4, properly executed certificates of insurance evidencing the
required coverage. These certificates shall provide the following information:
(a) Name of insurance company, policy number and expiration date;
(b) The coverage required and the limits on each, including the
amount of deductibles and self-insured retentions;
(c) A statement indication that thirty (30) Days notice of
cancellation or modification of any of the policies shall be given to the
insured and additional insureds; and
(d) Named insured.
12.5 POLICIES. Copies of the insurance policies for each Party will be
---------
forwarded to the other Party upon request.
12.6 WAIVER OF SUBROGATION. Each additional insured waives its rights
----------------------
of recovery against the other additional insureds (in their capacity hereunder)
and will use its reasonable efforts to secure its insurer's waiver of rights of
subrogation on its respective insurance policies. shall provide a waiver of
subrogation against the other additional insured on its respective insurance
policies
13.0 DISPUTE RESOLUTION
13.1 GENERALLY. It is the non-binding intent of the Parties that
----------
they shall not invoke the binding arbitration provisions of this Article 13
prior to attempting, for a period of at least thirty (30) Days after notice of
any dispute hereunder is given by one Party to the other, to settle any dispute
hereunder through good faith attempts at the management level, and, failing
that, through the designation by each Party of a
22
senior executive to make further good faith attempts to settle such dispute.
Notwithstanding the foregoing, in the event that, for any reason (including
inadequacy of settlement efforts), a settlement of such dispute, mutually
acceptable in the non-reviewable judgment of either Party, is not reached within
thirty (30) Days after notice of any dispute is given by either Party to the
other, either Party shall be entitled to invoke the binding arbitration
provisions of this Agreement, or, where permitted, to pursue other remedies
hereunder, in connection with which the adequacy or inadequacy of the aforesaid
settlement attempt by either Party shall neither be a basis for postponing
binding arbitration or pursuit of such other remedies, or otherwise an issue or
subject of such binding arbitration or any proceeding relating to the pursuit of
such other remedies.
13.2 ARBITRATION LIMITS. Both Parties agree to binding arbitration
-------------------
pursuant to Article 13.3 if such dispute involves claims which individually or
in the aggregate total not more than $1,000,000. No final arbitration award
rendered hereunder may exceed such amount. Each Party may pursue any available
legal or equitable remedy for all other disputes. The questions of whether
claims exceed the $1,000,000 and whether the binding arbitration provisions of
this Agreement are otherwise not applicable to the dispute shall each also be
determined through binding arbitration in the manner provided in Article 13.3.
13.3 ARBITRATION PROCEDURE. Disputes subject to binding arbitration
----------------------
hereunder shall be submitted to and settled by arbitration in conformance with
rules of the American Association of Arbitration then in effect (or at any other
place or under any other form of arbitration mutually acceptable to the
Parties). Any award rendered shall be final and conclusive upon the Parties, and
a judgment thereon may be entered in any court of any forum, state or federal,
having jurisdiction. In any arbitration, there shall be appointed one arbitrator
if both Parties agree in writing to do so. Otherwise, there shall be appointed
three arbitrators, one each by Lessee and Operator, and the third by the
arbitrators selected by the Parties. The jurisdiction of the arbitrator(s) shall
be limited to rendering an award not in excess of $1,000,000. The arbitration
shall take place in New York City, New York. The expenses of the arbitration
shall be borne equally by the Parties to the arbitration, provided that each
Party shall pay for and bear the cost of its own experts, evidence and counsel,
and provided, however, that the arbitrator shall have the discretionary power to
make a different allocation of costs of arbitration and/or Party expenses in the
interest of fairness.
13.4 CONSOLIDATION. To the extent permitted by applicable
--------------
Governmental Requirements, both Parties agree to consolidate into a single
arbitration or legal proceeding as the case may be, any disputes involving
Operator and Lessee.
14.0 LIMITATIONS OF LIABILITY
14.1 CONSEQUENTIAL DAMAGES, ETC. Each Party shall be liable for direct
---------------------------
contract damages for any breach of this Agreement, but shall not be liable to
the other Party, whether based in contract, in tort (including negligence and
strict liability), under warranty, or otherwise, for any special, indirect,
incidental, or consequential loss or damage whatsoever, including damage to or
loss of property or equipment (except for Operator's responsibility to pay
deductibles under the property insurance on the Facility as set forth in Article
12.2(d)), loss of use of equipment or power system, loss of profits or revenues,
increased costs of any kind, including capital cost, raw material cost and cost
of Facility production, or claims of any customers of Lessee, in each case to
the extent constituting special, indirect, incidental, or consequential damages.
For purposes of this Article 14.1, any costs of performing the Work incurred by
Operator in excess of amounts payable by Lessee pursuant to Article 5 shall not
be deemed to be special, indirect, incidental, or consequential damages.
23
14.2 TOTAL LIABILITY LIMIT. The total aggregate liability of either
----------------------
Party to the other Party, in excess of insurance payments received in respect of
the same, with respect to any and all claims arising out of the performance or
non-performance of its obligations under this Agreement, whether based on
contract, warranty, tort (including negligence and strict liability), or
otherwise shall not exceed, with respect to claims arising or accruing in any
Contract Year, 62.5% of the total of all Monthly Sums paid or to be paid
in such Contract Year.
14.3 SCOPE; SUPREMACY. The protections afforded Operator under this
----------------
Article 14 extend to any Subcontractors. The provisions of this Article 14
shall prevail over any conflicting or inconsistent provisions set forth
elsewhere in this Agreement.
15.0 CHANGES
15.1 CHANGE ORDER. Scope Changes shall not be effective unless and
-------------
until they are set forth in a document which describes all work outside the
scope of Work, authorizes a Scope Change, sets forth the price of such Scope
Change, and is duly executed by Lessee and Operator ("Change Order"). Change
Orders shall be required for all Unscheduled Services (with a credit up to
the amount provided therefor in Article 3.9 (b) in each Contract Year) and
for all matters contemplated by Articles 3.7, 5.4 and 16.1. Except for
insurance payments which may be received in respect of the same, Operator shall
not be entitled to a Change Order in respect of Unscheduled Services or in
connection with an addition to the Major Maintenance Budget to the extent
attributable to negligence in the performance of its other obligations
hereunder. Nothing hereunder shall restrict Lessee from engaging other parties
to provide goods and services to the Facility.
15.2 INITIATION. Lessee may, at any time, and from time, to time,
-----------
request a Scope Change. In addition, Operator may provide Lessee with a notice
of any condition or event which Operator believes entitles it to claim that a
Change Order should be issued. Such notice shall describe in detail the nature
of any such condition or event and shall include projected additional costs
including man-hours, labor rates and xxxx-ups, quantities, unit rates, equipment
prices, expenses and overhead. Such claims shall also be accompanied by such
available information to assist Lessee in determining the reasonableness of the
proposed Scope Change. Supplemental information shall be provided as it becomes
available.
15.3 PREPARATION OF CHANGE ORDER. In the event that the Parties agree to
----------------------------
enter into a Change Order, the initiating Party shall prepare, sign and issue to
the other Party a Change Order. Upon review of such Change Order and, subject to
its approval, the other Party shall sign and return the document to the
initiating Party. Operator shall not be obligated to proceed with any Scope
Change until a Change Order has been duly executed by both Parties.
15.4 PRICING. With respect to the pricing of Change Orders, Operator
--------
may provide lump sum pricing which shall include reasonable overhead and profit.
Where the parties cannot agree on a lump sum Change Order, pricing shall be
established based on Exhibit M.
---------
15.5 CHANGE IN GOVERNMENTAL REQUIREMENTS. Lessee and Operator intend
------------------------------------
that services under this Agreement will at all times comply with applicable
Governmental Requirements then in effect. If Governmental Requirements are
revised, repealed or judicially reinterpreted after the Effective Date so as to
increase Operator's cost of performance of the Work, Operator shall be entitled
to a Change Order.
24
15.6 CHANGE IN FACILITY CONTRACTS. If there are changes in the
-----------------------------
Facility Contracts after the Effective Date that increase Operator's cost of
performance of the Work, Operator shall be entitled to a Change Order.
16.0 HAZARDOUS MATERIALS
16.1 PRE-EXISTING MATERIALS. Operator makes no representation or
----------------------
warranty concerning the existence or nonexistence of Hazardous Materials at the
Site when the Work commences and disclaims all responsibility and liability for
the excavation, transportation, storage, handling, removal, treatment or
disposal of pre-existing Hazardous Materials discovered or encountered at the
Site. Lessee shall indemnify, defend and hold Operator and Subcontractors
harmless from and against any claim, suit, loss, cost, liability, fine, or
damage (including reasonable attorneys fees), including liability or cost
incurred or assessed against Operator pursuant to 42 USC 9601 et seq.,
"Comprehensive Environmental Response, Compensation and Liability Act of 1980"
and amendments thereto, 15 USC 2602, et seq., "The Toxic Substances Control Act"
and amendments thereto, 42 USC 6901 et seq., The Resource Conservation and
Recovery Act of 1976" and amendments thereto, or other applicable Governmental
Requirements made or asserted by any person, including governmental entities,
based on or related to complaints or allegations, whether or not supported by
fact, that soils, leachate, effluent, or other residue located on, emanating
from, or arising from the soils, subsurface or physical conditions at the Site
contain pre-existing toxic substances or pre-existing Hazardous Materials which
it finds during performance of the Work. Lessee shall be responsible for the
prompt determination of the nature of such Hazardous Materials and shall proceed
with due diligence. If treatment of such Hazardous Materials adversely affects
Operator's cost of performance or ability to perform, Operator shall be entitled
to a reasonable adjustment as set forth in a Change Order issued pursuant to
Article 16.
16.2 HANDLING OF MATERIALS. Operator shall arrange for the proper
----------------------
collection, removal and disposal of any Hazardous Materials furnished, used,
applied, generated or stored at the Site by Operator or Subcontractor(s) or
emanating from the Site as a result of Work at the Site, including MEA and other
process chemicals used in the Facility's carbon dioxide recovery process and
used oils, greases, and solvents from flushing and cleaning processes performed
under this Agreement. All activities in connection with the foregoing shall be
performed in accordance with all Governmental Requirements. All costs
associated with the transporting and disposing of Hazardous Materials introduced
on the Site by Operator during performance of the Work shall be paid by Operator
pursuant to the provisions of Article 3.4, subject to the reimbursement of costs
with respect to the same provided in Article 5.
16.3 DATA SHEETS. As required under all applicable Governmental
------------
Requirements, Operator shall provide Material Safety Data Sheets covering all
Hazardous Materials furnished under or otherwise associated with the Work.
Operator shall provide Lessee with copies of the applicable Material Safety Data
Sheets or copies of a document certifying that no Material Safety Data Sheets
are required under any applicable Governmental Requirements and shall determine
whether any substance or material furnished, used, applied, or stored in
connection with the Work is within the provisions of any Governmental
Requirements concerning Hazardous Materials.
16.4 OPERATOR RESPONSIBILITY. Operator covenants and agrees that
------------------------
Operator will not introduce Hazardous Materials on the Site or in the Work in
violation of Governmental Requirements or handle Hazardous Materials negligently
or in violation of Governmental Requirements. Operator shall indemnify, defend
and hold Lessee and its partners, officers, directors, employees, assigns,
successors in interest, and agents, from and against any claim, suit, loss,
liability, fine, or damage (including reasonable legal fees and expenses)
pursuant to 42 USC 9601 et seq., "Comprehensive Environmental Response,
Compensation and
25
Liability Act of 1980" and amendments thereto, 15 USC 2601, et seq., "The Toxic
Substances Control Act" and amendments thereto, 42 USC 6901 et seq., "The
Resource Conservation and Recovery Act of 1976" and amendments thereto, or other
Governmental Requirements, arising out of Operator's breach of the preceding
covenant and agreement. Lessee shall provide prompt notice to Operator of any
such indemnification sought from Operator.
17.0 PROPRIETARY INFORMATION
17.1 PROPRIETARY INFORMATION. Operator and Lessee have a
------------------------
proprietary interest in information that will be furnished to or obtained by
Operator pursuant to this Agreement, including the proprietary process
licensed by Owner and Lessee from Fluor Xxxxxx, Inc. for the recovery of carbon
dioxide in the Facility (which information Lessee and Lessee Owner are
authorized to disclose to Operator) and all operating and cost information
relating to the Facility prior to or during the Term. The Party in receipt of
proprietary information ("Receiving Party") from the disclosing Party
("Disclosing Party") shall keep in confidence and will not disclose any such
information which is specifically designated as being proprietary to the
Disclosing Party or use any such information for other than the purpose for
which it is supplied without the prior written permission of the Disclosing
Party. Without limiting the generality of the foregoing, Operator shall not
disclose Facility operating data to any purchaser of power from the Power Plant
or customer of the Facility, any governmental authority or any other party,
except as specifically directed (and only to the extent so directed) in writing
by Owner and Lessee or by a governmental authority of competent jurisdiction.
The provisions of this Article 17 shall not apply to information that the
Receiving Party can substantiate was in its possession at the time it was
initially furnished by the Disclosing Party; is or becomes generally available
to the public without breach of this provision; is received from a third party
who is, as far as reasonably be determined, under no limitation or restriction
regarding disclosure; or is developed independently by the Receiving Party
without benefit of the information furnished by the Disclosing Party. Operator
confirms that the facility cost and operating data is subject to a
confidentiality restriction in favor of Lessee and Owner, but may be freely
disclosed by Lessee and Owner at their discretion.
17.2 TERMS OF AGREEMENT. Operator and Lessee have a proprietary
-------------------
interest in this Agreement. Accordingly, its terms shall not be disclosed in
whole or in part to third parties without the prior written permission of the
other Party, provided, however, that nothing herein shall prohibit either Party
from making any disclosure required by any Governmental Requirement (pursuant to
Article 17.3), or Lessee from disclosing the same to Owner (on a confidential
basis as provided in this Article 17), or Owner from making any disclosure
required by any Governmental Requirement (pursuant to Article 17.3) or the
Financing Agreements (on a confidential basis as provided in this Article 17, or
as otherwise agreed between the Parties.).
17.3 MANDATORY DISCLOSURE. When required by Governmental
---------------------
Requirements, Operator may disclose such proprietary information to the
requesting governmental entity, provided, however, that prior to making any such
disclosure, Operator shall: provide Lessee and Owner with timely notice of the
proprietary information requested and Operator's intent to so disclose,
minimize the amount of proprietary information to be provided commensurate with
the interests of Lessee and Owner and the requirements of the governmental
entity, and make every reasonable effort (which shall include participation by
Lessee and Owner in discussions with the governmental entity) to secure
confidential treatment and minimization of the proprietary information to be
provided. In the event that efforts to secure confidential treatment are
unsuccessful, Lessee and Owner shall have the prior right to revise such
information to minimize the disclosure of such information in a manner
commensurate with their interests and the requirements of the governmental
entity.
26
18.0 MISCELLANEOUS
18.1 ENTIRE AGREEMENT. This Agreement contains the entire understanding
-----------------
of the Parties with respect to the subject matter hereof, and supersedes all
prior agreements and commitments between the Operator and either the Lessee or
Owner with respect to the Facility. There are no oral understandings, terms, or
conditions, and neither Party has relied upon any representation, express or
implied, not contained in this Agreement.
18.2 AMENDMENTS. No change, amendment, or modification of this
-----------
Agreement shall be valid or binding upon either Party unless such change,
amendment or modification shall be in writing and duly executed by both Parties.
Except as expressly provided in Article 7 or 11, this Agreement may only be
terminated by a writing duly executed by both Parties.
18.3 CAPTIONS. The captions and subheadings contained in this
---------
Agreement are for convenience and reference only and in no way define, describe,
extend, or limit the scope or intent of this Agreement or the intent of any
provision contained herein.
18.4 NOTICES. Any notice, demand, offer, or other written instrument
--------
required or permitted to be given pursuant to this Agreement shall be in writing
signed by the Party giving such notice and shall be hand delivered or sent by
registered letter, overnight courier or telephone facsimile copy (with a
concurrent telephone confirmation of receipt and a mailing of the original by
first class mail) to the other Party at the addresses set forth below:
TO LESSEE:
NECO-Bellingham, Inc.
00000 Xxxx Xxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
ATTN: Xxxx X. Xxxx, Vice President
Phone: (000)-000-0000
Fax: (000)-000-0000
With a copy in the same manner to Owner:
Northeast Energy Associates,
A Limited Partnership
c/o Intercontinental Energy Corporation
000 Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
ATTN: Xxxxxxx X. Xxxxxxxxx,
Operations Manager
Phone: (000)-000-0000
Fax: (000)-000-0000
TO OWNER:
Northeast Energy Associates,
A Limited Partnership
c/o Intercontinental Energy Corporation
000 Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
27
ATTN: Xxxxxxx X. Xxxxxxxxx,
Operations Manager
Phone: (000)-000-0000
Fax: (000)-000-0000
For notice to Financing Entity under Article 7.7 hereunder:
TO FINANCING ENTITY:
State Street Bank and Trust Company
Corporate Trust Department
0 Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
ATTN: Xxxx Xxxxx
Vice President
Phone: (000)-000-0000
Fax: (000)-000-0000
TO OPERATOR:
Westinghouse Operating Services
Company, Inc.
0000 Xxxxxxx Xxxxx
Xxx Xxxxxxxxxx
Xxxxxxx, XX 00000-0000
ATTN: Operation & Maintenance Manager
Phone: (000) 000-0000
Fax: (000)-000-0000
Each Party shall have the right to change the place to which notice shall be
sent or delivered by similar notice sent in like manner to the other Party. The
effective date of any notice issued pursuant to this Agreement shall be the date
when delivered if hand delivered, when sent if by overnight courier or telephone
facsimile copy (as aforesaid) or three (3) Days after being deposited in U.S.
mail if sent by registered mail.
18.5 SEVERABILITY. The invalidity of one or more of the provisions
-------------
contained in this Agreement shall not affect the validity of the remaining
portions of the Agreement so long as the material purposes of this Agreement can
be determined and effectuated.
18.6 ASSIGNMENT. This Agreement shall only be binding upon, inure to the
-----------
benefit of, and be performable by the successors and assigns of the Parties
hereto, and shall only operate to release the assignor, pledgor, or transferor
from any of its obligations under this Agreement, if consent to the assignment,
pledge or transfer, or release, as the case may be, is given in writing by the
other Party and Owner. Without the prior consent of Operator, Lessee may
collaterally assign all or part of its right, title, and interest in this
Agreement to Owner, and either Lessee or Owner may similarly make such a
collateral assignment to Financing Entity, and this Agreement may be assigned in
connection with any sale or other transfer of the Facility by Owner. In
addition, Lessee may assign all or part of its right, title, and interest in
this Agreement to any other person or entity with the prior written approval of
Operator, which approval shall not be unreasonably withheld, but shall not be
given without the consent of Owner. Operator agrees to execute any consents to
such assignment reasonably required by such Financing Entity or in connection
28
with any sale or transfer of the Facility so long as any such consents do not
expand the liability of Operator beyond that established in this Agreement had
no such assignment, sale or transfer taken place.
18.7 NO WAIVER. Any failure of either Party to enforce any of the
----------
provisions of this Agreement or to require compliance with any of its provisions
at any time during the pendency of this Agreement shall in no way affect the
validity of this Agreement, or any part hereof, and shall not be deemed a waiver
of the right of either Party thereafter to enforce any and each such provisions.
18.8 APPLICABLE LAW. This Agreement shall be governed by the laws of
---------------
the State of New York excluding conflicts of law principles.
18.9 EXHIBITS. All Exhibits referenced in this Agreement shall be
---------
deemed to be incorporated into this Agreement by such reference and to be an
integral part of this Agreement. In the event of a conflict or inconsistency
between the provisions of any Exhibit and the provisions of this Agreement, the
provisions of this Agreement shall prevail.
18.10 NO AGENCY, PARTNERSHIP, ETC. This Agreement shall not constitute
----------------------------
Operator an agent of, or partner or joint venturer with, Lessee or Owner, and
Operator shall have no authority to bind Lessee or Owner to any third party.
Likewise, this Agreement shall not constitute Lessee as an agent of, or partner
or joint venturer with Operator and Lessee shall have no authority to bind
Operator to any third party
18.11 THIRD PARTY BENEFICIARIES. Owner and Financing Entity shall be
--------------------------
deemed to be intended third party beneficiaries of this Agreement to the extent
of their rights expressly enumerated herein.
18.12 SURVIVAL. Article 8, 14 and 17, and all other Articles providing
---------
for limitation of or protection against liability of either Party, shall
continue in effect notwithstanding any other provision of the Agreement and
shall survive termination, cancellation or expiration of the Agreement.
18.13 COUNTERPARTS. This Agreement may be executed in counterparts, each
-------------
of which shall be deemed to constitute one and the same instrument.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed and delivered by their duly authorized representatives as of the
Effective Date.
NECO-BELLINGHAM, INC.
By:---------------------------
/s/ XXXX X. SIM
Name:-------------------------
/s/ VICE PRESIDENT
Title:------------------------
WESTINGHOUSE OPERATING SERVICES
COMPANY, INC.
By:___________________________
Name:_________________________
Title:________________________
29
EXHIBIT A
DESCRIPTION OF THE FACILITY
The Bellingham Carbon Dioxide Recovery Facility is designed to produce liquid
food grade Carbon Dioxide.
The feedstock to the plant is a 10 MM SCFH slip stream of combustion flue gas
from the adjacent 300 MW natural gas fired power plant. This gas stream
contains approximately 3.0 to 3.5 percent by volume of Carbon Dioxide.
The slip stream of flue gas is diverted to the Carbon Dioxide facility through
use of a 96 inch diameter duct. The flue gas exits this duct into a Direct
Contact Cooler. The cooler reduces the temperature and removes water from the
flue gas. The water removed is the sole source of process water available to
the Carbon Dioxide Recovery Facility.
The flue gas exits the Direct Contact Cooler into the suction of a 2500 HP
Blower which then pushes the gas stream upward through the Absorber Tower. As
the flue gas flows upward it is contacted inside the tower by a liquid stream of
"Lean" MEA flowing downward. Contact between the MEA and flue gas results in
transfer of Carbon Dioxide from the flue gas to the liquid MEA stream. At the
top of the Absorber Tower the flue gas exits to the atmosphere minus most of the
Carbon Dioxide it contained when it entered the bottom of the Absorber. The
liquid MEA at the bottom of the Absorber tower is "Rich" or high in Carbon
Dioxide content due to its countercurrent contact with the flue gas.
The "Rich" MEA liquid proceeds to the top of a stripping column. It is stripped
of its Carbon Dioxide as it flows downward through the column into each of two
reboilers at the bottom of the stripper. At this point the MEA is now "Lean" or
low in Carbon Dioxide concentration. From the reboilers the "Lean" MEA liquid
is returned to the top of the Absorber.
In the reboilers, Carbon Dioxide gas is liberated from the MEA solution by
heating the MEA. This Carbon Dioxide gas flows upward through the stripper
joining with the Carbon Dioxide gas being released from the downward flowing
MEA. The combined or total Carbon Dioxide gas stream flows up and out of the top
of the Stripper through the reflux condenser and accumulator to the CO2 wash
column where to the "Back End" or the Liquefaction portion (back end) of the
Facility begins. The heat, or energy, that liberates the Carbon Dioxide gas from
the liquid MEA in the reboilers comes from steam off the low pressure steam
header of the Power Plant. Steam use averages 60 to 68 thousand pounds per hour.
Steam condensate is returned to the Power Plant in a closed loop.
The Carbon Dioxide gas stream exiting the top of the Stripper is laden with
moisture and contains small amounts of various impurities. The moisture and
impurities are removed as the Carbon Dioxide passes through a wide variety of
heat exchangers, knockout drums, filter media, drying media and a stripping
tower. At the same time the Carbon Dioxide gas stream is pressurized in two
stages to 300 psig and liquefied at -15 to -20 degrees Fahrenheit.
A two stage Ammonia system provides the refrigeration for cooling and liquefying
the Carbon Dioxide gas stream. All other process cooling is accomplished with
air finned fan coolers.
A-1
The high purity food grade liquid Carbon Dioxide is stored at 217 psig and -17
degrees Fahrenheit in eight individual 200 ton storage tanks. It is loaded into
trucks in amounts ranging from 18 to 22 tons at a time for distribution to its
end users.
A-2
EXHIBIT B
XXXXXXXXXX XX0 PRODUCTION FACILITY
ORGANIZATIONAL CHART
FACILITY WORK FORCE
----------------------
FACILITY PLANT MANAGER
XXXX XXXXXXXXXX
----------------------
------------------ -------------------- -------------------------
OPERATIONS MANAGER MAINTENANCE MANAGER ADMINISTRATIVE SUPERVISOR
XXXXXXX XXXXX
------------------ -------------------- -------------------------
Plant Engineer Maintenance Engineer
1. Operator 1. Aux Oper. 1. Mechanic
2. Operator 2. Aux Oper. 2. I&CTech.
3. Operator 3. Aux Oper.
4. Operator 4. Aux Oper.
5. Aux Oper.
6. Aux Oper.
7. Aux Oper.
8. Aux Oper.
B-1
EXHIBIT C
EXISTING INVENTORY
Current listing of all Facility Equipment, Spare Parts, Facility Tools and
Consumables to be supplied by Lessee to Operator thirty (30) Days prior to the
Operation Date.
C-1
EXHIBIT D
TERMINATION PAYMENT SCHEDULE
Fixed Termination Fee
Termination date falls in first year $600,000*
after Operation Date
Termination date falls in second year $450,000*
after Operation Date
Termination date falls in third year $300,000*
after Operation Date
Termination date falls in fourth year $150,000*
after Operation Date
Termination after fourth year following 0
Operation Date
* Fixed Fee values will be multiplied by the current escalation adjustment
factor in effect as of the date of termination as calculated in accordance
with Exhibit K.
D-1
EXHIBIT E
O&M RECORDKEEPING REQUIREMENTS]
The following includes a list of records that shall be retained in accordance
with Article 3.18. This list is subject to mutually agreed upon changes from
time to time.
Document of Communication and Events Within the Plant
- Control room operators' log book
- Supervisors log book
- Instruction log book
- Maintenance work order status log book
DCS Printouts
- Daily production/consumption summary
- DEP daily report
- Daily report
- Shift report
Production and Product Quality
- Daily inventory/production/shipment summary
- Daily Production Report
- Carbon dioxide batch test record
- Carbon dioxide/purity test - product to storage
- Lot control form
- Pickup tickets
- Truck weigh scale calibration records
- Liquid CO2 sample collection log
- Outside laboratory CO2 analysis and chain of custody forms
- Continuous Product Monitoring System, (CPMS), log book
- CPMS repairs and calibration log
- CPMS data printouts
- CPMS cal. gas specification analysis
Visitor Registration and Safety
- Control room visitor log
- Plant visitor/safety equipment checklist
- Work permits
- Lock out and tag log
Training and Safety
All documentation of specialized training, i.e., hazard material handling,
emergency response, CPR, first aid, specialized skills, etc. Monthly and
quarterly inspection checklists and summaries for:
E-1
- Fire extinguishers, halon systems, safety showers and eyewash stations,
fire hoses and cabinets and sprinklers.
- Electrical powered hand tools
- Xxxxx airpacks, workplace air quality analyzers and in-line fresh air
breathing gear
- Motor vehicle safety inspections
- Respirator cleaning and inspections
- Rigging
- Safety belts
Process Data Logs and Trend Plots
- Daily chemical analysis log - MEA solution
- MEA and inhibitor addition and tankage log
- Waste disposal log
- Reclaimer campaign - lean solution and soda ash addition
- All outside laboratory analysis
- Corrosion probe readings and plots, (XE - 115, 125, 140, 141 and 150)
- Trend graphs of - heat stable salts, solution iron, inhibitor
concentrations, rich and lean CO2 loadings and MEA color
Materials, Services and Equipment Maintenance
- Purchase orders
- Receiving slips
- Maintenance work orders
- Instrument calibration records
- Equipment history
- Spare parts inventory status
Major Plant Equipment Data
- Blower readings
- Compressor readings
- CO2 waste water carbon filter log
- D.E. filter log
Waste Storage and Disposal
- Daily environmental inspection - check list
- Weekly satellite station and waste accumulation area inspection log
- Waste storage area log
- Waste movement forms
- Waste shipment manifests
Monthly Reports
Outage Reports
Event Reports
E-2
EXHIBIT F
MONTHLY SUM BREAKDOWN
The Monthly Sum will include the following items:
Personnel and Services
----------------------
- All full time plant staff salaries, overtime, benefits, payroll taxes and
insurance. All personnel management and administration, engineering, technical,
environmental, regulatory and training and other support.
Process Consulting Services
---------------------------
Utilities
---------
- House Power
- Telephone
Chemicals and Filters
---------------------
- MEA Deliveries*
- MEA Carbon Filter*
- Inhibitor Deliveries*
- Soda Ash Deliveries
- Diatomaceous Earth
- CO2 Carbon Filter
- XX0 X00 Filter Cartridges
- Drier Media*
- Coalescer Cartridges
- Mole Sieve Media*
- Miscellaneous Filters
Waste Removal/Disposal
----------------------
- Reclaimer Sump*
- Industrial Wastewater Sump
- Cotton Filter
- Oily Rags
- Speedy Dry
- MEA Carbon*
- Dryer Media*
- Mole Sieve Media*
- CO2 Carbon
- Carbon Filter Cartridges
- Compressor Oil and Ammonia
- Parts Wash Solvent
- Carbon H20
F-1
- Methanol
- Containers
- Analysis
- Plant Trash
- Shutdown Services*
Maintenance, Parts and Services
-------------------------------
- Repair Parts & Services
- Preventive Parts & Services
- Insulation Materials & Services
- Paint Materials & Services
- Inspection and testing Materials & Services
- Other Outside Contractors
- Minor Improvements
- Fire Protection Systems
- Bench Stock
- Scaffold Rental
- Hose
- Expendables - Gasket, Thread Compound
- Scale Repair/Calibration
- Fan Belts
- Tools
- Groundskeeping
Rental Equipment and Services
-----------------------------
- Pickup Truck Lease and Repairs
- Fork Lift Truck Repair Agreement
- Office Equipment
- Storage Trailers
- Janitorial Services
- Spring Water
- Crane
MEA Analysis
------------
- Lab Material and Equipment
- Equipment Repair
- Outside Analysis
- Sample Transport
CO2 Analysis
------------
- Site Materials and Equipment
- Outside Analysis
- CO2 Sample Transport
- Continuous Analyzer System Maintenance & Service
F-2
Other
-----
- Safety Equipment and Materials
- First Aid Supplies
- Office Supplies
- Federal Express
- Computer Supplies
- Plant Travel
- Training Materials
- Employee Relations
- Computer Equipment & Software
* These items will be delineated separately as budgeted categories in accordance
with Article 3.9(a).
F-3
EXHIBIT G
LIST OF DAILY REPORTS TO BE PROVIDED TO LESSEE
Daily inventory/production/shipment summary of status report.
All other reports, records, logs, etc. listed in Exhibit E under Article
---------
3.18 of the Agreement will be available to the Lessee at all times at the
Site.
X-0
XXXXXXX X
XXXX XXXXXX AND DESCRIPTION
See attached Plot Plan - Drawing 624700-4-500 Rev. 2
Release date January 24, 1990
H-1
EXHIBIT I
SAMPLE OF MONTHLY REPORT
SEE ATTACHED SAMPLE OF MONTHLY REPORT
A sample monthly report has been included in the three ring binder provided
to Operator. It is the December, 1994 monthly report produced by the
current contract operator less the figures for financial performance.
I-1
EXHIBIT J
INSPECTION SCHEDULING GUIDELINES
Maintenance Inspections to be performed by the Operator in accordance with
manufacturers' recommendations.
J-1
EXHIBIT K
ESCALATION FORMULA
Beginning with January 1996, the Monthly Sum (excluding the estimated allocable
portion of the cost of all process chemicals and waste disposal for the
applicable Contract Year based on the Budget for such Contract Year) shall be
increased or decreased, as the case may be, January of each year as follows:
Adjusted Fee = [.7(EGSWx)/(EGSWo) + .3 (ECI-WCx)/(ECI-WCo)]
multiplied by the initial Monthly Sum.
Where:
EGSWx is the U.S. Bureau of Labor Statistics average hourly earnings of
Electric, Gas and Sanitary workers for the month in respect of
which the adjustment is made;
EGSWo is the U.S. Bureau of Labor Statistics average hourly earnings of
Electric, Gas and Sanitary Workers for July 1995;
ECI-WCx is the Employment Cost Index for Private Industry White Collar
Wages & Salaries, as published by the United States Department of
Labor, Bureau of Labor Statistics in the publication entitled
"Monthly Labor Revie w", for the month in respect of which the
adjustment is made; and
ECI-WCo is the Employment Cost Index for Private Industry White Collar
Wages & Salaries, as published by the United States Department of
Labor, Bureau of Labor Statistics in the publication entitled
"Monthly Labor Review," for July 1995.
K-1
EXHIBIT L
CARBON DIOXIDE QUALITY SPECIFICATIONS
The composition of the liquid carbon dioxide produced by the Carbon Dioxide
Plant Facility will meet the following criteria:
ANALYSIS LIMIT
-------- -----
Percent Carbon Dioxide, Purity 99.95% by Volume (Min.)
Water Content, Dew Point 8 ppm by Volume, -80 F. (Max.)
Volatile Hydrocarbons as Methane 20 ppm by Volume (Max.)
Non-Volatile Residues 5 ppm by Weight (Max.)
Oxygen (O /2/) 10 ppm by Volume (Max.)
Carbon Monoxide (CO) 10 ppm by Volume (Max.)
Hydrogen (H/2/) 60 ppm by Volume (Max.)
Hydrogen Sulfide (H/2/SO/4/ 0.5 ppm by Volume (Max.)
Nitrogen (N/2/) & Argon 90 ppm by Volume (Max.)
Nitrogen Oxides (No/x/) 2.5 ppm by Volume (Max.)
Sulfur Dioxides (SO/2/) 0.5 ppm by Volume (Max.)
Carbonyl Sulfide (COS) 0.5 ppm by Volume (Max.)
Mercaptans 0.5 ppm by Volume (Max.)
Benzene 50 ppb by Volume (Max.)
All Carbon Dioxide shall conform to the requirements of the Product Quality
Control Procedure, as mutually agreed upon by Operator and Lessee.
L-1
EXHIBIT M
PRICE LIST 1720
See attached Price List 1720.
M-1
[LETTERHEAD OF WESTINGHOUSE ELECTRIC CORPORATION]
September 2, 1994 SEE REVERSE SIDE FOR SECTION 2 FIELD ENGINEERING
Supersedes PL 1720 Section 1 SERVICES FOR
dated January 2, 1993 FOSSIL PLANT SITES
Prices subject to change without notice
Mailed to:E. C/1700A
--------------------------------------------------------------------------------
I. SELLING POLICY
All prices contained herein are subject to the terms and conditions of
Westinghouse Selling Policy 1701 in effect on the date on an order is received.
II. PRICE POLICY
All rates and prices are subject to change without notice. Unless contracted
otherwise, rates and prices for ongoing contracts will be those in effect at the
time the work is performed.
III. ENGINEER HOURLY RATES
Westinghouse offers three types of field engineering services for power
generating equipment, at rates as defined below.
A. TECHNICAL FIELD ASSISTANT (TFA)
An Engineer providing TFA renders advice and makes recommendations based on
Westinghouse procedures and drawings during standard maintenance of Westinghouse
units. By definition, standard maintenance includes disassembly, inspection,
replacement of renewal parts, routine repair and reassembly.
(*) Hourly rates for TFA:
Straight Weekday OT/ Sunday &
Time Saturday Holiday
-------------------------------------------------------
$112.00 $168.00 $224.00
-------------------------------------------------------
B. SUPERVISORY SERVICES
An Engineer providing supervisory services directs Westinghouse personnel
performing to Westinghouse procedures and process specifications, requiring
unique skills and custom equipment or tooling.
A job specific readiness fee will apply to all orders, that are not firm priced,
for supervisory services. This fee will cover pre-job efforts and will be
quoted separately.
(*) Hourly rates for Supervisory Services:
Straight Weekday OT/ Sunday &
Time Saturday Holiday
-------------------------------------------------------
$112.00 $168.00 $224.00
-------------------------------------------------------
C. SPECIAL SERVICES
An Engineer providing Special Services performs diagnostic and operational
trouble-shooting of turbine-generator equipment. This work may be conducted
onsite or by telecommunication. Special Services includes diagnostic electrical
testing, evaluation and set-up activities on control systems, voltage regulator
systems and any on-line diagnostics. Level III NDE and balancing is also
included in this type of field engineering services.
(*) Hourly rates for Special Services:
Straight Weekday OT/ Sunday &
Time Saturday Holiday
-------------------------------------------------------
$112.00 $280.00 $280.00
-------------------------------------------------------
IV. EXPLANATORY NOTES
A) In the event Westinghouse use outside or subsidiary personnel to perform
services that would normally be performed by Westinghouse personnel.
Westinghouse will invoice Purchaser for such personnel at the hourly rates
published herein.
B) Minimum billing is 8 hours
C) The straight-time rate applies to all time worked or traveled during an 8
hour work day or fraction thereof; that is, any consecutive 8 hour period in
a weekday (Monday through Friday, holidays excepted) with an allowance for
lunch time.
D) The week day overtime and Saturday rates apply to all time worked or
traveled in excess of 8 hours during a weekday and all time worked or
traveled on Saturday (holidays excepted). All time worked or traveled on a
Sunday or a holiday, locally observed by Westinghouse, will be billed at the
Sunday and holiday rate.
E) Technical services of factory engineers, headquarters service specialists,
and computer charges will be those set forth in Westinghouse Price List
1275. Project Managers will be quoted upon request.
F) Changes for equipment, tools and instruments supplied with field engineering
personnel will be quoted by your local Westinghouse representative.
G) Technical Direction of Installation (TD of I) will be charged at the rate in
Section III A. Terms and Condition for TD or I are SP1701 with Technical
Services Warranty and Exclusive Remedy (5B) being applicable.
V. EXPENSES
A fixed daily expense charge will be assessed as outlined below.
A) * When daily commuting personnel supplied, a $35 local daily expense charge,
covering local transportation and miscellaneous expenses, will be assessed
for each day assigned to the work.
B) For job sites where personnel require overnight lodging, the applicable
daily expense charge for the job site will be assessed for each calendar day
an individual is assigned to a project including non-working weekend days
for jobs extending over the weekend(s). Westinghouse will supply engineers
and technicians based on qualifications with priority given to qualified
daily commuting personnel when available.
Round trip air and/or ground transportation from the individual's home location
to the job site will be extra and billed at cost.
The following geographical area daily expense charge covers lodging, meals,
local transportation and miscellaneous expenses (telephone, postage, laudry,
etc.).
Daily Expense Daily Expense
Charge Class Charge (*)
----------------------------------------------------------
A1 $280.00
A 215.00
B 190.00
C 175.00
D 165.00
E 150.00
F 140.00
G 130.00
----------------------------------------------------------
The daily expense charge class for a particular power plant or job location can
be obtained from the local Westinghouse representative.
(*) Changed since previous issue.
EXHIBIT N
WESTINGHOUSE ELECTRIC CORPORATION GUARANTY
NECO-Bellingham, Inc.
00000 Xxxx Xxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxx 00000
Gentlemen:
Reference is made to the Contract between NECO-Bellingham, Inc. ("Lessee") and
Westinghouse Operating Services Company, Inc. ("WOSC") for the Bellingham
Project Carbon Dioxide Recovery Facility ("Contract"). WOSC is a wholly owned
subsidiary of Westinghouse Electric Corporation ("WELCO"). In connection with
said Contract, WELCO agrees as follows:
1. Unless otherwise noted, capitalized terms used in this letter shall
the meanings assigned to such terms in the Contract.
2. In consideration of one dollar and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
WELCO, on behalf of itself, its successors, and permitted assigns,
irrevocably and unconditionally guarantees to Lessee, its successors, and
permitted assigns, the prompt, full and faithful observance, fulfillment
and performance by WOSC of each of the obligations, responsibilities, and
undertakings to be carried out, performed or observed by WOSC to the extent
and under the terms and conditions set forth in the Contract.
3. If at any time WOSC, its successors, or permitted assigns, fails,
neglects or refuses to timely or fully perform any of its obligations,
responsibilities, or undertakings as expressly provided in the terms and
conditions of the Contract, and if within fifteen (15) days after written
notice of such failure, WOSC has not commenced corrective action to the
extent required by the Contract, then upon receipt of written notice from
Lessee specifying the failure, WELCO shall perform, or cause to be
performed, any such obligation, responsibility, or undertaking as required
pursuant to the terms and conditions of the Contract, including without
limitation all payment obligations under the Contract.
4. With respect to any claim, action or proceeding against WELCO in
connection with this guaranty, WELCO shall be entitled to assert only those
defenses which WOSC would be able to assert if such claim, action or
proceeding were to be asserted or instituted against WOSC based upon the
Contract.
5. WELCO covenants and agrees with Lessee, its successors, and
permitted assigns, that (i) any amendments, modifications or supplements to
the Contract, or (ii) the giving of any consent by Lessee or WOSC to any
permitted assignment of the Contract, or (iii) the waiver of the
performance or observance by WOSC of any agreement, covenant, term or
condition to be performed or observed by WOSC, or (iv) the lease, sale,
transfer or conveyance of the Equipment or any interest to any party, may
all or any of them be made and done without notice to, or the
N-1
consent of, WELCO and without in any way affecting, changing or releasing
WELCO from its obligations hereunder.
6. With respect to this Guaranty, WELCO represents the following:
(i) that it is a corporation duly organized, validly existing and in
good standing under Pennsylvania laws and that the execution,
delivery and performance of this Guaranty has been duly authorized
by all requisite corporate action and will not violate any
provision of any governmental rule, regulation or ordinance, its
charter or by-laws or any indenture, agreement or instrument to
which it is a party; and
(ii) that it is not in violation of any applicable law, statute, order,
rule or regulation promulgated or judgment entered by any federal,
state, local or governmental authority which violations,
individually or in the aggregate, would affect WELCO's guaranty of
WOSC's performance of its obligations under the Contract; and
(iii) that it is not a party to any legal, administrative, arbitral,
investigatory or other proceeding or controversy pending, or, to
the best of WELCO's knowledge, threatened, which would adversely
affect WELCO's ability to guaranty of WOSC's performance of its
obligations under the Contract. 7. This Guaranty shall be governed
by and interpreted under the substantive laws of the State of New
York, United States of America, excluding rules governing conflicts
of laws. Any dispute arising under or relating to this guaranty
shall be resolved according to the provisions set forth in Article
13, Dispute Resolution, of the Contract.
Very truly yours,
N-2
